Global Processing

Fitch sees global chemicals industry poised for recovery

December 21, 2009
Fitch Ratings expect the global chemicals industry to experience gradual recovery in 2010, with stronger demand in China and South America tempered by constrained Western European and North American markets, reports the Associated Press. Fitch expects growth rates for the North American chemicals industry in the low-to mid-single digits in 2010. Other factors slowing the sector''s recovery include excess capacity and the end of stimulus packages. Furthermore, Fitch said new capacity coming online in the Middle East -- where lower raw material prices translate to cost advantages -- could threaten Western European and North American facilities. The ratings agency predicted stiff competition for less advanced chemical products. Companies with a lot of these products in their portfolio will change their strategy to purely low-cost manufacturing to stay competitive. Companies with high value-adding, innovative product portfolios, in contrast, will focus on research and development.