Top of the cycle?

THE STRONG profitability achieved in 2006 and 2007 could prove to have been the peak of the present chemicals cycle, if – as forecast – business conditions deteriorate later this year, Martin Quinlan writes. Petroleum Economist's annual survey of chemicals profitability, based on the results of the world's largest chemicals companies and the chemicals subsidiaries of the major oil companies, shows a hint of a decline in 2007. Overall, the sector achieved an average return-on-assets of 10.9% last year – a high figure, but down slightly from the 11.4% of 2006. Profits under threat If a downturn is confirmed in this year's results, 2006-07 will have marked the end of a four-year up-cycle which