It remains very interesting to us that despite the apparent major shortages of chemicals and polymers in the US, the industry continues to operate at rates below those of a year ago, according to the ACC. We fully understand the Gulf Coast swing in February and are surprised that it was not worse, given the extent of the shutdowns we have been monitoring – March should be bad also because many of the shutdowns extended into March. While the bulk of the US chemical industry is in the Gulf Coast – as can be seen by the Gulf Coast influence on the “total US” bar, why production remains below 2020 levels in other regions is a little surprising. Granted, February 2020 was not impacted by the Pandemic and the economy was strong and demand for materials high, but with the import issues of the last 4 months and the move by US manufacturers and retailers to source more product from the US, we remain surprised that regional chemical production outside the US Gulf has not at least matched 2020 levels.
Source: American Chemistry Council, March 2021
A couple of possible explanations are first, that the regional producers are reliant on materials that come from the Gulf or imports and they cannot get enough material, and second, that the auto production slowdown is having enough of an impact on regional coatings, polymer, compound, and adhesive demand that it is holding down overall production. The first argument is supported by the broad drop in February as it looks like the Gulf Coast disruptions impacted all regions.