Fitch Ratings’ sector outlook for North American Chemicals is neutral. The Chemicals sector includes diversified, specialty and petrochemical segments. Overall market conditions should remain favorable heading into 2022 despite expectations that margins will normalize in the second half of the year. Industry prospects are improving due to strengthening chemical products demand stemming from continued recoveries across end markets in auto, industrial and construction.

Fitch expects chemical demand growth by volume to continue, and new capacity in some market segments, such as polyethylene, will lead to a more balanced market than in 2021. Overall, sector fundamentals remain strong and Fitch will continue to monitor supply chain pressures.