On top of this, however, a slowdown in global demand and the start-up of two major crackers is beginning to introduce some slack into the market. That, ironically, will curtail the industry's ability to raise prices to cover the price hikes of raw materials further upstream. Prices downstream could not follow through. The year-end assessments of various chemical associations in Europe show a fairly consistent outlook for a slowing, following strong performance this year. For example, in the Italian chemical industry, a growing number of chemical sectors are benefiting from the ongoing recovery, including those that were hit by the recent financial crisis in Asia, economists at Milan-based Federchimica note.
Italian fibers are usually a good indicator of overall European fibers performance.
The Finnish chemical industry was showing most strength in basic chemicals and plastics, the association reports, while output of compounded chemical products, including pharmaceuticals, slowed from 1999. Because of its geographical location, Finland has always had particularly strong insights into developments in Russia, and the chemical federation's report continues to share its thoughts about that country. In Russia, the economic and political situation has become more stable. A cheap ruble and expensive oil give Russia more room for maneuvering. The more stable economic and political environment may have a positive effect on foreign direct investment in Russia.