A MARKET UPDATE for July, 2012

THE VIEW FROM JAMESTOWN”
A MARKET UPDATE for
July, 2012
From
THE CHEMICAL COMPANY.

Contact:
The Chemical Company
P.O. Box 436
44 Southwest Ave.
Jamestown, RI 02835
Phone: (401) 360-2800
Website: thechemco.com
Email: Info@thechemco.com

Special Message:

The Chemical Company has a new website!! thechemco.com

Not only is it a new look and feel but there is much more information than ever!

The TCC website has always been at the forefront of our industry and our new site continues this legacy. We have a commodities bar on our homepage, a translator for most languages, easier movement within the site, a large and growing “featured chemicals” list and much, much more.

Our featured chemicals list for example includes product information, applications, specifications and ordering and transport information. We encourage you to visit it at: https://thechemco.com/chemicals/featured/

Please keep in mind this page does not include all of TCC’s products, but the list is growing daily.

The site will continue to include our free publication “The View from Jamestown.” The subscriptions to this publication continue to grow and the feedback from our customers, suppliers and friends is overwhelming. Please keep it coming!

As always we appreciate your business and interest in The Chemical Company. We work hard every day to improve how we do business to benefit our customers and suppliers. Our goal is to provide our customers with the most competitive, safe and service oriented chemical supply possible.

We hope you are enjoying the Summer season to our friends in the Northern Hemisphere and the Winter to our friends in the Southern Hemisphere.

Quote of the Month:

A man is not judged by what he drives, or how sharp his sword is. He is judged by his actions and his heart.”

Jamestown Resident Pio Moretti

When your children are teenagers, it’s important to have a dog so that someone in the house is happy to see you.”
Nora Ephron, quoted in NYTimes.com

A man should not be judged by the

From Icis Magazine (Page 77) w/o July 16, 2012

TCC Videos:

http://www.vimeo.com/24834423

http://vimeo.com/38459394

http://vimeo.com/38459041

Upcoming Events:

EPCA 46th Annual Meeting 2012

6 – 10 October 2012 – Budapest

Please contact Robb Roach at Robb@thechemco.com for an appointment.

 

Links and Social:

Want to exchange links?? Contact us!

For immediate updates on Chemical Industry News be sure to follow us on Twitter @thechemicalco or our facebook page here: 

We are also on Twitter @thechemicalco

Habla Español??? The TCC website is available in multiple languages!

TCC Downloadable Brochures:

The Chemical Company Brochure
TCC Plasticizers and Plastics Additives
Iron Oxides
Composites
Flame Retardants


New Products In Stock

Tetrabromo Phthalic Anhydride: TCC now offers TBPA in Small Bags (25 Kg.) and Supersacks (2,000 lb.)

Zinc Borate:TCC now offers Zinc Borate in 25 Kg. Bags

Malic Acid: 25 Kg. Bags (In Stock and Available Now!)

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

Products In Transit/ Available Soon

Neo- Pentyl Glycol (NPG) 500 Kg. Sacks

Tetrakis-(hydroxymethyl)-phosphonium chloride 2200 lb. Totes

Bio- Succinic Acid 2000 lb. supersacks and 25 Kg. Bags

Antimony Trioxide High Tint, Supersacks

New/ Updated Technical Information (hyperlinked):

Antimony Trioxide

ATBC – Nature-Flexx 509

Chemflexx 206

Chemflexx DOA

Chemflexx TOTM

Citric Acid

Dicyandiamide

Diisononyl Phthalate

Epoxidized Soybean Oil

Fumaric Acid

Malic Acid

Methanol

Succinic Acid

Tartaric Acid

Urea

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.**

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

CRITICAL RAW MATERIALS MARKETS

Benzene U.S. benzene contracts for July settled higher to US$4.30/ Up $.19/ gallon from US$4.11/ gallon in June. Spot prices are in the $5.10’s/ gallon. +

N Butane Butane prices remain in the $1.30’s per gallon. Current pricing in the $1.35- $1.38/ gallon range.

Ethylene U.S. Contract Price for June decreased by $.0725/ lb. to $.39/ lb. Current spot is in the Upper $.40’s so we expect an increase for July. -/+

Natural Gas Natural Gas pricing has escalated for most of June and throughout July. Pricing is now threatening to break $3.00/ mmbtu. +

Oil Crude Oil pricing has escalated dramatically in July. Current WTI Crude price is at $92.40/ barrel range and moving up. +

Check thechemco.com for up to the minute info.

Orthoxylene July contracts settled $.05/ lb. lower at $.59/ lb. Aromatics are dirving price and we expect an increase of $.03- $.05/ lb. for August. -/ +

Propylene July contracts settled as a roll from June at $.52/ lb. for Polymer Grade and $.505/ lb. for Chemical Grade. /+

CHEMICALS MARKETS

Adipic Acid: Adipic Acid pricing is expected to climb on strengthening benzene. Also there is considerable risk of outages during the Atlantic hurricane season due to the locations of major producers. Building inventory is recommended. +

For more information please contact Robb

Roach at robb@thechemco.com

Ammonia: May pricing in Tampa has increased again and substantially up $65/ ton to $690/ ton. Tampa is trading at $690- $710/ ton and NOLA at $655/ ton. +

For more information please contact Robb

Roach at robb@thechemco.com

Ammonium Nitrate: Ammonium Nitrate producers announced a $45/ ton increase for July due to increased feedstock costs and limited availability. The major feedstock ammonia continues to move up on agricultural demand. Demand remains very good. +

For more information please contact AJ Petrarca aj@thechemco.com

Antimony Trioxide:     

Demand for antimony trioxide remains relatively weak and pricing has moved lower by $100/ ton recently. Current offers remain barely in excess of $5.00/ lb. Buyers continue to keep inventories to a minimum and use alternate chemistries where possible.

For more information please contact AJ Petrarca aj@thechemco.com

Dicyandiamide:       

Pricing has strengthened on energy costs in China.  Normal seasonal pressures due to increased energy demand are pushing prices higher.  Product is in stock and immediately available.

For more information please contact AJ Petrarca aj@thechemco.com

Epoxidized Soybean Oil: Soybean prices have pushed up dramatically due to a major draught in North America. Despite competitive offers of eso from new market players and imports, most U.S. Producers are pushing for higher pricing on ESO. With the soy bean prices approaching $1700 cbot and very little rain relief there will likely be further strengthening in price. +

For more information please contact Robb Roach robb@thechemco.com

Fumaric Acid: FA Pricing has pushed slightly lower. Lower Butane pricing and lower priced import offers are now affecting Fumaric pricing.

For more information please contact AJ Petrarca aj@thechemco.com

 Glycol (Mono, Di and Tri):

June Ethylene Contracts settled at US$.39/ lb. Down 7.25 cts from May. Spot is trading in the upper $.40’s per lb.

MEG – North America producers have announced a 2 cts/ lb. increase for August. Benchmarks for August will be in excess of $.60/ lb. +

DEG- DEG price increase of $.03- $.05/ lb. have been announced for August. +

TEG- Seasonally slow demand continues. Buyers are seeking low US$.60’s per lb. and sellers are in the upper US$.60’s per lb. /

For more information please contact Robb Roach at

robb@thechemco.com

Isophthalic Acid:

PIA pricing has moved down by US$.03/ lb. for June in response to lower raw material costs. Supply and demand remain stable. /

For more information please contact Robb

Roach at robb@thechemco.com

Maleic Anhydride:

The Maleic Anhydride market is quiet and demand is seasonally slow. Supply is balanced to long in North America. Prices have declined $05- $.08/ lb. on lower butane values. –

For more information please contact AJ Petrarca aj@thechemco.com

Melamine:    

Melamine supply is long world-wide on massive new capacities in Trinidad and Qatar but raw material pricing has pushed prices higher. Increases of US$.08/ lb. + are noted despite robust availability. +

For more information please contact Javier Fernandez  Javier@thechemco.com 

Malic Acid: Malic Acid pricing has been pressured and retreated slightly on lower butane values and good availability. TCC has Malic Acid in stock and available.

For more information please contact AJ

Petrarca aj@thechemco.com

Methanol: The Methanex Non-Discounted Reference Price for July has declined US$.06/ gallon to US$1.32/ gallon. Spot pricing is currently approx. US$1.07- $1.09/ gal. and stable. +

For more information please contact

Robb Roach at robb@thechemco.com

Notes:

OCI has begun producing Methanol at their Beaumont, TX facility.

Methanex has re-started their #2 Montunui plant in New Zealand

Gas curtailments in Trinidad could reach 30% for September and beyond due to a platform maintenance.

Embargo on Iranian Methanol has caused a “re-shuffling” of volumes world- wide.

Nitric Acid:

Nitric Acid pricing has increased by US$50/ ton (100% basis) on July 1st due to high ammonia cost and availability due to an explosion and intense damage at the site of a major producer (El Dorado/ DSN). Demand is good. /

For more information please contact Robb

Roach at robb@thechemco.com

Phenolic Resins:

Phenol will certainly increase for August on higher Benzene values. Formaldehyde prices remain stable with methanol prices unchanged. +

For more information please contact John

Santini at john@thechemco.com

Phthalic Anhydride: Phthalic Anhydride pricing will decrease by $.05/ lb. in August in line with the July orthoxylene price decrease. Orthoxylene will likely increase for August as oil and aromatics pricing has strengthened.

For more Information please contact Javier

Fernandez at javier@thechemco.com

Plasticizers and Plasticizer Alcohols:

Plasticizer demand world-wide has been slow seasonally but the base raw material costs have started to increase and this has caused some slight inventory building. Propylene and Ethylene spot prices are trading higher than contract levels so increases are expected. Orthoxylene pricing is also expected to follow.

Plasticizer alcohol demand had been weak but recent strengthening is noted. Rumors of an INA outage have been circulating and higher alcohols remain balanced.

Plasticizer pricing is a stable but increases are expected in the coming weeks/ months.

For more information please contact Forest Goodman at

forest@thechemco.com

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

TCC Plasticizers available:

Non- Phthalate:

ChemFlexx Dibenzoate Esters

ChemFlexx DiOctyl Succinate (DOSX)

ChemFlexx NP 500” Non- Phthalate Replacement for General Purpose Plasticizers

ChemFlexx NP 600” Non- Phthalate Replacement for DIDP

NatureFlexx 509” Phthalate Free General Purpose (ATBC)

Epoxidized Soybean Oil

ChemFlexx TOTM (TriOctyl Trimellitate)

ChemFlexx DOA (DiOctyl Adipate)

ChemFlexx 8 10 Trimellitate

Phthalate:

Vestinol 9 DiIsononyl Phthalate (DINP)

ChemFlexx 206” Functional Linear Phthalate Replacement

ChemFlexx 208” Low Temp Functional Linear Phthalate Replacement

ChemFlexx DOP (DiOctyl Phthalate)

ChemFlexx DUP (DiUndecyl Phthalate)

DMP (DiMethyl Phthalate)

ChemFlexx DOTP (DiOctyl Terephthalate)

Brominated DOP

ChemFlexx 9 11 Phthalate

ChemFlexx L9 Phthalate

Styrene monomer: Styrene Pricing increased slightly for July in line with higher benzene values (up $.19/ gallon). NA demand remains slow. +

For more information please contact Robb Roach at robb@thechemco.com

Urea: Urea pricing is a moving target with short term surging followed by a temporary retreat. Current pricing is US$455/ ton. Granular barges are pegged at US$445- $455/ ton and prilled at US$445- $455/ ton also. /

For more information please contact Robb

Roach at robb@thechemco.com

Notes:

Seasonal demand has slowed.

Corn acreage this year should top 96 million acres!

Zinc Borate: Pricing has been relatively steady but demand has increased as consumers scramble to replace a portion of their Antimony Trioxide usage where possible. Product is in stock and immediately available.

For more information please contact

Robb Roach at robb@thechemco.com

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

Environmental, Health, Safety and Sustainability (EHS&S)

 

CHEMICAL INDUSTRY NEWS

The American Chemistry Council (ACC) US Chemical Production Index dropped by 0.3% in May, following a downwardly revised 0.5% decline in April. Chemical production fell across all regions and is flat regarding year over year comparisons. Overall, chemistry output is anticipated to rise by 0.5% in 2012 before attaining a 2.3% growth rate in 2013.

The ACC recently released the first monthly report of its Chemical Activity Barometer (CAB,) a “new leading macroeconomic indicator.” The published data suggest that the US economic recovery is slowing. Preliminary June data from the CAB showed a decrease of 1.3% compared to the previous month and that demand for chemical products fell for a third straight month. The chemicals industry generated about $760 billion last year.

Thanks to a deal between The Carlyle Group and Sunoco the oldest and largest East Coast refinery will stay open in Marcus Hook (Philadelphia), PA. A joint venture will make an investment in the facility in order to enable it to utilize lower cost crude oil from North Dakota’s Bakken formation. The joint venture, to be known as Philadelphia Energy Solutions, expects to save all the 850 current refining jobs and to create 200 more as the refinery is updated and expanded. Union leaders praised the action and local members voted 98% in favor of a reworked contract. Product mix will be shifted to a higher percentage of ultra-low sulfur diesel fuel. A high speed train unloading facility, receiving up to 140,000 bbls/day of Bakken crude is planned.

Sunoco’s idled propylene splitter in Marcus Hook, PA has been acquired by Braskem, and the company will direct production to a nearby facility that it owns.

Rep. Ed Markey, D-MA petitioned the FDA to evaluate the use of bisphenol A (BPA) in baby food containers. The FDA recently denied two other petitions from him related to BPA. As recently as March, the FDA reviewed the best available science and supported the use of BPA in food-contact materials.

Cytec Industries, Elevance Renewable Chemicals and Codexis are three recipients of the EPA’s Presidential Green Chemistry Challenge Award for 2012. Cytec was honored for its scale inhibitor technology used in aluminum production.

Cytec will restart expansion work at its facilities in South Carolina and Texas in order to increase capacity for composite materials production geared towards the aerospace industry.

The EPA chose not to revise the permitting thresholds for greenhouse gas emissions (GHG) in a final rule issued on July 3. The EPA said that it is retaining existing rules because state permitting authorities need more time to develop infrastructure necessary to issue GHG permits.

The Department of Agriculture has made $25 million in private bond placement available for Myriant Technologies’ bio-succinic facility in Louisiana, which is expected to start up early in 2013.

US chlor-alkali operating rate for May fell to 74% of capacity, from the mid-80% range seen from January to April of this year.

BASF plans to build a butadiene extraction facility in Antwerp, Belgium and have it in operation by 2014. BASF is also constructing with Sinopec a superabsorbent polymers facility in Nanjing, China, which will include acrylic acid and butyl acrylate plants.

US-based chemical manufacturer Dyno Nobel International is developing a feasibility study regarding construction of a 750,000 MT/year anhydrous ammonia plant in Waggaman, LA. Cost is estimated at $800 million. The proposed plant would be integrated with Cornerstone Chemical’s existing Waggaman complex, which produces acrylonitrile, melamine, and sulfuric acid.

At the UN Conference on Sustainable Development (Rio+20) the International Council of Chemical Associations (ICCA) reported the chemical industry’s contributions to sustainable development and the green economy. Andrew Liveris, CEO of Dow Chemical, is president of the ICCA.

Saudi Aramco’s joint venture refinery project called Saudi Aramco Total Refining and Petrochemical (Satorp) is expected to start up in December, 2012. Saudi Aramco has a 62.5% interest, with the remaining 32.5% held by France’s Total. The 400,000 bbl/day facility will be the first producer of paraxylene in Saudi Arabia.

A thirteen hour summit in Brussels on June 29 created immediate relief for Spanish and Italian banks, which had been near collapse. Banks’ direct access will be available to the two European bailout funds. In the past only governments could borrow from these rescue funds. The EU will create a new banking supervisory agency within six months, eventually leading to a European banking union. It was reported that Italy and Spain threatened to block “everything” unless Germany and other eurozone countries backed their demands for help.

Demand for US debt has risen because investors are worried about Europe’s worsening crisis. US government debt is considered one of the safest investments. China increased its holdings to $1.15 trillion in April; Britain, Brazil, and Germany increased holdings as well. In June Standard and Poor’s reaffirmed the lowered Treasury rating of AA+.

German power giant RWE will build no more nuclear power stations, not only in Germany, where nuclear power is to be phased out by 2022, but anywhere in the world.

Germany’s seasonally adjusted unemployment rate increased to 6.8% in June, up slightly from 6.7% in May, and essentially the same as April’s 6.8%. The German economy grew by 0.5% in the first quarter, but concerns over the euro crisis have led to a cautious approach to hiring.

The new French Socialist government proposed €7.2 billion ($9 billion) of tax increases in order to meet deficit reduction goals. The measure, approved at a cabinet meeting, indicated larger tax increases and spending cuts next year. The largest single action is a one-time surcharge on wealthy individuals’ assets. France’s national auditor said on July 2 that the government needs between six and ten billion euros in savings this year to meet its 2012 target of a deficit equal to 4.5% of economic output.

Unemployment in the eurozone was reported at 11.1 % in June and is the highest in the history of the currency.

A new Russian polypropylene plant under the name PolyOm is expected to start up in July following government regulatory approval. This facility was supposed to have come on line in 2006 but financial issues created delays.

China’s industrial production grew 9.6% in May compared to a year earlier, versus 9.3% growth in April. China’s consumer price index rose 3% in May, lower than April’s 3.4%. The country’s producer price index fell 1.4% in May after a reduction of 0.7% in April. For the April period, China posted a trade surplus of $18.42 billion, much higher than forecast.

China’s Sinopec and Japan’s Mitsui Chemicals established a joint venture to build a 750,000 MT/year ethylene-propylene-diene terpolymer unit in Shanghai, China with an estimated cost of $316 million. The new company, named Shanghai Sinopec Mitsui Elastomers, will be held equally by the partners. Start-up is projected for the first quarter of 2014.

A Chinese construction company that highlights its fast building technique has announced a plan to build the world’s tallest building in nine months. Broad Group says the skyscraper, called Sky City, will be located in the company’s home city of Changsha in central China’s Hunan province. It will be 838 meters high, with 220 floors, ten meters higher than the current tallest building, the Burj Khalifa in Dubai. .

Sinopec and Sibur (Russia) plan to manufacture nitrile rubber and isoprene rubber in Shanghai in two plants, each with a 50,000 MT/year capacity.

Growth in China’s gross domestic product slowed to 8.1% year-on-year in the first quarter of 2012. This is the lowest rate of economic growth since the first quarter of 2009. Chinese government GDP growth projections are less than 8% for the year.

On June 29 Congress approved legislation that will extend federal highway programs through 2014. A low student loan interest rate was approved for one year, and the National Flood Insurance Program for five years. It’s likely that this will be the last major piece of legislation approved by Congress until after the November elections. A provision calling for construction of the Keystone XL pipeline was not included.

The American Trucking Association reported that tonnage decreased 0.7% in May, after falling 0.6% in April. Compared with May 2011, the tonnage index was up 4.1%. Year-to-date, tonnage was up 3.8% compared with the same period last year. Trucking represents 67.2% of tonnage carried by all modes of domestic freight transportation.

Each day, about 43 million tons of goods valued at $29 billion move on the US network of ports, roads, rails, and inland waterways, according to the US Chamber of Commerce. The goods travel on 26,000 miles of navigable waterways and through 360 ports. The American Society of Civil Engineers says that there are 4,095 “unsafe” dams that are susceptible to failure. The Army Corps of Engineers says that most lock sites are beyond life expectancy. As the economy picks up, demands on the system will increase and so will delays and bottlenecks.

Shale oil and gas-related:

According to a recent KPMG report, large scale production of natural gas has resulted in a “wholesale transformation” of the chemical sector, encouraging exports and growth in the industry.

Celanese Corp., the world’s largest manufacturer of acetic acid, plans to produce methanol in Clear Lake, TX in order to supply its plants with the material derived from low cost natural gas. The facility is expected to start up after July 1, 2015 and will be capable of producing 1.3 million MT of methanol per year. Celanese uses methanol to make acetic acid but also plans to acquire a partner to take some of the supply. Celanese is one of a number of chemical companies to announce new plants aimed at utilizing inexpensive US gas. For example, Methanex Corp., the world’s biggest maker of methanol, has announced the relocation of a Chilean plant to Louisiana.

Proposed rules for fracking on federal lands would add approximately $1.5 billion in annual costs to the natural gas industry according to a study published by the Western Energy Alliance. Various estimates indicate that close to 1.5 million US jobs will be generated by the shale gas boom by 2015 and 2.4 million by 2035. The rules are expected to be finalized by year-end.

Apache Corp. recently announced what it believes may be one of the world’s largest shale gas discoveries in British Columbia, containing as much as 48 trillion feet of gas. The company also announced that its holdings in Kansas and Nebraska could contain as much as 2 billion barrels of oil.

Gov. Tom Corbett recently signed the 2012 – 2013 Pennsylvania $27.7 billion budget which includes tax credits designed to encourage Royal Dutch Shell to build a massive new petrochemical refinery in order to utilize Marcellus shale deposits.

Ohio’s Utica Shale development may require additional pipeline construction, creating a number of jobs, as seen by optimistic labor union officials in Ohio.

ShaleNet initiative, which funds training programs at state colleges and institutions in order to prepare workers for the natural gas industry is helping to employ low income adults in Pennsylvania.

THE ECONOMY

The Congressional Budget Office reported that the federal government incurred a budget deficit of $845 billion in the first eight months of fiscal 2012, $80 billion less than the deficit recorded in the same period in fiscal 2011.

The Treasury Department reported that the federal debt was $15.8 trillion as of June 30, 2012. It stood at $5.7 trillion in 2001.

The Bureau of Economic Analysis reported the revised first quarter 2012 Gross Domestic Product unchanged at an annual rate of 1.9%, that is, from the fourth quarter to the first quarter. This is a reduction from the initial estimate of 2.2%. In the fourth quarter of 2011, real GDP increased 3.0%. Current-dollar GDP, the market value of the nation’s output of goods and services, increased at a rate of 3.9% or $148.4 billion in the first quarter to a level of $15,467.8 billion. Fourth quarter increase was reported as 3.8% or $143.3 billion.

Republican and Democrat congressional leaders are considering whether or not to delay automatic federal spending cuts until March 2013. The $1.2 trillion cuts over ten years are scheduled to begin January 2013. At the same time, lawmakers must decide what action to take about income tax cuts and other tax breaks scheduled to expire at year-end. Leaders in both houses are discussing whether to propose a catch-all bill that would delay the automatic cuts, fund the government through March or later and temporarily extend the George W. Bush-era tax cuts and other tax laws. Such a measure would follow a short-term spending bill to keep the government operating after October 1.

The Conference Board’s Leading Economic Index increased 0.3% in May to 95.8 (2004=100) following a 0.1 % decrease in April and a 0.2 % increase in March.

The Conference Board Consumer Confidence Index which had decreased in May fell further in June. It stands at 62.0 (1985=100) down from 64.4 in May and 68.7 in April.

The Institute for Supply Management’s Manufacturing Index registered 49.7% in June, a decrease from May’s 53.5% and the first contraction since July, 2009. A reading below 50% indicates that the manufacturing economy is generally retracting. The Non-Manufacturing Report for June was 52.1%, lower than May’s 53.7% indicating continued growth at a slower rate.

In May, retail and food services sales adjusted for seasonal variations were $404.6 billion, a decrease of 0.2% from April but 5.3% above May 2011. Total sales for the March through May 2012 period were up 5.7% from the same period a year ago.

Privately owned housing starts in May of 708,000 were 4.8% below the revised April estimate of 744,000 and 28.5% above the revised May 2011 rate of 551,000. Single family housing starts in May were at a rate of 516,000 or 3.2% above the revised April figure of 500,000. New home sales increased 7.6% in May, to a seasonally adjusted annual rate of 369,000, and were 19.8% above the May 2011 figure of 308,000.

The National Association of Realtors reported that sales of existing homes rose declined 1.5% in May to a seasonally adjusted annual rate of 4.55 million. Home prices rose in May, up 7.9% from a year earlier and the highest since June 2010. The increase is seen as a bright spot in a generally slow recovery.

US foreclosures rose in May for the first time in more than two years as banks resumed dealing with distressed properties. Overall foreclosure activity, which includes default notices, scheduled auctions, and bank repossessions increased 9.1% from April.

New orders for manufactured durable goods in May increased $2.3 billion or 1.1% to $217.2 billion. This increase followed a O.2% April decrease and a 3.7% March decrease.

May unfilled orders for manufactured durable goods decreased $0.4 billion to $984.5 billion. This followed decreases in March and April.

Consumer Price Index for all urban consumers decreased 0.3% in May on a seasonally adjusted basis. Over the last twelve months, the index increased 1.7 % before seasonal adjustments. The energy index, which had declined 1.7% in April after a series of increases in each of the previous months, declined in 4.3% in May on a seasonally adjusted basis and offset increases in the other major indexes. The gasoline index decreased 6.8% in May, leading to a sharp decrease in the energy index and the decline in the all items index.

The Producer Price Index for finished goods fell 1.0% in May, seasonally adjusted, following a reduction of 0.2% in April, no change in March and a 0.4% February increase. On an unadjusted basis, prices for finished goods increased 0.7% for the twelve months ended May 2012.

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

Inflation: Inflation rate was 1.7% in May following April at 2.3%. A rate of 2% is projected for 2012.

Unemployment: The June 2012 rate was essentially unchanged at 8.2% as reported by the Bureau of Labor Statistics and marked more than three years of unemployment at or above 8%. The BLS reported that the long-term unemployed, i.e., jobless for 27 weeks and over remained at 5.4 million in June. Those individuals accounted for 41.9% of the unemployed.

Trade Deficit: For April 2012 the goods and services deficit decreased to $50.1 from a revised March figure of $52.6 billion as imports decreased more than exports.

Crude Oil: Volatile due in part to Iranian crisis. Present WTI spot price ~$87/bbl.

Natural Gas Henry Hub price closed on July 6 at $2.90/MMBTU. Working natural gas in storage remains above the five year average.

Industrial production decreased 0.1% in May, after a gain of 1.0% in April. At 97.3% of

its 2007 average, total industrial production for May was 4.7% above the level of a year

earlier.

May capacity utilization rate for total industry decreased to 79.0%. This was 4.7% above the rate of a year earlier but 1.3% below 1972 – 2011 average.

The US dollar trading at 79.4 Japanese yen; $1.24 = euro. The British pound sterling = $1.55. Canadian dollar trading at US$1.03

Current US gold price reported as $1553/ounce compared to the record price of $1920/ounce in September, 2011.

As reported by the NY Post US citizens are leaving the country in record numbers in order to avoid high taxes. This year about 8,000 citizens are expected to renounce their citizenship, versus approximately 3,800 in 2011. It was stated that they want to avoid much higher tax bills with the expiration of the Bush-era cuts at the end of this year.

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