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.