CHICAGO--(BUSINESS WIRE)--Fitch Ratings has published a new report on the 2016 outlook for the Latin American chemicals industry.
Fitch expects the credit profiles of rated Latin American chemicals to remain stable during 2016 despite low petrochemical prices.
"Low oil prices should benefit Braskem's cost structure, which is reliant upon derivative oil product, naphtha," according to Gilberto Gonzalez, Associate Director at Fitch. Producers in Mexico such as Alpek, S.A.B. de C.V., Mexichem, S.A.B. de C.V. and Grupo IDESA, S.A. de C.V. should benefit from solid North America demand. "Growth in key automotive, building and construction, and packaging end markets remains robust" said Gonzalez.
Latin American chemical companies will likely maintain high capex relative to cash flow generation through 2016. Aggregate investments for rated chemical companies in the region should remain high and total about USD1.7 billion in 2016, slightly above the USD1.6 billion projected for 2015. Companies projected cash flow generation remains solid, in part boosted by depreciating currencies and company liquidity remains sound. This combination should result in stable to lower net leverage in most cases.
The full report 'Outlook 2016: Latin American Chemicals' is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
2016 Outlook: Latin America Chemicals (Heading North, Looking South)