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The Economy: January 2013

A Gallup Poll conducted on January 7 – 10, just after Washington narrowly avoided the fiscal cliff knocked unemployment off the top of Gallup’s “most important problem” list for the first time since 2009. Federal budget deficit and government dysfunction took over the top spots.

The Congressional Budget Office reported that the federal government incurred a budget deficit of $293 billion for the first three months of the fiscal year 2013 (that is, October through December 2012), $29 billion less than the shortfall recorded in the first quarter of last fiscal year. The US Treasury Department reported that on January 27, 2013 the federal debt was $16.44 trillion. It was $5.7 trillion in 2001.

The White House has informed House Budget Committee Chairman Paul Ryan that it will miss the legal deadline of February 4 for sending a budget to Congress. The Senate last passed a budget resolution in 2009.

The $787 billion economic stimulus legislation mandated quarterly status reports. Fourteen should have been released by now; eight have been issued, the last one covering the period ending in June 2011. The last report stated that for every $317,000 spent, one job was created or saved.

The US government debt held by foreign entities is a record $5.5 trillion, with China holding $1.17 trillion of it, or slightly more than 21% of all the debt owned by foreign entities. In January 2009 the US government owed $3.07 trillion to foreign entities. China remains the top creditor, although Chinese holdings are down 6.7% year over year. Japan is a close second, holding $1.13 billion.

The Bureau of Economic Analysis advance estimate of the fourth quarter 2012 Gross Domestic Product showed a decrease of 0.1% at an annual rate that is from the third quarter to the fourth quarter. In the third quarter, real GDP increased 3.1%. In the second quarter, real GDP increased 1.3%. Current-dollar GDP, the market value of the nation’s output of goods and services, increased at a rate of .05% or $18 billion in the fourth quarter to a level of $15,829 .0 billion. In the third quarter current dollar GDP increased 5.9% or $225.4 billion.

The Conference Board’s Leading Economic Index rose 0.5% in December to 93.9 (2004=100) following no change in November and a 0.3% increase in October.

The Conference Board Consumer Confidence Index which had decreased slightly in November, contrary to earlier estimates of improvement, posted another decrease in December. It stands at 65.1 (1985=100) down from an adjusted 71.5 in November.

The Institute for Supply Management’s Manufacturing Index increased 1.2% to 50.7% in December after contracting in November following two months of modest growth. A reading above 50% indicates that the manufacturing economy is generally expanding. The Non-Manufacturing Report for December was 56.1%, 1.45% higher than the 54.7% registered in November and still indicating continued growth.


In December, retail and food services sales adjusted for seasonal variations were $415.7 billion, an increase of 0.5% from November and 4.7% above November 2011. Total sales for the twelve months of 2012 were up 5.2% from 2011. October through December 2012 sales were up 4.2% from the same period a year ago.
The 2012 US holiday season may have been the worst for retailers since 2008, with sales growth far below expectations. One bright spot was online sales, which continue to grow rapidly.

Privately owned housing starts in December of 954,000 were 12.1% above the revised November estimate of 851,000 and were 36.9% above the December 2011 rate of 697,000. Single family housing starts in December were at a rate of 616,000 or 8.1% above the revised November figure of 570,000. New home sales declined 7.3% in December, to a seasonally adjusted annual rate of 369,000, while November’s sales pace was revised to 398,000. This was 8.8% above the December 2011 estimate of 339,000.

The National Association of Realtors reported that sales of existing homes in 2012 rose to the highest level in five years as prices also gained. Sales of existing homes declined 1% in December to a seasonally adjusted annual rate of 4.94 million but were up 9.2% from 2011. The national median existing home prices rose in December, up 11.5% from a year earlier. The average rate for a thirty year fixed mortgage fell to 3.38% in the week ending January 17. The association has reported that non-American buyers accounted for $82 billion in home sales last year. More than $7 billion of that is by the Chinese, who are the second largest foreign home buyers after Canadians. The Chinese purchase high-end multimillion dollar homes and pay cash.
New orders for manufactured durable goods in December, up seven of the last eight months, increased $10.0 billion or 4.6% to $230.7 billion. This followed a 0.7% November increase.

December unfilled orders for manufactured durable goods, up six of the last seven months, increased $8.2 billion or 0.8% to $992.0 billion. This followed a slight November increase.

Consumer Price Index for all urban consumers was unchanged in December on a seasonally adjusted basis. The US Bureau of Labor Statistics reported that over the last twelve months the all items index increased 1.7 % before seasonal adjustments. The gasoline index fell 2.3% in December, but other indices such as food and shelter increased, resulting in the all items index being unchanged.

The Producer Price Index for finished goods declined 0.2% in December, seasonally adjusted, following a decrease of 0.8% in November and 0.2% in October. On an unadjusted basis, prices for finished goods increased 1.3 % in 2012, compared with a 4.7% increase in 2011.

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

Inflation: Inflation rate in December reported at 1.7%. The November rate was 1.8%. The October rate was 2.2%, September rate was 2.0% and the August rate was 1.7%. Average rate of 2.0% is projected for 2012. It is expected to rise slightly in 2013 to approximately 2.3%.


Industrial production increased 0.3% in December, after having risen 1.0% in November, declined 0.7% in October, increased 0.2% in September, and fallen 1.4% in August. The gain in November is estimated by the Federal Reserve to have largely resulted as recovery from Hurricane Sandy. At 98.1% of its 2007 average, total industrial production in December was 2.2% above its year-earlier level. Capacity utilization for total industry increased 0.1% to 78.8%, a rate1.8% below its 1972 – 2011 average.

Unemployment: The December 2012 rate edged back up to 7.7% as reported by the Bureau of Labor Statistics. This has basically been the same level since September. The number of unemployed persons changed little at 12.2 million. The BLS stated that the long-term unemployed, i.e., jobless for 27 weeks and over was essentially unchanged at 4.8 million. Those individuals accounted for 39.1% of the unemployed. North Dakota continued to lead the nation with the lowest state unemployment rate in December of 3.2%; Nevada and Rhode Island were both reported highest at 10.8%. The Federal Reserve announced on December 20 that it would hold interest rates near zero until it hit the target of 6.5% unemployment. As of January 17, The President’s Council on Jobs and Competitiveness had not held a meeting for a year.

The decline in union membership continued in 2012. The BLS reported that the total number of union members fell by 400,000 to 14.3 million, although the nation’s overall employment rose by 2.4 million. The percentage of workers in unions fell to 11.3%, down from 11.8% in 2011.

Trade Deficit: For November 2012 the goods and services deficit increased to $48.7 billion from the October figure of $42.1 billion as imports increased more than exports.

Crude Oil: Present WTI spot price ~$95/bbl and holding, compared to ~$90+/bbl a year earlier. OPEC has reported that world oil demand is expected to decline in 2013 and has reduced production.

Natural Gas: Henry Hub spot price closed on January 22 at $3.53/MMBTU. February 2013 contract reported at $3.55/MMBTU. Working natural gas in storage is greater than last year and remains above the five year average

The US dollar trading at 91.0 Japanese yen; $1.35 = euro. The British pound sterling = $1.58. Canadian dollar trading at US$1.006

Current US gold price quoted at $1657.00/ounce compared to the record price of $1920/ounce in September, 2011.

Chemical Industry News: January 2013


The American Chemistry Council (ACC) US Chemical Production Index rose by 0.3% in December following a revised 0.1% increase in November. Chemical production rose in all regions for the first time since February 2012. Comparing the entire year 2012 to 2011, chemical production was up 0.2% nationally. Year to year comparisons remained ahead in the Gulf Coast and Ohio Valley regions, strengthened by shale gas advantage. The outlook for 2013 is sluggish, with increase of 1.9%

The ACC’s Chemical Activity Barometer (CAB), for January showed sustained growth, with a 0.4% gain over December 2012. The year over year monthly moving average showed an increase of 2.8% gain compared with January 2012. The chemicals industry generated about $760 billion last year. The ACC reported that 96% of manufactured goods are touched by products of chemistry.

Germany’s Evonik announced on January 11 that it will be expanding output of C-4 based products, including butadiene, methyl tertiary butyl ether, and 1-butene at its plants in Belgium and Germany. The increased capacity is expected to come on stream in 2015. Evonik signed a letter of intent with PETRONAS (Malaysia) in order to cooperate in the production of hydrogen peroxide, C-4 monomer and OXO products. Also included is an isononyl alcohol (INA) plant with a projected volume of 220KT/year expected on line in 2016.

According to a poll conducted by the British manufacturers’ association EEF, many European manufacturers are still unclear of how the Registration, Evaluation, and Restriction of Chemical Substances (REACH) program affects their operations.

Following with Georgia Gulf Corporation’s pending merger with PPG, the company will be known as Axiall Corporation. The merger between Georgia Gulf and PPG’s commodity chemicals business was announced in July. The value of the transaction is estimated by the parties at $2.1 billion.

PPG has acquired the assets of Spraylat Corp., a manufacturer of industrial powder and liquid coatings based in Pelham, NY. The price was not disclosed.

Clariant agreed to sell their textile chemicals, paper specialties, and emulsions businesses to SK Capital Partners for 502 million Swiss francs ($550 million). The deal is expected to be completed by late June.


The ACC is challenging a New York University School of Medicine study that links bisphenol A (BPA) exposure to increased risk of heart and kidney disease. The ACC statement cited that regulators in Japan, Europe, and the US have repeatedly supported the continued safe use of BPA.

 
 
Ford Motor Co. has expanded its car parts recycling program, and has found ways to reuse approximately 62,000 bumpers and 26,000 headlights in the past two years. Headlights normally include a number of polycarbonates and other plastics.

In a Chemical Watch survey, nearly 60% of companies expect increased regulatory compliance activities as tighter rules demand increasing attention to chemical management. Not only TSCA, but also Europe’s REACH program must be considered.

On January 4, the EPA released drafts of the first five of 83 chemical risk assessments it is planning to conduct in order to determine whether it should regulate the substances under TSCA. The EPA has updated regulations for industrial boilers that are aimed at reducing emissions of acid gases, mercury, and fine particulates. The agency estimated that the ruling will cost US manufacturers, chemical facilities, and oil refineries between $1.3 and $1.5 billion each year. The new standards will not take effect until 2016.

The ACC and other groups are working with Sen. David Vitter, R-LA, on possible legislation to reform TSCA. Sen. Vitter is the lead Republican on the Environment and Public Works committee.
US chlor-alkali operating rate for December was reported at 81% of capacity, up 4% from November.
The fourth quarter GDP in Great Britain shrank 0.3% and was seen as leading to a triple-dip recession.

The International Monetary Fund (IMF) Managing Director, Christine Lagarde, was recently quoted as saying that nations need to press forward with fiscal and reform promises, especially in Europe and the US.


Unemployment in the eurozone rose to a new record high of 11.8% in November, up from 10.4% a year earlier. Spain was reported at 27%, the highest rate in the EU. Retail sales rose just 0.1% in November, and were 2.6% lower than November 2011.

The German economy registered a contraction in the fourth quarter of 2012. It expanded 0.7% for the year, but gross domestic product was estimated to have dropped by 0.5% in the fourth quarter. Investment in machinery and equipment was down 4.4% in 2012, while construction investment was down 1.1%.
China’s export growth in December moved upward sharply to a seven month high after seven straight months of slowdown.

Chinese manufacturing unexpectedly expanded at its fastest pace in 19 months in December, creating optimism that recovery of the Chinese economy is gaining.

The Association of American Railroads announced that mixed carload traffic on major US railroads for the week ending 1/19/13 5 declined 3.5% year over year. Intermodal volume was up 13.5% compared with the same week last year.

The ACC along with other shipper groups, recently urged the Surface Transportation Board to adopt policies that promote an economically strong freight rail system by encouraging competition.

 
The American Trucking Association reported that for-hire truck tonnage increased 2.8% in December, and 3.9% in November. For all of 2012, tonnage was up 2.3%.

Shale oil and gas-related:

Private landowners are receiving billions of dollars in royalties each year from the boom in natural gas drilling. In Pennsylvania, royalty payments could exceed $1.2 billion for 2012, according to an Associated Press analysis. The National Association of Royalty Owners estimates that natural gas royalties totaled $21 billion in 2010, the last year for which it has full analysis.

Petrochemical industry representatives met in Pittsburgh early in January to discuss how their industry can capitalize on natural gas and improved manufacturing options. Pittsburgh-based Bayer MaterialScience is examining methane use for producing chemical building blocks. Other participants included Shell Chemical, which is considering constructing an ethane cracker in the commonwealth, and ExxonMobil Chemical.
The complete development of the Marcellus and Utica shale formations could add more than $10 trillion in new economic activity according to a report from Kroll Bond Rating Agency.

Chemical Product News

 

THE CHEMICAL COMPANY

The View from Jamestown”
Product News, December 2012

A Special Message

 On a beautiful New England Winter morning in mid December 2012 evil was in Newtown, CT. There were gentle, happy, harmless children and smart, brave and kind adults sacrificed. They were violently thrust into the hands of God. Our thoughts and prayers have been with those sacrificed and their friends and families.

As we enjoy the Christmas Holiday and the New Year we have all been shocked by these tragic deaths. This event has been thought provoking on many, many levels. Such tragic events usually bring a swift political reaction. We can only hope that any new legislation is well thought out, addresses the issues of mental health and guns, and is not just reactive. We need to protect children and the innocent. This is an obligation not an option. Yet we need to do it through debate and insight, we can’t get this wrong.

The Chemical Company has been proactive about the needs of children for decades. TCC supports each and every employee to sponsor a child at an orphanage in El Salvador. Our support helps them to enjoy the basics of food and clothing that unfortunately we in our lives take for granted. We are able to communicate with the children and see the progress that our money provides. We don’t care about the politics of the country because our money goes to the children and ignoring the problem and letting children suffer just isn’t fair. We love helping these children.

So in memory of all these lovely children and dedicated teachers who died a miserable death, let’s move forward from this tragedy. Let’s start to address all the issues relating to children as loving and caring adults. Let’s try our hardest to protect all children. If the government can’t do it, lets try personally. If we all react and do something positive for children because of the thoughts brought on by this tragedy, this loss may have at least one positive result.

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

Quote of the Month:

“There’s only one thing we can be sure of, and that is the love that we have for our children, for our families, for each other. The warmth of a small child’s embrace, that is true.”

– President Obama, speaking in Newtown, Conn.



 

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Product News

NatureFlexx 509

Phthalate Free General Purpose Plasticizer. Available in Totes (2200 lbs.) and Drums.

Vestinol 9 DINP

TCC offers bulk trucks and split loads (eso or dop) DINP to North America.

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

Bio- Succinic Acid

2000 lb. supersacks and 25 Kg. Bags (Available Q1 2013)

 


New/ Updated Technical Information

 

Stearic Acid

ChemFlexx DOTP

Vestinol 9 DINP

Dicyandiamide

Maleic Anhydride

Tris (Chloroisopropyl)Phosphate (TCPP)

 

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


CRITICAL RAW MATERIALS MARKETS

 

 

UP  Benzene

U.S. benzene contracts for December settled up $.03/ gallon to US$4.93/ gallon from US$4.90/ gallon in November. Spot prices are in the $5.12- $5.23/ gallon range and trending higher.

 N ButaneUP

Normal Butane prices are trading in the mid low to mid US$1.70’s per gallon. N Butane traded the first week of December in the low to mid $1.80’s/ gallon before sliding back to the current level.

  Ethylene

U.S. Contract Price for November settled lower by $.02/ lb. to $.4525/ lb. Current spot is in the low $.50’s due to strong demand.

 Natural Gas

Natural Gas pricing has been moving lower since late November. Pricing eclipsed the $4.00/ mmbtu price point in Mid- November before falling back to the current $3.40’s/ mmbtu.

UP

 Oil

Current WTI Crude price is at $93+/- per barrel range. Prices have been trading in the high $80’s per barrel since late October but have recently spiked and are trending higher.

UP  Orthoxylene

December contracts settled up $.0175/ lb. to $.655/ lb.

UP Propylene

Contract pricing for December settled at $.58/ lb. for Polymer Grade and $.565/ lb. for Chemical Grade. Up $.01/ lb. from November.

 

CHEMICAL’S MARKETS

[wpspoiler name=”Adipic Acid” ]

Adipic Acid

Adipic Acid pricing is flat with good demand and stable supply. Raw material prices are higher (ammonia/ benzene) putting pressure on producer margins. TCC has Adipic Acid in stock and immediately available in 1,000 Kg. Sacks, 500 Kg. Sacks and 25 Kg. bags.

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

[/wpspoiler][wpspoiler name=”Ammonia ” ]

Ammonia

December pricing in Tampa decreased US$35/ ton in Tampa from November ($720/ ton C&F) to US $685/ ton C&F for December. NOLA is seen at $685/ ton fob. Prices in Yuzhnyy (Black Sea) have dropped but are looking to be higher in Q1. Tampa is expected to further decline for January.

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

[/wpspoiler][wpspoiler name=”Ammonium Nitrate” ]

Ammonium Nitrate

Ammonium Nitrate pricing is stable. Seasonal demand will pick up end of Q1. The major feedstock ammonia is stable ($685/ ton) so price movement has not been extreme.

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

[/wpspoiler][wpspoiler name=”Antimony Trioxide” ]

Antimony Trioxide

Demand for antimony trioxide remains weak and availability from South America are keeping prices flat. Current offers are in the upper $4.00/ lb. range for full truckloads. Buyers continue to keep inventories to a minimum and use alternate chemistries where possible.

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

[/wpspoiler][wpspoiler name=”Dicyandiamide” ]

Dicyandiamide

Prices have stabilized. We are keeping a close eye on energy demand and pricing for Q1 2013. Prices are expected to climb as energy demand picks up through January and February. The Chemical Company has both bags and sacks in stock and immediately available.

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

[/wpspoiler][wpspoiler name=”Epoxidized Soybean Oil” ]

Epoxidized Soybean Oil

Soybean prices have been steady, check thechemco.com for real time soybean pricing on our commodities ticker. Epoxidized Soybean Oil Supply is healthy keeping prices stable.

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

[/wpspoiler][wpspoiler name=”Fumaric Acid” ]

Fumaric Acid

Fumaric Acid Pricing has stabilized and availability on both domestic and imported material is good.

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

[/wpspoiler][wpspoiler name=”Glycol (Mono, Di and Tri)” ]

UP Glycol (Mono, Di and Tri)

Ethylene: U.S. Contract Price for November decreased by $.02 /lb. to $.4525/ lb. +

MEG – U.S. producers have announced a 1-2 cts/ lb. increase for January. Spot prices are in the high- $.40’s fob Gulf. Availability is still limited and could get extreme during Q1 with 7 major turnarounds. +

DEG – U.S. producers have announced no price change for January. Spot prices are in the high $.40’s per lb. fob Gulf with improved availability. 7 major turnarounds are planned for Q1 so supply is expected to tighten considerably. \

TEG – U.S. producers announced no pricechange for January after a $.05/ lb. increase for December. Spot pricing is in the $1.10- $1.15/ lb. range and should increase substantially once the turnarounds begin. \ +

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

[/wpspoiler][wpspoiler name=”Isophthalic Acid” ]

UP Isophthalic Acid

PIA pricing has increased slightly in response to strengthening raw material costs. Supply and demand remain stable.

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

[/wpspoiler][wpspoiler name=”Maleic Anhydride” ]

UP Maleic Anhydride

Producers have announced a January increase of $.03- $.04/ lb.. Supply is balanced to long in North America so it is believed that only a portion of the announced increases will stick.

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

[/wpspoiler][wpspoiler name=”Melamine” ]

UP Melamine

Melamine supply has tightened considerably. Price increases of $.05- $.08/ lb. were announce for Q1 2013. Supply and Demand is the most recent driver of pricing.

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

[/wpspoiler][wpspoiler name=”Malic Acid” ]

Malic Acid

Malic Acid Pricing has stabilized and availability on both domestic and imported material is good. TCC has Malic Acid in stock and available.

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

[/wpspoiler][wpspoiler name=”Methanol” ]

Methanol

The Methanex Non-Discounted Reference Price for January will remain unchanged at US$1.45/ gallon (Southern decreased by $02/ gallon to $1.46). Spot pricing is currently approx. US$1.21- $1.23/ gal. and trending lower.

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

Notes:

Northeast terminals are now fully operational.

Gas Curtailment issues in Trinidad continue at an approximate reduction of 20%.

[/wpspoiler][wpspoiler name=”Nitric Acid” ]

Nitric Acid

Nitric Acid pricing is stable and availability is good.

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

[/wpspoiler][wpspoiler name=”Phenolic Resins” ]

Phenolic Resins

Phenol pricing has shifted only moderately higher on less demand and despite higher benzene values. Formaldehyde prices have stabilized on better methanol availability and improved supply.

For more information please contact John Santini at john@thechemco.com

 

[/wpspoiler][wpspoiler name=”Phthalic Anhydride” ]

UP Phthalic Anhydride

Phthalic Anhydride pricing will increase by $.0175/ lb. in January in line with the December orthoxylene price increase. Orthoxylene will likely continue to increase as oil and aromatics pricing tend to increase as build up begins for the Summer driving season.

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

[/wpspoiler][wpspoiler name=”Plasticizers and Plasticizer Alcohols” ]

UP Plasticizers and Plasticizer Alcohols

Plasticizer demand world-wide has been slow but pricing is pressured by the underlying aromatics costs. A price increase for both branched and linear plasticizers has been nominated for Mid- January 2013. Evonik has announced that they will broaden their plasticizer portfolio in the second half of 2013.

Plasticizer alcohol pricing is stable with lack luster demand and healthy supply. There is large capacity expansions completed in Asia and staggering growth slated for the future.

For more information please contact Forest Goodman at forest@thechemco.com

TCC Plasticizers

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

Non (ortho)- Phthalate

ChemFlexx DiOctyl Succinate (DOSX)

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

“ChemFlexx NP 600” Non- Phthalate Replacement for DIDP

ChemFlexx TOTM (TriOctyl Trimellitate)

ChemFlexx DOA (DiOctyl Adipate)

ChemFlexx 8 10 Trimellitate

ChemFlexx DOTP (DiOctyl Terephthalate)

Oxsoft 3G8 (Triethylenglycol-di-(2-ethylhexanoate))

Oxsoft DUO 1

Oxsoft DUO 2

 

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)

Brominated DOP

ChemFlexx 9 11 Phthalate

ChemFlexx L9 Phthalate

 

Phthalate Free

ChemFlexx Dibenzoate Esters

Epoxidized Soybean Oil

NatureFlexx 509” Phthalate Free General Purpose (ATBC)

[/wpspoiler][wpspoiler name=”Styrene monomer” ]

UP Styrene monomer

Styrene pricing increased slightly for December in line with higher benzene values (up $.03/ gallon). NA demand remains slow. 

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

 

[/wpspoiler][wpspoiler name=”Urea” ]

UPUrea

Current granular barge pricing of Urea is US$417- $420/ ton up from $385- $415 in Mid- December. Prills are at $415- $420/ ton fob Gulf. The firming of pricing is associated with a seasonal uptick in demand. 

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

Notes:

Most fertilizer combinations are produced well ahead of the Spring demand season.

Massive U.S. acreage is again expected in 2013.

[/wpspoiler][wpspoiler name=”Zinc Borate” ]

Zinc Borate

Pricing has been relatively steady. 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

[/wpspoiler]

 

Chemical Industry News


Chemical Industry News – December 2012

The View from Jamestown”
A MARKET UPDATE

From the Wall Street Journal:

A new round of negotiations has been scheduled in the dispute between shipping companies and dock workers at ports along the East Coast.

Federal mediators announced the new talks on Thursday. They are scheduled for the week of Sept. 17.The longshoremen’s contract expires at the end of September, and some retailers have already begun re-routing ships in anticipation of a possible strike.

Key issues in the labor dispute include overtime rules and royalty payments to longshoremen based on container weight.The U.S. Maritime Alliance, which represents shippers, says union members are taking advantage of loose overtime rules and driving up shipping costs. The longshoremen’s union says a small minority are being singled out to unfairly characterize the whole membership.

 

Chemical Industry News

The American Chemistry Council (ACC) US Chemical Production Index rose by 0.2% in October following an upwardly revised 0.3% increase in September. Chemical production rose in all regions except the Mid-Atlantic, Northeast, and West Coast, which declined. Compared to October 2011, total production in all regions was down by 0.2%, following a 0.2% decline in September. Comparing revised figures for the first nine months of 2012 with the same period a year ago, chemical production was up 0.1% nationally with only the Ohio Valley region ahead on a year-to-date basis.

The ACC’s Chemical Activity Barometer (CAB,) for December showed no change over the last month. This followed four consecutive monthly increases in the CAB. The chemicals industry generated about $760 billion last year. The ACC reported that 96% of manufactured goods are touched by chemistry.

The ACC will issue updated Responsible Care product and safety codes next year. Sven Ryall, chair of the Responsible Care board committee stated that they were moving forward rather than waiting for government action.

The president of the European Chemistry Council recently stated that Europe’s Registration, Evaluation, and Restriction of Chemical Substances (REACH) program threatens competitiveness by diverting resources from innovative research.

DuPont has begun to focus more on its food and agriculture products, while reducing emphasis on its paint business. More than a third of the company’s profit last year came from paint ingredient titanium dioxide (TiO2), and demand can be volatile. DuPont has invested heavily in the seed business, encountering stiff competition from Monsanto.

Mexichem will no longer pursue a proposed joint venture with Petroleos Mexicanos (Pemex) that would have expanded capacity at a Pemex vinyl chloride monomer plant.

PPG Industries expects to finalize early in 2013 the merger of its spun-off chemicals business with Georgia Gulf. Georgia Gulf CEO Paul Carrico credited low cost natural gas with giving Gulf Coast choro-vinyls a strong market position.

Starting in 2013, bio-based fuel will help power three Dow Automotive Systems plants in Midland, MI. This is expected to reduce CO2 emissions by as much as 8,000 MT/year.

Louisiana is granting Sasol more than $135 million in incentives to build an ethane cracker in the state. It was reported that the package included tax incentives, property funding, and worker training. The project is expected to generate 1250 permanent jobs.

The long-expected EPA standards for soot emissions were released on December 14. They tighten limits on soot pollution from sources as varied as power plants, diesel engines, and burning wood. The new standards limit annual average soot emissions by the end of the decade. Individual states will be responsible for deciding how to cut emissions of the fine particulates.

The Occupational Safety and Health Administration (OSHA) will use sets of 15 questions in process safety assessments for chemical facilities. The questions will vary and will not be available to the public.

A federal appeals court on December 20 rejected an industry-backed request that it reconsider its decision to uphold Obama administration greenhouse gas regulations.

Sabic will open four technology centers in 2013, one each in India and China and two in Saudi Arabia.

US chlor-alkali operating rate for November was reported at 83% of capacity, up 3% from October.

On December 14 President Obama signed into law a bill to remove Cold War era restrictions on trade with Russia and to establish permanent normal trade relations with Moscow. The action became necessary after Russia joined the World Trade Organization.

In a move towards “insourcing,” a number of companies are moving the manufacture of many products back to the US. GE, Whirlpool and Otis have moved offshore manufacturing back to this country. Even Wham-O is bringing Frisbee making from China to California.

The third quarter GDP growth in Great Britain was recently revised to 0.9% from a previous estimate of 1.0%

Unemployment in the eurozone rose to a new record high of 11.7% in October, up from 10.4% a year earlier. Spain was reported at 26.2%. The lowest unemployment rates were recorded in Austria (4.3%), Luxembourg (5.2%), Germany and the Netherlands (5.4%).

China has announced the completion of the world’s longest high-speed rail line, a stretch of 2,298 kilometers (1,428 miles.) The new line will help China to reach its goal of having 18,000 kilometers of high speed railway by 2015.

China’s export growth in November slowed to a much lower than expected 2.9%, to $179.38 from $177.5 billion. A record monthly level of $186.4 billion was reported in September.

Chinese manufacturing accelerated in November as a non-official index jumped to a 13 month high, indicating that the Chinese economy gained momentum.

A Chinese group, International Lease Finance Corp, purchased 80.1% of American International Group Inc. (AIG)’s plane leasing operation for $4.23 billion. This is the nation’s largest acquisition of a US company.

The Association of American Railroads announced that mixed carload traffic on major US railroads for the week ending 12/15 declined 3.8% year over year. Intermodal volume was up 8% compared with the same week last year.

The American Trucking Association reported that tonnage increased 3.7% in November, after falling 3.7% in October. Year-to-date, tonnage was up 2.8% compared with the same period last year.

Environment, Health, Safety and Sustainability

Shale Oil and Gas-related:

Dow Chemical Co. applied for a federal permit to build the company’s biggest ethylene plant, driven by low cost natural gas. The proposed cracker, to be built in Freeport, TX would have annual capacity of 1.5 million tons/year. Construction is estimated to begin in January 2014 at a total cost of $1.7 billion, with start-up in 2017.

New York Governor Andrew Cuomo’s administration will delay a decision on whether to overturn a four year ban on hydraulic fracturing (fracking.) The Department of Environmental Conservation (DEC) filed a notice for a 90 day extension.

The first barrel of ethane from the Bakken field will go to Nova Chemicals’ Joffre, Alberta facility to be converted to polyurethane next year.

There are huge shale deposits outside North America that global energy companies want to tap. However, developers are running into obstacles as they try to reproduce the US experience. Among the reasons for the slow pace are government ownership of mineral rights, lack of infrastructure, and environmental concerns.

The Economy:

      According to an article in The Washington Post, if President Obama and the Congress fail to reach a deal to avoid hundreds of billions of dollars of tax hikes and federal spending cuts,(the “fiscal cliff”) many Americans will see less money in their paychecks in the first week of the New Year.

      The Congressional Budget Office reported that the federal government incurred a budget deficit of $292 billion for the first two months of the fiscal year 2013, $57 billion more than the number recorded in October and November of last year. The US Treasury Department reported that on December 24, the federal debt was $16.35 trillion. It was $5.7 trillion in 2001.

The US government debt held by foreign entities is a record $5.4 trillion, with China holding $1.15 trillion of it, or slightly more than 21% of all the debt owned by foreign entities. In January 2009 the US government owed $3.07 trillion to foreign entities. China remains the top creditor, although Chinese holdings are down 9% year over year. Japan is a close second.

The Bureau of Economic Analysis reported the advance estimate of third quarter 2012 Gross Domestic Product growth at a revised annual growth rate of 3.1%, that is, from the second quarter to the third quarter. In the second quarter, real GDP increased 1.3%. Current-dollar GDP, the market value of the nation’s output of goods and services, increased at a rate of 5.9% or $225.4 billion in the third quarter to a level of $15,811.0 billion. In the second quarter current dollar GNP increased 2.8% or $107.3 billion.

The Conference Board’s Leading Economic Index declined 0.2% in November to 95.8 (2004=100) following a 0.3% increase in October and a 0.4% increase in September.

The Conference Board Consumer Confidence Index which had increased in October, improved again in November. It stands at 73.7 (1985=100) up from an adjusted 73.1 in October.

The Institute for Supply Management’s Manufacturing Index contracted in November following two months of modest growth. The index for November registered 49.5%, a decrease of 2.2% from October’s reading of 51.7%, indicating contraction in manufacturing for the fourth time in the last six months. A reading below 50% indicates that the manufacturing economy is generally retracting. The Non-Manufacturing Report for November was 54.7%, 0.5% higher than the 54.2% registered in October and still indicating continued growth.

In November, retail and food services sales adjusted for seasonal variations were $412.4 billion, an increase of 0.3% from October and 3.7% above November 2011. Total sales for the September through November 2012 period were up 4.3% from the same period a year ago.

“US holiday retail sales this year were the weakest since 2008. This year’s shopping season was disrupted by bad weather and consumers’ rising uncertainty about the economy.”

According to the trade group International Council of Shopping Centers, retail sales for the fiscal month of December will accelerate to 4.0 to 4.5%, keeping the holiday (November-December) forecast of 3% on track.

Privately owned housing starts in November of 861,000 were 3.0% below          the revised October estimate of 888,000 and were 21.6% above the November 2011 rate of 708,000. Single family housing starts in November were at a rate of 565,000 or 4.1% below the revised October figure of 589,000. New home sales fell 0.3% in October, to a seasonally adjusted annual rate of 368,000, while September’s sales pace was revised from 389,000 to 369,000. This was 17.2% above the October 2011 estimate of 314,000.

The National Association of Realtors reported that sales of existing homes increased 5.9% in November to a seasonally adjusted annual rate of 5.04 million from October’s adjusted level of 4.76 million, and are14.5% higher than the 4.4 million rate of November 2011. The national median existing home prices rose in November, up 10.1% from a year earlier. The association has reported that non-American buyers accounted for $82 billion in home sales last year. More than $7 billion of that is by the Chinese, who are the second largest foreign home buyers after Canadians. The Chinese purchase high-end multimillion dollar homes and pay cash.

New orders for manufactured durable goods in November, up six of the last seven months, increased $1.6 billion or 0.7% to $220.9 billion. This followed a 1.1% October increase.

November unfilled orders for manufactured durable goods, up for five of the last six months, increased $1.1 billion or 0.1% to $984.4 billion. This followed a 0.3% October increase.

Consumer Price Index for all urban consumers declined 0.3% in November on a seasonally adjusted basis, following an increase of 0.1% in October and a 0.6% increase in September. The US Bureau of Labor Statistics reported that over the last twelve months the all items index increased 1.8 % before seasonal adjustments. The gasoline index fell 7.4% in November, which more than offset increases in other areas.

The Producer Price Index for finished goods declined 0.8% in November, seasonally adjusted, following a decrease of 0.2% in October, and an increase of 1.1% in September. On an unadjusted basis, prices for finished goods increased 1.5 % for the twelve months ended November 2012, the smallest advance since a 0.5% increase for the twelve month period ended July 2012.

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

Inflation: Inflation rate in November reported at 1.8%. The October rate was 2.2%, September rate was 2.0% and the August rate was 1.7%. Average rate of 2.0% is projected for 2012.

Industrial production increased 1.1% in November, after having declined 0.7% in October, increased 0.2% in September, and fallen 1.4% in August. The gain in November is estimated by the Federal Reserve to have largely resulted as recovery from Hurricane Sandy. The largest estimated storm-related effects included reductions in the output of utilities, chemicals, and food. At 96.6% of its 2007 average, total industrial production in October was 1.7% above its year-earlier level. Capacity utilization for total industry increased 0.7% to 78.4%, a rate1.9% below its 1972 – 2011 average.

Unemployment: The November 2012 rate edged down to 7.7% as reported by the Bureau of Labor Statistics. The number of unemployed persons changed little at 12.0 million. The BLS stated that the long-term unemployed, i.e., jobless for 27 weeks and over was little changed at 4.8 million. Those individuals accounted for 40.1% of the unemployed. North Dakota continued to lead the nation with the lowest state unemployment rate in October of 3.1%, and Nevada was again reported the highest at 10.8%. The Federal Reserve announced on December 20 that it would hold interest rates near zero until it hit the target of 6.5% unemployment.

Trade Deficit: For October 2012 the goods and services deficit increased to $42.2 billion from September figure of $40.3 billion as exports decreased more than imports.

Crude Oil: Present WTI spot price ~$87/bbl and holding, compared to ~$90+/bbl a year earlier.  OPEC has reported that world oil demand is expected to decline in 2013.

Natural Gas:  Henry Hub spot price closed on December 19 at $3.25/MMBTU. January 2013 contract reported up at $3.82/MMBTU. Working natural gas in storage is greater than last year and remains above the five year average

The US dollar trading at 84.7 Japanese yen; $1.32 = euro. The British pound sterling = $1.61. Canadian dollar trading at US$1.008

Current US gold price quoted at $1661.00/ounce compared to the record price of $1920/ounce in September, 2011.

 

 

TCC Downloadable Brochures:

 

 

 

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

 

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


Chemical Industry News

The View from Jamestown”

Chemical Industry News – November 2012

CHEMICAL INDUSTRY NEWS

The American Chemistry Council (ACC) US Chemical Production Index was flat in September following no growth in August. Chemical production fell in all regions except the Gulf Coast and the Ohio Valley regions, which posted gains. Compared to September 2011, total production in all regions was down by 0.5%, a worsening year-over-year comparison. Comparing the first nine months of 2012 with the same period a year ago, chemical production was up 0.2% nationally.

The ACC’s Chemical Activity Barometer (CAB,) for November showed a drop of 0.5% over the previous month. This followed four consecutive monthly increases in the CAB. The chemicals industry generated about $760 billion last year.

Cytec Industries will sell its coating resins subsidiary to private equity firm Advent International for $1.03 billion. Advent will assume $118 million of liabilities associated with the unit, bringing the total value of the deal to $1.15 billion. It is expected to close in the first quarter of 2013.

BASF, the world’s largest chemical company, is breaking up its plastics division and splitting the operations into consumer and commodity lines in order to help market tailored products to the automotive and apparel markets.

Methanex obtained federal and state environmental permits to relocate its Chilean methanol plant to Geismar, LA and to operate it. The move was initiated in order to take advantage of low cost natural gas.

The Department of Health and Human Services has asked a federal judge to dismiss the American Chemistry Council’s lawsuit which seeks to obtain disclosure of documents that explain how HHS staff decided to list formaldehyde in its most recent report on carcinogens. The ACC claims that HHS has ignored its requests through the Freedom of Information Act.

Jubail Chemicals Storage and Services, the joint venture of SABIC and Vopak, awarded the engineering and construction contract for its Saudi Arabian chemical terminal to China National Chemical Engineering. The $400 million facility will have an initial capacity of 250,000 cubic meters when completed in 2015.

US chlor-alkali operating rate for October was reported at 80% of capacity, down 1% from September, down from the August rate of 86%.

The House of Representatives voted on November 16 to take a step toward normalizing trade relations with Russia, disposing of one of the last remains of cold war era policy. The US Senate is expected to pass the bill. A proviso is attached to the legislation that seeks to punish Russians who are involved in human rights abuses, so that the US could deny visas to Russian officials who are deemed abusers and freeze their assets. The Russian Foreign Ministry called the move “flagrantly unfriendly.”

Russian petrochemical producer Sibur and Belgium’s Solvay have agreed to form a joint venture for the production of surfactants and oilfield process chemicals in Russia. The company will be known as Ruspav and is expected to come on line in 2015.

More than a quarter of German companies have said that they would likely be cutting jobs in 2013. The Cologne Institute for Economic Research found that 30% of businesses said that their position was worse than the previous year.

German engineering giant Siemens is quitting its solar energy business in favor of wind and hydropower. Siemens will sell Solel Solar Systems, which it acquired for $418 million in 2009, and the photovoltaic business of its solar and hydro division.

Unemployment in the eurozone rose to a new high of 11.6% in the third quarter. Spain and Greece were reported at more than 25%. The lowest unemployment rates were recorded in Austria (4.4%), Luxembourg (5.2%), Germany and the Netherlands (5.4%). The UK rate was 7.9%

The EU failed to reach a seven year budget agreement at its Brussels summit in late November.

China’s exports decreased in October to $177.5 billion, from a record monthly level of $186.4 billion in September.

Chinese manufacturing accelerated in November as a non-official index jumped to a 13 month high, indicating that the Chinese economy gained momentum.

Following China Petrochemical Corp.’s (Sinopec) $1.5 billion investment in Canada’s Talisman Energy Inc. the state controlled Chinese company said it was already exploring ways to widen the partnership, emphasizing China’s eagerness to secure more energy resources. Sinopec owns 49% of UK North Sea oil and gas assets owned by Talisman.

The International Warehouse and Logistics Association has created a cross-border protocol for the warehousing of chemicals. It sets standards regarding best practices in the US and Canada.

Auto sales in China were up 6.4% in October, after a decrease of 0.3% in September and a September increase of 5.3%.

The Association of American Railroads announced that carload traffic on major US railroads for the week ending 11/17 declined 4.9% week to week, but was up 2.4% year over year.

The American Trucking Association reported that tonnage decreased 3.8% in October, after falling 0.4% in September. Year-to-date, tonnage was up 2.9% compared with the same period last year.

Shale Oil and Gas-related:

The International Energy Agency has stated that natural gas will overtake oil as the most-used fuel in the US by 2030 as supplies increase. The IEA foresees the US as an exporter starting in around 2018.

Senators Ron Wyden (D-Ore.) and Lisa Murkowski (R-AK) said that they plan to collaborate on a bill that would balance environmental protection, job generation and economic development spurred by the oil and natural gas boom.

Royal Dutch Shell anticipates spending over $20 billion on natural gas projects through 2015.

The CEO’s of Phillips 66 and Marathon Petroleum recently said that they expect President Obama’s second term to bring a wave of regulation on their industry. They cited that new and expanded federal regulations including the Renewable Fuel Standards and the Corporate Average Fuel Economy standards have cost their companies billions to date.

Former General Electric CEO Jack Welch told CNBC that the US hydrocarbons industry is poised to boom the way the internet sector did in the 1990’s, although regulations are preventing it from taking off.

Nick Vafiadis, global director of plastics for IHS Chemical recently stated that massive planned expansions for ethylene feedstock could lead to almost 15 billion pounds of lower cost polyethylene capacity in the US and Canada.

The natural gas industry has expressed frustration with New York State’s continuing review of hydraulic fracturing (fracking) with one trade group saying that its trust in state government has been exhausted. The Independent Oil and Gas Association of New York has sent a letter to Governor Andrew Cuomo urging that he have the Department of Environmental Conservation (DEC) release its long-awaited final report on large scale fracking and to move ahead with issuance of permits. The letter came in advance of a November 29 regulatory deadline, which if missed, would require the DEC to re-open its proposed regulations to public comment. The DEC report was first launched in July, 2008.

Occidental Chemical (OxyChem) has commissioned CB&I for the basic engineering design of a proposed cracker that will produce 1.2 billion lbs/year of ethylene. Feedstock will be from domestic shale gas.

THE ECONOMY

Federal Reserve Chairman Ben Bernanke said that an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth, while failure to avoid the so-called fiscal cliff would pose a “substantial threat” to the economy. Bernanke identified the threat of $607 billion in automatic tax increases and spending cuts scheduled to take place in 2013 as one of the impediments as companies hold back on hiring and investment.

      The Congressional Budget Office reported that the federal government incurred a budget deficit of $1.1 trillion for fiscal 2012, the fourth consecutive year with a deficit above $1.0 trillion. It was $207 billion less than the deficit recorded in fiscal 2011 because revenues rose by $147 billion while outlays dropped by $61 billion. The US Treasury Department reported that on November 24, the federal debt was $16.28 trillion. It was $5.7 trillion in 2001.

The US government debt held by foreign entities is a record $5.4 trillion, with China holding $1.16 trillion of it, or slightly more than 21% of all the debt owned by foreign entities. In January 2009 the US government owed $3.07 trillion to foreign entities. China remains the top creditor, with Japan a close second.

The Bureau of Economic Analysis reported the advance estimate of third quarter 2012 Gross Domestic Product growth at an annual growth rate of 2.0%, that is, from the second quarter to the third quarter. In the second quarter, real GDP increased 1.3%. 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 5.0% or $190.1 billion in the third quarter to a level of $15,775.7 billion. In the second quarter current dollar GNP increased 2.8%. or $107.3 billion.

The Conference Board’s Leading Economic Index increased 0.2% in October to 96.0 (2004=100) following a 0.5% increase in September and a 0.4% decrease in August.

The Conference Board Consumer Confidence Index which had increased in September, improved again in October. It stands at 72.2 (1985=100) up from an adjusted 68.4 in September.

The Institute for Supply Management’s Manufacturing Index expanded in October for the second consecutive month following three straight months of contraction. The index for October registered 51.7%, an increase of 0.2% from September’s reading of 51.5% indicating growth. A reading below 50% indicates that the manufacturing economy is generally retracting. The Non-Manufacturing Report for October was 54.2%, 0.9% lower than September’s 55.1%, but still indicating continued growth.

In October, retail and food services sales adjusted for seasonal variations were $411.6 billion, a decrease of 0.3% from September and 3.8% above October 2011. Total sales for the August through October 2012 period were up 4.7% from the same period a year ago.

According to the trade group International Council of Shopping Centers, major retailers reported robust post-Thanksgiving sales. Wal-Mart reported its best ever sales on “Black Friday.”

Privately owned housing starts in October of 894,000 were 3.6% above the revised September estimate of 863,000 and were 41.9% above the October 2011 rate of 630,000. Single family housing starts in October were at a rate of 594,000 or 0.2% below the revised September figure of 595,000. New home sales increased 5.7% in September, to a seasonally adjusted annual rate of 389,000, and were 27.1% above the September 2011 figure of 306,000. The Census Bureau adjusted estimate of new houses for sale at the end of September was 145,000, representing a supply of 4.5 months at current sales rates.

The National Association of Realtors reported that sales of existing homes increased 2.1% in October to a seasonally adjusted annual rate of 4.79 million from September’s adjusted level of 4.69 million. The national median existing home prices rose in October, up 11.1% from a year earlier.

US foreclosures and short sales accounted for 24% of October sales, unchanged from September. They were 28% in October 2011.

New orders for manufactured durable goods in September, up four of the last five months, increased $19.5 billion or 9.8% to $218.2 billion. This followed a 13.1% August decrease, which was the largest decrease since January 2009.

September unfilled orders for manufactured durable goods, up for three of the last four months, increased $1.7 billion or 0.2% to $981.0 billion. This followed a 1.7% August decrease.

Consumer Price Index for all urban consumers increased 0.1% in October on a seasonally adjusted basis, following a 0.6% increase in September. The US Bureau of Labor Statistics reported that over the last twelve months the all items index increased 2.2 % before seasonal adjustments. The shelter index rose 0.3%, its largest increase since March 2008. The energy index, which had risen sharply in August and September, declined slightly in October.

The Producer Price Index for finished goods declined 0.2% in October, seasonally adjusted, following an increase of 1.1% in September and 1.7% in August. On an unadjusted basis, prices for finished goods increased 2.3 % for the twelve months ended October 2012, the largest advance since a 2.8% increase for the twelve month period ended March 2012.

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

Inflation: Inflation rose in September by 2.2%. The September rate was 2.0% and the August rate was 1.7%. Average rate of 2.0% is projected for 2012.

Industrial production declined 0.4% in October, after having increased 0.2% in September, and fallen 1.4% in August. Hurricane Sandy, which held down production in the Northeast at the end of October, is estimated by the Federal Reserve to have reduced the rate of change in total output by nearly one percentage point. The largest estimated storm-related effects included reductions in the output of utilities, chemicals, and food. At 96.6% of its 2007 average, total industrial production in October was 1.7% above its year-earlier level. Capacity utilization for total industry decreased 0.4% to 77.8%, a rate 2.5% below its 1972 – 2011 average.

Unemployment: The October 2012 rate was virtually unchanged at 7.9% from 7.8% in September as reported by the Bureau of Labor Statistics. The number of planned layoffs by US firms increased 41% in October to the highest level in five months, although the number includes more than 10,000 jobs in US-owned auto plants in Europe. According to the BLS, Hurricane Sandy had no discernible effect on the October employment/unemployment data. The BLS stated that the long-term unemployed, i.e., jobless for 27 weeks and over was little changed at 5.0 million from the 4.8 million reported in for September. Those individuals accounted for 40.6% of the unemployed. North Dakota continued to lead the nation with the lowest state unemployment rate in October of 3.1%, and Nevada was again reported the highest at 11.5%.

Trade Deficit: For September 2012 the goods and services deficit decreased to $41.5 billion from a revised August figure of $43.8 billion as exports increased more than imports.

Crude Oil: Present WTI spot price ~$87/bbl and holding, compared to ~$90+/bbl a year earlier.  OPEC has reported that world oil demand is expected to decline in 2013. Prices have seen an increase of ~$1.00/bbl as a result of the Israeli-Palestinian conflict in Gaza.

Natural Gas:  Henry Hub spot price closed on November 20 at $3.62/MMBTU. December contract reported up at $3.76/MMBTU. Working natural gas in storage is greater than last year and remains above the five year average. Residential and commercial consumption is increasing as the temperature drops.

The US dollar trading at 82.4 Japanese yen; $1.30 = euro. The British pound sterling = $1.60. Canadian dollar trading at US$.99

Current US gold price quoted at $1729.50/ounce compared to the record price of $1920/ounce in September, 2011.

 

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


Optimize Your Business in China

THE CHEMICAL COMPANY

“The View from Jamestown”

CHEMICAL MARKETS UPDATE, November 2012

Optimize Your Position in China:
The Top 10 reasons to do business with The Chemical Company

Each and every day, if your spam filters don’t catch them, you will receive solicitations to do business in China.  Some are horribly written and not very professional, but many are quite good and seem legitimate.  These email solicitations will claim to be a producer and refer you to their professional looking web sites complete with pictures, specifications, a plant, etc.   When you contact them they will make claims and promises.  They will meet your specifications, provide incredible pricing and claim they can ship on time.

Unfortunately all of us at The Chemical Company have heard the stories of woe from different customers and associates who have been conned by one of these solicitations.  Please be careful.  If it sounds too good to be true, it probably is.

We have to understand that China is a different culture and the rules they play by are different than ours.  Many times employees of companies in China go home after work and run their side business.  They may even compete with their employer, selling the same or similar products on the side.  This isn’t unusual and isn’t considered as unethical as it is in the Americas.  The internet has now provided these small enterprising individuals access to the world and each one feels they are going to be the next world class trader.  Unfortunately, as was the case in the US when the internet ignited many new scams, China is no different.  We feel the problem is even bigger, its simple arithmetic, the more people the greater the possibility for unscrupulous individuals scamming on the internet.

Recently we have seen a huge uptick of email solicitation.  This is likely related to the availability of Google search on the internet in China.  The solicitations have been coming fast and furious.  Companies who have responded are being scammed and don’t even know it yet. So please be careful and take nothing for granted when deal with services from China.

 Top 10 Reasons to do Business with TCC:

1. The Chemical Company has operated a procurement and logistics office in China Since 2006.  We are well established, have major contracts and a history of success.  We can assure the most competitive price on most products we offer originating from the PRC.

2. The Chemical Company visits with each producing partner, analyzes their operations and abilities in depth prior to the first export.

3. We give firm price quotes with the validity (period of time that price offered is valid) specified.  We will not change our price after accepting an order.

4. We can handle all freight options and deliver on time.

5. We can offer payment terms where credit is approved.  Most transactions in China are Cash leaving a wide gap between payment and delivery.

6. We can keep the “pipeline full.”  We will make sure your critical raw materials are supplied on time and without interruption.

7. We can assure quality, terms, volume, etc.

8. We can offer l/c/l deliveries either direct from China or from one of our regional warehouses throughout the Americas.  In an environment of lower inventories allow us to manage your inventory off site.

9. We can assure quality.  Even offer pre-shipment sampling and testing/ survey to assure quality.

10. The Chemical Company is one of the largest chemical distributors world wide.  We are established, insured and trusted by our suppliers and customers.  The Chemical Company will back the products we offer from China or anywhere in the world.

 

We have heard so many sad stories over the years.  Including a company who loaded their reactor with melamine that turned out to be salt.  Another company ruined their reactor when their finished product turned rock hard.  Many companies have shut down their plants when product didn’t arrive as promised.  And hundreds of companies have received out of specification materials and some have paid and never received the product.  This is an epidemic in China.  We know it and have had to put the right people in place in China to prevent it.  It’s just not like doing business in the America’s and Europe.  In China you just need to be careful, we can help.

 

Quote of the Month:

Attention is the rarest and purest form of generosity.”

– French philosopher Simone Weil (1909-43)

 

 



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

 

Upcoming Events

 

American Fuel & Petrochemical Manufacturers

2013 AFPM International Petrochemical Conference March 24-26 Grand Hyatt San Antonio, TX

 

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

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Product News

NatureFlexx 509: Phthalate Free General Purpose Plasticizer.  Available in Totes (2200 lbs.) and Drums.

Phthalic Anhydride:  TCC offers Phthalic Anhydride in 25 Kg. Bags and 2,000 lb. supersacks.

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

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

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

 

New/ Updated Technical Information:

Stearic Acid

ChemFlexx DOTP

Vestinol 9 DINP

Dicyandiamide

Maleic Anhydride

Tris (Chloroisopropyl) Phosphate (TCPP)

 

Please contact Robb Roach at robb@thechemco.com

or Tel: (401) 423- 3100 for more information.

 

 

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

Critical Raw Materials Markets

Raw Materials Legend

Benzene: U.S. benzene contracts for November settled up $.50/ gallon to US$4.90/ gallon from US$4.40/ gallon in October. Spot prices are in the $4.90- $5.00/ gallon range.

 

N Butane: Normal Butane prices are trading in the mid US$1.60’s per gallon. N Butane closed the first week of November at $1.64/ gallon. This is well above the October’s average in the low $1.50’s.

 

Ethylene: U.S. Contract Price for October settled lower by $.01/ lb. to $.4725/ lb. Current spot is in the Mid to high $.50’s due to strong demand.

 

Natural Gas: Natural Gas pricing eclipsed the $4.00/ mmbtu price point in late October before falling back to the $3.60’s/ mmbtu. Recent strengthening has put pricing into the $3.80’s/ mmbtu.

Check the real-time commodities tracker at thechemco.com for up to the minute info.

Oil: Current WTI Crude price is in the $86 per barrel range.  Prices dropped through late October and post election but have stabilized in the $86/ barrel range.

Check the real-time commodities tracker at thechemco.com for up to the minute info.

Orthoxylene: November contracts settled down $.0325/ lb. to $.6375/ lb.

Propylene: Contract pricing for October were $.53/ lb. for Polymer Grade and $.515/ lb. for Chemical Grade.  November contracts have settled up $.04/ lb. to $.57/ lb. for Polymer Grade and $.555/ lb. for chemical Grade.

Chemicals Markets

 

Adipic Acid

Adipic Acid pricing is flat with good demand and stable supply.  Raw material prices are higher (ammonia/ benzene) putting further pressure on producer margins.   The risk of outages due to the Atlantic hurricane season is nearly over.  TCC has Adipic Acid in stock and immediately available in 1,000 Kg. Sacks, 500 Kg. Sacks and 25 Kg. bags.  
For more information please contact Robb Roach at robb@thechemco.com

Ammonia

November pricing in Tampa increased US$5/ ton over October ($715/ ton C&F) to US $720/ ton C&F.  NOLA is seen at $685/ ton fob.  Availability is tight to balanced with continued gas curtailments in Trinidad.  Prices in Yuzhnyy (Black Sea) are dropping while Middle East pricing is firm with limited availability. 
For more information please contact Robb Roach at robb@thechemco.com

Ammonium Nitrate

Ammonium Nitrate pricing is stable.  Seasonal demand has slowed.  The major feedstock ammonia is relatively tight due to the gas curtailments in Trinidad but price movement has not been extreme. 
For more information please contact AJ Petrarca aj@thechemco.com

Antimony Trioxide

Demand for antimony trioxide remains relatively weak and new availability from South America had helped relieve pricing although prices have recently plateaued.  Not much has changed as current offers are in the upper $4.00/ lb. range for full truckloads.  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

Prices have come off approx. US$400-500/MT in the past 2 months.  Producers are selling at or below cost to keep volumes up with the anticipation of 2 new production facilities in China that are expected to be operational by the end of October 2012.  
For more information please contact AJ Petrarca aj@thechemco.com

Epoxidized Soybean Oil

The is some relief in Soybean pricing which should help the rather unhealthy margins associated with ESO.  ESO Supply is healthy keeping prices low.  
For more information please contact Robb Roach at robb@thechemco.com

Fumaric Acid

Fumaric Acid Pricing has pushed higher on improved butane values and limited availability.  Product has become tight due to flooding earlier this year at a U.S. Producers plant and the Nippon Shokubai explosion.  
For more information please contact AJ Petrarca aj@thechemco.com

Glycol (Mono, Di and Tri)

Ethylene:   U.S. Contract Price for October  by $.01/ lb. to $.4725/ lb. 

MEG – U.S. producers have announced a 2-5 cts/ lb. increase for November.  Spot prices are in the mid- $.50’s fob Gulf.  Availability is still limited but Should improve. 

DEG- U.S. producers have announced a price increase of $.03- $.05/ lb. for November.  Spot prices are in the $.70’s per lb. fob Gulf.  Availability is limited due to turnarounds. 

TEG- U.S. producers announced a price increase of $.21- $.27 per lb. increase for October.  Another $.06- $.10/ lb. increase was announced for November.  Spot pricing is seen up to $1.28/ lb.
For more information please contact Robb Roach at robb@thechemco.com

Isophthalic Acid

PIA pricing has increased slightly in response to strengthening 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 despite continued pressure from its feedstock Butane.  Supply is balanced to long in North America. 
For more information please contact AJ Petrarca aj@thechemco.com

Melamine

Melamine supply has tightened considerably.  Price increases of $.10- $12/ lb. were announce for Q4 and have stuck.  Supply and Demand is the most recent driver of pricing.  Urea prices have moved lower and therefore no longer pressuring Melamine cost.  
For more information please contact Javier Fernandez  Javier@thechemco.com 

Malic Acid

 Malic Acid pricing has been pressured by supply and demand issues.  Domestic and International manufacturers are running well so pressure should wane in the coming months.  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 November has increase by $.13/ gallon to US$1.45/ gallon. Spot pricing is currently approx. US$1.25- $1.28/ gal. and trending lower. 
For more information please contact Robb Roach at robb@thechemco.com

Notes:

Northeast terminals are still unable to load methanol due to storm damage and continued power outages.  Repairs are quickly being made and power is expected to be recovered in the very near future.

Northeast customers are being re-routed to Wilmington, NC for contingency supply.

SCC Posted price US$1.48/ gallon

Gas Curtailment issues in Trinidad continue. 

The Atlas Plant in Trinidad has re-started.

Nitric Acid

Nitric Acid pricing is level yet pressured by good demand and higher ammonia pricing.

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

Phenolic Resins

Phenol pricing has shifted only moderately higher on less demand and despite higher benzene values.   Formaldehyde prices move nominally higher with limited availability in the Northeast due to Super Storm Sandy and methanol prices firming nationwide.  
For more information please contact John Santini at john@thechemco.com

Phthalic Anhydride

Phthalic Anhydride pricing will decrease by $.035/ lb. in December in line with the November orthoxylene price decrease.  Orthoxylene will likely continue to decrease as oil and aromatics pricing drops toward year end. 
For more Information please contact Javier Fernandez at javier@thechemco.com

Plasticizers and Plasticizer Alcohols

Plasticizer demand world-wide has been flat with pricing supported by underlying raw material costs.  No new increases have been nominated for November.  Pricing should remain unchanged for the remainder of 2012 unless there is an unforeseen issue/ outage or major raw material spike.

Plasticizer alcohol pricing is pretty stable with improved demand and some firming noted in Asia.  There is large capacity expansions completed in Asia and staggering growth slated for the future.
For more information please contact Forest Goodman at forest@thechemco.com

TCC Plasticizers available:

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

Non (ortho)- 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

ChemFlexx DOTP (DiOctyl Terephthalate)

Oxsoft 3G8 (Triethylenglycol-di-(2-ethylhexanoate))

Oxsoft DUO 1

Oxsoft DUO 2

 

Phthalates:

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)

Brominated DOP

ChemFlexx 9 11 Phthalate

ChemFlexx L9 Phthalate

Styrene monomer:

Styrene pricing increased for November in line with higher benzene values (up $.50/ gallon). NA demand remains slow. +
For more information please contact Robb Roach at robb@thechemco.com

Urea:

Current granular pricing of Urea is US$385- 415/ ton down from $425- $435 in Mid- October. The softening of pricing is associated with a seasonal lull as well as recent excessive imports. –
For more information please contact Robb Roach at robb@thechemco.com
Notes:
Prills are selling at a US$20-$30/ ton premium over granular.
Buyers are expecting even lower prices in the coming weeks.
Massive U.S. acreage is again expected in 2013.

Zinc Borate:

Pricing has been relatively steady Product is in stock and immediately available.

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

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

 

Chemical Industry News

The Chemical Company
Congratulations to A.J. Petrarca, married in 2012, Javier Fernandez (left) – TCC Central America, Robb Roach (right) – TCC President

Chemical Industry News

The American Chemistry Council (ACC) US Chemical Production Index dropped by 0.2% in August, following a revised 0.5% decline in July.  Chemical production fell in all regions except the Gulf Coast, which posted a gain, and the Ohio Valley, which was flat. Compared to August 2011, total production in all regions was down by 0.4%, the first negative year-over-year comparison in twelve months.

The ACC’s Chemical Activity Barometer (CAB,) for October showed a 0.6% growth to 97.9%, after September’s revised number of 90.2%. This represents the fourth consecutive monthly increase in the CAB. The chemicals industry generated about $760 billion last year.

According to the Congressional Budget Office, the bill proposed by Sen. Frank Lautenberg to reform the Toxic Substances Control Act (TSCA) would increase enforcement costs by 30% per year and would also cost manufacturers approximately $1 million per chemical for compliance.

The ACC is seeking a “highly influential scientific assessments” designation for the EPA’s planned assessment of seven chemicals under TSCA in order to foster a rigorous peer review.

St. Paul, MN-based Ecolab, Inc. will pay approximately $2.2 billion in cash and stock to purchase the specialty chemical company Champion Technologies. Champion is privately held and based in Houston, TX.

Lanxess AG opened a plant in Gastonia, NC on September 17 for the manufacture of nylon compounds and polybutylene terephthalate compounds. Investment was estimated at $20 million. Almost the entire output of the plant will be in automotive applications.

ExxonMobil plans to expand its chemical and lubricants facilities in Baton Rouge and Port Allen, LA is expected to create more than 400 construction jobs.

As part of its restructuring plan aimed at coping with slowing economic growth, Dow Chemical Co. will eliminate approximately 2,400 jobs and close approximately 20 manufacturing facilities. The job cuts amount to 5% of the company’s worldwide workforce. Cost savings are estimated to be $500 million. The company also plans to cut capital spending and investments, resulting in an additional $500 million. Dow anticipates that it will save $2.5 billion including all cost cutting measures.

Dow Chemical Chairman, President and CEO Andrew Liveris will lead the Business Council, a group made up of CEO’s of US firms that provides business practices guidance to the government.

Evonik will build a new 120,000 TPY methyl methacrylate plant at its Mobile, AL site. It is expected to come on stream in mid-2015. It will be Evonik’s largest North American site.

AkzoNobel is increasing its Texas specialty chemicals capacity in order to meet demand from the semiconductor industry. Demand is principally from the production of light-emitting diodes for tablet and laptop screens.

Nova Chemicals was named as the ICIS Company of the Year based on having taken advantage of favorable conditions in ethane to restore its finances and to show impressive profits. The success was attributed to drawing on ethane associated with shale gas drilling.

The US Export-Import Bank granted Sadara Chemical, a joint venture between Dow Chemical and Saudi Aramco, a $5 billion direct loan to help finance its $20 billion petrochemical operation in Jubail, Saudi Arabia. The loan is expected to support more than 18,000 US jobs and create export opportunities for US-based firms.

Dutch-based bioplastics producer CSM NV and BASF have established a 50/50 joint venture for the production of bio-based succinic acid. The venture will be called Succinity GmbH and will be based in Duesseldorf, Germany. Production is expected to start up in 2013.

US chlor-alkali operating rate for August was reported at 86% of capacity, down 2% from July. US chlor-alkali production reached 997, 000 tons for chlorine and 1,038,000 tons for caustic soda.

In response to growing concerns about shortages of rare earth materials a US industry group called The Rare Earth Technology Alliance has been established. Rare earth materials are used in a wide variety of electronics and energy production. China is one of the largest producers of them.

TCC Recycles!
The recycling of plastic bottles by US consumers increased 45 million pounds in 2011.

Oil and gas companies asked a federal appeals court in September to force the US Department of Interior to move more quickly on issuing oil and gas leases. The 10th Circuit Court of Appeals in Denver heard arguments about whether the Department’s Bureau of Land Management must issue oil and gas leases within 60 days after they’re sold.

Chemical production in the eurozone rose in July by 1.2% on a month-to-month basis. In June, chemical production had fallen 1.6% according to revised numbers. The July level was lower than a year earlier.
Kemira has put 14 of its manufacturing facilities under review as part of a consolidation and savings program. Specific locations have not been identified.

German chemical and pharmaceutical producers plan to increase R & D spending through 2012.
Germany’s seasonally adjusted unemployment rate remained at 6.8% in September. German GDP grew by 0.3% in the second quarter, and is showing signs of slowdown towards the end of the year.

Germany is planning to warn Great Britain that it will seek to cancel November’s European budget summit if Prime Minister David Cameron insists that he will veto any deal other than a total freeze on spending.

Sweden’s finance minister has warned that it is “probable” that Greece will leave the common currency within the next six months. Spain’s debt rating was recently cut to one level above junk by Standard and Poor’s.

Unemployment in the eurozone rose to 11.4 % in August. This is the highest level since the euro was formed in 1999.

Chinese GDP slipped to 7.4% in the third quarter, basically in line with the government target of 7.5% for the year.

China’s exports were at a record monthly level of $186.4 billion in September, rising 9.9% from a year ago. August increase was reported as 2.7%. Imports rose 2.4% year-on-year, compared with a 2.6% decline in August. Exports to the US were 9.6% higher year-on-year for the January-September period. Chinese manufacturing declined in September as the volume of new orders fell for the eleventh consecutive month. The Chinese yuan strengthened against the US dollar.

BP announced that it is selling its 475,000 bbl/day Texas City, TX refinery to Marathon Oil. The $2.5 billion deal also includes some of BP’s retail and logistics assets. It was stated that the agreement did not include the chemicals complex at Texas City.

Middle East supply chains are facing increased risk from piracy. The Gulf Cooperation Council, made up of over thirty countries is addressing the issue.

The Association of American Railroads announced that intermodal traffic on major US railroads for the week ending 9/15 rose 3.9% year over year, and 14.1% from the prior week. Carload traffic decreased 2.9% but was 6.6% higher week to week.

The American Trucking Association reported that tonnage was unchanged in July after increasing 1.1% in June, and falling 1.0% in May. Compared with July 2011, the tonnage index was up 4.1%. Year-to-date, tonnage was up 3.7% compared with the same period last year.

The US Postal Service has enough cash to avoid insolvency in October thanks in large part to the mountains of political junk mail and the influx of Super PACs paying top postage rates. Federal candidates, political parties, and special interest groups are mailing out more fliers and postcards than in previous election cycles. Spending was more than $28 million through the end of August.

Antea Group

Shale Oil and Gas

According to a report prepared by IHS Global Insight, unconventional oil and natural gas development could support approximately 3 million jobs by 2020 and generate more than $5 trillion in capital expenditures.

Chevron Phillips recently announced that it will start up its Gulf Coast cracker in 2017. It will use low cost ethane from shale gas.

The US Geological Survey (USGS) issued its first estimate of the Utica Shale stating that the formation holds about 38 trillion cubic feet of undiscovered, recoverable natural gas, 940 million barrels of oil and 9 million barrels of natural gas liquids like ethane and propane. The Utica lies beneath the Marcellus Shale, where energy companies have drilled thousands of unconventional gas wells in Pennsylvania in recent years. The USGS estimated last year that the eight state Marcellus region contains 84 trillion cubic feet of natural gas, far more than the 2002 assessment of 2 trillion.

The highly saline wastewater generated by hydraulic fracturing (fracking) is expected to create demand for water treatment in the Marcellus region. The demand is set to increase between 10% and 20% across North America each year through 2025.

A bipartisan Senate group expressed concern about the EPA’s draft guidance regarding diesel consumption in fracking. The group saw it as an effort by the agency to widen its authority over the drilling technique.
Shell Oil Co. has offered payments in lieu of taxes if it builds a multibillion dollar petrochemical plant in Beaver County, PA. The state has offered tax breaks for such a project.

The Economy

The Congressional Budget Office estimated that the federal government incurred a budget deficit of $1.1 trillion for fiscal 2012, approximately $200 billion less than the deficit recorded in fiscal 2011. The US Treasury Department reported that on October 18, the federal debt was $16.2 trillion. It stood at $5.7 trillion in 2001.
The US government debt held by foreign entities is a record $5.4 trillion, with China holding $1.15 trillion of it. In January 2009 the US government owed $3.07 trillion to foreign entities. China was the top creditor, with Japan a close second. It was estimated that each person in the US has $17,400 in foreign debt.

The Bureau of Economic Analysis reported an updated third estimate for the second quarter 2012 Gross Domestic Product growth at an annual growth rate of 1.3%, that is, from the first quarter to the second quarter. This is a decrease from the earlier estimate of 1.7%. In the first quarter, real GDP increased 2.0%. 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 2.8% or $107.3 billion in the second quarter to a level of $15,585.6 billion. Revised first quarter increase was reported as 4.2% or $157.3 billion.

The Conference Board’s Leading Economic Index increased 0.6% in September to 95.9 (2004=100) following a 0.4 % decrease in August, and a 0.4% decrease in July.

The Conference Board Consumer Confidence Index which had decreased in August, improved in September. It stands at 70.3 (1985=100) up from an adjusted 61.3 in August.

The Institute for Supply Management’s Manufacturing Index expanded in September following three straight months of contraction. The index for September registered 51.5%, an increase 1.9% from August 49.6%, indicating a return to expansion. A reading below 50% indicates that the manufacturing economy is generally retracting. The Non-Manufacturing Report for September was 55.1%, higher than August 53.7% indicating continued growth.

In September, retail and food services sales adjusted for seasonal variations were $412.9 billion, an increase of 1.1% from August and 5.4% above September 2011. Total sales for the July through September 2012 period were up 4.8 % from the same period a year ago.

According to the trade group International Council of Shopping Centers, a group of 18 major retailers reported September sales rose 3.9% and reflected the industry’s continuing positive performance.

Privately owned housing starts in September of 872,000 were 15.0% above the revised August estimate of 758,000 and were 34.8% above the September 2011 rate of 647,000. Single family housing starts in September were at a rate of 603,000 or 11.0% above the revised August figure of 543,000. New home sales decreased 0.3% in August, to a seasonally adjusted annual rate of 373,000, and were 27.7% above the August 2011 figure of 292,000.

The National Association of Realtors reported that sales of existing homes declined 1.7% in September 2.3% to a seasonally adjusted annual rate of 4.75 million from August adjusted level of 4.83 million. The national median existing home prices rose in September, up 11.3% from a year earlier.

US foreclosures and short sales accounted for 24% of September sales, up from 22% in August. They were 30% in September 2011.

New orders for manufactured durable goods in August decreased $30.1 billion or 13.2% to $198.5 billion. This decrease followed three consecutive monthly increases, and was the largest decrease since January 2009.

August unfilled orders for manufactured durable goods, following two consecutive monthly increases, decreased $16.9 billion or 1.7% to $978.7 billion. This was the largest decrease since December 2009 and followed an increase in July of 0.7%.

Consumer Price Index for all urban consumers increased 0.6% in September on a seasonally adjusted basis, following no change in July. Over the last twelve months, the index increased 2.0 % before seasonal adjustments. A large part of the increase was accounted for by the gasoline index, which rose 7.0% after increasing 9.0% in August.

The Producer Price Index for finished goods increased 1.1% in September, seasonally adjusted, following an increase of 1.7% in August and 0.3% in July. On an unadjusted basis, prices for finished goods increased 2.1 % for the twelve months ended September 2012, the largest advance since a 2.8% increase for the twelve month period ended March 2012.

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

Inflation: Inflation rose in September by 2.0%. The August rate was 1.7%, July rate was 1.4%. A revised average rate of 2.0% is projected for 2012.

Industrial production rose 0.4% in September, after having fallen 1.4% in August. For the third quarter as a whole, industrial production declined at an annual rate of 0.4%. At 97.0% of its 2007 average, total industrial production in September was 2.8% above its year-earlier level. Capacity utilization for total industry increased 0.3% to 78.3%, a rate 2.0% below its 1972 – 2011 average.

Unemployment: The September 2012 rate declined to 7.8% from 8.1% in August as reported by the Bureau of Labor Statistics. The BLS stated that the long-term unemployed, i.e., jobless for 27 weeks and over was little changed at 4.8 million. Those individuals accounted for 40.0% of the unemployed. North Dakota led the nation with the lowest state unemployment rate in September of 3.0%, and Nevada was reported the highest at 11.8%. According to the BLS government unemployment has dropped from 5.7% in July to 5.1% in August to 4.3% in September.

Trade Deficit: For August 2012 the goods and services deficit increased to $44.2 billion from a revised July figure of $42.5 billion as exports decreased more than imports.

Crude Oil: Present WTI spot price ~$90/bbl and holding, compared to ~$87/bbl a year earlier.  OPEC has reported that world oil demand is expected to decline in 2013 due to the economic slowdown.

Natural Gas:  Henry Hub spot price closed on October 23 at $3.34/MMBTU. Working natural gas in storage remains above the five year average. Residential and commercial consumption is increasing as the temperature drops.

The US Dollar trading at 79.3 Japanese yen; $1.30 = euro. The British pound sterling = $1.60. Canadian dollar trading at US$.99

Current US gold price quoted at $1722.10/ounce compared to the record price of $1920/ounce in September, 2011.

A MARKET UPDATE for September, 2012

THE VIEW FROM JAMESTOWN”
A MARKET UPDATE for

September 2012
From
THE CHEMICAL COMPANY.

Special Message:

From the Wall Street Journal:

A new round of negotiations has been scheduled in the dispute between shipping companies and dock workers at ports along the East Coast.

Federal mediators announced the new talks on Thursday. They are scheduled for the week of Sept. 17.

The longshoremen’s contract expires at the end of September, and some retailers have already begun re-routing ships in anticipation of a possible strike.

Key issues in the labor dispute include overtime rules and royalty payments to longshoremen based on container weight.

The U.S. Maritime Alliance, which represents shippers, says union members are taking advantage of loose overtime rules and driving up shipping costs. The longshoremen’s union says a small minority are being singled out to unfairly characterize the whole membership.

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

 

Quote of the Month:

“In times like these, it helps to recall that there have always been times like these.”
Radio broadcaster Paul Harvey, quoted in The Buffalo News

TheChemCo

From:         C&EN, September 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.

 

Please visit the TCC booth at:

Boston EXPO 2012

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:

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

NatureFlexx 509: Phthalate Free General Purpose Plasticizer.  Available in Totes (2200 lbs.) and Drums.

Phthalic Anhydride:  TCC offers Phthalic Anhydride in 25 Kg. Bags and 2,000 lb. supersacks.

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

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

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

 

 


New/ Updated Technical Information :

Stearic Acid

ChemFlexx DOTP

Vestinol 9 DINP

Dicyandiamide

Maleic Anhydride

Tris (Chloroisopropyl) Phosphate (TCPP)

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 September settled down $.40/ gallon to US$4.20/ gallon from US$4.60/ gallon in August. Spot prices are stronger and in the $4.35- $4.4o/ gallon range.

N Butane:  Normal Butane prices are trading in the mid to upper US$1.50’s per gallon.  Current pricing is in the $1.56- $1.57/ gallon range.  Prices have strengthened slightly in September from the low $1.50’s per gallon.  /+

Ethylene:   U.S. Contract Price for August increased by $.04/ lb. to $.46/ lb. Current spot is in the Mid to high $.50’s due to strong demand. +

Natural Gas: Natural Gas production declined sharply in late August when producers began evacuating platforms in preparation for Hurricane Isaac. However, prices did not spike. September futures prices were at the $2.65/mmbtu range.  –\

Check thechemco.com for up to the minute info.

Oil: Current WTI Crude price is at $92+/- barrel range.  WTI pricing eclipsed $100/ barrel in mid- September before its most recent drop.  –

Check thechemco.com for up to the minute info.

Orthoxylene: September contracts settled $.02/ lb. higher at $.67/ lb.  +

Propylene: Contract pricing for September has yet to settl.  Nominations of a $.025/ lb. and $.04/ lb increase have been offered. August contracts were $.505/ lb. for Polymer Grade and $.49/ lb. for Chemical Grade.  + 

CHEMICALS MARKETS

Adipic Acid: Adipic Acid pricing is flat with good demand and stable supply.  Raw material prices are lower.  There continues to be considerable risk of outages during the second half of 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: September pricing in Tampa increased US$15/ ton to US $705/ ton del’d.  Availability is tight to balanced.  Gas curtailments in Trinidad are a major concern and will likely further tighten the Ammonia market in the coming weeks/ months.

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

Ammonium Nitrate: Ammonium Nitrate pricing is stable.  Seasonal demand will evaporate over the coming months holding prices steady.  The major feedstocks ammonia is relatively tight due to the gas curtailments in Trinidad. /

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

Antimony Trioxide:     

Demand for antimony trioxide remains relatively weak and new availability from South America has helped relieve pricing. Not much has changed as current offers are in the upper $4.00/ lb. range.  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:       

Prices have come off approx. US$400-500/MT in the past 2 months.  Producers are selling at or below cost to keep volumes up with the anticipation of 2 new production facilities in China that are expected to be operational by the end of October 2012.  – 

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

Epoxidized Soybean Oil: Soybean prices have stabilized.  Supply is healthy keeping prices low and margins in the red.  /

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

Fumaric Acid: FA Pricing has pushed slightly higher on improved butane values and limited availability. Product has become tight due to flooding at a U.S. Producers plant. +

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

 Glycol (Mono, Di and Tri):

Ethylene:   U.S. Contract Price for August increased by $.04/ lb. to $.46/ lb. +

MEG – U.S. producers have announced a 5-8 cts/ lb. increase for October.  Spot prices are in the mid- $.50’s fob Gulf.  Availability is extremely limited nearly impossible to secure. +

DEG- U.S. producers have announced a price increase of $.03- $.05/ lb. for October. Spot prices are in the extremely high $.50’s per lb. fob Gulf.  Availability is also limited due to turnarounds. +

TEG- U.S. producers have announced a price increase of $.06- $.15+ per lb.  Spot pricing is in excess of $1.15/ lb. +

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

Isophthalic Acid:

PIA pricing has increased slightly in response to strengthening 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 remains seasonally slow. Supply is balanced to long in North America. Prices have leveled on strengthening 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. Urea prices have moved lower and therefore no longer pressuring Melamine cost.  /

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 September has rolled at US$1.32/ gallon. Spot pricing is currently approx. US$1.11/ gal. and stable. /

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

Notes:

Methanex took down their Damietta, Egypt plant at the end of August due to gas supply constraints.  An extremely hot summer was blamed for the curtailment.  This is not seen as a long term issue.

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

Nitric Acid:

Nitric Acid pricing is level yet pressured by good demand and higher ammonia pricing. /

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

Phenolic Resins:

Phenol pricing has shifted lower on less demand and lower 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 increase by $.02/ lb. in October in line with the September orthoxylene price increase. Orthoxylene will likely continue to increase 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 of PZ alcohols (driven by propylene) as well as orthoxylene, have started to increase.  Producers have nominated a 4 cts/ lb. increase for October 1st and demand is expected to improve.

Plasticizer alcohol pricing was slow seasonally but demand has improved slightly along with pricing driven mainly by higher propylene values.    A new 2-EH unit is expected to start end of 2012 in China and a new INA unit is expected to start soon in Singapore.

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 decreased slightly for Setpember in line with lower benzene values (down $.40/ gallon). NA demand remains slow.

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

Urea: Current granular pricing is US$435/ ton up from $418- $420 in early September.  This recent uptick is associated with September product shipping pre- Mississippi River closure.  /

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

Notes:

Low water levels on the Mississippi River is a continuing problem.

Reduced traffic on the Mississippi River will mean less pre- river close barges.

Zinc Borate: Pricing has been relatively steady 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

The Antea Group

 

CHEMICAL INDUSTRY NEWS

The American Chemistry Council (ACC) US Chemical Production Index dropped by 0.1% in July, following a revised flat growth in June. Chemical production fell in the Gulf Coast, Midwest, Ohio Valley, Mid-Atlantic, Southeast and West Coast regions. Production was flat in the Northeast region. Through the first seven months of 2012 chemical production was up 0.3% nationally compared to the same period in 2011.

The ACC’s Chemical Activity Barometer (CAB,) for August showed a 0.4% growth to 89.4%, after July’s revised number of 89.0%. The published data suggest that the US economic recovery is slowing. The chemicals industry generated about $760 billion last year.

ICIS Chemical Business magazine published its annual 100 Top Chemical Companies listing ranked by 2011 sales and BASF led the list with $95.2 billion in sales. The new number two was China’s Sinopec with $65 billion in chemical sales, edging out ExxonMobil’s $64.7 billion. The top 100 companies had combined sales of $1.4 trillion in 2011.

Pennsylvania increased chemical industry jobs by 3.6% during the past twelve months, the biggest sector increase in a statewide gain in industrial employment of 0.5%.

A new research study conducted by the Columbia Center for Children’s Environmental Health (NY) found that children between the ages of five and nine who are exposed to two types of phthalates have an elevated risk of asthma related airway inflammation. The study didn’t specify what types of products with phthalates the children might have been exposed to.

The DuPont Co. said on August 30 that it is selling its performance coatings business for $4.9 billion in cash to The Carlyle Group, a Washington, DC headquartered private equity firm. The performance coatings business caters to the automotive and industrial coatings sectors and has approximately 11,000 employees in more than seventy countries.

The total value of mergers and acquisitions (M&A) in the chemical industry slowed in the first half of this year. M&A activity was reported as $25.3 billion, compared to $55.8 billion from the same period a year ago.

Mexican chemicals company Mexichem recently signed a memorandum of understanding with OxyChem for a joint venture to build a facility to produce over 500,000 tons/year of ethylene. A feasibility study for the proposed cracker is expected to be completed in the second quarter of 2013. The project is expected to cost approximately $1 billion, with a 50/50 split between the parties.

BASF doesn’t see increased global economic growth for the remainder of 2012 and believes that earnings will not match those of 2011.

US chlor-alkali operating rate for July rose to 86% of capacity, up from the 82% number seen in June. Operating rate in July 2011 was 83%. Dow Chemical Co. CEO Andrew Liveris said that Dow, the world’s biggest chlorine producer, is seeing a reduction in European demand going beyond normal summer shut-downs.

On August 21, the US Court of Appeals for the DC Circuit vacated an EPA rule that would further limit emissions from coal-fired electrical power generating plants in 28 states. It ruled that the EPA exceeded its authority under the Clean Air Act, basically saying that it went too far in imposing its authority over state air pollution control programs. This decision marked the 15th time that a federal court has struck down an Obama regulation and the sixth court defeat for the EPA.

The ethanol food vs fuel controversy continues. The EPA has received a request to waive the federal mandate for corn-based ethanol in gasoline, citing this season’s extreme drought conditions in the Midwest farm belt. A coalition of US meat and poultry producers said that with reduced corn harvests, ethanol production would use about 40% of the crop. This amount is mandated by the Renewable Fuels Standard and requires 13 billion gallons of corn-based ethanol for blending into the gasoline supply.

The World Bank has warned that global food prices jumped by 10% in the month of July, raising fears of soaring prices. The bank said that the US heat wave and a drought in parts of Eastern Europe were to blame in part for the rising costs. From June to July this year, corn and wheat prices rose by 25% while soybean prices increased by 17%. Only rice showed a decrease of 4%. The World Bank also said that the use of corn to produce ethanol biofuel in the US was also a key factor in the price rise. Overall, the World Bank’s Food Price Index, which tracks the price of internationally traded food commodities, was 6% higher than July of 2011 and 1% over its previous peak in February, 2011.

The Bank of England recently lowered GDP growth forecasts from 0.8% to zero for 2012. France forecast a minor contraction of 0.1% for the third quarter, which would match second quarter results.

The Obama administration welcomed Russia’s entry in the World Trade Organization as its 156th member, but said that US export business would be at a disadvantage if Congress doesn’t repeal Russia’s Cold War-era trade status. The specific legislation, the Jackson-Vanik amendment to the Trade Act of 1974 tied bilateral trade policy to human rights, depriving the then-Soviet Union of permanent normal trade relations in order to pressure Moscow to allow Jewish emigration. The Obama administration and various business leaders have been pushing Congress to remove the legislation, stating that it had outlived its usefulness.

Philipp Roesler, German economy minister, has rejected calls for Greece to get more time to accomplish economic reforms, saying that the Greek government needs to respect the bailout deal reached with its international creditors. The Greek government has said that it needs a two year extension from its creditors. The question of how to avoid a Greek debt default and a possible chain reaction among other ailing European economies has preoccupied EU leaders.

Germany’s seasonally adjusted unemployment rate remained at 6.8% in August. The number of jobless rose by a seasonally adjusted 9,000. Following two years of strong economic growth, the German economy grew by only 0.3% in the second quarter.

On September 12 the German Constitutional Court ruled that President Joachim Gauck could sign the European Stability Mechanism and fiscal pact. The action was welcomed by eurozone leaders and was seen as a move toward resolving the debt crisis.

On September 15, more than 150,000 Portuguese demonstrated against planned tax increases that have destroyed the consensus behind austerity programs. Tens of thousands marched in Spain, seen as the next country in need of a bail-out.

Unemployment in the eurozone remained at 11.3 % in July. This represents an increase of 1.2% from a year earlier and is the highest level since the euro was formed in 1999.

China’s exports were up only 1% in July year-on-year compared to 11.3% the month before. Imports rose 4.7% year-on-year, down from June’s 6.3%. Chinese trade surplus dropped to $25.1 billion from $31.7 billion the previous month.

China urged countries gathered at a recent Asia-Pacific Economic Cooperation meeting to create stronger regional economic ties. Chinese president Hu Jintao announced a $157 billion government spending program to boost infrastructure as well as pledging support for greater trade liberalization.

Car sales in China continue to show growth, with an increase of 8.2% year on year in July, but indicating lower numbers from June results.

AMR Corp., the parent company of American Airlines, has entered a non-disclosure agreement with US Airways that will allow the companies to discuss possible merger.

BP PLC confirmed that it is selling its interests in a number of oil and gas fields in the deepwater US Gulf of Mexico to Plains Exploration and Production Company for a total of $5.55 billion. This move was seen as part of a previously announced plan to divest up to $38 billion in assets.

The Savage System announced that it completed a BNSF Railway Co. – served crude oil terminal near Trenton, ND. The terminal will handle crude oil drawn from the Bakken Shale and Williston basin, and will facilitate transportation to refineries. The terminal consists of truck receiving stations, pipeline connections, crude oil tanks, and a double loop track designed to handle two 118-car trains.

A report released by the US Department of Transportation (DOT) on August 8 states that the amount of freight carried by the for-hire transportation industry, which comprises trucking, rail, inland waterways, pipelines, and air, in June was 16.1% higher than the April 2009 recession low. Cargo growth at ports from coast to coast has been seen. The busiest port in terms of yearly twenty foot equivalent units (TEL’s) was the Port of Los Angeles/Long Beach followed by the Port of New York/New Jersey.

The American Trucking Association reported that tonnage was unchanged in July after increasing 1.1% in June, and falling 1.0% in May. Compared with July 2011, the tonnage index was up 4.1%. Year-to-date, tonnage was up 3.7% compared with the same period last year.

The US Postal Service announced on August 3 its first-ever default on $5.5 billion in payments due to the Treasury. A similar amount is due in September. The Postal Service has projected a loss of $14.1 billion for the year and it may avoid bankruptcy by defaulting on these payments.  The House and Senate have each taken a different approach to solving the problem.

Shale oil and gas-related:

The US Geological Survey issued a new estimate of technically recoverable domestic oil and gas. The amounts, 32 billion barrels of crude oil and 291 trillion cubic feet of natural gas, represent about 10% of the overall US oil and gas endowment.

TransCanada Corp., the company behind the Keystone XL pipeline, has proposed re-routing the US portion in order to obtain environmentalist group support. It has offered an alternate route to the Nebraska Department of Environmental Quality for evaluation. The company has begun construction of the Canadian part of the pipeline. The changes offered did little to modify environmentalist positions. President Obama delayed a final decision on the US leg of the pipeline until after the national election. GOP presidential candidate Mitt Romney stated that he would approve the pipeline on his first day in office. Some union groups back the project, saying that it will create needed jobs. The AFL-CIO has not stated a formal position.

A Citigroup commodities researcher stated that reindustrialization of the US brought about by higher natural gas production could create 3.6 million jobs by the end of the decade.

Lower cost US shale gas has given companies such as Dow Chemical Co. and DuPont Co. an estimated 8% profit advantage over industry giant BASF. The company’s huge Ludwigshafen, Germany flagship site consumes as much gas-generated power as Denmark.

The amount of carbon dioxide being released into the atmosphere in the US has fallen dramatically to its lowest level in 20 years. Energy Department officials said that the biggest reason is that cheap and plentiful natural gas has resulted in many power plant operators switching from coal. Both government and industry experts said that the biggest surprise was how rapidly the electric industry moved away from coal. In 2005, coal was used to produce about half of all electric power in the US; the Energy Information Agency said that it fell to 34% in March, the lowest level since it began keeping records almost 40 years ago.

         Governor Mario Cuomo stated on August 22 that New York has no timetable for issuing new regulations on fracking. Environmentalists and drillers have been waiting for a decision since June, when he said that a final report would be released shortly. In 2008 the state placed a moratorium on fracking based on water contamination concerns. Since then, the state’s Department of Environmental Conservation has been studying fracking. In June, the New York Times said that Cuomo was considering a plan to limit drilling to the poorer counties in the southern tier bordering Pennsylvania. A Quinnipiac University poll reported that the majority of voters in upstate New York support Marcellus shale drilling.

New York City Mayor Michael Bloomberg released a study that showed NYC needs natural gas to make complete its conversion away from heavy heating oil use in the city. ICF International has estimated that by 2030, 80% of the city’s natural gas supply would be coming from the Marcellus and Utica shale deposits, up from the current 25%.

THE ECONOMY

A survey released by the World Economic Forum said that the US dropped further down a global ranking of the world’s most competitive economies, moving from 5th position last year to 7th spot. This was its fourth year of decline. Switzerland and Singapore retained their respective number one and two positions.

According to Census Bureau annual data, last year the median income of American households dropped to its lowest level since 1995. Median income adjusted for inflation fell 1.5% below its 2010 level and 4.1% below 2009.

The Congressional Budget Office estimated that the federal government incurred a budget deficit of $1.17 trillion for the first eleven months of fiscal 2012, $70 billion less than the deficit recorded in the same period in fiscal 2011. The US Treasury Department reported that on September 4, the federal debt topped $16 trillion. It stood at $5.7 trillion in 2001.

The US government debt held by foreign entities hit a record $5.29 trillion in June, according to Treasury Department data released on August 16. In January 2009 the US government owed $3.07 trillion to foreign entities, which is an increase of 72.3%. China was the top creditor, with Japan a close second.

The US House of Representatives approved a 6 month stopgap government funding bill, which was seen as bipartisan resolve to avoid a budget showdown ahead of the November election.

The Bureau of Economic Analysis reported an updated estimate for the second quarter 2012 Gross Domestic Product growth at an annual growth rate of 1.7%, that is, from the first quarter to the second quarter. This is an increase from the initial estimate of 1.5%. In the first quarter, real GDP increased 2.0%. 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 3.3% or $127.8 billion in the second quarter to a level of $15,606.1 billion. Revised first quarter increase was reported as 4.2% or $157.3 billion.

The Conference Board’s Leading Economic Index increased 0.4% in July to 95.8 (2004=100) following a 0.4 % decrease in June a 0.3% increase in May.

The Conference Board Consumer Confidence Index which had increased slightly in July, declined in August. It stands at 60.6 (1985=100) down from an adjusted 65.4 in July. It is now at its lowest level since November 2011.  

The Institute for Supply Management’s Manufacturing Index for August registered 49.6%, a decrease from 49.8% in July and indicated contraction in this sector for the third consecutive month.  A reading below 50% indicates that the manufacturing economy is generally retracting. The Non-Manufacturing Report for August was 53.7%, higher than July’s 52.6% indicating continued growth at a slower rate.

In August, retail and food services sales adjusted for seasonal variations were $406.7 billion, an increase of 0.9% from July and 4.7% above August 2011. Total sales for the June through August 2012 period were up 4.0 % from the same period a year ago.

According to the trade group International Council of Shopping Centers, a group of 18 major retailers reported August sales rose 6% and reflected the industry’s best performance since March of this year. This report was in contrast with declining consumer confidence numbers.

Privately owned housing starts in July of 803,000 were 1.0% below the revised July estimate of 811,000 but were 24.5% above the revised August 2011 rate of 645,000. Single family housing starts in August were at a rate of 535,000 or 5.5% above the revised July figure of 507,000. New home sales increased 3.6% in July, to a seasonally adjusted annual rate of 372,000, and were 25.3% above the July 2011 figure of 297,000.

The National Association of Realtors reported that sales of existing homes rose 2.3% in July to a seasonally adjusted annual rate of 4.47 million from June’s adjusted level of 4.37 million. The national median existing home prices rose in July, up 9.4% from a year earlier.

US foreclosures declined in July after an increase in June. There were 58,000 finished foreclosures in July compared to 62,000 in June. The level was down from 69,000 a year earlier.

New orders for manufactured durable goods in July increased $9.4 billion or 4.2% to $230.7 billion. This increase, up for three consecutive months, followed a 1.6% June increase.

July unfilled orders for manufactured durable goods, up for two consecutive months, increased $7.8 billion or 0.8% to $996.3 billion.

Consumer Price Index for all urban consumers increased 0.6% in August on a seasonally adjusted basis, following no change in July. Over the last twelve months, the index increased 1.7 % before seasonal adjustments. The seasonally adjusted increase in all items was the largest since June 2009. About 80% of the increase was accounted for by the gasoline index, which rose 9.0%. The energy index had declined 0.3% in July on a seasonally adjusted basis.

The Producer Price Index for finished goods increased 1.7% in August, seasonally adjusted, following an increase of 0.3% in July and 0.1% in June. This was the largest monthly increase since a 1.9% bump in June 2009. On an unadjusted basis, prices for finished goods increased 2.0% for the twelve months ended August 2012, the largest advance since a 2.8% increase for the twelve month period ended March 2012.

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

Inflation: Inflation rose in August by 1.7%, the most in more than three years, driven by energy costs. The July rate was 1.4%. A revised average rate of 1.8% is projected for 2012.

The Agriculture Department forecast on August 31 that farm exports will set a sales record due to drought-induced smaller harvests. High prices for corn, soybeans, and wheat are expected to set an export sales record for the fiscal year ending September 30 of $143.5 billion. The US is the world’s largest agricultural exporter, shipping half of its wheat and soybeans and three quarters of its cotton to overseas buyers. China is the world’s largest cotton and soybeans customer.

Industrial production decreased 1.2% in August, after having risen 0.5% in July. At 96.8% of its 2007 average, total industrial production in August was 2.8% below its year-earlier level, due in part to hurricane shutdowns in the Gulf. Capacity utilization for total industry decreased 1.0% to 78.2%, a rate 2.1% below its 1972 – 2011 average.

Unemployment: The August 2012 rate declined slightly to 8.1% as reported by the Bureau of Labor Statistics and continued more than three years of unemployment at or above 8%. The BLS stated that the long-term unemployed, i.e., jobless for 27 weeks and over was little changed at 5.0 million. Those individuals accounted for 40.0% of the unemployed. North Dakota led the nation with the lowest state unemployment rate in July of 3.0%, and Nevada was reported the highest at 12.0%.

Trade Deficit: For July 2012 the goods and services deficit increased to $42.0 billion from a revised June figure of $41.9 billion as exports decreased more than imports.

Crude Oil: Petrobras announced significant offshore discoveries. US proven reserves have increased 12.8%.  Present WTI spot price ~$96/bbl and holding, compared to ~$87/bbl  a year earlier.  

Natural Gas:  Henry Hub spot price closed on September 12 at $2.94/MMBTU. Working natural gas in storage remains above the five year average.

The US dollar trading at 78.4 Japanese yen; $1.31 = euro. The British pound sterling = $1.62. Canadian dollar trading at US$.97

Current US gold price quoted at $1771.60/ounce compared to the record price of $1920/ounce in September, 2011.