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US chems contend with gloomy house market

September 21/2011

(ICIS) -- Tuesday's statistics on US housing starts show that the industry is still struggling to recover after peaking five years ago, a trend that will continue to affect chemicals that rely on this key end market.

Housing starts in the US fell to a seasonally adjusted annual rate of 571,000 units in August, down by 5% from the revised July estimate of 601,000, according to the US Department of Commerce.

August's figure was by far among the worst that the department has ever reported in more than half a century of statistics, where monthly starts typically exceeded an annual rate of 1m. Moreover, August is well below the peak of 2.27m reached in January 2006.

New housing is a key end market for the chemical industry, driving demand for polyvinyl chloride (PVC); nylon for carpet, flexible and rigid polyurethane foams, paints and coatings, titanium dioxide (TiO2) pigment, adhesives and sealants; and expandable polystyrene (EPS) for insulation.

The American Chemistry Council (ACC) estimates that each new home built represents some USD 15,000 (EUR 10,950) worth of chemicals and derivatives used in the structure or in the production of component materials.

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