Executive Briefings

Good Growth Predicted for Chemical Industry Throughout 2015

The recovery momentum for the chemical industry is expected to continue this year, backed by a strengthening U.S. economy, strength in the automotive space, healthy demand in emerging geographies and gradually convalescing construction markets.

Notwithstanding a few industry-related headwinds, weakness in Europe and slowdown in China, there are a number of reasons to be optimistic about the broader chemical industry for both the short and long haul.

According to the American Chemistry Council, abundant shale gas production is driving U.S. chemical exports. A string of factors are driving growth in the export markets, including favorable energy costs stemming from the abundance of shale gas and healthy demand from the emerging markets. New methods of extraction such as horizontal drilling and hydraulic fracturing (or fracking) are boosting shale production, bringing down prices of ethane (derived from shale gas) in the process.

Leveraging the abundant natural gas supply, chemical makers are ratcheting up investment on shale gas-linked projects which is expected to beef up capacity and export moving ahead. The shale revolution made the U.S. an attractive investment location and incentivized a number of chemical companies to invest billions of dollars for setting up facilities (crackers) to produce ethylene and propylene in a cost-effective way.

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Notwithstanding a few industry-related headwinds, weakness in Europe and slowdown in China, there are a number of reasons to be optimistic about the broader chemical industry for both the short and long haul.

According to the American Chemistry Council, abundant shale gas production is driving U.S. chemical exports. A string of factors are driving growth in the export markets, including favorable energy costs stemming from the abundance of shale gas and healthy demand from the emerging markets. New methods of extraction such as horizontal drilling and hydraulic fracturing (or fracking) are boosting shale production, bringing down prices of ethane (derived from shale gas) in the process.

Leveraging the abundant natural gas supply, chemical makers are ratcheting up investment on shale gas-linked projects which is expected to beef up capacity and export moving ahead. The shale revolution made the U.S. an attractive investment location and incentivized a number of chemical companies to invest billions of dollars for setting up facilities (crackers) to produce ethylene and propylene in a cost-effective way.

Read Full Article