Although China 's fiscal "cliff" and continuing European debt crisis have cast a shadow over the chemical industry, Wall Street predicts that most chemical companies headquartered in the United States will improve their profits next year.
Wall Street analysts predict that for most American chemical companies, there will be double-digit earnings growth in 2013, but not including Huntsman and Tronox, as the market for titanium dioxide is expected to remain weak and profits may continue decline.
According to the latest data released by HSBC, the final value of China's Manufacturing Purchasing Managers Index (PMI) was 50.5 in November, which was higher than the initial value of 50.4 and the October final value of 49.5, returning above the 50-blade boundary, creating a 13-month period. The new high has made China a potential bright spot for growth in 2013. Similarly, U.S. real estate also showed signs of recovery. In October, U.S. new housing starts rose to the highest level in more than four years, indicating that the US housing market has further improved.
However, the operating performance of the US chemical companies in the fourth quarter of this year is unlikely to be encouraging. As the downstream demand was affected by the seasonal demand weakness at the end of the year, the profitability of the ethylene industry chain was still not strong. Don Carson, senior analyst at Heiner International Group, an investment bank, said: “The polyethylene prices will fall by a cumulative US$0.05 per pound in November and December as buyers are far ahead of the market in the summer months. In spite of this, the combined profits of ethylene and polyethylene will remain close to the historical peak, because the price of ethane raw materials hit a two-year low."
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