Asia-Pacific chemical producers could face increased costs and pressured profitability amid the Middle East conflict, S&P Global Ratings said in a Friday release.
The conflict could also interrupt access to some major raw materials and intermediate chemicals, S&P said.
S&P credit analyst Betty Huang said continued disruption of about four weeks could restructure global chemicals trade flows, especially with about 20% of global crude oil supplies and chemical trade flow through the Strait of Hormuz.
Greater consolidation in the petrochemicals sector could also happen, given the persistent industry weakness that has weighed on producers, the analyst said.
Downside risks could also increase if the conflict continues, especially with a 35% negative rating bias for the region's chemicals sector and specifically petrochemical producers, according to credit analyst Raymond Hsu.
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