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ACC sees near 10% drop in US chemical volumes in 2020

June 29/2020

MOSCOW (MRC) -- US chemical volumes are expected to drop nearly 10% this year as global economic activity contracts due to the impacts of COVID-19, reported Chemweek with reference to the American Chemistry Council's (ACC) Mid-Year 2020 Chemical Industry Situation and Outlook.

Volumes should recover in 2021 with a return to pre-COVID-19 output levels in the US by the second half of 2021.

As key end-use and export markets struggle, US chemical volumes will contract as well, says Martha Moore, senior director of policy analysis and economics at ACC. Chemical volumes will fall 9.3% this year, while shipments will decline by 13.5%," Moore says. "In 2021, volumes will rebound 12.3% and shipments will increase by 14.5%."

ACC forecasts a decline in basic chemicals volumes of 8.9% in 2020 with a 14.2% rebound in 2021.Of the major basic chemical segments, plastic resins fare the best with an expected decline of only 5.6% in 2020. In specialties, the 2020 decline is expected to be 13.6% in 2020, followed by a 10.6% gain in 2021.

While recent data suggest that the global recession may have already bottomed out in the second quarter, the 2020 outlook is one of the poorest in decades, says Kevin Swift, ACC's chief economist. ACC expects global GDP to contract by 4.6% in 2020 before rebounding by 5.3% in 2021. After suffering the sharpest pullback on record in April, many industrial sectors are showing signs of recovery," Swift says. "(US) Industrial production is set to fall 10.5% in 2020 before increasing by 3.1% in 2021. World trade, still reeling from the impact of US trade policies, will contract 15.7% in 2020 before improving by 14.4% in 2021, Swift adds.

Industrial activity started the year on a weak note even before supply disruptions from COVID-19 emerged in February. Vehicle sales will decline from 16.9 million last year to 13.1 million in 2020, then improve to 14.9 million in 2021, according to ACC. Housing starts will tumble to 1.19 million in 2020, from 1.3 million last year, and increase to 1.24 million in 2021.

US chemical capital spending is set to decline 17.6%, to USD29.0 billion, in 2020, but grows 15.7% in 2021 to USD33.5 billion. "It'll be 2022 or even beyond when you get back to prior peak levels of capital spending as companies are trying to preserve cash, Swift says. They're doing that by delaying or extending some of these projects."

US chemicals trade will fall by 16.4% in 2020, to USD199 billion. US chemical exports will decline sharply, falling by 14.5% in 2020 before rising 10.9% in 2021. Full recovery to pre-COVID-19 levels is not expected until 2022. US chemical imports will fall an even sharper 19.1% in 2020, then grow by 11.9% in 2021. Full recovery is expected in late 2022 or 2023. By 2025, net exports of chemicals will reach USD37 billion as industry maintains its net trade surplus.

As MRC informed before, chemical production in the US fell by 2.0% in May on a three-month moving average (3MMA) basis, the third consecutive month of declines as the COVID-19 pandemic continues to put a dent into demand.

We remnd that Russia's output of chemical products rose in May 2020 by 4.4% year on year. Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, propylene, ethylene, petrochemistry, Rossiya, USA.
Category:General News
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