Petchems can breath easy: August auto sales seen at 16m unit pace

28 August 2013 20:12  [Source: ICIS news]

HOUSTON (ICIS)--Petrochemical makers worried about when red hot US auto sales will start to cool, can breathe easy for another month, sources said Wednesday. US automakers will report August sales at a 16m unit annual rate next week, several sources in Detroit told ICIS on Wednesday.

"We poll our dealers about the 20th every month and what we're hearing is that sales are holding," said one Detroit source.

"August is looking good," said another source.

US automakers are expected to produce 16m units this year, up by 10% from 14.5m a year ago. That's good news for US petrochemical producers who supply acrylonitrile, acrylonitrile-butadiene-styrene and polycarbonate to the auto industry for plastic body panels and interior trim. Petchem buyers and sellers have said they will watch auto sales closely over the next few months. Some feel that the pent-up demand from the 2008 recession that is driving US car sales has mostly run its course. Once that demand dwindles, petchem buyers and sellers worry that the underlying macroeconomic fundamentals -- high unemployment, declining wages, lower consumer confidence -- will not support robust auto sales.  

US automakers are sticking by their forecast of full-year car sales of 16m units, which would be the best year for the industry since 2007. Automakers are currently ramping up production for more than 20 new models that they will introduce over the next three months. To switch over plants to new models, automakers reduced the normal summer shutdown at plants, added shifts and hired more employees.

Automakers are expected to report August sales on 3 September.

By: Mark Yost
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