Expectations for chemical company earnings have been boosted by a combination of lower crude oil costs during the commodity’s slump along with strong demand for plastics that are used to make everything from shampoo bottles to grocery bags.

The worst oil rout in a generation has cut production costs for plastics that require oil-derived components. The price of plastics followed oil’s rapid climb from 2009 to mid-2014, but on the way back down, plastic prices have not fully followed crude, keeping margins robust for petrochemical companies.

Analysts say that should help chemical names when they report results in the coming days. Last week, LyondellBasell Industries beat consensus estimates, and estimates for Westlake Chemical Corp and, to a lesser extent, the more diversified Dow Chemical Corp, have been lifted. "Lower oil prices led to more demand in the markets and for the person who’s making plastics, their costs went down but their demand went up and they made money," said Joel Morales, director of polyolephins Americas for IHS. "It’s a perfect world on the petrochemical side."

Dow is expected to report earnings of 83 cents a share on Thursday, and in the last 30 days, six estimates have been raised by an average of 3.7 per cent. In 2015, the company reported a pre-tax profit margin of 20.4 per cent, its strongest since 1989.