The American Chemistry Council (ACC) reported that the U.S. specialty chemicals market volumes gained 0.9% in December, ending 2018 on a strong note. Large market volume gains (1.0% and up) were reported for lubricant additives, catalysts, electronic chemicals, mining chemicals, oilfield chemicals, plastic additives, plasticizers and plastic compounding.
Of the 28 specialty chemical segments being monitored by the ACC, 25 expanded in December, while three were stable. All changes in the data are reported on a three-month moving average (3MMA) basis.
The overall specialty chemicals volume index was up 5.6% year-on-year on a 3MMA basis. The index stood at 111.6% of its average 2012 levels, which is equivalent to 3.49 million metric tons. On a year-on-year basis, 24 market and functional specialty chemical segments posted gains. Compared to the previous year, volumes were down in only four segments.
Specialty chemicals are materials manufactured on the basis of their unique performance or function and provide a wide variety of effects on which many other sectors and end-use products rely. They can be individual molecules or mixtures of molecules, known as formulations.
Specialty chemicals differ from commodity chemicals. They may only have one or two uses, while commodities may have multiple or different applications for each chemical. Commodity chemicals make up most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time, and are relatively high value with greater market growth rates.
The ACC, which also publishes a regional index for U.S. chemical production, reported a 1.9% gain in December for the U.S. Chemical Production Regional Index or U.S. CPRI, following a 1.4% gain in November, and a 0.4% gain in October, as measured on a 3MMA basis. The upturn continues to reflect higher manufacturing activity in key end-use markets, in addition to recovery from hurricane disruptions. During December, chemical output increased in all regions, with the largest gains in the Gulf Coast, Ohio Valley, Midwest and Southeast regions.
Chemical production was mixed over the same three-month period. There were gains in the production three-month moving average output trend of organic chemicals, plastic resins, pesticides, coatings, adhesives, fertilizers, chlor-alkali, synthetic rubber and pharmaceuticals. These gains were offset by declines in the output trend in other specialties, synthetic dyes and pigments, industrial gases and manufactured fibers.
Nearly all manufactured goods are produced using chemistry in some form or another. Thus, manufacturing activity is an important indicator for chemical production. On a 3MMA basis, manufacturing activity rose by 0.6% in December, following a 0.7% gain in November. Production expanded in several chemistry-intensive manufacturing industries, including food and beverages; appliances; motor vehicles; construction supplies; machinery; fabricated metal products; computers and electronics; semiconductors; petroleum refining; iron and steel products; plastic and rubber products; tires; paper; structural panels; and printing.
Compared to December 2016, U.S. chemical production was ahead by 3.9% on a year-on-year basis, an improving trend. Chemical production was ahead of year-ago levels in all regions.
The U.S. CPRI was developed to track chemical production activity in seven regions of the United States. The U.S. CPRI is based on information from the Federal Reserve, and as such, includes monthly revisions as published by the Federal Reserve. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. Thus, the reading in December reflects production activity during October, November and December.