...Volatile Earnings: Fitch Ratings assesses the chemicals sector as having higher than average earnings volatility and business risk than the overall corporate universe, as a result of the volatility of input costs and end-user demand. Ratings range from `B¡' at single-site operations, to `A+' for large, diversified operations such as BASF SE (A+/Stable). To attain a given rating level we would typically require leverage to be around 1-1.5x more conservative than for an average corporate. Speciality Chemicals More Stable: Business profiles depend on whether output is speciality or commodity in nature. Competitive pressure and price volatility are typically high at the commodity end of the value chain and low for products with high technological content or niche applications. Where the sub-sector is highly consolidated, typically in niche markets, then it does not matter as much whether it is more speciality or commodity. High ratings are still achievable for commodity producers if they are...
