Market Monitor - Chemicals performance - Mexico

Market Monitor

  • Mexico
  • Chemicals/Pharma

1st June 2015

The chemicals sector in Mexico is expected to grow modestly in 2015 due to the country’s lower economic growth (forecast 2.6 % in 2015).

Market performance at a glance 

Mexico  

  • Lower economic growth in Mexico (forecast 2.6% in 2015) will affect the domestic chemicals sector, which is expected to show only modest growth.
  • The positive effects expected by the comprehensive energy reform in 2014 to liberalise the Mexican energy sector remain uncertain due to current low oil prices.
  • Lower oil prices have a negative effect on the oil, fuels and plastics subsectors, e.g. high inventory against low prices of oil derivative products. This might imply losses and higher costs that could not be easy to pass on to customers, while margins are already thin.
  • The volatility of the Mexican peso affects chemicals importers. For some businesses, sales are made in Mexican pesos but nevertheless converted into US dollars, which might result in foreign exchange losses and slow payments.
  • The average payment duration in the chemicals industry is 60 to 90 days. Currently the number of payment delays is high, and expected to increase further. However, an increase in insolvencies is not expected.
  • Due to the problems mentioned above, our underwriting stance on subsectors like oil and fuels, plastics and fertilizers is currently more restricted.

Related documents

Disclaimer, no warranties and exclusion of liability

Atradius disclaims any representations or warranties of any kind, whether expressed or implied, including but not limited to implied warranties of merchantability and fitness for a particular purpose of (INCLUDING BUT NOT LIMITED TO) any information contained on or provided via this Web Site and/or any service described or promoted on this Web Site, including warranties with respect to infringement of any patent, copyright, or other rights of third parties. Atradius shall not be liable for any injury, loss, damage or expense arising out of any access to or use of this Web Site or any site linked to or from this Web Site, including, without limitation, any loss of profit, indirect, incidental or consequential loss. Atradius furthermore shall not be liable for persons, property damage or especially direct, indirect, incidental, consequential, immediate or subsequent (pecuniary) loss. While Atradius has used reasonable efforts in maintaining a virus-free Web Site, it declines any liability for persons, property damage or especially direct, indirect, incidental, consequential, immediate or subsequent (pecuniary) loss which may result from transmission or downloading of computer viruses. Atradius cannot be held liable for hardware damage, loss of data, alteration of data, or downtime.