The GFC moves from Wall Street to Materials Street - Bayer and Hydro feel the pain
Recent financials from Polymeric and Metallic bellwethers, Bayer and Hydro are not pretty.
According to Bayer Chairman, Werner Wenning, "....the slump business at Material Science also left a distinct mark on sales and earnings of the Bayer group".
Hydro, the aluminium group made a similarly downbeat comment in their Q1 2009 report, "The results reflect the deepening global economic downturn, with historically low aluminium prices and a further fall in already weak downstream markets."
Looking at some of the specifics for Bayer sales compared to the prior year quarter;
- Foam raw materials (Polyurethanes) in the first quarter was down by 39.3 percent
- Polycarbonates also fell sharply, minus 41.7 percent
- Raw materials for coatings, adhesives and specialties down 40.8 percent
This downturn has led to a reduction in working hours and agreed rates of pay for many German employees.
Telling snippets from Hydro include;
"The market for metal products (extrusion ingot, sheet ingot, foundry alloys and wire rod) in Europe and North America has continued to decline following the dramatic weakening of these markets in the previous quarter. All major end-use markets have been impacted including automotive, building and general engineering."
"Global primary aluminium consumption excluding China could decline by 15 - 20 percent in 2009 from a consumption level of 25 million mt in 2008. Supported by economic stimulus and recovery packages, Chinese consumption of primary aluminium in 2009 is expected to be in line with 2008 level of 12.5 million mt."
Hydro have responded to the downturn by shutting down smelters.
However, it's not all doom and gloom - or is it?
Choose between; Bayer's outlook - "the first signs of a modest recovery in demand are appearing" or Hydro's "We do not see any short or medium-term upturn in the market".
Perhaps the best news is that Bayer plan to increase R&D expenditure in 2009 to roughly EUR 2.9 billion.
Then again, the Dow jumped overnight as all those Wall Street experts are buying again as they are very clever and can see through the current "real" figures. No doubt leading to a "derived" rosy future?
According to Bayer Chairman, Werner Wenning, "....the slump business at Material Science also left a distinct mark on sales and earnings of the Bayer group".
Hydro, the aluminium group made a similarly downbeat comment in their Q1 2009 report, "The results reflect the deepening global economic downturn, with historically low aluminium prices and a further fall in already weak downstream markets."
Looking at some of the specifics for Bayer sales compared to the prior year quarter;
- Foam raw materials (Polyurethanes) in the first quarter was down by 39.3 percent
- Polycarbonates also fell sharply, minus 41.7 percent
- Raw materials for coatings, adhesives and specialties down 40.8 percent
This downturn has led to a reduction in working hours and agreed rates of pay for many German employees.
Telling snippets from Hydro include;
"The market for metal products (extrusion ingot, sheet ingot, foundry alloys and wire rod) in Europe and North America has continued to decline following the dramatic weakening of these markets in the previous quarter. All major end-use markets have been impacted including automotive, building and general engineering."
"Global primary aluminium consumption excluding China could decline by 15 - 20 percent in 2009 from a consumption level of 25 million mt in 2008. Supported by economic stimulus and recovery packages, Chinese consumption of primary aluminium in 2009 is expected to be in line with 2008 level of 12.5 million mt."
Hydro have responded to the downturn by shutting down smelters.
However, it's not all doom and gloom - or is it?
Choose between; Bayer's outlook - "the first signs of a modest recovery in demand are appearing" or Hydro's "We do not see any short or medium-term upturn in the market".
Perhaps the best news is that Bayer plan to increase R&D expenditure in 2009 to roughly EUR 2.9 billion.
Then again, the Dow jumped overnight as all those Wall Street experts are buying again as they are very clever and can see through the current "real" figures. No doubt leading to a "derived" rosy future?
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