The American Chemistry Council (ACC) US Chemical Production Index rose by 0.6% in February 2013 following a revised 0.8 % increase in January. Compared to February 2012, chemical production rose in all regions by 1.2% following January’s 1.4% year to year increase. Comparing the first two months of 2013 to those of 2012 total chemical production rose 1.3% nationally.
The ACC’s Chemical Activity Barometer (CAB) for March 2013 showed slow expansion, with a 0.4% gain over February. The year over year monthly moving average showed an increase of 2.9% compared with March 2012.
The EPA is ready to begin evaluation of 23 common chemicals for health and environmental risks. This action will primarily involve flame retardants.
Chemical industry officials are proposing revision of the Toxic Substances Control Act (TSCA) that would strengthen the EPA’s authority to limit exposure to harmful substances rather than completely barring their use. The ACC supports a safety standard that “ensures the safety of a chemical for its intended use.”
Methanex is said to be still evaluating relocation of a second Cabo Negro, Chile methanol plant to Geismar, LA. The estimated capital investment of $500 million would create 35 new jobs.
PolyOne reached a $250 million cash deal for the sale of its base resins business to Mexichem. Spartech stockholders approved its acquisition by PolyOne; the Spartech name will no longer be used.
BASF has established an advanced materials R&D initiative with Harvard, MIT, and the University of Massachusetts, Amherst. The program will establish about twenty postdoctoral positions. The cost to BASF was not disclosed.
Dow Chemical projected petrochemical investment for the Gulf Coast involves recommissioning and improving existing ethane operations focused on performance plastics.
LyondellBasell Industries will upgrade its Houston refinery in order to handle an increased amount of oil from Canadian tar sands and to lower its reliance on feedstock from Venezuela. The company is relocating its R&D center from Newtown Square, Pennsylvania to Channelview, Texas.
Rigid plastics recycling in the US and Canada, excluding plastic bottles, exceeded 934 million pounds in 2011 according to a report issued by Moore Recycling Associates for the ACC.
US chlor-alkali operating rate for January 2013 was reported at 80% of capacity, essentially the same as December’s 81%.
Norwegian oil group Statoil announced a large natural gas find off Tanzania’s coast. This is the third major discovery in a year for the Statoil-ExxonMobil partnership.
Unemployment across the seventeen European Union countries that use the euro hit a new record high of 11.9 % in January.
A developing German political party led by economists, jurists, and Christian Democrats was established in March. It calls for the break-up of monetary union before it can do any more damage. They propose German withdrawal from the euro and return to the D-Mark, or a breakaway currency with the Dutch, Austrians, Finns and similar nations. The French are not among them.
Germany’s top industry trade group, BDI, welcomed plans by the federal government to prepare rules for fracking. German energy policies, particularly the country’s exit from nuclear power by 2022, made it necessary to investigate new domestic sources.
An apartment building under construction in Hamburg, Germany will be clad on its two south-facing sides with a transparent shell housing millions of microalgae. The building has been designed to harness heat generated by the microscopic plants and use it to heat its 15 apartments.
Russia’s Gazprom, the largest extractor of natural gas in the world and the largest Russian company, offered to bail out Cyprus in exchange for gas exploration rights. It was reported that Gazprom would undertake the restructuring of the country’s banks in return for the exploration rights.
Cyberattacks traced to Chinese hackers prying into US company secrets have made more firms rethink plans to locate in China.
Royal Dutch Shell will explore for and produce shale natural gas in China with China National Petroleum Corp. No details were available.
Mixed carload traffic on major US railroads for the week ending 3/23/13 increased 0.2% year over year. Intermodal volume was up 1.4% compared with the same week last year. Petroleum products shipments were up 57%.
Burlington Northern Santa Fe Railroad has begun to experiment with locomotives that run on liquefied natural gas as replacement for the costlier diesel fuel now in use.
The ACC filed comments with the Surface Transportation Board urging the agency to take action on reforms that would increase access to competitive freight service for domestic producers.
The American Trucking Association reported that seasonally adjusted for-hire truck tonnage increased 0.6% in February after increasing an adjusted 1.0% in January. Year to date, the tonnage index is up 4.4% for the same period.
SHALE OIL AND GAS-RELATED
The House Energy and Power subcommittee said that its primary goals for this session of Congress are getting the government out of the way of energy production, generation, and export. Examples such as easing export regulations, approving the Keystone XL pipeline, opening federal lands for drilling and applying a lighter touch on rules for greenhouse gas emissions and hydraulic fracturing (fracking) topped the agenda.
A Congressional Research Service report said that thanks to the innovation of fracking and horizontal drilling on private and state lands, the US in fisc
al 2012 produced 6.2 million barrels of oil daily, up from 5.1 barrels as recently as fiscal year 2007. Technological advances enabled private industry to increase production last year at the fastest rate in the history of the domestic industry. However, the same study found that federal oil production fell more than 23% from fiscal 2010 to fiscal 2012 and today is below 2007 levels. It was also reported that natural gas production on non-federal lands grew 40% since 2007 while production on federal lands dropped by 33%.
ExxonMobil Corp. is expanding its Baytown, Texas refinery capacity for turning natural gas into chemical building blocks. Permit applications are pending. It’s expected that this multibillion dollar project will create 10,000 jobs during its construction.
In early March the New York State Assembly approved a two year moratorium on fracking to last until May 15, 2015. The bill calls for the State University of New York to conduct an independent, comprehensive health review; fracking would be further delayed if the study were delayed.
Some of the country’s largest energy companies and environmental groups have agreed on a voluntary set of standards for gas and oil fracking in the Northeast that appears to go beyond existing state and federal regulations.
California governor Jerry Brown, a noted environmentalist, said on March 13 that the state should consider the use of fracking so it could develop its massive shale oil reserves and reduce dependence on imported oil. Some groups in California have opposed the use of fracking, but Brown has said that decisions would be based on science and common sense.
The Congressional Budget Office reported that the federal government incurred a budget deficit of $495 billion for the first five months of the fiscal year 2013 (that is, October 2012 through February 2013), $86 billion less than the shortfall recorded for the same period last year. CBO estimates are that if lawmakers enacted no further legislation affecting spending or revenues, the federal government would end fiscal 2013 with a deficit of $845 billion. The US Treasury Department reported that on March 29, 2013 the federal debt was $16.77 trillion. Since President Obama took office in January 2009, more than $6 trillion has been added to the national debt. It was $5.7 trillion in 2001.
January marked the sharpest one month decline in personal income in 20 years. Personal income decreased by $505 billion in January, or 3.6% compared to December. However, February showed an increase of 1.1% and was encouraging to economists. Consumer spending rose in January even as incomes dropped, and increased once again in February.
According to the Department of Agriculture, the number of Americans on food stamps saw an all-time high in 2012. An average of 46.6 million people received the benefits each month last year. In 2007, 26 million people received food stamps.
It’s been reported that health insurance companies are warning brokers that premiums for many individuals and small businesses could see a sharp increase in 2014 due to the health-care overhaul legislation. The projections appear to disagree with Department of Health and Human Services forecasts.
Banks wrote off $3 billion of student loan debt in the first two months of 2013, up in excess of 36% from the same period a year earlier. The cost of earning a four year undergraduate degree has increased 5.2% per year in the last decade according to the Consumer Financial Protection Bureau.
White House aides refused on March 27 to specify the date President Obama will release his proposed federal budget. Federal law requires that the White House submit a budget on the first Monday of February.
As of March 1, sequestration is in place. Sequester focuses on the portion of the budget that funds operating accounts for federal agencies and departments, including the Department of Defense.
The US government debt held by foreign entities is a record $5.56 trillion, with China holding $1.26 trillion of it, or approximately 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. Japan is a close second, holding $1.12 billion.
The Bureau of Economic Analysis third estimate of the fourth quarter 2012 Gross Domestic Product showed a revised annual increase of 0.4% that is from the third quarter to the fourth quarter. The earlier second estimate showed an increase of 0.1%. 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 of 2012 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 February to 94.8 (2004=100) following a 0.5% increase in January and a 0.4% increase in December.
The Conference Board Consumer Confidence Index which had improved in February, declined in March. It stands at 59.7 (1985=100) down from an adjusted 68.0 in February.
The Institute for Supply Management’s Manufacturing Index increased 1.1% to 54.2% in February, showing expansion for the third consecutive month. A reading above 50% indicates that the manufacturing economy is generally expanding. The Non-Manufacturing Report for January was 56.0%, 0.8% higher than the 55.2% registered in January, still indicating continued growth.
In February, retail and food services sales adjusted for seasonal variations were $421.4 billion, an increase of 1.1% from January and 4.6% above February 2012. December 2012 through February 2013 sales were up 4.5% from the same period a year ago.
Privately owned housing starts in February of 917,000 were 0.8% above the revised January estimate of 910,000 and were 27.7% above the February 2012 rate of 718,000. Single family housing starts in February were at a rate of 618,000 or 0.5% above the revised January figure of 615,000. New home sales increased 4.6% in February to a seasonally adjusted annual rate of 411,000. This was 4.6% below the revised January rate of 431,000 but 12.3% above the February 2012 estimate of 366,000.
The National Association of Realtors reported that sales of existing homes reached a three-year high in February and their prices rose, adding to signs of acceleration in the housing recovery. Sales of existing homes rose 0.8% in February to a seasonally adjusted annual rate of 4,980,000 units.
New orders for manufactured durable goods in February increased $12.4 billion or 5.7% to $232.1 billion. This followed five consecutive monthly increases.
February unfilled orders for manufactured durable goods increased $9.4 billion or 0.9% to $999.8 billion. This followed a decrease of 0.1% in January after four consecutive monthly increases.
Consumer Price Index for all urban consumers increased 0.7% in February on a seasonally adjusted basis. The US Bureau of Labor Statistics reported that over the last twelve months the all items index increased 2.0 % before seasonal adjustments. Food increased slightly at 0.1% in February, and the gasoline index rose 9.1% in February.
The Producer Price Index for finished goods increased 0.7 % in February, seasonally adjusted, following an increase of 0.2% in January and a decline of 0.3% in December. On an unadjusted basis, prices for finished goods increased 1.7 % for the twelve months ended in February 2013, the largest twelve month increase since a 2.3% rise in October of last year.
Interest rate: Prime at 3.25%, unchanged since 12/16/08.
Inflation: Inflation rate in February reported at 2.0%. The January rate was 1.6%, December rate was 1.7%. The average rate of 2.1% was reported for 2012. It is expected to rise slightly in 2013 to approximately 2.3%.
Industrial production increased 0.7% in February, having been unchanged in January. At 99.5% of its 2007 average, total industrial production in February was 2.5% above its year-earlier level. Capacity utilization rate for total industry increased to 79.6%, a rate 0.6% below its 1972 – 2012 average.
Unemployment: The February 2013 rate edged down to 7.7%, but has shown little movement since September 2012. The number of unemployed persons decreased 236,000 to12.0 million. The Bureau of Labor Statistics stated that the long-term unemployed, i.e., jobless for 27 weeks and over was essentially unchanged at 4.8 million in February. Those individuals accounted for 40.2% of the unemployed. North Dakota continued to lead the nation with the lowest state unemployment rate in February of 3.3%; Nevada, Mississippi, and California were all reported highest at 9.6%.
In a recent Federal Reserve report on economic conditions across the country, the cost of Obamacare was cited as one reason the unemployment rate has remained high.
The goods and services deficit increased to $44.4 billion in January, from $38.1 billion in December 2012 as imports increased and exports decreased. As a percentage of US gross domestic product, the goods and services deficit was 3.4% in 2012, down from 3.7% in 2011. Both imports and exports increased during the year. President Obama recently told his advisory council on exports that the US is on target toward his goal of doubling US exports before 2015. He said that the best way to increase exports is to move ahead with free trade agreements in Asia and Europe.
Crude Oil: Present WTI spot price ~$97/bbl, compared to ~$100+/bbl a year earlier. OPEC outlook shows a reduction in demand.
Natural Gas: Both spot and futures prices reached 18 month record highs during the week ending March 27. Henry Hub spot price closed on March 26 at $4.08/MMBTU. April 2013 contract reported at $3.97/MMBTU. Working natural gas in storage is lower than last year but is 3.5% above the five year average
The US dollar trading at 94.2 Japanese yen; $1.28 = euro. The British pound sterling = $1.52. The Canadian dollar trading at US$1.02.
Current US gold price quoted at $1597.00/ounce compared to the record price of $1920/ounce in September, 2011.