Capacity utilisation continues to be on a downward path, according to the latest data from the American Chemistry Council. As their chart above shows, there has been no improvement since the summer:
• October should see peak rates, as companies catch up after the summer break and rush to complete orders before Christmas
• Instead, global capacity utilisation fell for the 3rd month in a row, and was at 86.1% versus 86.9% in 2011
• Worryingly, even N American regional production was slightly negative, down 0.1%, despite the shale gas advantage
• Overall capacity utilisation thus remains well below the long-term average of 91.2%
The chart also confirms that utilisation rates peaked back in Q2 2011, when the blog launched its IeC Downturn Monitor. This marked the moment when companies began destocking, after the oil price had peaked.
Since then, it has become more and more apparent that consumers are increasingly short of cash, due to today's record oil prices. As a result, they cannot afford the discretionary spending that drives chemical industry sales.