ACC requests US remove $2.2 bn of chems from tariff list; Shin-tech begins PVC expansion; BASF strengthens 3D printing footprint

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Long-standing issues with China can be resolved through constructive negotiation, the ACC testified.

ACC requests US remove $2.2 bn of chems from tariff list

The U.S. risks losing thousands of jobs and billions of dollars in chemical investments by not excluding $2.2 billion worth of chemicals and plastic products from its second list of tariffs against China, a senior American Chemistry Council (ACC) official testified.

ACC Director of International Trade, Ed Brzytwa testified today before officials from the Office of the United States Trade Representative (USTR) regarding the U.S. Administration’s proposed Section 301 trade action against China.

The global trade shakeup comes at a time when the low-cost production of chemicals in the U.S. has attracted more than $194 billion in new chemical industry investment and sparked a U.S. manufacturing renaissance that could be undermined by the imposition of U.S. tariffs and retaliation by U.S. trading partners, Brzytwa told the USTR.

In his testimony, Brzytwa requested that the Administration remove all chemicals and plastics products, valued at $2.2 billion, from the U.S. List 2, and pursue more constructive measures to resolve China’s unfair practices.

“The inclusion of chemicals and plastics on List 2 has the potential to harm America’s manufacturing renaissance and is counterproductive to U.S. economic interests,” Brzytwa told policymakers. “Costs in the U.S. will go up, not just for our member companies, but also downstream industries that buy U.S.-made chemicals, including farmers and manufacturers. These tariffs will weaken the competitiveness of the U.S. chemicals industry and the U.S. as a whole.”

54 of the 114 products on China’s List 2 are chemicals, plastics, and plastics products, and would impact $5.4 billion in U.S. exports to China.

“China’s tariffs will hit the U.S. chemicals industry, not once, but twice, since demand for chemicals by manufacturers that make products containing chemistry will drop,” Brzytwa said. “China’s retaliation against U.S.-made chemicals will also make it prohibitive to supply China’s large and growing demand for chemicals. That is why chemicals, arguably more than any other products, do not belong on the front lines of a trade war.”

Shin-Etsu begins US PVC expansion

Shintech, a U.S. subsidiary of Japan’s Shin-Etsu, has begun construction in Plaquemine, Louisiana on the first phase of an integrated plant to produce polyvinyl chloride (PVC).

The $1.49 billion project is expected to be complete by 2020 and start up in 2021. The project involves increasing PVC output at Shintech’s Plaquemine, Louisiana complex by more than double. The company will also build a new 1 million tonne/year vinyl chloride monomer (VCM) unit, which is the feedstock for PVC. This unit will also produce raw materials further upstream including ethylene dichloride, chlorine and caustic soda.

Since completing its PVC plant in Plaquemine in 2008, Shintech has expanded and raised production capacity three times and remains on track to build its 500,000 tonne/year steam cracker at Plaquemine to be started up by the end of 2018, the company said.

BASF strengthens 3D printing footprint

BASF has invested $25 million in Materialise to further the development of the company’s software for 3D printing and to increase access to the technology.

“BASF will use our 3-D printing facilities, one of the largest in the world, to launch or certify new materials in multiple verticals such as aerospace, automotive and wearables,” Materialise CEO Fried Vancraen said in a statement.

In addition, BASF has purchased Advanc3D Materials and Setup Performance SAS, companies that recently collaborated on materials for laser sintering in 3D printing applications.

“These applications are a further step toward our objective to become a leading supplier of powder-based materials and formulation for the 3D printing industry,” BASF’s Dietmar Bender said in a statement.

Truck driver shortage is getting worse

The driver shortage has intensified in the trucking industry because of retirement and new regulations. Freight costs have increased as a result and analysts expect costs to continue rising.

The U.S., Germany, and Japan face a shortfall of 565,000 drivers, about 7% of the driver population in the U.S. and nearly 1/3 in the other two countries, according to Morgan Stanley data.

In the U.S., the electronic-logging device (ELD) mandate imposes an 11-hour cap on driver’s work days and is limiting their productivity.

Self-driving trucks could help lower costs and improve productivity, according to Morgan Stanley.

“We assume technology provides a viable and sustainable solution to the driver shortage problem,” the Morgan Stanley team wrote in a research note. “If it all works out, the maker of self-driving trucks TuSimple would start selling by 2020 and help carriers cut about 10% in total costs over the first five years.”

Bernstein analysts estimate that autonomous trucks would net the industry between $100 billion and $125 billion in savings on driver pay.