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Moody’s 2015 outlook for North America and EMEA chemicals industry

Hydrocarbon Engineering,

Moody’s Investors Service has published its 2015 outlook for North America and EMEA chemicals. The company expects EBITDA for the North American and EMEA chemicals industry to grow by 5 – 7% in 2015, but North American chemical companies will outperform their European peers, thanks to better domestic growth and feedstock price advantage.

  • North American ethylene producers will be hit hardest by lower crude prices, while North American ammonia producers, and makers of chemicals for medical and personal care, food and beverage, and coatings will see some of the best performances in 2015.
  • Individual company performance depends on their product mixes.
  • European growth will weaker, but commodity margins will make modest improvements in 2015, thanks to weaker oil prices.
  • M&A transactions will increase the number of new high yield chemical producers in 2015, and more companies will divest non-core assets, including DuPont (A2 stable), Royal DSM (A3 stable), Dow Chemical (Baa2 stable) and FMC.
  • Strong balance sheets will give chemical producers some credit protection. Cash balances remain high across the industry, and their maturities will be manageable in 2015.
  • Weaker growth in developing countries makes peak margins unlikely for ethylene producers in 2015 – 2016, as new capacity limits any improvements to margins, but the North American outlook for 2015 remains good.

Adapted from a press release by Emma McAleavey.

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