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U.S. Chemical Industry Poised for Large Increase in Output

December 6, 2018

A new report by the American Chemistry Council (ACC) forecasts that American chemical manufacturers will utilize abundant feedstock and energy available in the U.S. to increase domestic output of chemicals through the early 2020’s.

“American chemistry is set for significant growth in output as new production capacity comes online and demand strengthens in key-end use markets,” Martha Moore, senior director of policy analysis and economics at the ACC, said in a release. “In fact, growth rates in U.S. chemistry are expected to surpass average growth over the previous 20 years. Provided that access to export markets remains open to our producers, expanding global demand will be met by shale-advantaged chemistry sourced from the United States.”

Chemical companies have collectively invested about $202 billion since 2010 in 333 projects, according to the ACC. The report, “Year-End 2018 Chemical Industry Situation and Outlook,” points out that production volumes are being lifted in the U.S. as these investments come online. 

Total chemical production volume is anticipated to grow at by 3.6% next year and 3.1% in 2020. Production of basic chemicals is expected to rise by 4.8% in 2019 and 4.3% the following year. The volume of specialty chemicals produced is predicted to grow by 2.2% in 2019.

Part of the growth in output is forecasted to be a result from increased demand from the light vehicles and housing markets. 

“Housing, business investment, and their supply chains, have momentum. Light vehicle sales have likely peaked for this cycle, but remain at elevated levels. In 2019, industrial activity will expand, but the slowdown overseas is likely to affect the U.S. and rising trade tensions present a risk of economic disruption,” said Kevin Swift, the ACC’s chief economist, in the release.

While mostly optimistic, the ACC report cautioned that disruptions to trade may result in headwinds for U.S. chemical manufacturers. 

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