How the Chemical Industry Can Overcome Logistical Complexities

The chemical industry acts as a major contributor to the U.S. economy with more than $800 billion in sales. It accounts for nearly 14 percent share of the overall exports, with an approximate 881 million tons worth of material being shipped out every year.

Hurricane and the Aftermath: What’s Making News in the Chemical Industry?

Apart from the usual volatility concerns plaguing the chemical industry every now and then, Q3 2017 witnessed one of the deadliest hurricanes in U.S. history. Not only did this paralyze normal life but also impacted the chemical industry to a large extent. The short-term damage looks massive and this will affect both the domestic and global markets.

US Ethylene Market: A Rollercoaster Ride on the Supply Side

Ethylene is one of the most important building blocks in the organic chemicals value chain, and has an impact on various key derivatives such as polyethylene, styrene, and MEG. The ethylene market is expected to go back and forth in cycles of supply lengthening, shortening and further reach a phase where, due to oversupply, steam crackers might not even have a say in pricing anymore. Let’s see how supply side dynamics have affected ethylene in the recent past. What is the current scenario and what are the sentiments for the future?

Specialty Chemicals to Drive the US Chemicals Industry

Chemical producers across the US are slowly and steadily moving away from the production of commoditized and price-sen­sitive chemicals to low-volume, high-value, and high-margin specialty chemical production. THE MORE THE VALUE ADD, THE GREATER THE MARGINS. Though commodity chemicals continue to rule the roost, moving forward, Specialty Chemicals will anchor the overall chemicals industry. Massive brownfield expansions of specialty chemicals across the US are a definite indicator of this new trend.

Qatar Crisis – A Concern for the Asian Market?

Qatar has been facing an economic embargo for almost two months with its neighboring countries—including Egypt, Saudi Arabia, United Arab Emirates, and Bahrain. Its isolation is the result of speculation that Qatar supports terrorist organizations and interferes in the international affairs of other countries in the region.

The Missing Block in the Oil & Gas Industry

The oil and gas (O&G) industry has traditionally been one where innovations and developments are more focused on drilling and exploration, whereas office functions remain stagnant. The industry still relies on third-party supervision and paper-based contracting for joint operating agreements, lease agreements, and production sharing contracts exchanging trillions of dollars in revenue and expenses—with single deals and contracts pegged as high as US$ 130 Million.

Chemicals and Consolidation

Mergers and acquisitions (M&A) are shaping today’s chemical industry in a significant way. The market is moving toward consolidation, where portfolio realignment is important. Companies are focused on developing their core strengths and are continuously looking for favorable acquisitions to deliver growth and greater shareholder value. During 2017 and beyond, intermediates, specialties, fertilizers and agricultural chemicals will likely experience high growth in M&A activity. Chemical producers across the US will move away from commoditized and price-sen­sitive chemicals to low-volume, high-value, and high-margin specialty chemical production.

Consolidation in the Chemical Industry and its Outlook

In today’s marketplace, companies need to start treating M&As as a strategic tool that gives them an edge over its peers. Successful M&As typically help in seizing growth opportunities, improving capabilities, diversifying services/product portfolios, replacing leaders and/or strengthening its own position in the market, cutting costs along the value chain and, most importantly, assist in sustaining a dynamic environment.

Chemical Exports from the US to Remain Strong in the Long-Term

As per current data, the US chemical industry is on a growth trajectory once again after a few years of negative growth. A large part of the positive outlook can be attributed to the abundance of shale gas. Not only is this being used extensively in-house, but ethane exports from the US are changing the global trade game altogether. There was growth across all production indicators for 2016, as well as a significant jump in the export numbers of chemicals and its feedstock.

India’s Ethanol Output Improving Yet a Large Deficit Continues

The demand for ethanol in India continues to soar on the back of government’s plan to increase mandatory blending. Per the latest statistics, the domestic sugar mill industry achieved a production figure of around 1.12 billion liters during the last sugarcane season of 2015-16, around 65% more than the previous season. Despite record production, it continues to be significantly insufficient for blending purposes due to a deficit of around 900 million liters as of the end of 2016. The ethanol blending demand is further set to rise in the coming years, with ambitious targets set by the government of India to increase ethanol blending from 10% to 22.5%.

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