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Monday 1 January 2018

North American chemical cos in 2018 - Elusive top line growth


Fitch Ratings has a stable outlook on the North American chemical industry and most chemical company issuer ratings, supported by expectations of broad-based, solid economic growth, well-considered financial profiles and robust liquidity. Fitch expects that growth over and above GDP will remain elusive as a result of competitive pressures driving commoditization, high penetration in most markets, and lack of game-changing new products or chemistries. 
Fitch expects chemical demand growth by volume to remain near GDP levels given penetration in most end markets across the consumer, manufacturing and construction sectors. It also expects the agricultural chemical and oilfield service chemical sectors to continue to be challenged by relatively low commodity prices for end-market products in the short term. 
"As industry competition grows, the ability of companies to hold onto premium pricing diminishes and commoditization accelerates," said Monica Bonar, Fitch senior director.

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