NPRA '08: Economy fears overblown - MPG maker

31 March 2008 03:00  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--Business conditions in the US did not appear to be as bad as generally perceived, a major monopropylene glycol (MPG) producer said on Sunday after gathering feedback from buyers.

Some downstream markets such as boats were indeed soft, the producer acknowledged.

"We certainly know that story, and it's a true one," the producer said on the sidelines of the sidelines of the National Petrochemical & Refiners Association (NPRA) annual meeting in San Antonio, Texas.

But in discussions so far at the NPRA event, buyers from a range of downstream segments did not report weak demand as the recent chorus of pessimistic economic forecasts would suggest, the source said.

The underlying volumes in downstream markets seemed to be at more robust levels than all the talk of recession would indicate, the producer said.

For example, the producer's current sales volumes of basic chemicals used in the construction sector were not far off year-earlier levels despite the ongoing slump in the US housing market, the source noted.

However, MPG buyers were indeed suffering from margin squeeze as producers try to pass along higher costs for feedstock propylene, the source said.

The National Marine Manufacturers Association (NMMA), which represents the $40bn/year (€25bn/year) US boating industry, announced on 25 March that wholesale shipments of boats in the country fell 13% in 2007 from 2006.

The NMMA said the drop was "a clear reflection of the current US economy".

The US boating market represents around half of the world’s demand, according to the NMMA. The boat-building industry is a key demand segment for several chemicals.

($1= €0.63)

For more on mono propylene glycol visit ICIS chemical intelligence

By: Stephen Burns
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly