Global chemical demand will be strong next year, and costs will rise

[China Epoxy Network (China Epoxy Industry Online)News on January 4, 2011: HSBC’s latest report analysis is influenced by the urbanization process of developing economies and the vigorous construction of infrastructure Promoted, the overall demand situation of the global chemical market in 2011 will be better than in 2010.
However, it is still unclear when the demand in Europe and the United States will return to the historical average level.
The report shows that in 2009 the sales of chemicals in Europe and the United States fell by an average of 10%, and in 2010 it is expected to increase by 7%.
The average annual growth rate from 2002 to 2008 was about 2.
5%.
The increase in chemical sales in Europe and the United States was mainly due to the impact of the rebuilding of inventories by local downstream manufacturers.
HSBC pointed out: "We believe that the recovery of developed markets will stimulate the strong growth of the global chemical market, or will further lead to tight chemical market supply and demand, thereby stimulating the rise of chemical prices.
" This foreign exchange bank pointed out that in 2011 global chemical raw materials Costs will continue to rise, which will benefit basic chemical producers, but will increase cost pressures for specialty chemical producers.
Manufacturers of specialty chemicals must pass costs to end users in order to resolve the profit crisis.
HSBC predicts that despite rising product prices, European chemical producers have very limited room for growth in earnings before interest, taxes, depreciation and amortization (EBITDA), which is expected to reach a peak of 18.
3% by 2012 Compared with 18% in 2010, it only increased by 0.
3 percentage points.
The EBITDA of agrochemical companies will increase by 1.
38 percentage points, the profits of specialty chemical producers will increase by 1.
11 percentage points, industrial gas producers will be basically the same, and basic chemical producers will decline.
BASF, Johnson Matthey, K+S and Syngenta have the largest profit growth between 2010 and 2012.
According to experts from China Epoxy Network/China Epoxy Industry Online ( HSBC also stated that the activity of M&A transactions in the European chemical industry will weaken in the next few years.
It is expected that European chemical companies will not conduct major M&A transactions until 2013-2014.
Since there are no major acquisitions, the cash flow of the European chemical industry will be more abundant in 2011, but the Belgian Solvay Group may announce a large acquisition in 2011.
HSBC further analyzed that in the next four years, producers of agricultural chemicals and basic chemicals will have the most abundant cash flow, and producers may return to shareholders through high dividends or stock repurchases.

(This station reporter)

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