Monday, January 9, 2012

2012 outlook for domestic chemical firms: partly cloudy

From this week's Chemical and Engineering News, their World Chemical Outlook edition and a look at the domestic chemical manufacturing side:
Less expensive raw materials and good export opportunities will position the U.S. chemical industry to make the most of a bad economic situation this year. In the U.S., growth in chemical output, excluding pharmaceuticals, is expected to dip to 1.6% in 2012, compared with an estimated 3.8% gain in 2011, according to the American Chemistry Council. Basic chemicals, which rebounded early in the recovery in 2010 and then saw zero growth in 2011, will pick up a bit of speed with a 0.7% increase in output. 
The prognosis for specialty chemicals, 3.4% growth, is more robust, driven by demand from markets such as light vehicles and electronics, ACC says. Consumer products and synthetic rubber are also likely to grow faster than the average for chemicals. “A global soft patch has emerged and has been centered in manufacturing,” the primary customer base for chemistry, reports T. Kevin Swift, ACC’s chief economist. Still, Swift reports, “leading indicators of manufacturing activity are not yet pointing to a recession.” 
The fine chemicals sector was strong in 2011, with many companies claiming to have rebounded from losses incurred in 2009 and 2010. Producers remain optimistic about 2012 but mix, as usual, a good dose of caution with that optimism in a market that historically experiences sudden ups and downs.
Interesting how fine chemical manufacturing always seems to be waiting for the Chinese chemical manufacturing sector to screw up. Someday, they're going to get their act together. Then what?
The exit of major drug companies from manufacturing continues to drive business for fine chemicals makers. But Aslam Malik, president of Ampac Fine Chemicals, cautions that a rise in outsourced production of established or generic drugs may not mean increased business for Western API suppliers, since much of that production will go to China.  
A more solid upside, Malik says, lies in the uptick in drug approvals by FDA in 2011. The active ingredients in newer products are generally potent and complex, meaning lower volumes but more specialized manufacturing technology. More rigorous supply chain management on the part of pharmaceutical companies should benefit Western API makers, with drug companies instituting policies of establishing a Western backup to any key product manufactured in Asia. Some fine chemicals companies say business is coming back from China, in particular, because of quality concerns and Asia’s eroding cost advantage.

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looks like Blogger doesn't work with anonymous comments from Chrome browsers at the moment - works in Microsoft Edge, or from Chrome with a Blogger account - sorry! CJ 3/21/20