CHICAGO--()--Fitch Ratings expects single digit revenue growth for most chemical companies mirroring expectations for global GDP growth. More robust growth is expected for agricultural chemical companies given sustained high prices for cash crops, low stocks to use ratios for major cash crops, and historically high forecast planted acres. Fitch, today, has published a report titled '2013 Outlook: North American Chemicals Industry' that details its credit expectations for chemical producers.
The rating outlook for North American chemical companies is stable. Low feedstock costs and increased utilization have helped heal chemical companies' financial positions following the low cycle experienced in 2009. Most companies have adequate if not robust liquidity. Low feedstock costs are expected to persist, allowing companies to generate higher operating margins.
Low feedstock costs, largely due to shale gas and NGL production, are prompting many chemical companies to pursue large capital projects. Fitch believes fixed, long-term heightened capital spending of these types of projects presents risk until those projects are completed and producing operating income.
The full report '2013 Outlook: North American Chemicals Industry' is available on the Fitch Ratings' website www.fitchratings.com or by clicking on the link below.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research: 2013 North American Chemical