Monthly Thematic Piece

A US Chemicals Health Check – Unwell Before the Virus and Logistically Challenged
June 16, 2020
Products Mentioned:
Polyethylene, Industrial Gases, Hydrogen, Ethylene, PET, Nylon, Teflon, Lycra, Oil, Naphtha, Condensate, Ethane
Companies Mentioned:
Linde, Air Products, Air Liquide, Dow, Eastman, LyondellBasell, Suez, Walmart, Home Depot
Subjects Covered:
Demand Growth, Experience Curves, Re-shoring, Innovation, Peak Oil, ESG, Recycling, Carbon Price/Tax, Populism, Logistics

C-MACC Perspectives No 18

A US Chemicals Health Check – Unwell Before the Virus and Logistically Challenged

  • The more we do to understand volume trends year to date in 2020 and predict possible rates of recovery, the more we note how poor domestic US chemical growth has been for the last 10 years, despite the strong economic backdrop.  

  • Experience curve behavior at customers is a major contributor to the poor growth (we discuss the Industrial Gas example), innovation at chemical and polymer producers has also contributed, and there has been a continuous, albeit small these days, trickle of offshoring.

  • Helping to reverse the offshoring trend is really the only pro-active move that US chemical producers can make, as the other factors are likely to continue to eat away at volume growth relative to economic growth and consumer spending. But reshoring must address significant logistics challenges in the US

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