9 July 2009
Chemicals industry cycling down
The chemicals business is well into a classic down-cycle with profitability falling fast, Martin Quinlan writes
PROFITABILITY of the worldwide chemicals industry, as measured by the financial results of the largest chemicals companies and the chemicals subsidiaries of the major oil companies, declined sharply last year. The return-on-assets for the sector averaged 4.3% in 2008, down from 9.7% in the previous year and – the top of the latest cycle – 11.4% in 2006, Martin Quinlan writes. Figure 1 shows that profitability soared for three years after 2003, the trough of the last down-cycle. There was a dip in 2007, before profitability plunged last year as the new down-cycle developed. On the basis of previous cycles, the decline has some way further to run before the next up-cycle can start. Classically
Also in this section
4 December 2025
Time is running out for Lukoil and Rosneft to divest international assets that will be mostly rendered useless to them when the US sanctions deadline arrives in mid-December
3 December 2025
Aramco’s pursuit of $30b in US gas partnerships marks a strategic pivot. The US gains capital and certainty; Saudi Arabia gains access, flexibility and a new export future
2 December 2025
The interplay between OPEC+, China and the US will define oil markets throughout 2026
1 December 2025
The North African producer’s first bidding round in almost two decades is an important milestone but the recent extension suggests a degree of trepidation
