Companies have mixed views on the outlook

The blog’s quarterly look at company results raises more questions than answers about the outlook. This is very typical of turning points.

Back in May 2010, for example, companies also expressed mixed feelings, as the blog noted:

“Q1 has seen the forecast seasonal boost. But Asia, particularly China, remains the real focus of growth. PetroChina, Reliance and Sinopec all see a continuing boom underway, with Sinopec highlighting the importance of ‘state stimulus measures’.

“Dow Corning is certainly bullish, seeing ‘recovery in nearly every industry and geography’. Whilst Cognis, also focused on ‘green markets’, detects improved demand in Europe. But although Dow sees ‘demand growth returning in developed markets’, it notes significant “challenges” remain.

“Equally, Akzo Nobel seems typical of the majority when noting it remains ‘cautious about the strength of the recovery’. BASF also notes that ‘recovery is not certain’. And several companies, including Rhodia, worry about the ‘uptrend in raw material and energy costs”.

Today, Dow ‘anticipate that global growth will gain momentum’, whilst Unilever warn the ‘external macroeconomic environment remains difficult.’

This divergence suggests that Scenario planning, based on Dow’s Upside case and Unilever’s Downside view, could prove a very valuable exercise for companies to undertake over the next few weeks.

Air Products. “Business activity did not pick up as much as we expected”
Akzo Nobel. “Our concerns are focused on the risk of recession in Europe, delayed recovery of the US property market and the potential for a slowdown in China,”
Arkema. “Positive about market conditions”
BASF. “Increased raw material costs could not be fully passed on in all business areas, which put pressure on margins.”
Bayer. “Strong performance in its CropScience operations offset the sharp decline in its MaterialScience business”
BP. “Expected pethem margins to remain subdued given the difficult economic conditions”
Borealis. “Difficult market conditions, especially for the European polyolefin business segment”
Celanese. “Challenging economic environment in certain geographies and industries”
Clariant. “Economic headwinds, an unfavourable currency development and the absence of restocking activities”
Dow “Anticipate that global growth will gain momentum as we move through Q2 and into H2″
Dow Corning. “Demand improved slightly over last year, prices were depressed globally”
DSM. “Cautiously optimistic for 2012 despite the uncertain macro-economic situation”
DuPont. “Expect further sequential volume improvements”
ExxonMobil. “Weaker margins decreased chemical earnings”
Huntsman. “Certain economic challenges in various parts of the world”
Idemitsu Kosan. “Decreased demand for petchem products, particularly from China”
INEOS. “Demand for olefins in the quarter continued to be solid”
LG Chem. “Sluggish demand from China squeezed margins”
LANXESS. “Expects the performance in Q2 to be similar to Q1″
LyondellBasell. “Much weaker Europe, Asia and International olefins & polymers results”
Mitsubishi. “Drastic decrease in the sales volumes of basic petrochemicals due to the influence of the 11 March 2011 earthquake and a decline in demand”
OMV. “Significantly lower margins”
OxyChem. “Lower export volumes and higher raw material costs”
PKN Orlen. “High costs of feedstock led to lower margins”
PPG. Strengthening demand in the US in most end-use markets and growth in emerging regions, which offset weaker European activity,”
PTT. “Concerns over the uncertainty of economic situation in Europe and US, along with the more cautious economic policy in China, led to softened demand and continuously put pressure on product spreads”
Praxair. “Growth was strongest in North America and Asia”
Reliance. “Weaker demand for polyester products”
SABIC. “Lower prices for some products and an increase in some of our feedstock”
Shell. “Chemicals earnings were in line with the first quarter 2011″
Sherwin-Williams. “Higher paint sales volumes and price increases”
Siam Cement. “Chemical margins fell to their lowest as a result of excess global supply and slower demand”.
Solvay. “Continue to operate a strict financial discipline with a strong focus on cash”
TOTAL. “Strong deterioration of the environment for petrochemicals in Europe”
Unilever. “External macroeconomic environment remains difficult and higher input cost headwinds persist,”
versalis. “Demand tracked a recessionary environment”,
Vopak. “Optimism in the chemical sector in North America and increasing consumption of petrochemicals in Asia”

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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