According to American Chemistry Council (ACC) Weekly Chemistry & Economic Trends report on April 7, 2023, chemical railcar loadings were up 0.9% to 33,347 for the week ending April 1. Loadings were down 8.6% Y/Y (13-week MA), down 6.8% YTD/YTD and have been on the rise for 8 of the last 13 weeks according to data released by the AAR.
US chemicals trade flows contacted in February. US chemical exports declined by 3.5% to $13.0 billion in February, a level down 2.7% Y/Y. Exports of petrochemicals which are typically about 60% of total monthly exports, fell 5.3% to $7.5 billion. Imports were also down in February. Overall, chemical imports fell by 8.7% in the month. Declines were across all categories except for inorganics. The US trade surplus in chemicals increased by $609 million to $1.6 billion in February.
Chemical industry construction spending rose 4.6% in February and was up 20.6% Y/Y. Chemical construction spending as a percent of total manufacturing construction spending was 24.4% in February. The comparison has been softening gradually after climbing to a sustained high proportion (around 46%) during 2014-2017.
Chemical shipments rose in February, up by 1.1%. Increases in coatings and adhesives were offset by lower sales in agricultural chemicals and all other categories. Chemical inventories continued to move lower for a fifth consecutive month, down by 0.1%, with declines across all segments (except a small gain in coatings & adhesives). Compared to a year ago, chemical shipments were up 2.3% while agricultural chemical inventories were 3.2% higher. The inventories-to-shipments ratio fell slightly from 1.34 in January to 1.33 in February. Inventories are still high relative to shipments but are moving toward a more balanced position.
According to data from ACC, U.S. production of major plastic resins totaled 7.5 billion pounds during February, down 7.3% M/M and up 2.0% Y/Y. Year-to-date production was 15.6 billion pounds, a 1.0% increase Y/Y. Sales and captive (internal) use of major plastic resins totaled 7.4 billion pounds down 4.2% M/M and up slightly (0.3%) Y/Y. Year-to-date sales and captive use were 15.2 billion pounds, a 2.0% increase Y/Y.
Details of the ISM Manufacturing PMI® report suggest, the chemical industry activity continued to contract through March. New orders and new exports were down and both production and employment declined in March. Chemical manufacturers have been working off order backlogs and working down inventories. Supplier deliveries have been faster reflecting reduced supply chain pressures. Inflationary pressures have eased as well as chemical manufacturers report declining input/raw material costs.
Chemical industry (including pharmaceuticals) employment fell by 4,000 in March, following an increase in February. There were gains in both supervisory/non-production and production workers. The average workweek expanded by 12 minutes to 41.7 hours, the highest in nearly two years. The total labor input into chemical manufacturing fell suggesting that chemical industry output fell in March, consistent with the ISM Manufacturing PMI report.
The U.S. Geological Survey reported that monthly production of soda ash in January was 884 thousand tons, down 8.7% compared to the previous month and down 9.8% Y/Y. Stocks fell 16.8% over December to 303 thousand tons at the end of the month, an 11day supply. Ending stocks were up 5.9% Y/Y.
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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ACC_EconomicsDepartment@americanchemistry.com
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.
