The American Chemistry Council’s (ACC; Washington, D.C.; www.americanchemistry.com) Global Chemical Production Regional Index (Global CPRI) for February shows that the 1st quarter is “progressing on a good note, with the headline index rising 0.2% on a three-month moving average (3MMA) basis.” The February gain, noted in the latest ACC Weekly Chemistry and Economic Report, follows a 0.4% gain in January and a strong 4th quarter of 2015, the report says.
During February, chemical production rose in North America (2.1% Y/Y), Western Europe, and Asia-Pacific; was flat in Africa & the Middle East; and fell in Latin America and Central & Eastern Europe.
In the U.S., production edged higher in February with gains in manufactured fibers, adhesives, other specialties, organic chemical s, plastic resins, pharmaceuticals, and pesticides, the ACC report says. These gains were offset by declines in inorganic chemicals, synthetic rubber, fertilizers, pesticides, coatings, consumer products, and industrial gases, the report added. During February, Canadian production rose while Mexican chemical production slipped.
Here is how the latest ACC report assessed the chemical production of each region:
“Latin America production declined in February, off 5.5% Y/Y. On a Y/Y basis, Latin America is the weakest performing region with chemical production off in Brazil as well as in Uruguay and Venezuela. Production was up in Argentina, Chile, Colombia, and Peru.”
“In Western Europe, chemical production gained further in February and was up 4.0% Y/Y with gains in most countries in the region (France, Italy, The Netherlands, Spain, Switzerland and Austria, Denmark, Greece, Norway, and Portugal). Production was flat in Germany and declined in the United Kingdom, Belgium, and Sweden.”
“During February, growth in Central and Eastern Europe was 6.3% Y/Y, the strongest regional showing. Y/Y gains occurred in Russia, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Romania.”
“Chemical production in Africa and the Middle East was flat during February and was up 5.6% Y/Y. The region faces ongoing conflicts in some of the countries. Comparisons to last year were positive in the Gulf Region, Israel, South Africa, Tunisia, and Turkey but production was down in Jordan.”
“Chemical production in the Asia-Pacific region rose during February with gains centered in China. Following several months marked by contraction in 2015, China’s activity increased for the ninth consecutive month and at a fairly good pace. In addition to China, Y/Y overall regional production was up 4.6% with strong gains made in The Philippines, Singapore, and Thailand with more modest gains in Japan, Malaysia, Pakistan, South Korea, and Taiwan.”
Summarizing, the ACC report says, “All segments of the business of chemistry have improved from the trough of the recession with the most pronounced recovery having occurred in the cyclical segments. During February, results were positive, with production of manufactured fibers, synthetic rubber, inorganic chemicals, and coatings as weak segments.”
Also, the ACC report says, “Considering Y/Y comparisons, chemical production increased in every category. Growth was strongest in plastic resins followed by pharmaceuticals, consumer products, manufactured fibers, and other specialties. Other segments featured more modest year-earlier comparisons.”
Citing other recent economic data, the ACC report says the ISM (Institute of Supply Management) manufacturing report indicates that the chemical industry was one of the manufacturing industries reporting expansion during March, with “gains in exports and other new orders aided by expanding production, order backlogs, and imports.”
The ACC report also cited its own statistics for major plastic resins. U.S. production of major plastic resins totaled 6.5 billion pounds during February 2016, the ACC report says, up 6.7% compared to the same month last year.
“Year-to-date production was 13.4 billion pounds, a 7.6% increase as compared to the same period in 2015,” the report noted.
Finally, the ACC report noted that chemical equity prices, as measured by the S&P index for chemical companies, rose by 5.7% in March and “continued to make up for losses in January.” Meanwhile, the benchmark S&P 500 index rose by 6.6% in March.