In 2007, the weak housing market and the high fever of energy prices caused a major impact on the U.S. economy. These negative effects are difficult to eliminate in the short term. The U.S. economy’s performance in 2008 has cast a shadow over it. However, for the American chemical manufacturers, there seems to be no particular concern for 2008. Some well-known global economists and industrial observers believe that although the US economy may experience a recession, the outlook for the US chemical industry will depend on whether the global economy is relatively strong, and whether the weakness of the US dollar will stimulate greater export growth.
On the whole, 2007 was not a very bad year for American chemical manufacturers. According to the United States "Chemical Engineering and News" US 25 chemical companies profitability survey results show that in the third quarter of 2007, the profits of 25 companies rose by 14.6% to 3.58 billion US dollars; sales revenue increased by 9.4% year-on-year 48 billion U.S. dollars. In the first nine months of 2007, sales revenue of these 25 chemical companies increased by 7.7% year-on-year to US$ 143 billion, and profits increased by 10.2% year-on-year to US$ 11.5 billion.
Despite the strong performance of American chemical companies, statistical data from government departments revealed some problems. Statistical data released by the Federal Reserve Board shows that in the first 11 months of 2007, US chemical production only increased by 0.4%. Among them, the growth of basic chemical production was relatively strong, reaching 2.5%; the largest decline was in the agrochemical industry, which was a drop of 6.4% year-on-year. In 2007, there was a modest increase in the prices of chemicals in the United States, but the growth rate was less than that of daily necessities. According to the statistics of the US Department of Labor, in the first 10 months of 2007, the price of chemicals in the United States rose by 3.4% year-on-year, while the price of daily necessities increased by 4.1% year-on-year.
The highlight of the US chemical industry in 2007 was the trading business. According to the statistics of relevant experts in the first 10 months of 2007, the US chemical trade deficit in 2007 will be significantly reduced from US$7.3 billion in 2006 to US$559 million. Some experts even believe that according to past experience, US chemicals exports have become stronger at the end of the year. Therefore, the export performance of US chemicals in November and December of last year will be higher than expected. Therefore, the US chemical industry trade in 2007 is likely to have a surplus.
The depreciation of the dollar runs through the entire year of 2007. The exchange rate of the US dollar against the Euro reached 1.46:1 as of December 31, 2007 from 1.32:1 at the beginning of 2007. However, this is not a bad thing for US chemical producers, it will stimulate the continued strong growth of US chemical exports in 2008.
However, the continuous rise in global energy prices has made the US economy worse and further reduced the gross profit of chemical production. The US crude oil benchmark West Texas Intermediate Crude Oil (WTI) price continued to rise from about $58/barrel at the beginning of 2007 and reached a maximum of 100 US dollars/barrel by the end of the year. At the same time, the price of natural gas also climbed from about 6.3 U.S. dollars per million Btu at the beginning of the year to about 8.6 U.S. dollars per million Btu at the beginning of November.
The US Energy Information Administration (EIA) predicts that oil prices will increase by 17.7% in 2008 as consumer demand continues to grow and output growth slows. At the same time, EIA predicts that natural gas prices will rise by 4.1% in 2008.
Since the price increase of natural gas is relatively small relative to the price of oil, the US chemical industry, which uses natural gas as its main raw material, will further improve its international competitiveness in 2008. With a barrel of oil containing about 5.8 million Btu of energy, then when gas prices were highest in 2007, the cost of converting natural gas to oil was about $50 per barrel. The United States ethylene industry mainly uses ethane as raw material, and ethane comes from natural gas. In Europe and Asia, the ethylene industry mainly uses naphtha as a raw material, and naphtha is a derivative of petroleum.
Analysts at Fitch Ratings Securities said that the impact of the U.S. exchange rate and energy prices will create a more healthy competitive environment for U.S. petrochemical producers in 2008. He said that the continued weakening of the US dollar will continue to make strong exports of petrochemical products in the United States in 2008. At the same time, the US ethylene industry, which uses ethane as raw material, will have a stronger competitive edge if global crude oil prices do not retreat.
The American Chemical Industry Commission (ACC) stated in its 2008 forecast report that, driven by high growth in regions such as China, India, and the Middle East, the global chemical industry will grow by 4.3% in 2008, which is an increase from the 4.1% growth rate in 2007. 0.2%. US chemical production will increase by 2.1% in 2008, and chemical sales will increase by 2.3% to reach 654 billion US dollars. The report also stated that for the chemical industry in the United States, due to the strong growth of overseas economies and the impact of weaker US dollars to stimulate export growth, the US chemical industry will have a surplus in 2008, and chemical production will hit a new high.
Overall, 2008 was a mixed feeling for the American chemical industry.
On the whole, 2007 was not a very bad year for American chemical manufacturers. According to the United States "Chemical Engineering and News" US 25 chemical companies profitability survey results show that in the third quarter of 2007, the profits of 25 companies rose by 14.6% to 3.58 billion US dollars; sales revenue increased by 9.4% year-on-year 48 billion U.S. dollars. In the first nine months of 2007, sales revenue of these 25 chemical companies increased by 7.7% year-on-year to US$ 143 billion, and profits increased by 10.2% year-on-year to US$ 11.5 billion.
Despite the strong performance of American chemical companies, statistical data from government departments revealed some problems. Statistical data released by the Federal Reserve Board shows that in the first 11 months of 2007, US chemical production only increased by 0.4%. Among them, the growth of basic chemical production was relatively strong, reaching 2.5%; the largest decline was in the agrochemical industry, which was a drop of 6.4% year-on-year. In 2007, there was a modest increase in the prices of chemicals in the United States, but the growth rate was less than that of daily necessities. According to the statistics of the US Department of Labor, in the first 10 months of 2007, the price of chemicals in the United States rose by 3.4% year-on-year, while the price of daily necessities increased by 4.1% year-on-year.
The highlight of the US chemical industry in 2007 was the trading business. According to the statistics of relevant experts in the first 10 months of 2007, the US chemical trade deficit in 2007 will be significantly reduced from US$7.3 billion in 2006 to US$559 million. Some experts even believe that according to past experience, US chemicals exports have become stronger at the end of the year. Therefore, the export performance of US chemicals in November and December of last year will be higher than expected. Therefore, the US chemical industry trade in 2007 is likely to have a surplus.
The depreciation of the dollar runs through the entire year of 2007. The exchange rate of the US dollar against the Euro reached 1.46:1 as of December 31, 2007 from 1.32:1 at the beginning of 2007. However, this is not a bad thing for US chemical producers, it will stimulate the continued strong growth of US chemical exports in 2008.
However, the continuous rise in global energy prices has made the US economy worse and further reduced the gross profit of chemical production. The US crude oil benchmark West Texas Intermediate Crude Oil (WTI) price continued to rise from about $58/barrel at the beginning of 2007 and reached a maximum of 100 US dollars/barrel by the end of the year. At the same time, the price of natural gas also climbed from about 6.3 U.S. dollars per million Btu at the beginning of the year to about 8.6 U.S. dollars per million Btu at the beginning of November.
The US Energy Information Administration (EIA) predicts that oil prices will increase by 17.7% in 2008 as consumer demand continues to grow and output growth slows. At the same time, EIA predicts that natural gas prices will rise by 4.1% in 2008.
Since the price increase of natural gas is relatively small relative to the price of oil, the US chemical industry, which uses natural gas as its main raw material, will further improve its international competitiveness in 2008. With a barrel of oil containing about 5.8 million Btu of energy, then when gas prices were highest in 2007, the cost of converting natural gas to oil was about $50 per barrel. The United States ethylene industry mainly uses ethane as raw material, and ethane comes from natural gas. In Europe and Asia, the ethylene industry mainly uses naphtha as a raw material, and naphtha is a derivative of petroleum.
Analysts at Fitch Ratings Securities said that the impact of the U.S. exchange rate and energy prices will create a more healthy competitive environment for U.S. petrochemical producers in 2008. He said that the continued weakening of the US dollar will continue to make strong exports of petrochemical products in the United States in 2008. At the same time, the US ethylene industry, which uses ethane as raw material, will have a stronger competitive edge if global crude oil prices do not retreat.
The American Chemical Industry Commission (ACC) stated in its 2008 forecast report that, driven by high growth in regions such as China, India, and the Middle East, the global chemical industry will grow by 4.3% in 2008, which is an increase from the 4.1% growth rate in 2007. 0.2%. US chemical production will increase by 2.1% in 2008, and chemical sales will increase by 2.3% to reach 654 billion US dollars. The report also stated that for the chemical industry in the United States, due to the strong growth of overseas economies and the impact of weaker US dollars to stimulate export growth, the US chemical industry will have a surplus in 2008, and chemical production will hit a new high.
Overall, 2008 was a mixed feeling for the American chemical industry.
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