Volume Growth, Raw Material Costs Will Continue to Rise in 2011

摘要

Overall demand should improve in the chemical sector next year, mostly driven by developing economies because of a rise in urbanization and infrastructure, according to HSBC (London) report. It is unclear when demand in Europe and the U.S. will recover to historical averages, the HSBC says. “The chemical sector is largely driven by growth in volumes, which have been volatile over the past three years,” the report says. Volumes fell on average by 10% in 2009, and are forecast to increase by 7% in 2010. That growth rate compares to an average volume growth rate of about 2.5%/year between 2002 and 2008, HSBC says. Volume growth has been driven by restocking in the U.S. and Europe, which accounts for about 70% of sector sales, HSBC says. “We believe a recovery in developed markets would boost top-line growth strongly and could further tighten supply demand dynamics, pushing up prices,” the report says. Raw material costs will continue to rise in 2011, which will benefit basic chemical producers but “could place pressure” on specialty chemical makers, HSBC says. Specialties producers “must demonstrate that their products are sufficiently specialized to pass increased costs through to end-customers.” HSBC forecasts limited Ebitda margin growth for the European chemical sector, despite the price hikes. Margins should peak at 18.3% in 2012, compared with 18% in 2010, the report says.