Mitsui adds plastics capacity; U.S. crude oil production to reach record high; Chemical production ticks up
Our pick of the latest petrochemicals news you need to know
Mitsui Chemicals Group boosts capacity for automotive plastics
Mitsui Chemicals Group, which already operates eight polypropylene (PP) compound production sites worldwide, is adding compounding lines in Ohio and Tennessee to address automotive demand.
Two additional compounding lines are being added at Advanced Composites, Inc., which operates in Sidney, Ohio and Nashville, Tennessee. An additional line will also be installed at Advanced Composites Mexicana, S.A. de C.V.
The additions will boost overall capacity from 410,00o tonnes/year to 440, 000 tonnes/year.
Growing demand for PP compounds in North America and is being driven by high levels of auto production. The US assembled 12.2 million vehicles in 2016, up 0.8% year-on-year, while Mexico recorded production of 3.6 million, up 0.9%, and Canada 2.37 million, up 3.8%.
In the northeast quad state Appalachia area of Pennsylvania, Ohio, Kentucky and West Virginia, production of NGLs has grown almost 10-fold over the past four years and is prompting development of the chemicals used to make plastics.
U.S. crude oil production forecast expected to reach record high in 2018
Total U.S. crude oil production is forecast to average 9.3 million barrels/day in 2017, up 0.5 million barrels/day from 2016, according to the latest Short-Term Energy Outlook published by the U.S. Energy Information Administration (EIA).
In 2018, EIA expects crude oil production to reach an average of 9.9 million barrels/day, which would surpass the previous record of 9.6 million barrels/day set in 1970. EIA forecasts that most of the growth in U.S. crude oil production through the end of 2018 will come from tight rock formations within the Permian region in Texas and from the Federal Gulf of Mexico.
Source: U.S. EIA
Chemical activity ticked up in July
The American Chemistry Council’s (ACC) Chemical Activity Barometer (CAB) ticked up 0.1% in July following a flat reading in June and a 0.2% gain in May. Gains during the 2nd quarter averaged 0.2% following average gains of 0.5% during the 1st quarter.
The CAB has four primary components, production, equity prices, product prices and inventories. In July, all four of the broad categories improved, as did the diffusion index which rose to 71% from 65% in June. The diffusion index is the number of positive contributors relative to total indicators monitored),
In addition, the ACC’s Global Chemical Production Regional Index (Global CPRI) shows that global chemicals production rose 0.4% in June. During June, production increased in North America, Western Europe, Central & Eastern Europe, Africa & the Middle East, and the Asia-Pacific region, but was stable in Latin America. The Global CPRI was up 2.1% year-over-year on a three-month moving average basis and stood at 110.3% of its average 2012 levels in June.
During June, capacity utilization in the global business of chemistry rose 0.1 percentage points to 80.1%. This is off from 80.5% last June and is below the long-term (1987-2016) average of 88.8%.
Results were generally positive on a product basis during June, with gains in pharmaceuticals, agricultural chemicals, consumer products, synthetic rubber, manufactured fibers, coatings, and other specialty chemicals. Considering year-over-year comparisons, growth was strongest in coatings followed by plastic resins, pharmaceuticals, and synthetic rubber.