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Comment PDF Business & Economics

CPI outlook is adjusting and strong

By Dorothy Lozowski |

Following the major disruptions in 2020 due to the pandemic, U.S. chemical production has grown in 2021 and is poised for further gains in 2022, according to the American Chemistry Council’s Year-End 2021 Chemical Industry Situation and Outlook. U.S. chemistry is expected to grow by over 4% in 2022. Martha Moore, who is ACC’s chief economist and author of the report, says that “While risks for the global economy remain, the U.S. chemical industry is in a strong position going into 2022 … American chemistry is poised to accelerate as strong consumer demand and restocking drive growth.”

 

Strong demands tempered by supply and weather

After widespread lockdowns and hefty economic stimulus efforts during the pandemic, consumer demand for durable goods surged in 2021. Two large markets for chemical products, vehicles and housing, both saw expanding demand this past year.

And while demand was strong, vehicle production could not keep up because of supply constraints, specifically from semiconductor manufacture. In fact, supply-chain disruptions have affected just about every segment of production within the chemical process industries (CPI). In addition to supply-chain bottlenecks, significant weather events — in the U.S. most notably, the unusual freeze and a hurricane in the Gulf Coast — also contributed to lower inventories of basic chemicals. Production being held back by supply-chain disruptions, however, is expected to rebound as those issues are resolved and consumer demand remains high.

 

CPI trends

As the CPI continue to adjust to meet demands while weathering numerous disruptions, they are also keenly addressing longterm challenges and adjusting their focus accordingly. As mentioned in this column last month, ambitious climate-change targets are fueling work in areas such as carbon capture and storage, and “green” hydrogen production. Overall, sustainability and process efficiency goals are driving attention to recycling (particularly of plastics), bio-based chemistry and ways to increase efficiency, such as catalyst developments — see for example our Cover Story on the Kirkpatrick Chemical Engineering Achievement Award.

As mentioned, the automobile market is a major user of CPI products. Vehicle manufacturers’ movement away from petroleum-derived fuels and toward electric cars or possibly hydrogen as a fuel source, affects the products to be provided to them by the CPI. Examples include developments in battery chemistry and polymer chemistry.*

And, corporations are preparing for changing needs via business ventures. Last month, BASF (www.basf.com) announced a new standalone business called BASF Automotive Catalysts and Recycling, which is being formed specifically to focus on the changes expected in the automobile market. And recently, TotalEnergies (totalenergies.com) partnered with Plastic Omnium (www.plasticomnium.com) to design and develop new plastic materials, made from recycled polypropylene, for the automobile industry.

We look forward to continuing to cover these trends and much more throughout the year, and we wish our readers all the best for this new year. ■

Dorothy Lozowski

* See Electric Vehicles Drive performance Polymers, Chem. Eng. August 2021, pp.13–16

Dorothy Lozowski, Editorial Director

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