Petro Chemicals/Market Trends

Barclay’s Capital reports that the dip in chemical manufacturer profits is likely to last into 2011. The recession and credit crisis has pinched consumption to below (already low) expected levels. Even that projection relies on economic recovery in 2010. Capacity shutdowns and delay of new project openings will also slim supplies (

Will the effects of abundant, lower priced commodity chemicals reach the end user? Well, the consumer has seen the benefits at the gas pump; where prices are 40-50% lower than this time last year. The degree to how much procurement will be able to capture the downstream benefits of the soft market will have much to do with the price programs and sourcing strategies they employ. Needless to say, the manufacturers will hold the line for as long as they can, unchecked.
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