According to American Chemistry Council (ACC) Weekly Chemistry & Economic Trends report on March 10, 2023, chemical railcar loadings were up 6.4% to 34,284 for the week ending 4 March. Loadings were down 9.8% Y/Y (13-week MA), down 7.3% YTD/YTD and have been on the rise for 9 of the last 13 weeks According to data released by the Association of American Railroads.
Comments in the Federal Reserve Beige Book related to chemicals included, “Crude oil refining and petrochemical manufacturing contacts continued to report strong demand, although contacts noted that demand for chemicals related to adhesives and steel manufacturing fell.”
Following four consecutive months of declines, chemical shipments rose in January, up by 1.7%. Declining sales in agricultural chemicals, coatings and adhesives were offset by higher sales in other chemical categories. Chemical inventories continued to move lower for a fourth month, down by 0.9%, with declines across all segments (except a small gain in coatings & adhesives inventories). Compared to a year ago, chemical shipments off 2.0% while inventories were 4.7% higher. The inventories-to-shipments ratio fell back sharply from 1.42 in December to 1.38 in January. Inventories are still high relative to shipments, but are moving toward a more balanced position.
At the wholesale level, chemical sales fell 4.0% in January, following a 2.7% fall in December. Chemical wholesale inventories edged lower by 1.6% following a 0.2% decline in December. Compared to last January, sales were down 2.1% Y/Y while inventories were 10.0% Y/Y higher. The inventories-to-sales ratio for chemicals rose from 1.15 in December to 1.18 in January. Last December, the ratio was a lean 1.05.
The U.S. Geological Survey reported that monthly production of soda ash in December was 968 thousand tons, down 4.2% compared to the previous month and down 0.4% Y/Y. Stocks rose 5.2% over November to 364 thousand tons at the end of the month, a 12-day supply. Ending stocks were up 30.9% Y/Y.
U.S. chemical exports fell 1.6% to $13.5 billion in January, a level down 0.6% Y/Y. Exports of inorganics, agricultural chemicals, consumer products and specialties chemicals were down in January. Exports of petrochemicals rose with a strong gain in plastic resins exports. Chemical imports were strong with an 8.0% gain in January. Imports were up in every chemicals category with the exception of coatings. With imports growing faster than exports, the trade surplus in chemicals contracted by $1.1 billion to $1.0 billion in the month.
According to data from ACC, U.S. production of major plastic resins totaled 8.1 billion pounds in January, a level up 18.8% compared to December (when some production was disrupted from winter storm Elliott) but flat Y/Y. Sales and captive (internal) use of major plastic resins rose 3.8% to 7.7 billion pounds in January, a level up 5.2% Y/Y.
Chemical industry employment (including pharmaceuticals) rebounded in February, up by 2,500 (0.3%) with gains in both production/non-supervisory and supervisory/non-production jobs. Compared to a year ago, chemical industry employment was higher by 26,900 (3.0%). Average hourly wages for production workers were up 5.6% Y/Y, a slower pace than January’s 7.0% pace of wage gains. The average workweek for chemical industry workers remained stable in February at 41.6 hours and the total labor input into the chemical industry rose slightly February. After factoring in productivity trends, this suggests that chemical output was stable-to-slightly higher which was in contrast with last week’s ISM report that suggested chemical industry output contracted.
Note On the Color Codes
The banner colors represent observations about the current conditions in the overall economy and the business chemistry. For the overall economy we keep a running tab of 20 indicators. The banner color for the macroeconomic section is determined as follows:
Green – 13 or more positives
Yellow – between 8 and 12 positives
Red – 7 or fewer positives
For the chemical industry there are fewer indicators available. As a result we rely upon judgment whether production in the industry (defined as chemicals excluding pharmaceuticals) has increased or decreased three consecutive months.
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American Chemistry Council
The American Chemistry Council (ACC) represents the leading companies engaged in the multibillion-dollar business of chemistry. ACC members apply the science of chemistry to make innovative products, technologies and services that make people's lives better, healthier and safer. ACC is committed to improved environmental, health, safety and security performance through Responsible Care®; common sense advocacy addressing major public policy issues; and health and environmental research and product testing. ACC members and chemistry companies are among the largest investors in research and development, and are advancing products, processes and technologies to address climate change, enhance air and water quality, and progress toward a more sustainable, circular economy.
