The latest weekly report from the American Chemistry Council (ACC) includes a worrying picture of falling operating rates around the world. As their chart above shows, these fell quite sharply in August by 0.4% to 84.8%. By comparison, rates in August 2011 were 87.7%.
The ACC also note that the slowdown seems to be widespread:
• NAFTA production fell 0.5%, with the US down 0.3%, Canada down 2%
• Latin America was down 0.3%, with Brazil slowing fast
• W Europe was down 2.1%, with Germany down 4.6%
• CEE was down 5.4%, with Russia down 11.7%
On the positive side:
• MENA was up 4.3%, with its advantaged feedstock position
• Asia was slowing, but China was still up 9.7%
The ACC also report that global production rates were up 2.6% versus 2011. This highlights the major over-capacity that is developing in some regions.
The problem is that companies had assumed there would be a quick and strong recovery from the deep downturn in 2008/9. But this increase in demand has not occured, and so operating rates are falling as the new capacity comes online.