Chemical Industry News

QUOTE OF THE DAY
Patriotism is supporting your country all the time, and your government when it deserves it.
—Mark Twain

U.S. chemical production was flat in April; remains up 4.4 percent over one year ago according to the American Chemistry Council (ACC). The U.S. Chemical Production Regional Index (U.S. CPRI) was flat in April, as measured on a three-month moving average (3MMA). This followed an upwardly revised flat growth rate in March and a 0.2% gain in February.

Also measured on a 3MMA basis, chemical production by segment was mixed. There were gains in the output of coatings, chlor-alkali, pesticides, adhesives, consumer products, other specialties, industrial gases, synthetic rubber, plastic resins, and organic chemicals. These gains were offset, however, by declines in the production of fertilizers, acids, phosphates, sulfates, synthetic fibers, and pharmaceuticals.

Politics play too big a role in the Environmental Protection Agency’s proposed regulations, say a group of Senate Republicans. But the EPA Science Advisory Board Reform Act would “assist [the agency] in crafting and issuing appropriate environmental regulations,” said Sen. Mike Rounds, R-S.D., chairman of an Environment and Public Works Committee subpanel, during a hearing on the bill. The White House has issued a veto threat for the bill, which would overhaul the EPA’s scientific advisers.

Borealis and Agrifos Partners are in the early stages of forming a joint venture to build a world-scale ammonia production facility on the Texas Gulf Coast. Borealis would have rights to 40% of the ammonia from the site to help expand its global nitrogen business.

National Association of Chemical Distributors (NACD) sent a letter and supplemental information to the Occupational Safety and Health Administration asking for an immediate, short-term administrative stay through Dec. 1 regarding the agency’s enforcement of its Hazard Communication Standard rulemaking for companies’ chemical products previously labeled and stored in their existing inventory. The current deadline for complying is June 1.

In 2015, there is a tremendous amount of interest in India on the part of the global plastics industry. India’s industry is projecting that the country will double its per person use of plastics by 2020, as a growing consumer class increasingly wants the smartphones, computers, cars and better food packaging that are more common in other places.

DuPont is emphasizing new products to maintain growth in China. Roger Kant, the company’s marketing director for packaging & industrial polymers in the Asia Pacific highlighted several new products and technologies for the China market that included Elvaloy phthalate-free plasticizers for PVC and meat packaging using a combination of DuPont Surlyn resin, with EVOH barrier and a tough layer of either nylon or polyester.

The rise of the U.S. plastics industry and increase in chemical manufacturing will add 462,000 jobs across the nation in the next 10 years, according to data from the American Chemistry Council. More than $130 billion chemical-related investments have been proposed in the U.S. since 2010. “Companies are restoring jobs to the United States as new manufacturing is increasingly being located here at home,” said Steve Russell, vice president of plastics for ACC.

The Environmental Protection Agency’s Integrated Risk Information System needs “more tangible signs of progress,” the American Chemistry Council says. A recent progress report to Congress showed work on several of the recommendations from the National Research Council. However, IRIS must improve its criteria for reviewing evidence, its responsiveness to stakeholder input and its problem formulation and scoping process, ACC said.

The Federal Energy Regulatory Commission has asked the Environmental Protection Agency to include a safety valve to protect grid reliability in its Clean Power Plan. With a safety valve, states could ask the EPA for temporary exemption from compliance. FERC offered to help the EPA to assess such requests if the EPA allows the provision.

PTT Global Chemical and Marubeni plan to choose a third partner for a proposed $5 billion ethane cracker project in Ohio. The project, planned for Belmont County, could bring hundreds of long-term jobs to the area.

Rep. John Shimkus, R-Ill., is expected to officially introduce the Toxic Substances Control Modernization Act (TSCA. The full House Energy and Commerce Committee will likely review the bill in early June, and the bill may reach the House floor by the end of the month. “Our goal is to lock it down with the agreement that we have, unless there’s big buy-in on both sides” to make changes, Shimkus said.

At the 2015 Central Region Meeting on June 8-10 at the Eaglewood Resort in Itasca, Illinois, ICC Compliance Center’s Emily Walter will review the three major deadlines for compliance with the new Hazcom 2012 requirements. A discussion of what each deadline includes and who needs to comply, and an examination of OSHA’s recently published enforcement guidance and how it impacts the deadlines will be included. Understanding the deadlines and enforcement guidance will help companies stay compliant every step of the way.

The U.S. Centers for Disease Control and Prevention and other groups are urging people to stop urinating in pools as it depletes the chlorine and produces an irritant that can sting people’s eyes. Meanwhile, the smell commonly thought to come from chlorine is actually from “chemicals that form when chlorine mixes with pee, sweat and dirt from swimmers’ bodies,” said Chris Wiant, Chair of the Water Quality and Health Council. Therefore, pool users should shower before getting in and refrain from urinating in the pool, experts advise.

The Vie from Jamestown - Oil & Gas

Oil & Gas Related

Shale oil companies are edging closer to their big debts becoming a bigger problem. Moody’s Investor Service believes 7.4 percent of U.S. oil producers over the next year could default on the risky debt that fueled the nation’s shale boom if crude stays cheap.

Private land and mineral rights owners say they are seeing sluggish revenues from royalty payments as shale producers default on debts and go bankrupt amid a slump in oil prices.

“Thanks to hydraulic fracturing and horizontal drilling, the U.S. is experiencing a renaissance in domestic oil and natural gas production. The benefits for U.S. consumers — as well as manufacturers, the travel and tourism industry and frankly our entire economy — are hard to overstate,” John Felmy, chief economist with the American Petroleum Institute, said in a conference call with reporters.

The Environmental Protection Agency’s proposal to lower the ground-level ozone limit would “throw thousands­­—if not millions—of jobs into jeopardy,” writes Michael James Barton, energy adviser at ARTIS Research. The American Chemistry Council has determined that 211 shale-related projects worth $135 billion could be threatened by the standards.

The U.S. is about to change the global LNG market forever. When the first tanker carrying liquefied natural gas from shale fields leaves the Sabine Pass terminal in Louisiana in December, it will turn consumers into traders with more bargaining power. That will transform a market dominated by long-term contracts into one where spot trading gains prominence, similar to crude oil.

Significant U.S. exports will likely boost gas prices, currently at about $3 a million British thermal units, Energy Aspects Ltd. said in a report for UniCredit SpA on Tuesday. U.S. gas may converge toward European levels, now at about $7 a million Btu, the analysts said.

LNG trade will exceed $120 billion this year, overtaking iron ore as the second most valuable commodity after oil, Goldman Sachs Group Inc. said in a March report. LNG is gas cooled to minus 160 degrees Celsius (minus 256 degrees Fahrenheit) so it occupies 600 times less space.

Ten Senate Democrats implored President Obama Thursday to nominate a new head for the Pipeline and Hazardous Material Safety Administration (PHMSA), which has not had a leader in seven months. The letter came two days after an oil pipeline on California’s coast leaked an estimated 105,000 gallons of oil into the the Pacific Ocean, which washed onto the beaches of Santa Barbara County.
Since 2010, the benchmark price for natural gas futures contracts has mostly held below $5 per million British thermal units (MMBtu). Frequently, the price has dipped as low as $2 per MMBtu, as drillers from Pennsylvania to Texas have raised output from previously uneconomical gas deposits buried in shale and other hard-to-drill rock.

Demand for gas is also growing from a surprising source: Fleets of trucks switching from costly diesel fuel to cheaper compressed or liquefied natural gas to save on fuel costs.

Sens. Joe Manchin, D-W.Va., Lisa Murkowski, R-Alaska, Heidi Heitkamp, D-N.D., and Bob Corker, R-Tenn., on Tuesday unveiled a bill that would lift the ban on U.S. crude oil exports. The legislation would provide “triggers to stop exports if gas prices increase or if our economy is adversely affected,” said Manchin. He added that allowing oil exports would benefit U.S. national security interests.

Royal Dutch Shell’s deal with BG Group that we’ve been watching since last month may not likely signal a wave of major mergers and acquisitions in the oil and natural gas industry, contrary to several observers’ predictions, writes Reuters reporter Clyde Russell. He notes that other companies could follow, but at “a smaller scale,” as they seek to complement their businesses with additional assets. “It will take sustained, lower commodity prices to knock valuations to the level where mega-mergers may make sense again,” Russell wrote.
Cleanup continues for the California oil spill, and experts are now saying that it could have been way worse than it was. The pipeline was carrying 1,300 barrels of oil an hour, which is below its capacity of 2,000 barrels.

The Middle East’s OPEC oil cartel just ramped up its war on the US shale gas industry as new data from Saudi Arabia shows that oil exports in March reached their highest level in 12 years, with production at record levels.

Morgan Stanley says the U.S. shale boom is over and the industry is getting more efficient — because it has to. After a conference in Houston with the oil and gas industry, MS’s research team writes that the industry is weathering the downturn in oil prices by increasing efficiency. This included the willingness by operators to look at new solutions, technologies, and approaches to project development that perhaps would not have gained traction without the downcycle.

“It will take many years until we see oil prices anywhere near the $100 mark,” Petroliam Nasional Bhd. President and Chief Executive Officer Wan Zulkiflee Wan Ariffin said at a conference in Kuala Lumpur. “We’ve underestimated the resilience of U.S. shale production. ‘We’re still grappling our way to climb out of this big drop.”
Tokyo Gas Co Ltd, Japan’s biggest gas utility, is looking to invest in more U.S. shale gas production as a hedge to liquefied natural gas (LNG) imports from the United States to start next year, a company executive said. The company has inked contracts to buy 1.9 million tonnes per year (tpy) of LNG from U.S. producers and aims to invest in an equal volume in the upstream sector, said Shigeru Muraki, a board member and executive adviser at Tokyo Gas.

Pumping a barrel of oil out of the Eagle Ford Shale could get $10 to $15 cheaper by summer 2016 as service companies cut costs and operators tune up their wells, analysts say. The oil slump hasn’t stopped producers in the South Texas play from getting better at targeting oil-rich rock in lateral sections of their horizontal wells, speeding up their pressure pumping systems and adopting better technologies for bringing wells into production. Those efforts could help lift wells’ initial production rates by an average 33 percent in the Eagle Ford, even as service companies cut prices for drilling tools, proppant and rigs by an average 16 percent this year, Wood Mackenzie analysts said.

Adapting the technology that powered the shale oil boom in Texas to the deserts of Saudi Arabia and elsewhere could produce 141 billion barrels of crude, research firm IHS said. Horizontal drilling and hydraulic fracturing, alongside other technological breakthroughs in recent years, could pump that much oil out of 170 older, largely unproductive fields around the world, from the Middle East to Latin America to Russia.

 

The View from Jamestown - Economy

The Economy

According to Bloomberg, the weekly consumer sentiment index dropped to 42.4 in the period ended May 17, the lowest since mid-December, from 43.5 as fewer consumers said now was a good time to spend. Such angst, particularly among lower-income households, probably has its roots in steadily climbing prices at the gas pump and limited wage gains.

Retail sales rose less than expected in March after declining for three consecutive months. Since the U.S. began collecting data in 1967, only twice has it seen three-month stretches of waning retail sales in non-recessionary times.

Businesses have remained upbeat all year, particularly in the U.S. This seems incongruous with slower growth and suggests that the recent slowdown will prove temporary. Businesses remain steadfast in their optimism over sales, investment, and hiring. Credit is also freely flowing. Pricing is sturdy, despite heightened deflation concerns in much of the world, and sales are healthy.

Legislation aimed at granting “fast track” powers to President Barack Obama as he seeks to cement the Pacific trade deal cleared a key procedural hurdle in the Senate this morning, with Republicans and a handful of Democrats joining to break a filibuster. A full vote is expected by Saturday, setting the stage for a contentious House debate on the legislation.

The U.S. will hold new talks with Cuba today, with the two countries believed to be on the brink of opening embassies and normalizing diplomatic relations. “We’re closer than we have been in the past, and I think my counterparts are coming up here with a desire to get this done,” a top State Department official said.

U.S. economy is edging closer to recession. Government information released in May indicates that growth actually contracted quarter over quarter. Barclays Capital and JPMorgan (JPM) both lowered U.S. Q1 GDP estimates to negative 1.1% after disappointing factory order data revisions last Thursday. Now, it even looks as if the second quarter is imperiled. Retail sales for April were disappointing. Again, economists had expected that a decline in gasoline prices would boost consumption, which hasn’t happened.

Wall Street Journal—Consumer prices rose for the third consecutive month in April, the latest sign of firming inflation.

Federal Reserve Chairwoman Janet Yellen said the central bank is on track to raise interest rates this year but will likely proceed cautiously.

U.S. home building surged in April to the highest level since before the recession officially began, a sign of thaw in the housing market during the critical spring selling season.

A weaker euro helped boost exports of goods from the Eurozone to the rest of the world in March, pushing the currency area’s trade surplus higher and aiding its economic recovery.

China’s factories showed little sign of a rebound in May, in the latest indication that any near-term upturn in the world’s second-largest economy will be driven more by stimulus than a broad-based recovery.

American households across the wealth spectrum increasingly face sharp swings in monthly income and spending, a finding that underscores the unpredictability that has become a hallmark of the U.S. labor market since the recession.

NEW DELHI, India — When Narendra Modi became prime minister a year ago on a promise to revive India’s once-sparkling economy, inflation was running at 9% and economic growth had slowed to less than 5% — half the pace of two years earlier. Today, inflation is down to 5%, and the International Monetary Fund forecasts India’s economy will grow 7.5% this year, outpacing China’s growth for the first time since 1999.

Fed Chair Janet Yellen: “If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy,” she said. “To support taking this step, though, I will need to see continued improvement in labor market conditions, and I will need to be reasonably confident that inflation will move back to 2 percent over the medium term.”

Chemical Industry News – January

Chemical Industry News

Chemical Industry News - January 2014 - The Chemical Company

The American Chemistry Council (ACC) US Chemical Production Index rose by 0.3% in November, following three consecutive monthly declines. Production increased in all seven regions of the US during the month.  Compared to November 2012, chemical production in all regions increased by 1.5% year-over-year, following a revised gain of 1.7% in October. Comparing the first eleven months of 2013 to those of 2012, total chemical production rose 1.3% nationally, with six of the seven regions posting gains.

The ACC’s Chemical Activity Barometer (CAB) rose by 0.1% in December. Following an increase of 0.1% in November, the CAB remains up 2.8% over a year earlier and is at its highest point since June 2008.

The ACC issued a report in December entitled “2013 Chemical Industry Situation and Outlook: American Chemistry is Back in the Game”, saying that chemical sales in the US will reach $1 trillion by 2018 and that R&D spending will rise to $68.7 billion. The outlook for Europe is less optimistic with a Eurozone growth of 1% in 2014.

WR Grace announced that it had completed the acquisition of Dow Chemical’s polypropylene licensing and catalyst business in a $500 million cash transaction.

Nova Chemicals is moving forward with several projects in the Sarnia, Ontario, Canada area and is evaluating options for a new $1 billion polyethylene plant.

Phillips 66 will sell Phillips Specialty Products to Berkshire Hathaway for approximately $1.4 billion in stock. The company produces chemicals related to pipeline flow potential. The agreement is expected to be finalized by mid-year.

Axiall is planning a $3 billion ethane cracker in Louisiana pending approval from their board of directors.

Cargill announced that it is to built a new ethanol plant in Saxony Anhalt, Germany, with an investment of ~$82 million. The new facility will serve the beverage, cosmetics, and pharmaceuticals industries.

On December 8, 2013 Sysco Corp. of Houston agreed to purchase US Foods of Rosemont, IL in a deal valued at approximately $3.5 billion.

The Society of Chemical Manufacturers and Affiliates (SOCMA) has called for the re-authorization of the miscellaneous tariff bill, which provides tariff relief for US companies that import chemicals not available in this country. SOCMA stated that chemical import duties can add 5 – 25% to total cost.

Andrew Liveris, Chairman, President and CEO of Dow Chemical was once again named number one chemical industry power player by ICIS.

It has been reported that Exxon’s new cracker in Singapore allows the company to bypass the refining process and to process crude oil directly into petrochemicals. This new technology helps to reduce raw material costs, energy consumption, and carbon emissions. According to Exxon, it is the most feed-flexible cracker that they’ve ever built.

US chlor-alkali average operating rates rose to 85% in November 2013 from October’s 79%.

The EPA was scheduled to publish re-proposed carbon dioxide limits for new power plants on January 8, setting separate standards for coal-fired and natural gas-fired generating units. The rule would revise an April 2012  proposal,  in which the EPA had intended to set a single standard for both types of plants. The new standards aren’t expected to result in significant CO2 reductions because the power generating sector is already investing in lower cost, cleaner natural gas-fired generating units.

The US Navy has announced that it is moving rapidly toward making regular purchases of biofuel for its warships and jet aircraft by 2015.  The Secretary of the Navy said that this was part of a joint venture with the US Agriculture Department.

Odebrecht, Brazil’s major contractor, is considering the development of an ethane cracker and three polyethylene plants in a project called Ascent, according to Governor Tomblin of West Virginia. In addition, Braskem, also a Brazilian company, would be responsible for petrochemical related activities as well as marketing the polyethylene

Russian production of chemicals and petrochemical products increased in the January – November 2013 period according to Rosstat, the national statistical agency.

China became the world’s largest trading nation in 2013, overtaking the US. This ranking is based on annual trade in goods, and China passed the $4 trillion mark for the first time last year. Exports were reported to have risen 7.9% to $2.21 trillion and imports to have risen 7.3% to $1.95 trillion. Total trade rose 7.6% over the year to $4.16 trillion. US data for 2013 hasn’t yet been published but with trade totaling $3.15 trillion in the first eleven months of the year, it’s unlikely to beat China. Economists forecast that the Chinese economy will expand 7.5% in 2014.

On January 9 US lawmakers proposed a bill to give the White House the power to fast-track international trade agreements as 2014 looks to be a hectic year of trade negotiations. The proposed legislation would allow an up-or-down vote without amendments.

China’s consumer price index decreased at an annual rate of 1.5% in December. Producer prices remained level.

China’s monthly industrial output in excess of 10% continues to exceed the government annual target of 7.5%.

Germany’s business climate continued to grow, but slightly, in December. Munich-based Ifo, an economic research group, reported that its monthly business climate index for Germany rose to 109.5 in November from 109.3 in October. The survey represents responses from firms in construction, manufacturing, wholesaling and retailing. Their expectations regarding business developments rose to their highest level since spring 2011.

Unemployment across the seventeen European Union countries that use the euro was reported unchanged at 12.1% for November. The lowest rates among member states were Austria at 4.7%, Germany at 5.2% and Luxembourg at 5.9%. The highest rates among member states were Greece at 27.4% and Spain at 26.7%. However, during the same period sales rebounded 1.6% versus a year ago.

Inflation in the Euro zone was reported at 0.8%, down from 0.9% in November. This was less than half of the European Central Bank’s ceiling, which indicated economic weakness in parts of the region.

The head of safety for CN Rail says that the rail industry wants to phase out older model tank cars that have been implicated in several recent accidents. This problem could involve as many as 80,000 sub-standard cars in use across North America. The Association of American Railroads (AAR) and Regional Railroad Association has proposed a new safety standard that would require shippers to upgrade tank cars. The Canadian and US governments have been reluctant to deal with this huge number of cars, in part because of the cost and logistics of an overhaul.

Total carload rail volume for 2013 was down 0.5% from 2012. Intermodal volume was up 4.6% compared to the same period. Petroleum products shipments were up 29.8%.

The American Trucking Association reported that seasonally adjusted for-hire truck tonnage increased 2.7% in November, after falling 1.9% in October. Compared with November 2012, year-over-year increase was 8.1%.

Kinder Morgan Energy Partners entered into an agreement to purchase American Petroleum Tankers and State Class Tankers for $962 million in cash. This will result in Kinder Morgan adding maritime tanker service.

Shale Oil and Gas Related

The Chemical Company - Chemical Industry News - Shale Oil and Gas RelatedThe New York State Energy Planning Board long-term plan, which was supposed to have been completed in September 2012 was released on January 7, 2014 for a 60 day public comment period. It calls for expanding the use of natural gas for heating and power generation, but takes no position on the use of hydraulic fracturing. Over the past year Governor Cuomo has said that he’s waiting for his health commissioner to complete a review, with no deadline for a decision.

Canadian Prime Minister Stephen Harper recently said that he remains confident that the Keystone XL pipeline will eventually be built even as President Obama delays making a decision on the $5.4 billion project. Oil sands developers are planning to double output by 2025 and are counting on Keystone XL to connect their crude oil to the Gulf Coast, the world’s largest refining center. According to the American Petroleum Institute, buying oil from Canada makes sense because for every US dollar spent on Canadian products, such as oil, up to 89 cents is returned in the form of imports of US goods to Canada.

The operator of the $2.3 billion pipeline between Cushing, OK and the Gulf Coast expects to begin shipping oil on January 22.

Royal Dutch Shell has renewed its option to buy the Horsehead site in Monaca, PA as it continues to evaluate whether or not to proceed with a $2 billion ethylene plant in the area. However, demolition of a zinc oxide plant at the site is taking place.

The Economy

Chemical Industry News - January 2014 - The EconomyThe Congressional Budget Office estimated that the federal government incurred a budget deficit of $182 billion for the first three months of fiscal year 2014, $111 billion less than the shortfall reported for the same period a year ago. The federal government incurred a $680 billion deficit in fiscal year 2013. This was $409 billion less than the deficit in fiscal year 2012. The US Treasury Department reported that on January 4, 2014 the federal debt was $17.312 trillion. The national debt has increased an average of $2.67 billion per day since September 30, 2012.

An omnibus spending bill of $1.012 trillion was revealed on January 13; a House vote on it was expected on January 14 and for it to be before the Senate by the weekend. The bill covers the entire federal discretionary budget for fiscal 2014 and fills in the details of the earlier agreement between Democrats and Republicans. Passage of the bill will ensure that the government will stay open until October 1.

Personal income in November increased $30.1 billion or 0.2% according to the Bureau of Economic Analysis. In October, personal income decreased 0.1% or $10.8 billion.

China, the largest foreign creditor of the US, bought more Treasuries in October than any other foreign investor. This was taken as a sign that the US is still considered a global financial safe haven in spite of the recent shutdown and threat of default. China’s holdings increased by $10.7 billion to $1.305 trillion, according to Treasury Department data. The US government debt held by foreign entities continues in excess of $5.6 trillion.

The Bureau of Economic Analysis third estimate showed an increase in Gross Domestic Product of 4.1% in the third quarter of 2013, that is, from the second quarter to the third quarter. In the second quarter, real GDP increased 2.5%. First quarter data showed an increase of 1.1%. Revised fourth quarter 2012 real GDP increased 0.4%. Current-dollar GDP, the market value of the nation’s output of goods and services, increased 6.2% or $251.9 billion to a level of $16,912.9 billion. In the second quarter, current dollar GDP increased 3.1% or $125.7 billion to a level of $16,661 billion. In the first quarter current dollar GDP increased 2.8% or $115.0 billion.

A report by the National Association for Business Economics estimated that US GDP should grow by 2.8% in 2014.

The Conference Board’s Leading Economic Index increased 0.8% in November to 98.3 (2004 = 100), following a revised 0.1% increase in October, and a 1.0% increase in September.

The Conference Board Consumer Confidence Index which had decreased in November rebounded in December to 78.1 from 72.0 in November.

The Institute for Supply Management’s December Manufacturing Index registered 57%, the second highest reading for the year and just 0.3% below the November reading of 57.3%. The December reading is the seventh consecutive monthly increase. The Non-Manufacturing Report for December was 53%, a decrease of 0.9% from November’s 53.9%, but indicating continued growth in the non-manufacturing sector at a slower rate.

In November, retail and food services sales adjusted for seasonal variations were $432.3 billion, an increase of 0.7% from October and 4.1% above November 2012.

Privately owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,007,000, which was 3.1% below the revised October rate of 1,039,000, but is 7.9% above the November 2012 rate of 933,000. Single family authorizations in November were at a rate of 634,000, which was 2.1% above the October figure of 621,000.

Sales of new single family houses in November were at a seasonally adjusted rate of 464,000. This was 2.1% below the revised October rate of 474,000 but is 16.6% higher than the November 2012 number 398,000.

The National Association of Realtors reported that total sales of existing homes declined 4.3% in November to a seasonally adjusted annual rate of 4.9 million from an October rate of 5.12 million and were 1.2% below the November 2012 rate of 4.96 million. Prices continue to increase and were up 9.4% from November 2012. Distressed homes, foreclosures and short sales, accounted for 14% of November sales, at no change from October.

New orders for manufactured durable goods in November increased $8.2 billion or 3.5% to $241.6 billion. This increase, up three of the last four months, followed a 0.7% decrease in October.

November unfilled orders for manufactured durable goods increased $10.5 billion or 1.0% to $1058.5 billion. This number has increased for nine of the last ten months.

Consumer Price Index for all urban consumers was unchanged in November on a seasonally adjusted basis. The US Bureau of Labor Statistics reported that over the last twelve months the all items index increased 1.2% before seasonal adjustments. Food index rose slightly, after an increase of 0.1% in October, and no change in September. The gasoline index dropped 1.6% and natural gas fell as well, offsetting increases in electricity and heating oil.

The seasonally adjusted Producer Price Index for finished goods decreased slightly 0.1% in November. Prices for finished goods fell 0.2% in October and 01% in September. On an unadjusted basis, prices for finished goods increased 0.7 % for the twelve months ended in November 2013.

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

Inflation: Inflation rate for the twelve months ended in November reported at 1.2%; October was reported at 1.0%, September at 1.2%. An average rate of 2.1% was reported for 2012.

Industrial production increased 1.1% in November, after having edged up an adjusted 0.1% in October and 0.7% in September. The November gain was the largest since November 2012.  Capacity utilization rate for total industry increased 0.8% to 79.0%, a rate 1.2% below its 1972 – 2012 average.

Unemployment: The December unemployment rate declined to 6.7% from the November 2013 rate of 7.0% as reported by the Bureau of Labor Statistics. The number of unemployed persons was reported at 10.4 million, down from the 10.9 million from a month earlier. Employers added an unexpectedly low 74,000 jobs in December and a reported 374,000 people left the work force. Most economists had projected a 200,000 jobs gain. The long-term unemployed, i.e., jobless for 27 weeks and over was reported at 3.9 million in December, down from 4.1 million. Those individuals accounted for 37.7% of the unemployed. The number of long-term unemployed has declined by 894,000 in the past twelve months. North Dakota continued to lead the nation with the lowest state unemployment rate in November of 2.6%; Rhode Island and Nevada were highest at 9.0 % with Michigan, and Illinois not far behind.

The US Census Bureau and the Bureau of Economic Analysis through the Department of Commerce announced on January 7 that total November exports of $194.9 billion and imports of $229.2 billion resulted in a goods and services deficit of $34.3 billion, down from the October figure of $40.6 billion.

Crude Oil: WTI trading at ~$93/bbl, little changed from a year earlier.

Extremely cold weather in the Northeast drove up natural gas pricing. Henry Hub spot price closed on January 7 at $4.35/MMBTU, with a reported increase up to $4.54. Regional price variations were pronounced.  February futures reported in the $4.20/MMBTU range. Working natural gas in storage at the beginning of January decreased and was 15.1% lower than last year at that time, and 10.1% lower than the five year average.

The U.S. Dollar trading at 104.8 Japanese yen; $Canadian 1.09; $1.37 = euro; . The British pound sterling = $1.65.

Current U.S. gold price quoted at $1247.00/ounce. The record price of $1920/ounce was recorded in September, 2011.