U.S. chemical production increased in November as the industry continued to recover from the damaging effects of hurricanes – according to the latest monthly report from the American Chemistry Council (“ACC”).
The chemical industry trade group said that the U.S. Chemical Production Regional Index (“CPRI”) went up 1.2% in November on a monthly comparison basis. This follows a 0.5% rise a month ago and a 1.2% decline in September. The U.S. CPRI, which is measured using a three-month moving average, was created to track chemical production in seven regions nationwide.
Per the ACC, chemical production rose across all regions in the reported month. The increase reflects sustained recovery from the unfavorable impacts of disruptions from hurricanes and a rebound in manufacturing activity.
Hurricane Harvey weighed on U.S. chemical production during the third quarter. A sizable portion of total U.S. production capacity was hit by the storm. Harvey led to the shutdown of several chemical plants along the Gulf Coast – the epicenter of the U.S. specialty chemicals and petrochemicals industry. A number of major chemical producers had to shutter or cut back ethylene production, leading to reduced supply of this major chemical in the third quarter.
Encouraging November Readings
The November readings showed a rise in chemical output across the board. Production across Gulf Coast, Midwest and Ohio Valley went up 2.2%, 1.2% and 2.1%, respectively, while both Mid-Atlantic and Northeast saw a 0.9% increase. Output rose 0.8% in West Coast while Southeast saw a 1.4% gain.
By segments, chemical production was mixed in November. Gains across pesticides, fertilizers, coatings, adhesives, organic chemicals, other specialty chemicals, synthetic rubber, consumer products and pharmaceuticals were neutralized by lower production in industrial gases, manufactured fibers, dyes and pigments, plastic resins and chlor-alkali.
Per the ACC, activity for the U.S. manufacturing sector – the largest consumer of chemical products – rose 0.6% in November. The sector is a major driver for the chemical industry which touches around 96% of manufactured goods.
Overall chemical production also went up 2.4% on a year over year basis in November with all regions scoring gains.
U.S. Chemical Industry Set to Ride Growth Wave
The U.S. Chemical Industry is set for solid growth in 2018. The ACC envisions national chemical production (excluding pharmaceuticals) to rise 3.7% in 2018, further accelerating to a 3.9% growth in 2019. The growth is expected to be spurred by higher demand across light vehicles and housing markets, capital investments and improved export markets.
The trade group also expects basic chemicals production to expand 4.7% in 2018 and further gain steam with a 5.2% rise in 2019 on the heels of new capacity additions. Major export markets such as Latin America and Asia are expected to play a significant role in production growth.
The United States remains an attractive investment destination for chemical investment and domestic chemical makers continue to enjoy the advantage of access to abundant and cheaper feedstocks and energy. This is driving investment in chemical production projects.
Per the ACC, roughly 320 chemical projects have been already announced worth more than $185 billion, 62% of which is foreign direct investment. Moreover, roughly 65% of the chemical investment announced since 2010 are complete or under construction. New capacity is expected to provide a boost to chemical production as these investments come on stream.
The ACC also expects chemical industry capital spending to rise 6.3% in 2018 and 6.8% in 2019 and eventually reach $48 billion by 2022.
Moreover, the ACC sees improving export markets to contribute to solid growth of the domestic chemical industry. Strengthening export markets and increasing capital spending are driving chemical demand across key end-use markets such as light vehicles and housing.
https://www.zacks.com/stock/news/287149/us-chemical-output-up-in-november-on-recovery-from-hurricanes
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U.S. chemical production increased in November as the industry continued to recover from the damaging effects of hurricanes – according to the latest monthly report from the American Chemistry Council (“ACC”).
The chemical industry trade group said that the U.S. Chemical Production Regional Index (“CPRI”) went up 1.2% in November on a monthly comparison basis. This follows a 0.5% rise a month ago and a 1.2% decline in September. The U.S. CPRI, which is measured using a three-month moving average, was created to track chemical production in seven regions nationwide.
Per the ACC, chemical production rose across all regions in the reported month. The increase reflects sustained recovery from the unfavorable impacts of disruptions from hurricanes and a rebound in manufacturing activity.
Hurricane Harvey weighed on U.S. chemical production during the third quarter. A sizable portion of total U.S. production capacity was hit by the storm. Harvey led to the shutdown of several chemical plants along the Gulf Coast – the epicenter of the U.S. specialty chemicals and petrochemicals industry. A number of major chemical producers had to shutter or cut back ethylene production, leading to reduced supply of this major chemical in the third quarter.
Encouraging November Readings
The November readings showed a rise in chemical output across the board. Production across Gulf Coast, Midwest and Ohio Valley went up 2.2%, 1.2% and 2.1%, respectively, while both Mid-Atlantic and Northeast saw a 0.9% increase. Output rose 0.8% in West Coast while Southeast saw a 1.4% gain.
By segments, chemical production was mixed in November. Gains across pesticides, fertilizers, coatings, adhesives, organic chemicals, other specialty chemicals, synthetic rubber, consumer products and pharmaceuticals were neutralized by lower production in industrial gases, manufactured fibers, dyes and pigments, plastic resins and chlor-alkali.
Per the ACC, activity for the U.S. manufacturing sector – the largest consumer of chemical products – rose 0.6% in November. The sector is a major driver for the chemical industry which touches around 96% of manufactured goods.
Overall chemical production also went up 2.4% on a year over year basis in November with all regions scoring gains.
U.S. Chemical Industry Set to Ride Growth Wave
The U.S. Chemical Industry is set for solid growth in 2018. The ACC envisions national chemical production (excluding pharmaceuticals) to rise 3.7% in 2018, further accelerating to a 3.9% growth in 2019. The growth is expected to be spurred by higher demand across light vehicles and housing markets, capital investments and improved export markets.
The trade group also expects basic chemicals production to expand 4.7% in 2018 and further gain steam with a 5.2% rise in 2019 on the heels of new capacity additions. Major export markets such as Latin America and Asia are expected to play a significant role in production growth.
The United States remains an attractive investment destination for chemical investment and domestic chemical makers continue to enjoy the advantage of access to abundant and cheaper feedstocks and energy. This is driving investment in chemical production projects.
Per the ACC, roughly 320 chemical projects have been already announced worth more than $185 billion, 62% of which is foreign direct investment. Moreover, roughly 65% of the chemical investment announced since 2010 are complete or under construction. New capacity is expected to provide a boost to chemical production as these investments come on stream.
The ACC also expects chemical industry capital spending to rise 6.3% in 2018 and 6.8% in 2019 and eventually reach $48 billion by 2022.
Moreover, the ACC sees improving export markets to contribute to solid growth of the domestic chemical industry. Strengthening export markets and increasing capital spending are driving chemical demand across key end-use markets such as light vehicles and housing.
https://www.zacks.com/stock/news/287149/us-chemical-output-up-in-november-on-recovery-from-hurricanes