US chem volumes to surge 5-6%/year in 2014-17 on shale gas

13 December 2012 18:49  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS)--US chemical production volumes are poised to surge between 5-6%/year from 2014-2017, driven by the shale gas boom, the chief economist of the American Chemistry Council (ACC) said on Thursday.

“Most forecast models are demand-driven, but the US shale gas phenomenon is a supply-side shock – a positive shock that will have a knock-on effect on chemical production and GDP for the next 10 years,” said ACC chief economist Kevin Swift.

“Models don’t capture the supply side. While the consensus outlook calls for production growth in the 2-5%/year range, we think the growth profile will be much higher,” he added.

For the coming years, he sees US chemical production volumes, excluding pharmaceuticals, rising by 2.9% in 2013, followed by a 5.4% surge in 2014 and another 6.0% jump in 2015.

Already there have been over 50 chemical projects requiring capital investment of more than $40bn (€31bn) announced in the US to capitalise on the shale gas advantage, said ACC economist Martha Moore.

“We see shale gas fuelling the US manufacturing sector, which will also pull on chemical demand. But also some of the surplus will be going to exports because of renewed US competitiveness,” Moore said.

The ACC projects US chemical exports will rise 4.7% to $199.7bn in 2013, 6.6% to $212.8bn in 2014, and 7.0% to $227.8bn in 2015.

While imports are also expected to rise in the coming years, the ACC expects US chemical trade surpluses rising every year from $1.2bn in 2012, to $6.4bn by 2017.

($1 = €0.76)

By: Joseph Chang
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