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United States Petrochemicals Report Q4 2010

Business Intelligence
September 23, 2010
88 Pages - SKU: BTAI2831140

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Countries covered: United States

The US petrochemicals market is experiencing an uneven recovery, but domestic producers are reporting broad-based growth as their market share increases amid increased competitiveness particularly in polyethylene, according to BMI’s latest US Petrochemicals Report.

US production of major plastic resins totalled 37.4bn pounds, a 5.4% y-o-y increase, according to the American Chemistry Council (ACC). Sales and captive use of major plastic resins totalled 36.8bn pounds, a 2.6% y-o-y increase. There were significant variations between polymer segments, although across the market US producers saw their share of sales increase. Even in segments where sales declined, the weakness of the US dollar prompted an increase in production. The most dynamic segment was PVC, with sales growing by 8.6% to 6.85mn pounds, leading to a 12.3% growth in output to 6.95mn pounds. This was partly due to the stimulus package that BMI expects will generate 1.6% growth in construction in 2010, as well as a rise in PVC cargoes to Europe. However, this will not be enough to offset the massive decline in PVC sales experienced in 2009 when the construction sector slumped by 9.6%, leading to a 1.3% decline in PVC output. In addition, the housing market is close to a bottom but shows very few signs of a sustainable recovery, so there is a distinct possibility of PVC sales and production falling again. LLDPE and LDPE saw sales grew by 7.2% and 2.7% y-o-y to 6.57bn pounds and 3.41bn pounds respectively, leading to output growth of 8.8% and 5.0% y-o-y to 6.80bn pounds and 3.36bn pounds. This was largely due to the competitiveness of US PE output in Asian markets. Notably, LLDPE output has been highly robust and resilient to the recession due to its increased use in a broader range of packaging applications, largely at the expense of LDPE. In 2009, LLDPE output grew by 4.2% and LDPE output decreased by 5.7%.

Sales performance was disappointing in the HDPE, PP and PS segments, with falls of 1.6%, 0.6% and 2.0% respectively to 8.2bn, 8.5bn and 2.5bn pounds, reflecting the lacklustre performance of industries utilising these productions, notably consumer durables and the automotives industry, which continue to suffer from the effects of unemployment and low levels of household consumption growth. The PS segment is also suffering from a decline in popularity in the packaging sector, with sales falling by 7.3% in 2009. Despite the contraction in the market for these segments, HDPE output grew 1.9% to 8.41bn pounds, PP grew by 1.2% to 8.53bn pounds and PS grew by 2.4% to 2.55bn pounds. As such, US petrochemicals production growth was broad-based and resistant to the slow and uneven recovery. BMI forecasts 5.0% growth in petrochemicals output in line with global trends, but the rebound will moderate in 2011 and 2012 and output may not return to pre-recession levels until 2013 at the earliest. This is a downward revision from the 9.0% we forecast in the previous quarter due to an expected slowdown in growth in H210. Growth is expected to be fairly even across the country, although plants on the Gulf Coast are set to grow faster than other regions. Capacity utilisation is forecast to rise from about 70% in 2009 to 75% in 2010.

BMI forecasts that the North American thermoplastics compounds market will grow by 17.6% y-o-y in 2009-2014 to reach 48.5mn tonnes. The resins market will grow by 16.7% over the period to reach 31.8mn tonnes by 2014 with the processor segment rising by 18.0% to 10.7mn tonnes. During this period, the nature of the US market will change as the emphasis shifts towards lower costs, lower weight and improved performance. In the face of massive new petrochemicals capacity in emerging markets, the US industry will need to leverage its technological advantages to produce value-added materials in order to compete. Consequently, plant closures need not signify the demise of the earning potential of US petrochemicals if they are accompanied by product improvements such as lightweighting, downgauging and improved performance attributes.

Executive Summary: SWOT Analysis; US Political SWOT; US Economic SWOT; US Business Environment SWOT; Global Overview; Petrochemicals Market Overview
Table: World Ethylene Production By Country, 2009 And 2014 (‘000 tonnes capacity): Financial Results
Table: Financial Results Of Major Petrochemicals Companies, 2009: Global Oil Products Price Outlook
Table: Oil Product Price Assumptions, Q409-Q410 (US$/bbl)
Table: Oil Product Price Data And Forecasts, 2007-2014 (US$/bbl): US Market Overview; Competitive Landscape; Upstream; Olefins
Table: Olefins Production Capacity, 2009 (‘000 tpa): Aromatics
Table: Aromatics And Derivatives Capacity, 2009 (‘000 tpa): Mixed Xylenes
Table: Xylenes Capacity, 2009 (‘000 tpa): Polyethylene (PE)
Table: US Polyethylene Manufacturing And Applications, 2009
Table: PE Chain Capacity, 2009 (‘000 tpa): High-Density Polyethylene (HDPE); Low-Density Polyethylene (LDPE); Linear Low-Density Polyethylene (LLDPE); Polypropylene (PP)
Table: US PP Capacity, 2009 (‘000 tpa): Polyvinyl Chloride (PVC)
Table: PVC Chain Capacity, 2009 (‘000 tpa): Polystyrene (PS)
Table: PS Chain Capacity, 2009 (‘000 tpa): Polyethylene Terephthalate (PET)
Table: US Petrochemicals Sector - PET Chain Capacity, 2009 (‘000 tpa): Financial Results; Industry Trends And Developments; Government Policy And Regulations; Mergers, Acquisitions And Related Developments; LyondellBasell Bankruptcy; Collapse Of The PIC-Dow Merger; Dow’s Takeover Of Rohm And Haas; Impact Of REACH
Table: Key Elements Of REACH
Table: REACH And TSCA Comparison: Petrochemicals Business Environment
Table: Americas Petrochemicals Business Environment Ratings: Forecast Scenario; Petrochemicals Forecasts
Table: US Petrochemicals Industry, 2007-2014 (‘000 tpa, unless otherwise stated): Macroeconomic Outlook
Table: US - Economic Activity, 2007-2014: Company Monitor; BP; Chevron Phillips Chemical Company; Dow Chemical; ExxonMobil; Huntsman; Ineos; LyondellBasell; Occidental Chemical; Shell Chemicals; Westlake Chemical; Appendix: BP; Country Snapshot: US Demographic Data; Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030: Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030: Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012 (US$): Glossary Of Terms
Table: Glossary Of Petrochemicals Terms: BMI Methodology; How We Generate Our Industry Forecasts; Chemicals And Petrochemicals Industry; Cross Checks; Business Environment Ratings
Table: Petrochemicals Business Environment Indicators And Rationale: Weighting
Table: Weighting Of Indicators

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United States Petrochemicals Report Q4 2010

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