A MARKET UPDATE for June, 2012

THE VIEW FROM JAMESTOWN”
A MARKET UPDATE for
June, 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:

From THE WEEK Magazine June 12, 2012:

The median American family — the exact middle between the wealthiest and the poorest — had the same amount of money in 2010 as it did in 1992, according to the Federal Reserve’s Survey of Consumer Finance, an extensive and detailed look at American wealth undertaken every three years. While the latest data is 18 months old, it underscores the astonishing economic devastation wreaked by the Great Recession, which, beginning in 2007, swept away a chunk of the wealth accumulated since the early 1990s. (The Fed defines “wealth” as income plus assets — like homes, cars, and stocks — minus debts.) Here, a numerical look at the average family’s struggles:

$126,400 
Net worth of the median American family in 2007

$77,300 
Net worth of the median family in 2010

40 
Percentage drop in wealth over that three-year period

$95,300 
Median home equity — the value of a house minus what is owed on the mortgage — in 2007

$55,000 
Median home equity in 2010

42.3 
Percentage drop of home equity since the start of the recession

$49,600Income of the median family in 2007

$45,800 
Median family income in 2010, an 8 percent drop

$3,100 
Median credit card balance in 2007

$2,600 
Median credit card balance in 2010, a 16 percent decline

15.2 
Median percentage of debt that was education-related in 2007

19.2 
Median percentage of education-related debt in 2010

7 
Percentage of Americans late on their debt payments in 2007

11 
Percentage late on payments in 2010

$49,600 
Median value of stock-based retirement plan in 2007

$44,000 
Median stock-based retirement plan in 2010, a 7 percent plunge

Quote of the Month:

 A wise man will make haste to forgive, because he knows the true value of time, and will not suffer it to pass away in unnecessary pain.”


Samuel Johnson, quoted in Refdesk.com

From Icis Magazine (inside front cover) w/o June 4, 2012

TCC Videos:

http://www.vimeo.com/24834423
http://vimeo.com/38459394
http://vimeo.com/38459041

Upcoming Events:

SPI’s Vinyl Products 23rd Annual Compounders Conference
July 15-17, 2012 at the Loews Annapolis Hotel, Annapolis, MD.

EPCA 46th Annual Meeting 2012

 6 – 10 October 2012 – Budapest


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TCC Downloadable Brochures

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

New Products In Stock

Ammonium Bromide: TCC now offers Ammonium Bromide Crystal packaged in 25 Kilo. Bags and Metric Ton Supersacks.

Bromide Products: Ask us about our other bromine compounds like sodium bormide, calcium bromide, potassium bromide and tetra bromo phthalic anhydride.

Fish oil: TCC now offers a variety of fish oil products. Ask us about which one could work in your food, vitamin and nutraceutical application. Contact Javier Fernandez AT JAVIER@THECHEMCO.COM

Methyl Acetate: TCC now offers Methyl Acetate in bulk, drums, and totes.

Sodium Alginate: TCC now offers Sodium Alginate in 25 kilo and 750 kilo bags.

Polyvinyl Alcohol: TCC now offers Polyvinyl Alcohol in 25 kilo bags and 500 kilo supersacks.

Iron Oxide: TCC now offers Iron Oxide in a variety of shades and particle sizes. Please see above data card for more information.

Composites: TCC now offers a variety of composites to the North and South American market. Please see above brochure for more info.

Sydol 61 Silane TCC now offers Sydol 61 Silane in 850 Kg. Totes and 250 Kg. Drums

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 June settled lower to US$4.11/ gallon, down just $.10/ gallon from US$4.21/ gallon in May. Spot prices are in the $3.80’s/ gallon.

N Butane Butane prices have dramatically dropped from the $1.80’s in early May to the current $1.33- $1.365/ gallon range.

Ethylene U.S. Contract Price decreased by $.09/ lb. to $.4625/ lb.

Natural Gas Currently trading in the low to mid $2.00’s range but reached as high as $2.80/ mmbtu in May. /

Oil Current WTI Crude price is at $83- $85/ barrel range. Pricing has fallen sharply through May.

Check thechemco.com for up to the minute info.

Orthoxylene June contracts settled $.04/ lb. lower to $.64/ lb. –

Propylene June contracts settled down $15.5 cts from May at $.52/ lb. for Polymer Grade and $.505/ lb. for Chemical Grade.

CHEMICALS MARKETS

Adipic Acid: Adipic Acid pricing has been steady with balanced raw material costs, healthy supply and mediocre demand. With Euro trending lower watch for good pricing on European AA. /

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

Ammonia: June pricing in Tampa has increased again and substantially up $80/ ton to $625/ ton. +

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

Ammonium Nitrate: Ammonium Nitrate producers have announced a $45/ ton increase due to increased feedstock costs and limited availability. The major feedstock ammonia has moved up on agricultural demand. An explosion at the El Dorado (high density) AN plant made for only minor repairs on the AN side but the nitric acid needed for production will take much longer to come on stream. Demand remains very good. +

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

Antimony Trioxide:     

Demand for antimony trioxide remains 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 moved lower and competitive pressure has heated up. Increased competition is noted from both new domestic producers and offshore.

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

Fumaric Acid: FA Pricing is stable. Butane has dropped to $1.35 +/- range. Lower prices are on the horizon. /

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

 

Glycol (Mono, Di and Tri):

Ethylene has settled down .005 cts/ lb. for May to 55.25 cts/ lb.

MEG – North America producers have announced a 2-3 cts/ lb. increase for June based on limited availability. Benchmark for June will be $.56/- $.57 lb. +

DEG- DEG spot prices rebounded quickly from US$.33 cts/ lb. to $.40 cts/ lb. and now $.45 cts/ lb.+ Turnarounds have tightened supply dramatically and price increase announcements of $.04- $.07 cts/ lb. were announced for June 1. +

TEG- Seasonally slow demand has kept pricing low. Buyers are seeking 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:

Maleic Anhydride supply is balanced in North America as UPR demand remains good. No decrease announced for June 1 despite the price plunge of normal butane. Price decreases are expected. /-

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

Melamine:    

Melamine availability long world wide on massive new capacities in Trinidad and Qatar. Pricing dropped in Q4 but despite much higher urea pricing melamine prices have been stabile.  /

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

Malic Acid: Malic Acid supply has improved but long lead times continue. 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 June remains at US$1.38/ gallon. Spot pricing is currently approx. $1.13/ gal. and trending lower. +

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

Notes:

Chinese demand is currently slow on concerns surrounding concerns of slower economic growth and the European Debt.

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

Nitric Acid:

Nitric Acid pricing has increased by US$50/ ton on 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 is balanced and raw material pricing, specifically benzene has stabilized. 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 $.04/ lb. in July in line with the June orthoxylene price decrease.

For more Information please contact Javier Fernandez at javier@thechemco.com

Plasticizers and Plasticizer Alcohols:

Plasticizer demand world-wide has been steady but the base raw material costs have started to retreat and this has caused some more cautious buying. In June propylene dropped $.155/ lb., ethylene dropped $.09/lb. and orthoxylene $.04/ lb.

Plasticizer alcohol pricing is also being affected by the raw material retreat. 2-EH is now very long in Asia but balanced in the western hemisphere. INA and higher alcohols are balanced and price has yet to be affected by these raw material price erosions,

Plasticizer pricing is a moving target right now with decreases of $.02– $.04/ lb for June.

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 will decrease slightly for June in line with lower benzene values (down $.10/ gallon). NA demand remains slow. –

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

Urea: Urea prices have dropped to $430- $460/ ton. Seasonal demand has waned and sellers are eagerly anticipating the beginning of rice season. Granular barges are pegged at $500- $540/ ton and prilled at $500/ ton.

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

According to the American Chemistry Council (ACC) the US Chemical Production Regional Index dropped by 0.3% in April, following a revised 0.4% decline in March. Chemical production fell across all regions. Compared to April, 2011, total chemical production in all regions was up 0.3%. On a year-to-year basis, the production during the first four months of 2012 was up 0.5% nationally compared to 2011. The ACC expects the US chemical industry to increase output this year by 1.6%, and projects an increase of 2.1% in 2013.

The ACC planned to introduce four code updates to its Responsible Care Program involving product and process safety, energy management, and reporting standards.

The National Academy of Sciences will begin a comprehensive review of the EPA’s Integrated Risk Information System (IRIS) assessment development process. The National Research Council, a branch of the Academy will consider current methods of conducting analyses and will recommend new approaches for chemical hazard identification. The ACC stated that it supports the review.

The European Chemicals Agency (ECHA) issued a draft report on DINP and DIDP for public review and comment. The period for comment will remain open until July 31, 2012. The ECHA conclusion said that existing restrictions regarding toy and childcare articles was justified but that no further risk reduction measures are necessary.

US chlor-alkali operating rate for April was 86% of capacity, unchanged from March.

US styrene industry representatives told Congress in April that the recent government finding that styrene is carcinogenic is the result of flawed process. Companies that use styrene as a feedstock warned the House Committee on Investigations and Oversight that if allowed to stand the determination would force them out of business and have a negative impact on approximately 250,000 US manufacturing jobs.

Iraq and Chevron Phillips Chemical Co., a joint venture of Chevron Corp. and Conoco Phillips signed a letter of intent to evaluate the feasibility of developing a petrochemical plant in the country. The company would examine upgrading an existing Iraqi-owned petrochemicals plant as well as building a new facility. Iraq contains some of the world’s largest crude oil and natural gas deposits in the Middle East.

Dow Chemical and Pennsylvania State University have agreed to widen their laboratory-safety partnership as part of Dow’s $25 million annual pledge to help science programs at US universities.

BASF and Sinopec are constructing a superabsorbent polymers facility in Nanjing, China, which will also include acrylic acid and butyl acrylate plants.

Royal DSM expects to build three research and development sites in the Netherlands, with emphasis in the food, health, and climate areas.

The controversial new rule from the NLRB requiring employers to speed up union elections was struck down by US District Judge James Boasberg.

Methanex and Danish turbine group Vestas have agreed to look at opportunities for wind facilities that Methanex can develop in its methanol production. The deal was made in Chile, where Methanex already uses the Danish company’s turbines.

Bayer MaterialScience AG announced that it will establish a development center for wind energy at Otterup, Denmark. The facility will be concerned with advanced materials used in wind energy applications.

New York State accounted for the biggest migration exodus of any state in the US between 2000 and 2010, with 3.4 million residents leaving over that period. More than 600,000 moved to Florida, perhaps for that state’s more lenient tax system; Florida has no individual income tax, estate tax, or inheritance tax.

Industry rumors say that the Texas pipeline company Energy Transfer Partners will consider selling Sunoco’s retail business. Sunoco’s retail unit could be worth as much as $1.8 billion. Energy Transfer Partners is buying Sunoco in a deal valued at $5.3 billion. The Marcus Hook, PA refinery property includes port facilities, fuel storage capacity and pipeline connections. It also has five underground storage areas carved out of bedrock that can hold two million barrels of pressurized liquid fuels or petrochemicals.

Argentina’s Senate approval on April 26 bill to nationalize YPF, the country’s biggest energy company, has prompted a reaction from the European Union. It was reported that the EU will shortly take action against the Argentine government as a result of the expropriation of 51% of YPF’s stock. Argentina has also requested that the European Commission look into whether Spain’s recent decision to block Argentine biodiesel imports violates World Trade Organization rules.

Braskem is looking into switching its US polypropylene plants to shale gas feedstock as the cost of crude oil derivates hurts profits. The acquisition of PP businesses of Sunoco Inc. and Dow Chemical Co. in the last two years made Braskem one of North America’s largest PP manufacturers. Braskem, the largest petrochemicals company in Latin America, posted a 50% drop in first quarter profits.

The Export-Import Bank, the US government’s agency for promoting export sales had its charter renewed by the Senate on May 15. Without congressional action, the bank’s charter would have expired at the end of May. Last year the bank provided approximately $32 billion in loans, loan guarantees, and credit financing.

International Monetary Fund managing director Christine Lagarde was recently accused of hypocrisy after it became known that she pays no income tax on her salary of $467,940 due to her diplomatic status. A few days earlier she had blamed the Greeks for causing their financial problems by dodging their own bills.

On June 9, after a 2½ hour conference call, seventeen European finance ministers agreed to lend Spain up to €100 billion to shore up its banking system. The precise amount will be determined after independent audits to be completed within approximately one week. With the financial rescue of Greece, Ireland, Portugal, and now Spain, the EU and the IMF have committed approximately €500 billion to bailouts. The action was welcomed in Washington, and the US stock market is expected to react positively.

Germany’s seasonally adjusted unemployment rate eased to 6.7% in May, down from April 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.

Unemployment in the eurozone was 11.0% in April, the highest level since the euro was introduced in 1999. Spain had the highest rate in the eurozone at 24.3%.

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.

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.

Indian industrial production dropped unexpectedly in March attributed to weaker domestic demand and reduced exports. Production declined 3.5% from a year earlier, compared with an increase of 4.1% in February.

Congress is in danger of missing a self-imposed deadline. It appears that House and Senate negotiators were far apart on a long-term deal to keep federal highway, rail, and transit programs funded beyond the end of June. A major sticking point is the Republican pressure to include a provision for construction of the Keystone XL pipeline, which has strong business and labor support but is opposed by environmental groups; Democrats want to exclude Keystone. Work will soon begin on the noncontroversial southern leg.

The American Trucking Association reported that tonnage decreased 1.1% in April, after increasing 0.6 % in March. Compared with April 2011, the tonnage index was up 3.5%. Trucking represents 67.2% of tonnage carried by all modes of domestic freight transportation.

Delaware and Port of Wilmington officials are seeking a partnership with a private company or investment group to operate the publicly owned terminal. They hope to expand the port by building ship berths on the Delaware River that could cost as much as $500 million. The Port of Wilmington is said to be the biggest handler of imported perishable cargo, fruits and vegetables in the US and the largest banana port in North America, second only to Antwerp, Belgium in world volume. The expansion would also make Wilmington available to deeper draft vessels.

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:

The CEO’s of Royal Dutch Shell and ExxonMobil said that US natural gas will be an economic driver in a world where oil becomes more expensive. ExxonMobil’s Rex Tillerson stated clear regulations are needed in order to provide a road map for getting things done.

Dow Chemical CEO Andrew Liveris was recently quoted as saying that shale gas makes “America a low cost jurisdiction for any energy-intensive manufacturing of the value-add kind.”

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.

Even if New York state legislators decide to permit fracking on state lands, a Department of Environmental Conservation spokesman said that it would be a slow process. A reason given was the price drop of 80% since beginning work on drilling rules.

Energy firms reported about $4.7 billion in 2011 revenue from Marcellus Shale drilling in Pennsylvania and West Virginia.

The shale gas boom is showing a positive impact in a variety of manufacturing operations in addition to chemical production, such as steel and tires.

Government regulation is the highest risk seen by crude oil and natural gas exploration and production companies. This was reported in a study by accounting/consulting firm BDO USA.

On May 4 the Department of Interior released its proposed rules governing oil and gas fracking on federal lands. If finalized they will be the first new fracking rules since 1988. The Sierra Club is opposed to their adoption.

THE ECONOMY

The Congressional Budget Office reported that the federal government incurred a budget deficit of $721 billion in the first seven months of fiscal 2012, $149 billion less than the deficit recorded in the same period in fiscal 2011.

The Treasury Department reported that the federal debt was $15.7 trillion as of May 31, 2102. It stood at $5.7 trillion in 2001. The debt is now roughly larger than the entire US economy.

The Bureau of Economic Analysis reported that first quarter 2012 Gross Domestic Product increased 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 3.6% or $134.6 billion in the first quarter to a level of $15,454.0 billion. Fourth quarter increase was reported as 3.8% or $143.3 billion.

The Federal Reserve Bank of Minneapolis tracks economic performance for each recovery and compares GDP growth and job growth. Over the past 60 years, there have been 11 recessions and 11 recoveries. Current recovery is close to the bottom of all 11. Cumulative GDP growth is 6.8% eleven quarters into this recovery, and is less than half the average of 15.2% and the worst of all 11.

The Conference Board’s Leading Economic Index declined 0.1% in April to 95.5 (2004=100) following a 0.3 % increase in March and a 0.7 % increase in February.

The Conference Board Consumer Confidence Index which had decreased slightly in April fell further in May. It stands at 64.9 (1985=100) down from 68.7 in April.

The Institute for Supply Management’s Manufacturing Index registered 53.5% in April, a decrease of 1.3% from April’s 54.8% indicating expansion in the manufacturing sector for the 34th consecutive month. A reading above 50% indicates that the manufacturing economy is generally expanding. The Non-Manufacturing Report for May was 53.7%, higher than April’s 53.5% indicating continued growth at a slower rate.

In April, retail and food services sales adjusted for seasonal variations were $408.1 billion, an increase of 6.4% above April 2011. Total sales for the February through April 2012 period were up 6.6% from the same period a year ago.

Privately owned housing starts in April of 717,000 were 2.6% above the revised March estimate of 699,000 and 29.9% above the revised April 2011 rate of 552,000. Single family housing starts in April were at a rate of 492,000 or 2.3% above the revised March figure of 481,000. New home sales increased 3.3% in April, to a seasonally adjusted annual rate of 343,000, but were 9.9% above the April 2011 figure of 312,000.

The National Association of Realtors reported that sales of existing homes rose 3.4% in April to a seasonally adjusted annual rate of 4.62 million, and were 10.0% above the April 2011 figure of 4.2 million. Home prices fell in the first quarter to new post-crisis lows, but prices were up in March from February for the first time in seven months. The increase is seen as the latest evidence of a slow recovery taking place in the housing market.

New orders for manufactured durable goods in April increased $0.3 billion or 0.2% to $215.5 billion. This increase, up two of the last three months, followed a 3.7% March decrease.

April unfilled orders for manufactured durable goods decreased $0.7 billion, or 0.1% to $985.3 billion. This followed twenty-seven consecutive monthly increases.

Consumer Price Index for all urban consumers was unchanged in April on a seasonally adjusted basis. In the last twelve months, the index increased 2.3 % before seasonal adjustments. The energy index, which had risen in each of the previous months, declined in April on a seasonally adjusted basis and offset increases in the other major indexes. The gasoline index decreased 2.6% in April and accounted for most of the energy decline.

The Producer Price Index for finished goods fell 0.2% in April, seasonally adjusted, following no change in March and a 0.4% February increase. On an unadjusted basis, prices for finished goods increased 1.9% for the twelve months ended April 2012.

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

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

Unemployment: The May 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 rose from 5.1 to 5.4 million in May. Those individuals accounted for 42.8% of the unemployed.

Trade Deficit: For March 2012 the goods and services deficit increased to $51.8 from a revised February figure of $45.4 billion as imports increased more than imports.

Crude Oil: Prices have dropped significantly as demand declines. Present WTI spot price ~$84/bbl.

Natural Gas Henry Hub price closed on June 6 at $2.41/MMBTU. Working natural gas in storage remains above the five year average.

Industrial production increased 1.1% in April. Revised figures for March and February show a 0.6% decline and an increase of 0.4% respectively. At 97.4% of its 2007 average, total industrial production for April was 5.2% above the level of a year earlier.

April capacity utilization rate for total industry increased to 79.2%. This was 3.1% above the rate a year earlier but 1.1% below 1972 – 2011 average.

The US dollar trading at 79.4 Japanese yen; $1.25 = euro. The British pound sterling = $1.54. Canadian dollar trading at US$1.03

Current US gold price reported as $1627/ounce compared to the record price of $1920/ounce in September, 2011.

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