As we approach the holiday season and prepare for the New Year, a range of trends and factors across the industry are poised to make an impact both for the positive, as well as the negative.
Benzene sits around $3.40/gallon, with continued rising prices. We anticipate seeing chemical prices downstream impacted and rising going into December, including, but not limited to styrene and adipic acid. In anticipation of these price increases, we recommend that our customers plan early and place orders with as much lead time as possible.
Aside from benzene, TCC is anticipating higher prices across the market as stricter Chinese environmental regulations go into effect. We’ve already seen multiple small and mid-size producers shutter, either to update facilities or permanently as result of these new laws. Until the New Year kicks in, we won’t know just how widespread these closures will be in impacting global chemical markets, but we recommend preparing for the worst.
Related to logistics, the U.S. Electronic Logging Device (ELD) mandates become mandatory on December 18 of this year. Multiple outlets are reporting a high percentage of logistics and trucking firms are not amenable to these new rules, and as many as 16% of an already depleted truck driver industry is planning to walk away from trucking rather than comply with the new regulations. To our north, Canada has already implemented similar mandates, which have produced anticipated results of additional tightness throughout the freight market. Though regulating bodies have extended a grace period with minimal implications for non-compliance through April 2018, we still expect trucking and freight to be tight. We urge customers and business partners to plan early to allow as much lead time and flexibility as possible.
In company news, The Chemical Company has continued its investment in Environmental Health & Safety (EH&S). Matt Francoeur joins our staff from the University of Rhode Island. He will oversee TCC’s EH&S management and reporting for all products, geographies and industries where we are involved. We are enthusiastic about our investment in Matt and this position, and we are confident that it will have a favorable impact on our long-term strategy of organic, positive growth.
On behalf of the TCC family, I would like to extend our best wishes for the holiday season as we head into the New Year.
– Robb Roach, President