A MARKET UPDATE for DECEMBER 2010

Special Message:

The Christmas and Holiday Season is a special time for all of us. It is a time to reflect, to spend time with friends and family and to give thanks for all of our blessings. TCC would like to thank our dedicated employees, customers and suppliers for all of your support throughout 2010. We are truly blessed to have such wonderful friends in the chemical industry. Thanks to your support we have enjoyed the success that brings happiness and security for the TCC family.

We pray for those worldwide who are facing difficult times during these tough years. We hope that the economy will expand and allow those who have been affected to find opportunity and a positive future.

Best wishes for a safe, healthy, and enjoyable Christmas and New Year Celebration.

Spanish:
Las fiestas navideñas son un momento especial para todos nosotros. Es un tiempo para reflexionar, pasar tiempo con familia y amigos, y sobre todo dar gracias por todas nuestras bendiciones. TCC da las gracias a sus trabajadores, clientes y proveedores por todo su apoyo durante el 2010. Estamos bendecidos por tener tan buenos amigos en la industria química. Gracias a su apoyo, hemos tenido un año exitoso que trae felicidad y confianza para la familia TCC.

Oramos por todos aquellos que en el mundo que están pasando tiempos difíciles. Esperamos que la economía mejore para que aquellos afectados tengan la oportunidad de encontrar un futuro prospero. Esperamos que el 2011 sea un año de recuperación y de bienestar para todos.

Les deseamos unas fiestas de fin de año seguras, saludables y agradables.

Portuguese:
As férias são um tempo especial para todos nós. É um tempo para refletir, passar tempo com a família e amigos e, sobretudo, dar graças por nossas muitas bênçãos. TCC gostaria de agradecer a seus dedicados colaboradores, clientes e fornecedores pelo apoio ao longo de 2010. Estamos verdadeiramente abençoada por ter amigos tão maravilhosos na indústria química. Graças ao seu apoio, temos tido o sucesso que traz felicidade e segurança para a família do TCC.

Nós rezamos por todos aqueles que eo mundo estão passando por momentos difíceis. Esperamos que a economia melhore, para que os afectados têm a oportunidade de encontrar um futuro próspero. Desejamos que 2011 seja um ano de recuperação e bem-estar para todos.

Nossos melhores votos de um Natal agradável, seguro e saudável.

TCC News:

TCC is excited to be exhibiting at the Informex 2011 in Charlotte, NC. Please feel free to stop by and visit us at booth 2140.

We look forward to seeing you in Charlotte!

Be sure to follow us on our new facebook page


Myriant Technologies reports that they are staying on track to meet the full scale production goal of Q1 2012 for bio- based succinic acid. Due to the limited availability and extreme price of Adipic Acid many users in both technical and food applications are looking at this bio-based alternative.

Biobased Succinic Acid

Habla Español??? The TCC website is now in Spanish!

Events:

February 7-10, 2011 InfomexUSA 2010
Charlotte, NC
March 27 – 29, 2011 NPRA/ International Petrochemical Conference
San Antonio, TX
October 1-5, 2011 EPCA Berlin
Germany

Downloadable Brochure

click here to download/view

Products In Transit/ Available Soon

Melamine Crystal 25 Kg. Bags (In stock and available now!)

2- Hydroxyethyl Methacrylate Drums( In Stock! )

2- Hydroxypropyl Methacrylate Drums

Succinic Acid Small Bags

Malic Acid Small Bags ( In Transit )

90% Phenol Drums (Available Now!)

Fumaric Acid Big Bags (In Stock and Available Now!)

Maleic Anhydride Briquettes (In Stock and Available Now!)

Citric Acid (In Stock and Available Now!)

Acetyl TriButyl Citrate (In Stock and Available Now!)

Adipic Acid 25 Kg., 500 Kg. and 1,000 Kg. Bags (In Stock and Available Now!)

New/ Updated Technical Information (hyperlinked):

Antimony Trioxide

Citric Acid

Epoxidized Soybean Oil

Succinic Acid

Malic Acid

Fumaric Acid

Tartaric Acid

New Products:

Melamine Crystal is an organic compound that is often combined with formaldehyde to produce melamine resin, a synthetic polymer which is fire resistant and heat tolerant. Melamine resin is a very versatile material with a highly stable structure. Uses for melamine include whiteboards, floor tiles, kitchenware, fire retardant fabrics, and commercial filters. Melamine can be easily molded while warm, but will set into a fixed form. This property makes it ideally suited to certain industrial applications.
Spec:Melamine Crystal

Succinic Acid is a dicarboxylic acid comprised of four carbon atoms. The chemical is produced as a colorless crystalline solid and is used in the drug, agriculture, food products, and other industries.
Spec: Succinic Acid

NP500 Non- Phthalate Plasticizer Non-phthalate plasticizer to replace general purpose phthalate plasticizers like DOP, DOTP and DINP. Drums, Totes and Bulk Available.
Spec: ChemFlexx NP500

NP600 Non- Phthalate Plasticizer Non-phthalate plasticizer to replace the general purpose phthalate plasticizers DIDP. Drums, Totes and Bulk Available.
Spec: ChemFlexx NP600

NatureFlexx 509 100% Phthalate Free General Purpose Plasticizer! This high molecular weight plasticizer is an excellent, phthalate free replacement for general purpose phthalate plasticizers like DINP, DOP, DOTP, Etc. Drums, Totes and Bulk Available.
Spec: NatureFlexx 509

Malic Acid A suttle and persistent sour in food applications as well as an excellent acidulant. New technical applications are being discovered as well. Food and Technical Grade material is in stock and immediately available. Packaging is 25 Kg. Bags, 2,000 lb. Supersacks and a 50% solution.
Spec: DL Malic Acid

Please contact Robb Roach at robb@thechemco.com or Tel: (401) 423- 3100 for more information.

We appreciate your taking the time to review this newsletter. We welcome your comments as well as contributions regarding our readers’ company/industry activities. Please send them to Bob Beavins at chemcobob@comcast.net

**Please note that all products are now in Alphabetical Order and many products are hyperlinked to their own information page.**

Critical Raw Materials Markets

At the end of each paragraph you will notice a symbol and the meaning of these symbols are as follows:

+ Denotes upward pricing momentum
\ Denotes stable pricing momentum
– Denotes downward pricing momentum

Benzene
US December Benzene contract settled down $.14/ gallon to $3.28/ gallon (November $3.42/ gallon). Spot prices are currently in the$3.58-3.63/ gallon range. +

Natural Gas
Natural gas in underground storage hit an all time high in early November. In response to recent cold weather, spot prices have increased significantly, especially New York and Florida. The Henry Hub spot price was reported at $4.46/MMBtu. +

Oil
Oil continues to increase. Current spot prices in the $90/bbl range; futures are similar. +

Orthoxylene
December contracts settled at $.51/lb, a rollover from November. \

Propylene
November contracts were down $0.01 from October at $.56/lb for chemical Grade and $.575/lb. for polymer grade. December settlements are showing an increase of $0.03/lb, advancing chemical grade to $.59/lb and $.605 for polymer grade. +

Chemicals Markets

Adipic Acid:
Rhodia’s integrated Adipic Acid Plant in Chalampe, France had a mechanical failure in early December due to a utilities outage. This has forced them to declare force majeur. This outage is expected to last 3 weeks, to a month and has put the pressure back on an already under supplied market especially in Europe. AA pricing has pushed higher and further increases are expected for Q1 of 2011. There is growing cost pressure from Benzene values as well. +

Ammonia:
December business for Tampa was fixed at US$460/ metric ton. This is down just $10/ metric ton from November. Most were predicting a much larger drop. -/

Ammonium Nitrate:
Low density AN prices are currently stable with good demand. Pricing could quickly change once we reach peak demand season in the Spring. Rationalization and ammonia cost will keep pressure on this commodities pricing. /

Antimony Trioxide:
Antimony prices have once again come under pressure yet buyers are cautious to inflate inventories. Buyers are reporting record pricing in excess of US$5.00/ lb. and moving higher. Most industry experts feel US pricing will continue to be under pressure in Q1. Many consumer are currently looking at alternative chemistries. +

Dicyandiamide:
Prices are moving up very quickly based on electricity cost and governmental pressure to cease production. The major driver for Dicyandiamide cost is electricity and this cost has jumped. There is also pressure from the Chinese Government to stop Dicyandimaide production due to its ill effects on the environment. ++

Epoxidized Soybean Oil:
Soy Bean Oil pricing has increased substantially in 2010 with the majority happening only in the last few months. This cost pressure has matriculated into ESO pricing with several price increases and more expected in Q1. +

Fumaric Acid:
FA Pricing has pushed higher over the last two months and butane values continue to keep cost pressure. Global operating levels have improved. Look for higher pricing in Q1 2011. +

Glycol (Mono, Di and Tri):
MEG – US producers and Traders announced a $.05- $.08/ lb. increase for December. This increase puts benchmarks for December at US$.57- $.61/ lb. from US$.52- $.54/ lb. in November. +

DEG inventories are improving due to a seasonal slow down in demand. Spot pricing for November was in the US$0.56-0.57/lb range. December postings are pegged at US$.69- $.72/ lb. /

Triethylene Glycol price increase announcements for December were from US$.03- $.06/ lb. with one producer electing to roll. Benchmarks range from US$.93- $.98/ lb. The cold weather has been slow to settle into the lower 48 hence increased demand has been slow to matriculate. +

Isophthalic Acid:
Pricing has leveled and availability has improved. Some imports are available at slightly lower pricing. /

Maleic Anhydride:
Cost increase from feedstock Butane has pressured at least one producer into announcing a price increase for December. Demand is typically slow during Q4 and supply is not an issue. Ashland has bought back the Marathon Petroleum MEA plant in Neal, WN that they sold to Marathon in 2005. +\

Malic Acid:
Malic Acid supply remains tight. Cost pressure from feedstock butane is also an issue. TCC has Malic Acid in stock and available. ++

Melamine:
Melamine availability remains an issue. Pricing is also under pressure from escalating Urea cost. Global operating issues and feedstock costs have motivated price increase announcements for Jan 1, 2011.+

Methanol:
The Methanex Non-Discounted Reference Price for December increased by 0.05/gal to US$1.38/ gallon. The increase was based on higher global values, global production issues/ scheduled outages and good demand. Spot has not yet responded to the increased demand with barge offers currently in the $1.09- $1.10/ gallon range. A decrease in contract pricing is expected for January 2011. /

Notes:

  • The EMethanex plant in Egypt is in the commissioning stage. Commercial quantities are expected in Q1 2011.
  • Since early December the Point Lisas complex in Trinidad has had a 20% reduction in natural gas availability which is expected to last approximately 10 days.
  • Pemex (Mexico) has restarted their 260,000 ton plant that has been idled since 2008.
  • Demand in North America, Europe and Asia is all pegged as good.
  • The new Metor 2 plant in Venezuela is producing commercial quantities of on-spec methanol.
  • The Obama Backed Tax Legislation, if passed, contains language that retroactively extends the $1.00/ gallon tax credit for biodiesel.
  • Nitric Acid:

Nitric Acid pricing is under pressure due to increased ammonia cost. Demand is good. Price increase announcements are noted for January 2011. +

Phenolic Resins:
Pricing is under pressure due to underlying feedstock costs. Demand is improving. Pricing is under pressure and will likely increase in Q1, 2011. +

Phthalic Anhydride:
Orthoxylene contract pricing has rolled for December. Despite the roll one phthalic anhydride producer has elected to increase pricing for January 2011. +

Plasticizers and Plasticizer Alcohols:
Plasticizer pricing is under pressure from underlying feedstock costs. (i.e. propylene, ethylene, phthalic anhydride)

Increases are noted for Jan 1, 2011 for all general purpose, specialty, non-phthalate and phthalate free products.

Branched and Linear alcohols supply has improved but remain tight, especially 2-EH and Isononyl Alcohol. +

Note: Many plasticizers have limited availability. Please contact TCC for further details.

TCC Plasticizers available:
Non- Phthalate:

 

Phthalate:

 

Styrene monomer:
Styrene pricing moved slightly lower in December but the recent higher spot pricing on benzene points toward a much higher price in January. \+

Urea:
Urea prices are once again pushing higher on excellent demand and lack of availability. Prices have increased for November as well as December. Now a new round of increases isnoted for January. Demand is expected to continue especially from corn farmers so a steady level of imports will be necessary to meet this demand. +

Notes:

  • North Amercia is expected to plant 90 million acres of corn in 2011. Corn is heavily fertilized.
  • Venezuela’s Fertintiro Ammonia/ Urea plant is down. BR>
    Urea demand for Diesel Exhaust Fluid is expected to significantly increase over the next two years.

For more information on these or any of the products and services provided by TCC please contact Robb Roach directly at Robb@thechemco.com or go to our web site at thechemco.com

Chemical Industry News

DOP (DEHP) has been registered for use under REACH in all current uses including medical devices. However, because the plasticizer is classified in Europe as a Substance of Very High Concern, the continued use of DOP beyond January, 2015 will require authorization. Manufacturers are expected to begin the approval process as soon as the European Chemicals Agency (ECHA) finalizes details of the process.

The deadline for submission of registration documents and evidence to the ECHA for compliance with REACH legislation was November 30, 2010. From December 1, any chemical producer or importer of materials over 1,000 tonnes per year will be operating illegally if they have failed to comply.

As of December 8, Rhodia’s Chalampe, France plant declared force majeure affecting production of KA oil, adipic acid, nylon salt and polymer.

Arkema announced that it is acquiring the coatings resin business of Cray Valley and Cook Composite Polymers as well as the photocure resins business of Sartomer from Total Specialty Chemicals. The cost of the acquisition was reported as €550 million.

BASF has signed a memorandum of intent with Petrobras for a joint feasibility study on the production of products such as INA and other specialty items in Indonesia. The study is expected to be complete by the end of 2011, and initial investment is estimated at €1 billion. BASF is also setting aside at least $2.6 billion for investment in Asian sites by 2014, with the majority slated for Chinese ventures. The company reported third quarter net profit of $1.7 billion.

WackerChemie has reported an increase in third quarter net profit to €155 million from €36 million in the same period last year. Sales for that same period rose 28%.

Celanese Corp. plans to spend approximately $350 million on two coal-to-ethanol facilities in China. The company said that it would use propriety technology to produce 400,000 tons of ethanol annually at each of the plants.

Procter and Gamble plans to eliminate the remaining polyvinyl chloride (PVC) from its product packaging in the next few years as part of its 2020 goals. P&G has been gradually reducing PVC content in its plastic packaging.

October average operating rate for the chlor-alkali industry fell to 80%, compared to 91% in September. The industry’s operating rate average was 79% in October, 2009.

Plastic bottle recycling reached almost 2.5 billion pounds in 2009, up 2% from 2008 according to a recent report by the ACC and the Association of Postconsumer Plastic Recyclers.

Bisphenol-A (BPA) debate goes on. Canada recently became the first government in the world to declare it toxic. It has been banned from baby food packaging and polycarbonate baby bottles and critics of the chemical want Canadian authorities to ban it for all food and beverage cans. Opponents of such legislation have stated that BPA used in can liners prevents food-borne illness such as botulism. A November report issued by the American Chemical Society stated that traces of BPA in both fresh and canned food as well as wrapped food packaging are almost 1,000 times lower than the standards set by the EPA and the European Food Safety Authority. The World Health Organization has stated that it would be premature to initiate measures to manage potential risks to public health from BPA.

A bipartisan Senate effort led by Sen. Diane Feinstein to limit the use of BPA by adding it to the Food Safety Bill was dropped. The major concern is its use in children’s food and drink containers. At the same time, the European Commission approved a plan to restrict BPA as an ingredient in the manufacture of polycarbonate bottles starting in March 2011 and to ban their import in June.

Archer Daniels Midland announced that it offers isosorbide, a corn-based product that is a potential alternative to BPA. It is not yet approved for food contact use.

For the second time in three months, on October 29, the Environmental Protection Agency has put off deciding whether to adopt the tougher smog standards proposed by Administrator Lisa Jackson. The decision has been delayed indefinitely. The agency has also decided to delay until January a decision whether gasoline blended with up to 15% ethanol is safe for 2001 – 2008 cars and light trucks.

Some House Republicans have floated the possibility of using the Congressional Review Act, a legislative option to veto agency regulations, to halt the EPA’s climate change regulations.

In July, President Obama signed the Formaldehyde Standards for Wood Products Act into law, setting nationwide limits for formaldehyde emissions from composite wood products including hardwood plywood, particleboard, and some grades of fiberboard. Some of the new standards will take effect as early as July 2011. The law will be enforced by the EPA and is similar to one in effect in California. It will affect a wide range of everyday products from DIY materials to flooring and paneling, and even picture frames. As a result, every US retailer, distributor and manufacturer that sells, supplies or manufactures any of these products will be impacted.

Republicans plan to eliminate the House Select Committee on Energy Independence and Global Warming, which was created in 2007 by the present Speaker to examine climate change and press for possible caps on CO2 emissions. Climate change matters are overseen by the House Energy and Commerce Committee. The Select Committee didn’t pass legislation but did hold hearings, will cease in the new Congress.

An advisory panel tasked to review the EPA’s efforts to impose tighter dioxin regulations has found that “an overwhelming scientific consensus” points to the EPA’s methods of assessing dioxin risk as being scientifically flawed. Analysts and chemical companies are concerned about additional cleanup expenses as a result of these efforts.

The National Safety Council recognized Dow Chemical’s advances in health, safety, and environmental consciousness by honoring the company with the Robert W. Campbell Award. In 1996, Dow started a program to reduce injuries and illnesses within its workforce, as well as to minimize accidents in chemical transportation and plant operations.

In a move to increase its presence in the US plastics market, DAK Americas, a unit of Mexican conglomerate ALFA is buying three plants from Eastman Chemical for $600 million. The major product manufactured is PET.

A report from the American Chemistry Council stated that capacity utilization rates in the global chemistry sector were as high as 92%- 94% in 2003 – 2008, falling to 77% during the depth of the economic downturn. The sector has recovered, but only to the levels of 2003 as production remained flat in some key markets.

The ACC remains committed to updating the Toxic Substances Control Act of 1976 and to working with the Congress in the upcoming session. According to ACC data, US chemistry exports for 2010 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.

Evonik Industries intends to build a new methyl methacrylate (MMA) using the company’s Aveneer process for the first time. Capacity has been estimated at 150,000 – 200,000 MT/year with start-up in 2014.

LG Chem Ltd., South Korea’s biggest chemicals producer has bought out LG Dow Polycarbonate Ltd., a joint venture with Dow Chemical. No details of the purchase were given. In 2009, the company reported $325 million in revenue. LG Chemicals projects a significant 2011 increase in battery orders from GM as sales increase for GM’s Volt electric car.

Former Vice President Al Gore said that support for corn-based ethanol in the US was “not a good policy” weeks before tax credits are up for renewal. The $.45/gallon subsidy on corn ethanol is due to expire on December 31, as is the $.54/gallon tariff on cheaper imported ethanol. If the Congress does nothing it’s estimated that the public will save $6 billion. Opposition to extending subsidy and tariff also comes from meat and food producers, environmental groups, and consumer organizations. Their argument is that corn ethanol production drives up the cost of food. The Senate version of the White House-GOP tax deal preserves these multiple subsidies.

Brazilian energy company Petrobras and Danish enzymes producer Novozymes have established a partnership to develop new methods of producing biofuels from sugarcane bagasse.

Brazil’s Braskem plans to start production of “green” propylene made from sugarcane-based ethanol in the second half of 2013. The investment is estimated to be $100 million, resulting in a minimum capacity of 30,000 tonnes per year.

Shell and Russia’s Gazprom recently signed an agreement on strategic global cooperation. Opportunities to be considered are further hydrocarbons exploration and production, cooperation in the downstream oil products business in Russia and Europe, and Gazprom participation in Shell upstream projects outside of Russia.

Germany’s EON, the world’s largest private utilities group, announced a major shift away from Europe and toward emerging markets in order to restore sagging profits. The company’s annual sales are €80 billion.

Germany’s exports now account for 48% of GDP, reflecting a gain in competitiveness. GDP growth is expected to be 3% this year due to rapid growth in emerging markets.

China’s foreign currency reserves, the world’s largest, may be as high as $2.5 trillion. Currency holdings increased approximately $48 billion in the third quarter. These figures give more ammunition to those who call for a rapid appreciation of the Chinese yuan. China’s economic growth unexpectedly accelerated in the third quarter, showing GDP increase of 9.6% over the same period a year earlier. Chinese CPI increased 4.4% over a year earlier in October.

China’s total consumption of crude oil is expected to increase by 11% in 2010 on a year to year basis.

A newly sealed trade deal with South Korea, which requires Congressional approval, would be the largest since the North American Free Trade Agreement with Canada and Mexico in 1994. The pact must also be approved by South Korean legislators.

Halliburton started voluntarily naming the chemicals that it uses in hydraulic fracturing, or fracking, by establishing a website that the company claims shows the three most used chemical fracking solutions in Pennsylvania. The company stated that the website was not intended to fulfill the EPA’s request for company-specific information.

The US law banning ordinary incandescent light bulbs has had a negative impact on the American economy; GE has closed its last major bulb producing factory in the country. The compact fluorescent lights (CFL) are an inexpensive alternative but the manufacture is labor intensive and too expensive for US wage rates. CFL’s are manufactured in China and increasing American demand is expected to create new jobs there. The CFL’s contain small amounts of toxic mercury. Three members of Congress have introduced a bill that would repeal the ban.

On October 25 the EPA and the Department of Transportation issued the first ever national standards to reduce greenhouse gas emissions and to improve fuel efficiency of heavy duty trucks and buses. They address combination tractors, heavy-duty pickups and vans, and recreational vehicles.

UPS reported third quarter revenue of $12.9 billion, an increase of 9.3% year to year. Operating profit for the same period was up 74% at $1.6 billion. UPS announced rate increases averaging 4.9% effective January 3, 2011. UPS rates for 2011 will include a net increase of 4.9% for ground and air shipments. Also effective January 3, 2011 divisor used to calculate dimensional weight will change.

FedEx recently announced rate increases for FedEx Ground and FedEx Home Delivery units by an average of 4.9% which will take effect on January 3, 2011.

The US Postal Service reported that it had a net loss of $8.5 billion for the fiscal year which ended on September 30.

The Association of American Railroads reported that October monthly carloads were up 8.7% from October 2009, but down 7.9% from the same month in 2008. Intermodal shipments continue to increase, showing a gain of 14% October, year to year.

The US Chamber of Commerce issued Transportation Performance Indexes which indicate that there has been a significant decline over the past five years in how America’s transportation infrastructure serves domestic commerce, international trade, and the overall US economy.

The Economy

A US government deficit of $140.0 billion was reported for October, close to CBO estimates. The deficit in November was $142 billion, $22 billion more than the same period a year earlier. The federal budget deficit for the first two months of fiscal 2011 has been estimated by the CBO at $283 billion, $14 billion less than the comparable period in 2009.

In its most recent survey, the National Association for Business Economics projects a sluggish economic recovery. Projections for real GDP growth remain sub-par through the first quarter of 2011, but accelerate gradually through the rest of the year. The NABE survey panel projects GDP growth of 2.6% in 2011.

The National Retail Federation reported a “Black Friday” spending increase of 9% year to year. Higher traffic and increased average spending made the weekend called a complete success by the NRF.

An Associated Press survey of leading economists shows that the economy will improve only slightly next year. Some now think that the unemployment rate won’t drop to a historic norm of ~6% until at least 2018 as employers remain cautious.

On or about January 1, 2011, federal, state, and local tax rates are expected to rise sharply. President George W. Bush’s tax cuts expire on that date, meaning that the federal income tax rates, dividend taxes, and capital gains taxes will all go up significantly. President Obama and Republican leadership reached a compromise to avoid this, which has been opposed by some members of Congress. As of this edition of The View from Jamestown, Congress is attempting to resolve the issue before year end.

The Conference Board’s Leading Economic Index increased 0.5% in October following an adjusted 0.5 % increase in September and a 0.1% increase in August. The index continues on an upward trend.

The Conference Board Consumer Confidence Index which had improved in October increased further in November. It stands at 54.1 (1985=100) up from 49.9 in October. Analysts state that consumer confidence is at its highest level in five months.

The Institute for Supply Management’s Manufacturing Index registered at 56.6% in November, a benefit from the recovery in autos. In the non-manufacturing sector the index was reported as 55.%. They continue to show slow growth.

In October, retail and food services sales adjusted for seasonal variations increased 1.2% from September and were 7.3% above a year earlier. Total sales for the August – October 2010 period were up 6.3% from the same period a year ago.

Privately owned housing starts in October of 519.000 were 11.7% below the revised September estimate of 588,000 and1.9% below the October 2009 rate of 529,000. Single family housing starts in October were at a rate of 436,000 or 1.1% below the revised September figure of 441,000.

New orders for manufactured durable goods in October decreased $6.8 billion or 3.3% to $196.0 billion. This decrease, down two of the last three months, followed a September increase of 5.0%.

October unfilled orders for manufactured durable goods increased $5.4 billion or 0.7% to $821.9 billion and followed a 1.4% September increase. This indicator has been up nine of the last ten months.

Consumer Price Index increased 0.2% in October. In the last twelve months, the index for all items increased 1.2% before seasonal adjustments. During the same period, the index for all items less food and energy rose 0.6%, the smallest twelve month increase in the history of the index which dates to 1957.

Interest rate: Prime at 3.25%, unchanged since 12/16/08.

Inflation: Annual inflation rate was 1.1% for October, expected to average 1.5% in 2011.

Unemployment: November 9.8% after 9.6% in each of the previous three months.

Trade Deficit: For September 2010 the goods and services deficit decreased to $44.0 billion from an adjusted $46.5 billion in August as imports decreased and exports increased.

Crude Oil: Currently trading in the $90’s/bbl, range. Global oil demand for 2011 is forecast at an increase of 1.6% over 2010. US inventories continue high. OPEC’s annual report estimated that crude oil demand levels of 2007 will not be reached again until 2011.

Natural Gas: Pennsylvania sits atop the Marcellus shale gas basin, which is estimated to hold enough reserves to meet US demand for more than a decade. New legislators in the state capitol are expected to lower a recently enacted tax on gas producers. An estimated 44,000 jobs have been added by Marcellus development. Coal power generation is at risk because of the cleaner natural gas opportunity.

Industrial production was unchanged in October after a decrease of 0.2% in September; earlier data had shown a September increase. Capacity utilization rate for total industry in October remained at 74.8 %, up 6.6% from the low in June, 2009 and 5.8 % below 1972 – 2009 average.

The Bureau of Economic Analysis second estimate of third quarter Gross Domestic Product showed a gain of 2.5% from the second quarter. This compares to an increase of 1.7% in the second quarter.

The US dollar trading at 80.9 yen. $1.33 = euro. The British pound sterling = $1.58.

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