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growth in the chemical industry the chemical company

Unpacking Recent Growth in the U.S. Chemical Space

unpacking growth in the US chemical space the chemical company

Business leaders across all industries are keeping an eye on 2019, wondering whether favorable marketplace conditions might materialize. For executives overseeing enterprises in the U.S. chemicals space or other sector-adjacent organizations, the outlook for 2019 is quite favorable. Production in the states is expected to rise 3.6 percent over the forthcoming 12-month span as manufacturers introduce new higher-capacity workflows and demand in key market increases, according to research from the American Chemistry Council. These developments are likely to lay the foundation for long-term growth, ACC analysts found, vaulting revenue beyond $700 billion by 2023. However, paired with this maturation are a number of significant challenges that American chemical companies will have to address over the course of 2019 and beyond. So as executives and other key stakeholders in the U.S. chemicals space prepare for the coming year, it essential that they weigh every variable in this complicated growth equation.

Dissecting the industry upside

The American chemicals industry has been on the upswing for the past three years, with manufacturers making considerable production headway due, in part, to rising demand within the automotive sector, ICIS reported. Here, the average vehicle rolls out of the factory equipped with $3,500 worth of chemical products. Housing has also been a boon for the sector, along with the oil and gas and mining spaces. However, the strengthening U.S. manufacturing is perhaps the biggest driver behind the ongoing growth within the American chemicals arena. Output and capacity in this sector, whose members consume countless chemical compounds during the production process, have risen steadily for the last decade, according to data from the Bureau of Labor Statistics analyzed by the Federal Reserve. These trends have greatly benefited the stateside chemical space, which now appears to be poised for additional expansion over the next year.

Grappling with future challenges

That said, there are some burgeoning roadblocks that might hold U.S. chemical companies back in 2019, beginning with the declining state of the global marketplace. Chemical manufacturers outside of the U.S. are struggling as a consequence of numerous variables, including the emergence of protectionist trade policy, according to researchers for PricewaterhouseCoopers. Global chemical production decreased in the opening weeks of the fourth quarter, continuing an underwhelming year for sector in general, ACC analysts found. This is likely to continue into 2019, which might drag on the U.S. industry even as it grows. Unfortunately, the industry is expected to face additional challenges stemming from another corner of the global marketplace: the manufacturing sector. Manufacturing firms worldwide are grappling with several serious issues – most notably severe labor shortages and rising raw material prices, Reuters reported. Consequently, economists foresee the arrival of strong financial headwinds that threaten not only manufacturers operating abroad but also those based in the U.S. Should adverse developments materialize in this arena, American chemical companies could certainly feel the effects.

In addition to these relatively recent roadblocks, chemical manufacturers in the states continue to deal with several long-standing issues. Enterprise digitization, for instance, continues to pose problems for businesses in the industry, according to consultants for PwC. While most recognize that they must rejigger their internal processes and workflows to meet the needs of technology-savvy customers and keep pace with forward-thinking competitors, pinpointing and implementing the right digital tools continues to be a challenge for chemical companies everywhere.

Making the most out of the market

The businesses that populate the American chemicals sector have solid footing in the marketplace and appear to be in a strong position entering 2019, according to the ACC. However, it is essential that these firms continue to pursue operational improvement, as there are a variety of pitfalls in play here at home and abroad.


Cleaning Water The Chemical Company

Understanding the Chemical Industry’s Role in Water Treatment Operations

Cleaning Water The Chemical Company

Drinking water quality measures worldwide have reached historic highs. Today, an estimated 71 percent of the global population has access to safe drinking water, according to researchers from the World Health Organization. The U.S. boasts some of the cleanest supplies on the planet, as 94 percent of its residents can take advantage of pollutant-free aquifers, pipes and fixtures. Numerous parties laid the foundation for this progress, here and abroad. From government institutions and nonprofit organizations to private enterprises, countless entities have contributed to drinking water decontamination efforts across the globe. Surprisingly, chemical companies are among these H20-conscious groups.

Businesses within the global chemicals space have long provided the synthetic materials needed for water treatment operations. These organizations produced more than $24 billion worth of such products in 2018 alone and are expected to generate another $25 billion in water treatment chemicals this year, according to projections from BlueWeave Consulting and Research. In short, chemical companies play an essential role in drinking water decontamination programs and will continue to do so as these initiatives expand.

Unpacking the water treatment equation

Here in the U.S., water treatment unfolds at the community level. Independent public drinking water systems across the country sanitize the supplies found within local aquifers and transport the clean end product to individual homes, per the Centers for Disease Control. The decontamination portion of this process features four distinct phases:

  • Coagulation and flocculation: Water treatment teams introduce positively-charged chemicals to untreated water. This neutralizes the negative charges carried by dissolved sediment and draws these particles together, creating larger, easier-to-handle dirt flecks called floc.
  • Sedimentation: The floc sinks to the bottom of the supply and settles there.
  • Filtration: With the larger contaminants resting at the base of the supply, water treatment personnel run the purified water above through a series of filters that collect particles still present in the H20, including charcoal, gravel and sand. These fixtures also catch microorganisms such as bacteria, parasites and viruses.
  • Disinfection: Following filtration, a number of disinfectants are put into the supply to eliminate any lingering bacteria and inoculate the water against any of the germs it might pick up will traveling through delivery infrastructure.

This water purification methodology has proven extremely effective domestically, despite the scale at which it is deployed. However, this is not the only strategy communities around the world use to rid their supplies of harmful particles. For instance, some leverage slow sand filtration, a much simpler and more cost-effective technique, according to the WHO. That said, the approach outlined above is perhaps the most dominant water treatment procedure in Western nations with access to ample capital and manpower.

Understanding the role of chemical companies

Enterprises within the chemical production arena provide the solutions that propel the water treatment process deployed here in the States. Aluminum sulfate and other inorganic substances are used during the coagulation process, neutralizing the charged ions attached to dangerous contaminants and making them more manageable, per the Minnesota Rural Water Association. Chemicals facilitate flocculation too. All manner of molecular polymers are used here, lending loosened particles the magnetic attraction that allows them to bunch and sink the bottom of supplies in the moments before sedimentation.

And finally, chemical compounds make drinking water disinfection possible at scale, according to the American Chemistry Council. Chlorine is the dominant product here and has been for more than a century. The U.S. and Canadian government began using chlorine to treat drinking water during the early 1900s and have relied heavily on the chemical ever since. Why? Chlorine is an effective germ killer and can easily dispatch waterborne microorganisms, while keeping funguses and harmful chemicals such as ammonia and nitrogen at bay. It eliminates unwanted tastes and odors as well. Together, these features make it an ideal compound for use in this essential industrial niche.

Facing future water treatment challenges

While the chemical companies and other entities that support water treatment operations in the U.S. and abroad have managed to achieve significant success, numerous challenges lie ahead. Crumbling infrastructure is perhaps the most pressing for all parties. The American national drinking water delivery system, which is centered on fixtures installed 75 to 100 years ago, is falling apart, according to field analysis from the American Society of Civil Engineers. For chemical companies, other infrastructure problems, including deteriorating domestic railways, roadways and waterways, complicate logistics, creating further water supply risk. In addition to infrastructure-related hardships, chemical companies are coping with product-centric issues related to the increased regulation of disinfection byproduct, per the ACC.

However, chemical companies are up to the task. Many are providing products to supplement decaying water delivery infrastructure and ensure communities can access safe H20. They are also adjusting their supply chains to combat logistical issues and looking into new disinfectants to meet federal regulations and put residents at ease. In the end, these efforts will strengthen the industry and, by extension, the water treatment operations it supports across the globe.

Grappling with Procurement Challenges in the Chemicals Industry

Grappling with Procurement Challenges in the Chemicals Industry

Grappling with Procurement Challenges in the Chemicals Industry

Procurement is an unceasing challenge for businesses across virtually all sectors. From supply chain breakdowns to stocking issues, the stakeholders managing this essential organizational function often find themselves putting out fires rather than developing and deploying overarching operational strategies. However, these hardships are particularly pronounced for firms orbiting the chemicals space. Here, chemicals producers and consumers grapple with significant procurement roadblocks, some of which are entirely unique to the industry. Instead of mitigating procurement issues as they materialize, these chemicals-adjacent companies must pinpoint and implement sustainable solutions that lay the foundation for success, now and in the future.

Here are some of the common procurement challenges that arise in the chemicals sector and what industry leaders are doing to address them:

Product toxicity

It is no secret that many of the products chemicals manufacturers develop are hazardous by nature. For instance, sulfuric acid, which is perhaps the most commonly produced and used chemical compound in the world, according to researchers from the University of York in the U.K., is intensely caustic and poses a serious threat to all who handle it, including logistics teams. The ubiquitous industrial ingredient ethylene, which the American Chemical Society deemed an imperative “petrochemical building block,” is similarly dangerous and can cause considerable damage if exposed to open flames or agitated, the Centers for Disease Control and Prevention found. This variable complicates the procurement process, as producers, shippers and buyers must implement safety measures to protect workers, bystanders and the environment, lest they risk regulatory action from government agencies such as the Pipeline and Hazardous Materials Safety Administration. In most cases, this involves developing safety training programs, investing in viable chemical transportation assets and cultivating complex reporting workflows, according to Inbound Logistics.

On the surface, these demands appear excessive and almost impossible to meet. This is not the case. Numerous organizations in the chemicals space manage to maintain compliant, efficient and effective procurement processes that drive growth. Most of these high-performers achieve this by ensuring supplier excellence via robust sourcing and vendor evaluation practices. This allows them to pinpoint and collaborate with only those partners that can facilitate optimal availability, while meeting regulatory and safety standards. This emphasis on partnership and supplier excellence has proven effective among businesses with top-flight procurement operations, according to analysts for the consulting form A.T. Kearny, who found that this strategy generated 27 percent of the total procurement value when deployed effectively.

Increased competition

Competition is fierce in the global chemicals industry, which rakes in approximately $5 trillion in sales annually, researchers for Deloitte revealed. While this robust marketplace offers immense potential, it also creates significant operational issues, especially where procurement is concerned. The cost pressures and increasingly intricate organizational relationships that have arisen as a consequence of this booming environment make it difficult for suppliers distinguish themselves. And, the shortened value chains associated vertical integration and portfolio consolidation create risk for purchasers. In all, the immensely competitive state of the chemicals space has created volatility that disrupts procurement operations.

That said, both chemicals suppliers and consumers have viable options for addressing such competition-related roadblocks. For those in the latter category, network optimization combined with renewed client collaboration workflows can bring down expenses and attract the attention of potential customers, all of whom prize cooperation and transparency. Businesses reliant upon raw chemical compounds must explore new supplier selection and performance tracking methods, while adding elasticity to existing vendor networks to mitigate the risks that come with managing procurement operations in an arena where mergers and acquisitions flourish and vertical integration reigns.

Fluctuating economic policies

For the better part of the last decade, businesses everywhere have been adjusting their processes to address the emergence and crystallization of globalization. Procurement stakeholders in the firms navigating the chemicals arena pursued extensive infrastructure expansions in an effort to more effectively tap global supplies and draw in international customers. Unfortunately, things appear to be moving in the opposite direction thanks to the very recent phenomenon of “deglobalization,” according to PricewaterhouseCoopers. Over the last year, countries across the world, including the U.S. and U.K., have disengaged from the global marketplace with the intention of boosting domestic growth. This has further complicated procurement activities in the chemicals space, as businesses that spent years rolling out worldwide supply networks now grapple with finding themselves working to mitigate the risks that materialize as this bulwark breaks down.

Optimizing supply chain flexibility is really the only recourse for the organizations dealing with this particular issue. These entities must have options when it comes to procuring raw materials and finished chemical compounds, and this necessitates the cultivation of multi-layered supplier networks primed to reduce the risk of operating amidst deglobalization.

Together, these issues pose a serious challenge to procurement departments tasked with sourcing chemicals and the base compounds that form their foundations. However, as discussed above, there are viable solutions for addressing these roadblocks, no matter how serious.

Searching for solutions to ongoing chemical logistics issues

Searching for solutions to ongoing chemical logistics issues

Searching for solutions to ongoing chemical logistics issuesEnterprise transportation spending has skyrocketed. U.S. businesses invested almost $1.5 trillion in logistics services in 2017, an all-time high, according to researchers from the Council of Supply Chain Management Professionals. Chemicals manufacturers were, of course, among the numerous organizations that contributed to this spend; as such firms heavily depend upon commercial freight companies. Why are the enterprises that populate this unique and ever-expanding niche setting aside so much for shipping? A number of significant challenges plague logistics services providers, especially those operating in the continental U.S. Together, these issues, which require expensive intervention, are expected to cost American chemical companies an additional $79 billion between 2017 and 2027, according to analysis from the American Chemistry Council and PricewaterhouseCoopers.

With this disturbing projection in play, stateside chemical companies should gain an in-depth understanding of the logistics issues affecting the industry.

Competition and staffing in the trucking space

An estimated 61 percent of chemical shipments travel via truck, making the semi the dominant mode of transportation within the space, the ACC and PwC discovered. Unfortunately, the upward momentum of the economy has created a traffic jam of sorts, as businesses across all industries race to reserve the relatively limited number of shipping slots and push trucking companies to capacity. This heightened competition has allowed logistics organizations to raise prices with impunity, The Wall Street Journal reported. However, demand is not the only variable fueling this price increase. Logistics companies with mature trucking fleets have been struggling to achieve optimal staffing levels for some time. The nationwide trucker shortage presently sits at 50,000 and could increase to as much as 174,000 by 2026. Firms in this logistics niche are attempting to address this issue by luring new drivers with high salaries and robust training programs, the cost of which they are lying in the laps of customers. Sadly, there are no solutions on the horizon, meaning chemical companies will be forced to pay increased trucking costs for some time or risk severing their supply chains.

Congestion on the railroads

As the second-most utilized shipping method in chemicals manufacturing behind trucking, rail plays an essential role in the space, especially for bulk shippers. While most businesses in the industry continue to see logistical success with this particular mode of transportation, it is not without its issues – namely, congestion. Back in February 2018, for instance, organizations in several sectors saw significant delays stemming from congestion at Canadian National Railway and Union Pacific Railroad terminals in Illinois due to a variety of variables, including weather, locomotive operator shortages and electric logging device issues, the Journal of Commerce reported. With turn-around times stretching as long as four hours, shippers voiced considerable displeasure. Depleted infrastructure is often cited as a contributing factor, as private and government entities responsible for American railroads lag behind on mission-critical repairs to tracks, cables and other key fixtures, the ACC and PwC found.

The Association of American Railroads and other industry groups have long advocated for increased institutional investment. But without a massive infusion of cash, little is likely to change, an unfortunate scenario for chemicals manufacturers.

Crumbling marine infrastructure

American ports have long bolstered logistics operations in the chemicals arena. Today, approximately 14 percent of all chemical products move through these aquatic gateways by way of marine container vessels, according to the ACC and PwC. However, this logistics strategy has been less reliable as of late. The causes? Crumbling infrastructure is one, analysts for the American Society of Civil Engineers found. A good number of the more than 920 ports that dot the country have not been retrofitted to accept modern container ships, which boast carrying capacities as high as 22,000 twenty-foot equivalent units. For comparison, in 2005, the average shipping vessel could hold no more than 10,000 TEU. Without the physical structures needed to support the streamline flow of the behemoth ships of today, congestion regularly occurs.

In addition to suffering from serious infrastructural deficiencies, U.S. ports are often at the center of maritime administrative disputes that inhibit operations. West Coast ports in particular are known for experiencing delays due to such disputes, the ACC and PwC found. For example, a contractual conflict between the International Longshore and Warehouse Union and the Pacific Maritime Association back in 2015 derailed productivity at ports across the Pacific Coast. Unfortunately, the solutions for these maritime shipping problems are few and far between, which will require businesses in the chemicals manufacturing space to come up with internal fixes to mitigate the impact.

Finding a solution

These multi-modal logistics challenges might seem insurmountable, especially since there are, at the moment, virtually zero overarching solutions capable of ameliorating these issues in one foul swoop. However, chemical companies are not doomed to ratchet up their logistics budgets into perpetuity to cover the cost of logistical dysfunction. Adding flexibility to the supply chain is the best solution here. Chemical companies that do this by growing their supply bases, streamlining procurement methods and facilitating optimal collaboration can find their way in today’s less-than-ideal enterprise transportation arena without losing steam or emptying the coffers.

Understanding the Importance of Plasticization

Plastic is perhaps the most dominant industrial material on the market. From building supplies and consumer items to commercial packaging provisions and textiles, plastic is deployed in the fabrication of countless products. However, this foundational substance would not boast such value without plasticizers – the colorless and odorless chemicals that make it pliable and therefore usable across numerous applications. In 2017, organizations worldwide invested more than $12 billion in plasticizers, according to research from MarketsandMarkets. The market for this material is expanding at a compound annual growth rate of almost 6 percent, with analysts expecting plasticizer spending to reach $16.15 billion by 2022. Of course, this should come as no surprise to those familiar with this transformative substance.

Grappling with the plasticization process
Plasticizers are responsible for softening a variety of plastics – most notably, polyvinylchloride, more commonly known as PVC or vinyl. Businesses that produce and sell this material account for between 80 and 90 percent of the plasticizer market, according to IHS Markit. Phthalate esters are the most common plasticizer types, accounting for 65 percent of all the plasticizer products sold in 2017. These assets center on alcohol and phthalic acid, which combine with plastic polymers to reduce rigidity and support optimal chain flexibility. The acid’s low molecular weight makes these outcomes possible, cutting down on crystallization and supporting polymer elongation. In the end, this entire process lays the groundwork for great flexibility and strength, two qualities that make vinyl an immensely popular material.

Grasping the impact of plasticization
Vinyl and other plastics produced via plasticization hold great sway in the global marketplace, underpinning a variety of critically important industries. The homebuilding industry is perhaps the biggest consumer of PVC, as roughly three-quarters of all vinyl products are used in construction projects, analysts for the American Chemistry Council discovered. Where? Just about any homebuilding application imaginable. Synthetic products such as vinyl flooring are extremely popular among architects and builders, more than half of whom reported using these items in 2018, according to data from the American Institute of Architects. PVC is also an essential ingredient in many electrical wiring products, including conduit which is used to protect cabling. And vinyl is, of course, the linchpin component found in PVC plumbing fixtures, which is industry standard.

As mentioned above, the homebuilding sector is merely one of the many industries that leverage products derived from plasticizers. Packaging, for instance, is another industrial arena that relies heavily on PVC, the ACC found. As does the health care space, where hospitals and other medical entities take advantage of PVC-based intravenous therapy and blood bags that are flexible yet unbreakable. In all, this versatile material has an immense impact on consumers, playing a central role in the creation of key consumer products, some of which quite literally save lives.

Unpacking the plasticizer safety equation
Despite the widespread use of PVC and similar plastics, some question the safety of items fabricated via plasticization, Stephane Content, Sector Group Manager for the European Council for Plasticizers and Intermediates, explained in an interview with Chemistry Views. Why? Content said a small number of concerned customers and environmental health and safety analysts believe plasticizers leach out of PVC products, resulting in the release of harmful gases. In reality, in well-formulated compounds and products, this is not the case. Leaching of this kind only occurs in the event that vinyl is exposed to highly caustic solvents for extended periods of time, or in a compound that may not be properly and definitively compounded for its’ required application. For everyday items, the possibility of this occurring is slim-to-none. In addition to leaching, some outside of the plastics space have been known to claim that PVC dust is an active irritant or pollutant. Again, scientific studies have proven this to be false. PVC dust poses no harm.

On top of being safe, plastic materials produced via plasticization are heavily regulated, according to the ACC. The Environmental Protection Agency, U.S. Food and Drug Administration and NFS International, a third-party product testing organization, manage PVC-related regulatory workflows and ensure all vinyl materials used in the American industrial space are safe to consumers.

How plasticization propels product advancement
Plasticizers and the polymer fortifying processes in which they are used are critical to numerous industries, lending enterprises across numerous spaces the ability to create and deploy sturdy assets that stand up to punishment and the slow march of time. And, as plastics carve out an even deeper niche in the global marketplace, plasticization will only increase in popularity and importance.

World Antifreeze Trends in 2019

Antifreeze boasts numerous industrial applications, from combustion engine temperature regulation to heating, ventilation and air conditioning refrigeration. Businesses across numerous sectors rely upon the compound due to its plain yet versatile chemical framework. However, this simplicity does not translate to the marketplace, where numerous developments are reshaping the antifreeze arena. That said, the total effect of these changes is positive, as the global market for the substance is growing at an accelerated rate and expected to surpass the $8.7 billion mark by 2025, according to data from Grand View Research. Exactly which factors are fueling this expansion? Here are some of the most important trends:

Increased investment among automakers

Businesses in the automotive manufacturing space have always been reliable antifreeze consumers. Every single motor vehicle on the road requires the compound, after all. This historical trend lives on, as carmakers and original equipment manufacturers in the United States and abroad continue to make massive investments in antifreeze. In fact, spending from this sector is likely to increase due to rising vehicle production demands, analysts for MarketsandMarkets discovered. The International Organization of Motor Vehicle Manufacturers found that automakers worldwide produced 97 million passenger and commercial units in 2017 – the highest number ever recorded in the history of the space. Former Reuters automotive correspondent and Forbes contributor Neil Winton believes the group will publish even larger figures by the conclusion of 2018, laying the groundwork for additional growth in demand for antifreeze in the car manufacturing niche. However, this exciting development is not without complications.

Regulatory bodies such as the Environmental Protection Agency have rolled out amended industrial standards in recent years, including more stringent antifreeze disposal and recycling rules, prompting automakers to embrace sustainability on the shop floor, according to Grand View Research. Even so, larger builders like Fiat Chrysler Automotive are prioritizing more substantial materials as part of such efforts, including fluids like antifreeze, which constitute just over 4 percent of the average FCA vehicle build, are less likely to be subject to usage reductions.

OAT products continue to dominate

There are numerous antifreeze mixtures on the market, but all center on ethylene glycol or polyethylene glycol, though additives may vary. However, additives vary. Inorganic acid technology mixtures, which feature EG and have dominated the market for decades, contain phosphates and silicates that complement the various metals used in automotive cooling systems. These coolants normally last for three years or 36,000 miles. Organic acid technology solutions, on the other hand, contain PG and leverage corrosion-fighting additives and other chemicals to remain active for five years. The latter offer very obvious benefits to users and have begun to overtake their older counterparts. In fact, IAT antifreeze accounts for more than half of all blends sold and maintains the title of fastest growing product segment in the antifreeze space, according to research from MarketsandMarkets.

Global aerospace firms drive growth

In addition to businesses in the automotive sector, aerospace firms are making significant investments in antifreeze products, and are therefore driving considerable growth, analysts for Grand View Research and Global Market Insights discovered. Total commercial aircraft deliveries continue to climb due to increased demand, an overarching trend that has forced plane builders to spend more on mission-critical production components, including antifreeze, according to Deloitte. Additionally, numerous nations, including the U.S., are increasing their defense budgets, allocating extra war fighting funds that inevitably go toward the development of new combat-ready aircraft. In 2016, the latest year for which data from the Aerospace Industries Association was available, U.S.-based firms generated nearly $150 billion in revenue linked to defense projects. With further defense budget increases on the way, the aerospace sector is poised to drive traffic to suppliers of all kinds, including the makers of antifreeze.

The Chemical Company’s Products & The Antifreeze Market

The Chemical Company supplies a wide variety of products that directly or indirectly supply or impact the antifreeze industry. TCC distributes products such as Monoethylene Glycol, Diethylene Glycol, Triethylene Glycol and Methanol. For more information, click here to request product information from TCC.


Rhine River Levels Rise The Chemical Company

Rhine River Water Levels Return to Normal; Transportation Eases

Rhine River levels are returning to normal, meaning higher barge capacity resulting in lower barge rates into and out of Germany.

The Central Commission for the Navigation of the Rhine (CCNR) explains that water levels are currently rising due to significant surface discharge from recent rain events, but has warned this trend may not sustain. For significantly better Rhine levels in spring of 2019, CCNR administrator Kai Kempmann warns, “We will need a precipitation of 1,000 millimeters in December, which is about 120% of the average monthly rainfall.” Even still, Kempmann does not expect levels to fall to the extremes observed through these previous summer and autumn months.

According to data collected by Bundesanstalt für Gewässerkunde (the German Federal Institute of Hydrology), current levels are within mean range, though stations in Maxau (upper Rhine), Kaub (mid Rhine), and Emmerich (lower Rhine), all report levels are currently dropping as of Dec. 28, 2018.

The CCNR quarterly freight rate index fluctuates around the 100 mark during periods where the load capacity of 2.5 and 3-meter draught vessels can operate at 60% or greater capacity. 2018 has seen freight indices topping the 500 mark from May through the present, as 3-meter draught vessels are just able to make 40% capacity, while smaller vessels are breaking 50%.

The CCNR freight index is expected to decline over the first quarter of 2019, with reports that rates have already significantly shifted.


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Ethylene Glycol: An Unseen Manufacturing Powerhouse

Modern manufacturers leverage countless chemical compounds. However, few of these industrial substances are as important as ethylene glycol. This colorless, odorless liquid is deployed in an immense number of manufacturing environments, which is why the global EG market continues to grow. In fact, analysts for Grand View Research predict that EG sales will surpass $33 billion by 2020. What exactly are manufacturers using this chemical for? Here are some common applications, along with some information on the chemical characteristics that make EG an unseen production powerhouse.

An essential coolant component

Antifreeze, the industrial coolant used to keep combustion engines operational in extreme temperatures, is perhaps the most common product associated with EG – and for good reason. The manufacturers that populate the worldwide antifreeze market, which is expected to eclipse $885 billion by 2021, according to research from MarketsandMarkets, heavily rely on this compound. When mixed with water, EG can lower the freezing point of any given liquid while also increasing its boiling point. This makes it ideal for use as antifreeze, which is in turn deployed across numerous industries, including the automotive and heating, ventilation and air conditioning sectors. In short, most motors, residential and commercial cooling systems and the functions these assets support depend on the versatile thermal capabilities of EG.

The foundation for food packaging

The global market for packaged food continues to expand, despite the emergence of competing trends, including the increased consumption of fresh fruit, meat and vegetables. Within fewer than two years, spending on off-the-shelf food items is expected to reach $3 trillion on the back of a compound annual growth rate of 4.5 percent, according to projections from Allied Market Research. This activity is driving similar growth in the worldwide food packaging space, which analysts for Grand View Research believe will expand to more than $411 billion by 2025. Companies in both of these interconnected industries can thank EG for some of this financial success. Why? The chemical provides the foundation for a good portion of the food packaging floating around grocery stores worldwide.

EG supports resin formation by reacting with dimethyl terephthalate or terephthalic acids. Food packaging manufacturers leverage this process to produce everything from soda cans to egg cartons – essential assets for companies selling pre-wrapped fare of all kinds.

A textile production essential

Clothing and textiles accounted for 6 percent of all the manufactured goods exported globally in 2017, according to research from the World Trade Organization. Analysts for the National Council of Textile Organizations, an American trade group, found that producers in the U.S. shipped out almost $80 billion in products over that 12-month span, an all-time high. This growth is expected to continue over the next six years, with researchers for Grand View Research predicting worldwide textile sales to reach approximately $1.2 trillion by 2025. The textile manufacturers powering this marketplace expansion are leveraging a variety of shop floor workflows to meet consumer demand and facilitate success, many of which center on EG.

The chemical is a key ingredient in the production of polyester fiber, which is used in a variety of textile products, including carpet, clothing and furniture upholstery.

The basis for fiberglass products

Industrial companies worldwide invested almost $14 billion in raw fiberglass in 2017, according to research from MarketsandMarkets. That figure is expected to increase to more than $18 billion by 2022 through an impressive compound annual growth rate of 6 percent. This versatile material is used in numerous applications, from the production of bathtubs and bowling balls to shipbuilding. Of course, fiberglass is a not a naturally occurring material. Manufacturers craft the substance in bulk via shop floor processes that leverage EG, which catalyzes resin formation and makes fiberglass possible.

A little-known manufacturing mainstay

These are just a handful of the ways in which EG is used in the manufacturing space. The chemical’s versatility makes it ideal for a vast number of applications. Perhaps the only downside to EG is its toxicity. The substance does pose a hazard to humans if ingested in raw form, which is why industry groups and occupational safety and health oversight organizations advise manufacturers to put into place stringent handling protocols. That said, businesses that manage to address this challenge often find themselves experiencing significant success as a result of EG usage.

rhine river critical levels for the chemical company

Rhine River Levels Critical for Global Trade and Supply Chains

Considered a lifeline to all of Germany, the Rhine River has reached crippling new lows as the severity of this summer’s draught is reaching dire consequences. Recent measurements put the riverbed at 10 inches deep or less, leaving the man-dredged shipping channel at about five feet deep, down from a standard 10-12 feet.

According to the New York Times, roughly 80% of the 223 million tons of cargo transported by water in Germany each year will hit the Rhine at some point in the supply chain. Low water levels have crippled multiple chemical production facilities along the river, leading to either a lack of production, lack of ability to ship goods out, and in many cases, both.

The 745-mile-long river has played a vital role in shaping the worldwide economy due to its influence on international trade since the days of the Holy Roman Empire. It still plays that role to this day. The months-long drought, the most severe since the 1920s, has captured the attention of the global media because of its far-reaching impact on dependent economies in an array of businesses; the chemical industry being one of the most important and most hard hit.

BASF, the German chemical group said in a statement that it was forced to curtail production at the world’s largest integrated chemicals facility at Ludwigshafen due to the inability of ships to navigate the low water levels.

“With the current water level, only a few barges can dock,” BASF said. The statement went on to say, “Even if some goods are transferred to alternative means of transport such as trucks or trains, the supply of some important raw materials will be restricted.”

S&P Global Platts, a publication that covers oil and commodities reports that available smaller barges, capable of navigating the shallow waterways, raised prices from $4–5 per metric ton to more than $40, a cost that will ultimately be absorbed by consumers.

The LED reading at Duisburg, a Rhine measuring station, read 5.09 feet. “This is the lowest level ever measured here,” said Jan Boehme, a hydrologist with the Water and Shipping Authority.

Although the claims on the causes of the drought on the statistical website are not proven beyond a doubt, German authorities say the extreme dry weather matches the models of climate change drawn up by scientists.

The chemical industry and the world are anxiously waiting to see what the impact of the extreme drought coupled with possible new tariffs, trade agreements, and regulatory changes resulting from the U.S. mid-term elections will have on the industry, supply chains, and the global economy. At this time—the outlook is grim.

The Chemical Company Weekly Market Update Benzene Ethylene Propylene PGP RGP Crude Natural Gas November 7, 2018

Weekly Market Update: November 7, 2018

TCC’s Weekly Raw Materials Update: November 7, 2018.


Nov MtB-NOVA bid at 20, offered at 21cpp

Up 1-2cpp from October


Much Lower
Priced DDP HTC at 237cpg

Down $.50, from 287cpg in October


Nov PGP traded at 45.25cpp, down 11cpp from Oct

Nov RGP last traded at 32.5cpp, down 12cpp from Oct

Brent Crude Oil

$72.12/bbl – Down $11.50
Jan ICE Brent

Crude Oil

$62.21/bbl – Down $12.00

Natural Gas

$3.555/mmBtu – Up $.30
Dec NYMEX Natural Gas

Weekly Market Review

The Chemical Company Weekly Market Update Benzene Ethylene Propylene PGP RGP Crude Natural Gas November 7, 2018

TCC produces weekly market review graphics, with content courtesy of PetroChem Wire. This information is distributed via TCC’s social media pages, including Facebook, Twitter, LinkedIn and Instagram, as well as posted to The View section of the website, and occasionally published via email with other market updates.