The recovery will be particularly lengthy in the polyvinyl chloride (PVC) segment given PVC's high dependency on the housing and construction sector. Renewed discussions to implement bans for the use of polystyrene (PS) in fast-food containers also cast doubts on recovery prospects for PS.

Prospects are moderately better for high-density polyethylene (HDPE) and low-linear density polyethylene (LLDPE). While sales volumes for both materials were adversely affected by the economic downturn, HDPE and LLDPE may benefit from less cyclical end-user markets, particularly in the food and packaging sector.

Even in the event of a rebound, the economics of the ethylene value chain may remain under pressure as new global capacity additions, particularly in the Middle East, come onstream which benefit from low-cost access to feedstock. As a result, production capacity, especially smaller and older steam crackers, will be idled or permanently shut down along the U.S. Gulf Coast. North American producers will also continue to seek alliances and joint ventures with players from the Middle East.

The full report 'North American Chemicals: Ethylene Value Chain Dynamics and Outlook' can be found on the Fitch Ratings' web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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