U.S. capacity could rise from 26.6 million tonnes this year to more than 35.0 million tonnes per year by 2018, with peak spending occurring in 2015 and 2016, based on announced expansion plans. The wave of cracker expansions set to hit the industry may place interim pressure on credit metrics, depending on timing and other spending priorities and all other factors equal. Even the largest free cash flow (FCF) producers in the chemicals industry are likely to experience material negative effects on FCF when spending on these capital projects.
Stress scenarios in the pre- and post-expansion chemicals credit environment could potentially differ dramatically. Pre-expansion, recessionary pressure is most likely to be the cause of industry stress. Company believes stronger positioned credits include those with more modest expansion plans and plentiful and clear access to cash as well as material FCF.
U.S. ethylene and ethylene product chain demand would have to grow by 6.5% per annum in order to absorb the anticipated supply increase, indicating the current expansion is aimed in part at exports. In the event ethylene exports are not cost-competitive, possibly due to diminished feedstock margin differential, large, diversified chemicals companies and specialty chemical manufacturers will likely have more stable credit profiles.
| On 26th Jul 2021
Vietnam Railways (VNR) has added a new rail freight link from Vietnam ...
The United Kingdom recently launched a consultation on new trading...
Australian wool exports are expected to grow in the current season...
There was a certain switch, but it was not 100% pandemic related
Biggest learning was adaptability
Ensured payment of fee was least concern for students
Based out of Como, Italy, and with technological expertise of nearly 70...
Established in 2000 as a liaison with the Government of India, Industree...
Shambhu Nath Jha
Leading research and consulting firm Fact.MR recently launched a report on ...
Freudenberg Performance Materials is a leading global manufacturer of...
Arevo, based in Silicon Valley in California, develops technology to...
Steve McCullough & Marco Weichert
Functional Fabric Fair & Design and Development GmbH Textile Consult respectively
Functional Fabric Fair is a trade-exclusive event showcasing the latest...
Designer <b>Suman Nathwani</b> talks about her journey of opening a...
Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...
Gramin Vikas Evam Chetna Sansthan
Ruma Devi is a jet-setting promoter of artisans who has empowered...
Letter to Editor
Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.
Subscribe today and get the latest information on Textiles, Fashion, Apparel.