Survival of US commodity chemicals is questionable - ACS

19 January 2006 23:25  [Source: ICIS news]

WASHINGTON (ICIS news)--The viability of North American-based commodity chemicals production is questionable in the face of continued high prices for natural gas, the American Chemical Society (ACS) said on Thursday.

 

In its ten-year forecast titled “The Chemistry Enterprise in 2015,” ACS warned that while the sharp increases in natural gas costs of the last four or five years currently are being passed on to chemical customers, “the sustainability of North American-based commodity chemical production has been questioned.”

 

ACS said that the North American chemicals industry already has seen its global competitiveness damaged by the high cost of natgas, but the science and business group said that increased raw material costs appear unlikely to limit worldwide growth in the chemical industry.

 

While the North American commodity chemicals industry faces an uncertain future, ACS said:t “Chemical commodities most directly dependent on natural gas as both an energy source and a raw material will grow predominantly in areas that are either close to new markets (Asia) or close to inexpensive raw material supply (the Middle East).”

 

As a consequence, said ACS, US industry will become increasingly specialty-oriented. “By 2015, the landscape for chemical technology in the US will be more entrepreneurial and developmental, as small companies innovate in new technological areas or market lower-volume existing specialty chemicals.”

 

“The US will be one of the most expensive places in the world to manufacture,” ACS said, “and products made here will need to provide sufficient added value to support those costs.”

 

“Expansion of commodity chemical facilities in the US will be rare,” the 160,000-member ACS concluded, “but the industry will still be of global scale - neither disappearing nor growing markedly.”

By: Joe Kamalick
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