US Chemical Industry Outlook
The US is the world's major economy and its chemical industry is rising for the first time in a decade. With abundant source of low-cost feedstocks, the US chemical market has converted into one of the most favourable markets for chemical production globally. The US chemical industry is contributing a major share in the global chemicals market. Shale gas in the US is rapidly increasing as an available source of natural gas. The factors responsible for the growth are surge in attractive business investment, increasing manufacturing base, and expanding domestic oil & gas production.
US-based chemical manufacturers have advantages with the access to relatively cheaper and more abundant feedstocks. In 2017, specialty chemicals, bulk petrochemicals, basic chemicals, and other specialties reflected beneficial gains. In spite of this, Hurricane Harvey paused production temporarily and minimised volumes during the third quarter.
Currently, the US is witnessing demand for basic chemicals which is driving the manufacturing and export in this region. Improved business activities in domestic end-use markets and exports are boosting the growth for more specialty segments. The export market is expected to expand with the rising performance across the world. Improvements in oilfield and mining chemicals, adhesives, and electronic chemicals are the main trends for growth in specialty chemicals, and demands are expected to increase from manufacturing and construction sectors in 2018.
Furthermore, the chemical industry continued to add high-paying American jobs for a fifth consecutive year. Chemical companies in the US are proceeding to innovate, focusing on new as well as improving efficiencies of existing products, and leading-edge product development.
In the late 2015 and 2016, the business investment in the US was weak, but the recovery in the oil & gas sector has improved the related investments. In 2017, changing trends and high confidence in these segments healed the US economy. The current scenario is, oil & gas sector is a leading factor behind the robust economic growth in the US. Also, in coming years, the demand for enhanced productivity and competitive business will boost the investment.
This economy growth will bring purchasing power in consumers. The US is evaluated as an investment location due to its petrochemical production capacity. In the US, petrochemical producers have announced significant expansions in the capacity. In November 2017, nearly 320 new chemical production projects (valued $185 billion approximately) have been announced; in which nearly 62% of investment is coming from foreign direct investment (FDI) or include a foreign partner.
The US trade group is witnessing a strong demand in almost all major chemical sectors, including paints & coatings, agrochemicals, petrochemicals, polymers, organic intermediates, and consumer products. This demand is an output of strong export market and booming manufacturing sector.
– Khushboo Pandey,