Americas Chemical Industry Outlook for 2018
ICIS Editorial
15-Jan-2018
HOUSTON (ICIS)–The following OUTLOOK ’18 stories were published by ICIS news between Thursday 21 December 2017 and Tuesday 9 January 2018. Please click on the headlines to read the full versions.
OUTLOOK ’18:
Crude oil to face tightening fundamentals,
active geopolitics
The global crude oil glut is on the wane,
although not necessarily as the direct effect
of OPEC’s supply management efforts: The loose
collective agreement may have supported market
sentiment, but it is tearing at the seams.
OUTLOOK ’18: US
biodiesel hopeful heading into new
year
The US biodiesel industry is heading into 2018
with more certainty than in previous years,
following the finalisation of federally
mandated blend volumes for 2018 and 2019.
However, the highly politicised industry
remains unsure as to the outcome of the $1/gal
federal tax credit.
OUTLOOK ’18:
Increasing US BD supply putting pressure on
sellers
Supply of domestic butadiene (BD) in 2018 is
expected to increase on the start-up of several
new crackers, putting pressure on domestic BD
producers to increase market share.
OUTLOOK ’18: US SBR
likely softer on BD, still faces NR
challenge
US styrene butadiene rubber (SBR) prices are
likely to soften year on year in 2018, mostly
on upstream butadiene (BD), but still faces a
challenge from Asian natural rubber (NR)
prices.
OUTLOOK ’18: US MPG to
follow feedstock propylene amid stable
fundamentals
The US monopropylene glycol (MPG) market is
anticipated to remain largely stable in 2018,
with pricing expected to follow the movement of
feedstock propylene.
OUTLOOK ’18: US
domestic soda ash steady, producers eye export
growth
The US soda ash market expects to see steady
domestic demand in 2018, with slight growth
possible in line with an expanding economy.
Globally, producers of US material will eye
growing export opportunities at more attractive
pricing as the supply situation remains tight
worldwide.
OUTLOOK ’18: US
PE market facing downward pressure on supply
overhang
The US polyethylene (PE) market will
be facing some downward pressure at the start
of 2018 as several large capacity additions are
expected to result in longer supply.
OUTLOOK ’18: US
PP buyers hoping for lower feedstock propylene
prices
Buyers in the US polypropylene (PP)
market are heading into 2018 hoping to see some
easing in feedstock propylene costs.
OUTLOOK ’18: US
ACN expected to balance out in new
year
The US acrylonitrile (ACN) market is
expected to recover and balance out in 2018,
following major production hurdles encountered
in 2017.
OUTLOOK ’18:
Higher quarterly prices for US BDO on the
table
Higher prices will be the first consideration
for the US butanediol (BDO) market in
2018, because of producer nominations that take
effect on the first day of the new year.
OUTLOOK ’18:
Supply issues could undercut US MMA
surge
Supply problems in 2017 kept the US methyl
methacrylate(MMA) market tight and propelled
prices higher, but resolved issues and
additional global capacity could undercut or
even derail that trend in the new year.
OUTLOOK ’18:
Chemical M&A drivers in place but players
turn cautious
It’s been a roaring mergers and acquisitions
(M&A) cycle in global chemicals, but the
tide may be turning as players turn cautious as
the economic cycle heads into the late stages
and many commodity chemicals may be near peak
profitability.
OUTLOOK ’18: US
acrylates expected balanced-to-tight amid
strong demand
US acrylic acid and acrylate esters markets are
anticipated balanced-to-tight early next year
as supply attempts to keep up with stronger
demand.
OUTLOOK ’18: US
ethanol eyes global markets amid rising
production, slack demand
US fuel ethanol producers, staring at
multi-quarter low pricing and deflating
domestic motor gasoline demand, must eye growth
in international markets in 2018 to keep a
healthy supply and demand balance.
OUTLOOK ’18:
Tightness in US benzene supply may ease in
Q1
US benzene supply concerns may see
some easing in the first quarter, following a
strong run-up in prices during the fourth
quarter of 2017, driven by prompt supply
shortages.
OUTLOOK ’18: US
MX to soften, trade deficit to increase in
2018
US mixed xylenes (MX) prices are expected to
continue softening into Q1 2018 after
experiencing some elevation in the latter half
of 2017, owing to production issues faced in
the refining industry.
OUTLOOK ’18: US
toluene demand expected to soften in Q1
2018
The US toluene market is expected to
soften in Q1 2018 as
downstream benzene supplies recover
amid production issues faced in the market in
Q4 2017.
OUTLOOK ’18 US
chemical industry experiencing
renaissance
Despite disruptions from several major
hurricanes three-quarters into the year, the US
chemical industry grew in 2017, with similar
growth expected for 2018 thanks to continued
investments, as well as gains in a wide
spectrum of industries.
OUTLOOK ’18: First wave
of new US plants to continue in new
year
The US will continue starting up new
petrochemical plants in 2018, after Hurricane
Harvey kept some companies from beginning
operations during the previous year.
OUTLOOK ’18 US
economy continuing momentum into new
year
Thanks to strong domestic growth, low
unemployment and finalised tax reform,
forecasts for the US economy in 2018 are
optimistic, with many expecting the gains from
2017 to continue.
OUTLOOK ’18: US
butac market anticipated to remain
balanced-to-long
US butyl acetate (butac) supply will
continue to stay balanced with demand for the
near term, then stretch into some oversupply
later in the first half of 2018.
OUTLOOK ’18: US
melamine prices poised to firm amid tight
global supply
US melamine prices are poised to rise
in the first quarter of 2018 on tight global
supply and steady demand in most major
consuming regions of the world.
OUTLOOK ’18: US
phenol/cumene margins likely down to flat
despite cutback
Margins over feedstock costs
for phenol and cumene in
2018 are expected to be down to flat in 2018,
despite a production cutback set for January.
OUTLOOK ’18: US
acetone set to tighten on production
cutback
The US acetone market is set to face
tighter supply and pressure to increase import
volumes in 2018 because of an impending
production cutback in January.
OUTLOOK ’18: US
gasoline demand sags but refiners to continue
record fuel production
Facing stagnant domestic demand for motor
gasoline, US refiners in 2018 will continue to
pump out increasing amounts of fuels to serve
growing international markets.
OUTLOOK ’18: US
IPA market anticipating continued balance,
stronger demand
US isopropanol (IPA) market
participants are anticipating a demand surge in
the first half of 2018 from storm- and
fire-related recovery efforts.
OUTLOOK ’18: US
MEK market moving into more balanced position
after tight H2 2017
The US methyl ethyl ketone (MEK)
market in the US are moving into a more
balanced position in early 2018, following a
tight second half of 2017.
OUTLOOK ’18:
Uncertainty persists as NAFTA renegotiation
deadline draws near
Negotiations for the reworking of NAFTA –
the nearly 24-year-old free-trade agreement
between the US, Canada and Mexico – is set
to finish in 2018, but forecasters are
virtually split over what a renegotiated NAFTA
could mean, if it manages to occur at all.
OUTLOOK ’18: US
stocks may extend gains on global
growth
The same factors that boosted US chemical stock
prices in 2017 will likely persist in 2018,
opening the possibility for further gains.
OUTLOOK ’18: US
MA faces upward pressure from feedstock
butane
US maleic anhydride (MA) prices are
facing upward pressure heading into 2018 amid
higher costs for feedstock butane.
OUTLOOK ’18:
Ammonia buyers likely to hold upper
hand
Global ammonia prices bounced back
strongly during the final phase of 2017,
although that upward momentum is expected to
run out of steam in early 2018, and sentiment
is that prices will likely favour buyers over
producers.
OUTLOOK ’18: US
ethylene market to continue feeling effects of
Harvey
US ethylene supplies will continue to
be constrained into early 2018 due to Hurricane
Harvey delaying the start-up of several cracker
projects.
OUTLOOK ’18: US
propylene production set to expand in
2018
With the start-up of a
new propane dehydrogenation (PDH)
unit and several
crackers, propylene capacity in the
US is set to expand during 2018, while
downstream capacity remains steady.
OUTLOOK ’18:
Tight TiO2 supply, strong demand driving North
American Q1 price hike
efforts
Amid chronically short supply, North
American titanium dioxide (TiO2)
prices will see stronger-than-usual
upward pressure in the first half of 2018,
including peak paint and coatings demand next
spring.
OUTLOOK ’18: US
caustic soda could push higher on restricted
global supply
US liquid caustic soda prices saw
their steepest price increases in almost a
decade during 2017, and 2018 holds prospects
for further increases.
OUTLOOK ’18: US
HCl poised for demand surge in new
year
The US hydrochloric acid (HCl) market
anticipates greater demand from oilfield users
in 2018 and will start the year with separately
proposed price increase initiatives of
$30-45/wet ton aimed at 1 January and the first
quarter.
OUTLOOK ’18: US
EDC could see production growth, new demand
from Europe
The US ethylene dichloride (EDC)
market is likely to see robust production
growth and rising export sales during 2018 as
new ethane crackers come online and
demand for the feedstock grows in global
markets.
OUTLOOK ’18: US
VCM likely to remain below the radar in new
year
US vinyl chloride monomer (VCM) has
become captive, produced almost exclusively by
integrated makers of polyvinyl
chloride (PVC) and exported almost
exclusively through contracted transactions.
OUTLOOK ’18: US
PVC bullish in new year on rising
demand
The US polyvinyl chloride (PVC)
market anticipates a strong 2018 on rising
demand to repair and rebuild the damage from
three Category 4 hurricanes that made landfall
in the US in 2017 and a rash of wildfires out
west that have consumed nearly 10,000 homes and
other structures in California.
OUTLOOK ’18:
Bullish potash market’s slow recovery to
continue
While yet to reach the highs seen pre-2008,
global muriate of potash (MOP) prices performed
strongly in 2017, increasing in all regions at
a slow, steady pace. Producers’ tight control
on output ensured a steady – if restricted –
supply across the world, although by the end of
the year, silos were largely empty, and buyers
left short.
OUTLOOK ’18: US
styrene prices likely to peak in March amid
turnarounds
Prices in the US styrene market are
poised to peak in the first quarter as up to
three plants are expected to conduct
turnarounds.
OUTLOOK ’18: US
PS, EPS to follow direction of key feedstocks
in 2018
US polystyrene (PS)
and expandable polystyrene (EPS)
prices will largely follow the direction of key
feedstocks benzene and styrene in
2018, given that the two feedstocks are the
largest determining factors in price direction.
OUTLOOK ’18: US
ABS/PC demand should strengthen from auto
sector
A continued effort to make US automobiles
lighter should keep demand for
acrylonitrile-butadiene-styrene (ABS)
and polycarbonate (PC) strengthening.
OUTLOOK ’18: US
isocyanate buyers hoping to see improved
supply
US isocyanate buyers are hoping to see improved
supply conditions in 2018, after both methyl
di-p phenylene isocyanate (MDI)
and toluene di-isocyanate (TDI)
markets saw significant price increases over
the course of 2017, driven by persistent supply
tightness.
OUTLOOK ’18: US
polyol demand set to rise with polyurethane
demand growth
US demand for polyols is likely to
rise in 2018 along with healthy demand expected
for polyurethane systems.
OUTLOOK ’18: US
nylon supplies expected to remain tight amid
strong demand
The US nylon market is expected to
remain tight in 2018 compared with 2017 amid
sustained demand and supply issues.
OUTLOOK ’18:
Strong phosphates demand expected in Q1 despite
fears of oversupply
The phosphates market is starting 2018 with
bullish expectation of demand in major regions,
with buyers in India likely to return to the
market in mid-Q1 following the announcement of
next year’s subsidies levels and maximum retail
price (MRP) in February.
OUTLOOK ’18:
Eastman’s Oct explosion resounds beyond US for
acetic acid
The October explosion at an Eastman Chemical
unit in Tennessee caused a big boom heard
around the world that continues to reverberate
in global acetyl markets as 2018 begins.
OUTLOOK ’18: US
VAM to face supply issues in new
year
The US vinyl acetate monomer (VAM)
market will face a pair of supply issues in the
first quarter of 2018, with one a lingering
force majeure and a busy turnaround season.
OUTLOOK ’18: US
PX faces downstream uncertainty, OX to remain
steady
US paraxylene (PX) prices firmed in late 2017,
and potential exists for pressure to remain on
the market amid uncertainty downstream.
Meanwhile, the orthoxylene (OX) market expects
stability seen in late 2017 to continue into
2018.
OUTLOOK ’18
Americas base oil industry moves into Group III
use
The Americas base oil industry is moving
strongly into Group III base stock use in 2018
as new vehicle engines will require more of the
light viscosity oils.
OUTLOOK ’18 US
fatty alcohols could see supply
pinch
The US fatty alcohol market in 2018 could see
supply pose as much a driver as feedstocks, a
shift from the upstream feedstock volatility
that dominated 2017.
OUTLOOK ’18: US
glycerine market faces uncertainties in new
year
The US glycerine markets are seeing
uncertainty going into 2018 with
global biodiesel an enigma, snug
Asian oleochemical markets and mixed price
direction in the US domestic market.
OUTLOOK ’18: High
feedstock costs, import prices to drive US
epoxy market
High feedstock costs and import prices are
expected to remain the main drivers for the US
epoxy resin market in 2018.
OUTLOOK ’18: US
EG expected to remain steady at start of
year
US ethylene glycol (EG) contracts are
expected to remain steady early next year as
supply levels are healthy, while downstream
demand is slow on seasonality.
OUTLOOK ’18:
Supply crunch could keep US PET market firm
amid antidumping, bankruptcy
cases
Resin supply is expected to be the primary
driver of the
US polyethylene terephthalate (PET)
market in 2018, and the general sentiment is
that pricing pressure will persist in the new
year after supply uncertainty drove resin
prices higher in the latter part of 2017.
OUTLOOK ’18: US
plasticizer market anticipates pressure amid
tightness, strong upstream
pricing
The US plasticizers market firmed in
the latter half of 2017, and market players
expect pricing pressure to carry into 2018 amid
some lingering tightness well as strong
upstream pricing in crude and propylene.
OUTLOOK ’18: OCI
plant start-up to be record-breaking for US
methanol
The big event for US methanol in 2018 will be
the projected start-up of the new OCI
Natgasoline unit in Beaumont, Texas, which
should become a record-breaking plant for at
least two reasons.
OUTLOOK ’18:
Sulphuric acid supply may remain tight through
first half of the year
Although supply in 2018 as a whole is not
expected to be as tight as it has been during
2017 because of a less intensive smelter
maintenance schedule, several players expect at
least the first half of 2018 to remain tight,
and there is near universal agreement that spot
shortages will continue throughout the first
quarter.
OUTLOOK ’18: New
project startup timings to dictate global
sulphur fundamentals
With a number of upcoming expansion projects in
both the global sulphur market and
the major end-use phosphates market planned for
2018, fundamentals are likely to be dictated by
the timings of when the various projects ramp
up to full production.
OUTLOOK ’18:
LatAm recovery strengthens amid busy election
year
The largest economies in Latin America will
continue recovering from recessions amid a busy
election season.
OUTLOOK ’18: US
PE oversupply could have mixed impact in Latin
America
New polyethylene (PE) production
coming online in the US Gulf in the first
quarter of 2018 could bring oversupply of
product in Latin America, but the impact on
each country will be different, considering
that the regional economies are on different
stages of development and have different import
tariffs.
OUTLOOK ’18:
Latin America PP to face limited impact from
expanding US capacity
Polypropylene (PP) markets in Latin America are
expecting
increased propylene production in the
US, but the impact in the region’s PP market
will be limited.
OUTLOOK ’18:
Latin America caustic soda likely to remain
steady but firm
The caustic soda market outlook in
Latin America points to stable-to-firm
pricing in the first quarter of 2018, driven by
the trend in other regions.
OUTLOOK ’18:
Latin America PVC faces uncertainty in early
2018
The polyvinyl
chloride (PVC) outlook in Latin
America for early 2018 remains tentative, after
markets weakened in November and December as
expected and in line with precedent.
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