Strong global growth prospects, rising exports, increased manufacturing, balanced inventories, healthy demand, and sufficient, inexpensive shale gas combined suggest positive growth this year for the U.S. chemical industry, the American Chemistry Council’s mid-year outlook states.
“The U.S. chemical industry continues to enjoy a competitive advantage from robust supplies of shale gas and natural gas liquids (NGLs), leading to significant investment in new capacity and capital spending that will continue to grow through 2023,” ACC reported.
“During 2018, output gains are expected to be strongest in agricultural chemicals, consumer products, coatings and bulk petrochemicals and organics,” the Mid-Year 2018 Chemical Industry Situation and Outlook states.
“In addition, production of plastic resins is set to grow at the fastest pace since 2012, as new capacity comes online and demand firms for domestic customers and those abroad. The specialty chemicals segment is also set to grow as industrial activity improves.”
Broad gains in U.S. manufacturing, construction and export markets bode well for growth, according to ACC. U.S. chemical production is expected to expand 3.4% in 2018, and 3.6% in 2019, Kallanish Energy reports.
“Over the next 18 months, we expect solid growth across multiple chemical sectors, especially fertilizers, crop protection, coatings, consumer products, and petrochemicals,” the Outlook states.
Longer-term, America’s chemistry industry continues to expand, ACC believes. The economics of shale gas has fostered new investment and growth in capacity, which is beginning to come online.
Chemical production is expected to continue to increase across all regions of the U.S. during 2018, with the most dynamic growth occurring in the Gulf Coast region, followed by the Midwest and Ohio Valley regions. American chemistry revenues will exceed $700 billion by 2023.
“Due to the U.S. chemical industry expansion and strong demand from foreign markets and domestic manufacturers downstream, total two-way U.S. chemicals trade is expected to grow 6.2% this year, to $241.0 billion following a 6.0% gain in 2017,” the report notes.
“Driven by the basic chemicals sector, U.S. chemicals exports will grow 7.2% this year, to $139.2 billion. At the same time, imports are projected to rise 4.9%, to $101.8 billion by the end of this year. The trade surplus in chemicals is projected to reach 71.4 billion by 2023.”
All data excludes pharmaceuticals.
