Americas Chemical Industry Outlook for 2019

HOUSTON (ICIS)–The following OUTLOOK ’19 stories were published by ICIS news between Friday 21 December 2018 and Tuesday 8 January 2019. Please click on the headlines to read the full versions.

OUTLOOK ’19: US chem industry to grow despite global economic uncertainty
The US petrochemical industry in 2019 is primed to continue the growth thanks to feedstock advantage trumping increased economic uncertainty various trade and fiscal policies.

OUTLOOK ’19: Chems may face more tariffs in US, China trade war
Chemical companies could face more trade barriers and tariffs if the US and China fail to reach some kind of agreement that addresses their trade grievances.

OUTLOOK ’19: US to finish first wave of new plants
Some of the last plants of the first wave of new US projects should start up in 2019, closing out a spurt that started in 2017.

OUTLOOK ‘19: Caution signals flash for chemical M&A amid downdraft
Coming off a long stretch of strong chemical mergers and acquisitions (M&A) activity, the sector could cool off markedly in 2019, depending on the depth and length of the downturn in financial markets, which reflects expectations of slowing economic growth.

OUTLOOK ’19: US economy to grow against multiple downside risks
US economic growth enjoyed during 2018 is likely to continue through 2019, though lingering trade issues, continuing labour challenges and concerns over a recession are raising uncertainty.

OUTLOOK ’19: Worries in stock markets to persist after rough 2018
US-listed chemical stocks will likely face more challenges in 2019 as markets contend with worries about trade disputes and slower growth.

OUTLOOK ’19: LatAm to see consequences of historic elections
The major economies of Latin America will see the consequences of a momentous 2018, in which Brazil and Mexico held historic presidential elections and Argentina fought a financial crisis.

OUTLOOK ’19: Crude oil demand to slow on tighter liquidity, higher risk of down cycle
OPEC is dead. Long live OPEC! The cartel and its leader Saudi Arabia may not have the influence they had a decade ago, but 2018 has shown, if anything, that they remained critically important to global crude prices.

OUTLOOK ’19: US BD supply to lengthen on cracker start-ups
US butadiene (BD) production is expected to grow in 2019 as new ethylene capacity increases availability of feedstock crude C4 (CC4).

OUTLOOK ’19: US SBR market to remain competitive with imports
Persistent pressure from imports is expected to continue on the US styrene butadiene rubber (SBR) market in 2019.

OUTLOOK ’19: US Q1 BDO contracts could fall on feedstocks
The first quarter has a history of being unpredictable when it comes to US butanediol (BDO), with contracts likely to settle in early January.

OUTLOOK ’19: US styrene prices to peak in Q1 amid turnarounds
Prices in the US styrene market are poised to peak in the first quarter as two plants are expected to begin turnarounds before the end of March.

OUTLOOK ’19: Feedstock propylene to drive US MPG amid stable fundamentals
The US monopropylene glycol (MPG) market is expected to be largely stable in 2019, with price direction likely to be driven by feedstock propylene.

OUTLOOK ’19: US benzene outlook bearish on supply length
US benzene prices are likely to remain under downward pressure during the early months of 2019, as the length in supply that has characterised much of 2018 is expected to remain in place in 2019.

OUTLOOK ’19: US likely to become dependent on toluene, MX imports
US toluene and mixed xylenes (MX) supply and demand fundamentals are expected to remain largely stable in 2019 as the market continues to track volatility in crude oil pricing and moderate growth in octane demand for the gasoline-blending pool amid growth in the gasoline export market.

OUTLOOK ’19: US ACN market to remain short-to-balanced
The US acrylonitrile (ACN) market is expected to remain short-to-balanced in 2019 amid sustained supply constraints over the last couple years stemming from numerous production disruptions in the global market coupled with healthy demand.

OUTLOOK ’19: US MMA supply to remain tight, demand strong
Participants in the US methyl methacrylate (MMA) market are likely to face many of the same dynamics in 2019 that have dominated the industry since 2017 – tight supply and strong demand.

OUTLOOK ’19: US acrylates market facing a soft start to an uncertain year
Conventional wisdom in the US acrylates market would point toward resurgent fundamentals in the first half of 2019, but economic and supply-chain uncertainties make the near-term picture difficult to paint.

OUTLOOK ’19: Trade tensions cast shadow as new US PE capacity comes on line
The US polyethylene (PE) industry is set to bring on several new plants in 2019 even as trade tensions with China create questions regarding the feasibility of new US export-driven PE plants.

OUTLOOK ’19: US PP industry hopes to see reduced volatility
The US polypropylene (PP) industry is hoping to see reduced volatility in 2019, following a year marked by large price swings.

OUTLOOK ’19: LatAm PE oversupply to continue
Polyethylene (PE) markets in Latin America will continue to experience high supply in 2019, even when production capacity has not increased in the area and will not increase in the short term.

OUTLOOK ’19: Latin America PP prices could fall further in 2019
Latin America polypropylene (PP) markets could continue to fall in the first quarter of 2019, under pressure from cheaper offers from Asia and the Middle East, and falling feedstock prices in benchmark US markets.

OUTLOOK ’19: US PET oversupply extends into 2019
The US polyethylene terephthalate (PET) market will continue slow, with ample supply and low buying interest in the first quarter of 2019.

OUTLOOK ’19: Latin America PET to remain long; demand sluggish
Polyethylene terephthalate (PET) markets in Latin America are likely to remain sluggish, with long supply and low buying interest in the first quarter of 2019.

OUTLOOK ’19: US phenol adders rise; demand remains strong
Margin-expansion pressure is expected to continue in 2019 in the US phenol market, on contracts that are up for renewal.

OUTLOOK ’19: US acetone challenges persist on length, but costs fall
While challenges are expected to persist in early 2019, US acetone market players are hopeful that conditions will improve, as feedstock costs have fallen and supply length may be tempered.

OUTLOOK ’19: Demand for US MEK, IPA could rise on recovery from natural disasters
Supply of US methyl ethyl ketone (MEK) and isopropanol (IPA) is likely to remain readily available in 2019, but storm- and fire-related recovery efforts could lead to increased demand.

OUTLOOK ’19: Long supply, low import prices to drive US epoxy market
Long supply and low import prices are expected to be the main drivers for US epoxy resin at the start of 2019.

OUTLOOK ’19: US MA to face downward pressure from feedstock butane
US maleic anhydride (MA) is facing downward pressure at the start of 2019 amid lower costs for feedstock butane.

OUTLOOK ’19: Price stability seen in US melamine market
After increasing by an average of 10 cents/lb in 2018, US melamine prices are entering 2019 on a more stable note. Prices are largely expected to rollover in the first quarter, although many negotiations are still underway due to the holidays.

OUTLOOK ’19: New capacity may lengthen US ethylene, keep upstream costs volatile
Production growth from several new crackers in early 2019 is expected to return some length to the US ethylene market, while feedstock constraints and new downstream capacity will provide some upward pressure.

OUTLOOK ’19: US propylene production to be bolstered by new crackers, low
Recent reductions in crude oil costs and new cracker start-ups are set to increase propylene production in 2019, although exports and outages could keep some volatility in the market.

OUTLOOK ’19: US gasoline margins depressed, refiners eye foreign markets
Long supplies of US gasoline have driven margins to five-year lows, but strong production and high refinery operable rates will persist through 2019 as refiners crank out distillate fuels and export markets become even more crucial to refiner profitability.

OUTLOOK ’19: US fuel ethanol must return to balance
With US fuel production margins under pressure due to record low pricing in the fuel sector over 2017, ethanol supply must return to balance. Additionally, shifting dynamics from the regulatory side combined with the tariff dispute with China will continue to paint a strong headwind for the US fuel ethanol market. However, increasing demand for high-octane gasoline components will continue to make fuel ethanol a desired commodity.

OUTLOOK ’19: US biodiesel industry unhappy heading into new year
The US biodiesel industry is heading into 2019 with more certainty than in previous years, following the finalisation of federally mandated blend volumes for 2019 and 2020. However, the highly politicised industry remains unhappy with the undecided outcome of the small refinery blend waivers.

OUTLOOK ’19: US HCl market expects stronger demand, firming prices
The US hydrochloric acid (HCl) market is anticipating a growth year in 2019, with firmer oil prices and greater demand for acid in the hydraulic fracturing drilling process.

US caustic soda sales to Australia will lower in 2019
Over the past five years, alumina refiners in Australia have tripled their buying of US liquid caustic soda to become the second-largest consumer of US exports, after Brazil.

OUTLOOK ’19: Latin America caustic soda continues to face downward pressure
The caustic soda market in Latin America, as well as in North America and other regions, will continue to face downward pricing pressure in the first quarter of 2019 as a result of ongoing production curtailment at Brazil’s alumina refiner Alunorte, which is critical to the caustic soda supply-demand balance.

OUTLOOK ’19: US EDC likely to see greater availability, relatively stable pricing
US ethylene dichloride (EDC) prices will likely remain at their recent higher level during 2019 after more than tripling during the past 12 months.

OUTLOOK ’19: US VCM likely to track PVC prices
US vinyl chloride monomer (VCM) is likely to see prices firm during the first quarter of 2019 as demand for derivative polyvinyl chloride (PVC) rises on restocking activity ahead of peak construction season.

OUTLOOK ’19: PVC watches for trade peril amid ample opportunity and expansion
The US polyvinyl chloride (PVC) market is watching the trade threats between China and the US for signs of potential market disruption in 2019 as ethylene integration continues at US plants and capacity additions loom.

OUTLOOK ’19: PVC markets to remain soft in Latin America
Latin America polyvinyl chloride (PVC) prices, whether domestic, export or import, are expected to remain soft into the first quarter of 2019, driven by regional weak demand on seasonality, weaker prices for feedstock ethylene in the US and declining crude values.

OUTLOOK ’19: US PS, EPS to follow direction of key feedstocks
US polystyrene (PS) and expandable polystyrene (EPS) prices will largely follow the direction of key feedstocks in 2019, as that is the largest determining factor in PS and EPS price direction.

OUTLOOK ’19: North America TiO2 market to stay tight amid potential structural changes
First-quarter 2019 price sentiment in the North America titanium dioxide (TiO2) markets ranges from flat to moderately stronger on anticipated resurgent demand from paint makers and other coatings producers, but supply will continue to lag demand.

OUTLOOK ’19: Shipping one-year countdown to low-sulphur fuel
The new year begins a countdown on one of the most challenging shipping regulations in decades, the imposition of a much lower global sulphur content in marine fuel being imposed by the International Maritime Organization.

OUTLOOK ’19: US isocyanate facing downward pressure on lengthening supply
Dynamics in the US and global isocyanate markets have changed drastically over the past year, with the persistent supply tightness that faced the markets at the beginning of 2018 giving way to ample supply heading into the start of 2019.

OUTLOOK ’19: US polyol demand expected to remain strong
US polyol demand is expected to stay strong heading into 2019 as the outlook for downstream polyurethane systems is healthy.

OUTLOOK ’19: US PC, ABS markets facing low-priced imports
The US polycarbonate (PC) and acrylonitrile-butadiene-styrene (ABS) markets have begun 2019 in a similar scenario with regard to low-priced imports from Asia.

OUTLOOK ’19: Crude oil/MARPOL stir uneasy waves for Americas base oils
Going into 2019, two items are stirring uneasy waves for the Americas base oil market: crude oil prices and the MARPOL (International Convention for the Prevention of Pollution from Ships) initiatives under the IMO (International Marine Organization) on new sulphur content guidelines for marine fuels.

OUTLOOK ’19: US C12-15 mid-cut fatty alcohols show mixed prospects
The US C12-15 mid-cut fatty alcohols are entering the New Year of 2019 with mixed perspectives on both prices and supply in the first quarter.

OUTLOOK ’19: US glycerine markets mixed amid uncertainty
The US glycerine markets are seeing uncertainty going into 2019 with global biodiesel production poised to increase and mixed price direction in the US domestic market.

OUTLOOK ’19: US nylon 6 to stay balanced, nylon 6,6 to remain tight
The US nylon 6 market is expected to remain largely stable in 2019, while the US nylon 6,6 market is expected to see some demand destruction, owing to severely constrained supply caused by structurally short feedstock adiponitrile (ADN) supply globally.

OUTLOOK ’19: Asian PX trade to US likely to increase amid shifting production
Asian paraxylene (PX) trade to the US is likely to increase in 2019 amid shifting production levels in both regions.

OUTLOOK ’19: Two new methanol units starting in the Americas
Two new methanol plants are scheduled to start up in 2019 in the Americas, one in the US and the other in Trinidad and Tobago.

OUTLOOK ’19: US acetic acid headed toward record new year
US acetic acid (AA) is pointed toward a record 2019, with new capacity possibly coming on line in Texas and export prices currently headed toward a multi-year low.

OUTLOOK ’19: US VAM adds first new capacity in decades
The US vinyl acetate monomer (VAM) market will begin the year with the first new capacity in that market in this century.

OUTLOOK ’19: US EG expected to face downward pressure at start of 2019
US ethylene glycol (EG) is expected to face downward pressure at the start of 2019 as supply outweighs demand, while demand is slow on seasonality and market fundamentals turn bearish.

OUTLOOK ’19: US H1 oxo-alcohols demand anticipated strong amid softer pricing
US oxo-alcohols demand is expected to be resurgent beginning in the first quarter, but buyers and sellers say the outlook beyond solid buying interest is less certain.

OUTLOOK ’19: US plasticizer pricing direction unclear; OX, PA to track demand seasonality
US plasticizers market direction is uncertain heading into 2019, stemming from trade tensions and potential demand decline from the automotive industry amid plant closures.

OUTLOOK ’19: US domestic soda ash demand declining; export market strong
The US domestic soda ash market continues to expected a slight decrease in demand following demand erosion of downstream products such as powder detergents.

OUTLOOK ’19: Nitrogen fertilizer producers face tough start to 2019
While nitrogen fertilizer prices ended 2018 on a downward trajectory amid soft demand and oversupply, the 2019 outlook for global fertilizer producers in general is mixed.

OUTLOOK ’19: Global potash supply squeeze intensifies, Europe production capacity uncertain
Muriate of potash (MOP) fertilizer supply will remain tight around the world in 2019, amid increasing demand, production discipline, outages, and the delayed ramp-up of new capacity.

OUTLOOK ’19 INTERACTIVE: China demand to continue driving global sulphur prices
Although global spot sulphur supply is structurally tight, China is expected to remain the control valve of the market in 2019 as the relative strength of its demand will largely dictate global prices.

OUTLOOK ’19: Global sulphuric acid supply to remain tight in H1 2019 before easing
The global sulphuric acid spot market is expected to remain tight throughout at least the first half of 2019, particularly in Asia.