The American Chemistry Council (ACC; Washington, D.C.; www.chemengonline.com) reported that U.S. specialty chemicals market volumes rose 0.3 percent in August. This follows a 0.4 percent gain in July and a 0.3 percent decline in June. All changes in the data are reported on a three-month moving average (3MMA) basis. Of the 28 specialty chemical segments we monitor, seventeen expanded in August with the largest gains (1.0 percent and over) in adhesives and sealants, lubricant additives, and mining chemicals.
The overall specialty chemicals volume index was off 0.8 percent year-over-year (Y/Y) on a 3MMA basis. The index stood at 105.0 percent of its average 2012 levels. This is equivalent to 7.24 billion pounds (3.28 million metric tons). During 2014, Y/Y comparisons were generally in the 4.0 percent to 6.8 percent range but since February 2015, they have fallen well below that range as the downturn in the oil and gas sector has affected headline volumes. Weakness spread to other segments as well and year-earlier comparisons have been negative since second quarter 2015. Lately, the year-earlier declines have been moderating. On a Y/Y basis, there were gains among market and functional specialty chemical segments.
Specialty chemicals are materials manufactured on the basis of the unique performance or function and provide a wide variety of effects on which many other sectors and end-use products rely. They can be individual molecules or mixtures of molecules, known as formulations. The physical and chemical characteristics of the single molecule or mixtures along with the composition of the mixtures influence the performance end product. Individual market sectors that rely on such products include automobile, aerospace, agriculture, cosmetics and food, among others.
Specialty chemicals differ from commodity chemicals. They may only have one or two uses, while commodities may have multiple or different applications for each chemical. Commodity chemicals make up most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time, and are relatively high value with greater market growth rates. Some areas where specialty chemicals are used include adhesives, cleaning materials, cosmetic additives, construction materials, food additives, fragrances and detergents.