Improved outlook for US chemicals
The outlook for the US chemicals manufacturing sector
is improving gradually and global production is set to increase
in the coming year, thanks in part to dramatic growth in export
markets for the products of chemistry, according to a report
from the American Chemistry Council (ACC).
For 2010, US chemistry exports will be up by 17%, shifting the
trade balance for the industry from a $0.1 billion deficit to a
$3.7 billion surplus, its best performance in 10 years. The
growth in export markets also has partially offset soft
domestic demand for chemical products.
Domestically, chemical production volumes have increased across
all regions of the US in 2010 following steep declines in 2008
and 2009. The largest gains have occurred in the Gulf Coast and
Ohio Valley regions, boosted by export demand for basic
chemicals and plastics. Output is expected to grow moderately
in all regions in 2011 and continue to improve through
Growth in export markets is driven by several factors,
including favorable energy costs, resulting from developments
in extracting natural
gas from shale; and growth in emerging markets, where
recovery, and now expansion, has been strongest.
US natural gas markets have seen a dynamic shift over the past
five years as a result of increased capacity to extract natural
gas from organic shale deposits. Reserves have risen by
one-third, resulting in lower prices and greater availability
of ethane, a feedstock material derived from
natural gas that is the basis for hundreds of manufactured
products. This low price for natural
gas compared to oil has enabled US chemicals manufacturers
to become more competitive than producers in much of the rest
of the world.
Growth in emerging markets, most notably in China, India and Brazil, is increasing
demand for chemistry feedstock materials. Production of
chemistry products in emerging economies increased by 12.2% in
2010, and further gains are expected.