Global rating agency Fitch Ratings reported that the North America (NA) Ethylene market is expected to be more balanced by year-end as restored production and imports will soften tight market conditions.
Operating rates are expected to be lower at the end of fourth-quarter 2005 (4Q'05) as the industry typically experiences a seasonal showdown. Production losses from unplanned outages - including those related to Hurricanes Rita and Katrina - were estimated to be approximately 30 percent and 15 percent of nameplate capacity for October and November, respectively.
The US petrochemical industry is ending what has been an unstable year, as reflecting in the industry's mixed financial results. A variety of factors - namely de-stocking of inventory, natural disasters, high commodity and raw materials costs - caused significant price volatility. In 4Q'05, however, commodity producers have realized strong pricing momentum as buyers work to secure supply.
While energy and raw material prices remain high, Fitch expects that commodity producers will realize strong margins during the last three months of 2005 and margins should remain healthy into first-half 2006.
New York based Fitch is operating offices and joint ventures in more than 50 locations and covering entities in more than 80 countries. Fitch Ratings is a wholly-owned subsidiary of Fimalac, S.A., an international business support services group headquartered in Paris, France.
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