U.S. Downstream Sector to 'Surge'

Significant Expansion Predicted

Growth in the U.S. downstream sector is predicted to “surge over the next five years,” according to analysis by market research agency Petrochemical Update

The firm predicts that significant growth in output from the chemicals sector, as new production capacity comes online, will mean that rates surpass average growth over the previous 20 years.

“During 2019, performance among individual chemical segments will be mixed. Output gains will be strongest in organic chemicals, inorganic chemicals and other specialty chemicals. Production of agricultural chemicals and consumer products will fall slightly before recovering in 2020,” a spokesperson for Petrochemical Update notes.

Investment to Rise

Despite the difficult macroeconomic picture, investment in the U.S. downstream sector is expected to rise as investors seek solid returns over the medium term. Findings published by the American Chemistry Council, or ACC, in its recent Mid-Year 2019 Chemical Industry Situation and Outlook, suggest a long term reversal of regression trends.

“The United States remains an attractive destination for chemical industry investment. Since 2010, petrochemical producers have announced significant expansions of capacity in the U.S., reversing a decades-long decline,” THE ACC's outlook said.

Based in Washington, D.C., the ACC represents a range of companies engaged in the business of chemistry using best-in-class member engagement, political advocacy, communications and scientific research.

40% in Planning Phase
An estimated 334 chemical and plastics projects, cumulatively valued at US$204 billion, have been announced to date, according to figures from Petrochemical Update, and of these 40 percent are in the planning phase.

“America’s plentiful and affordable supplies of natural gas and NGLs – a key feedstock for chemical makers in the U.S. – are driving the new investment. Further gains in capital spending are anticipated, increasing by 5.4 percent this year and 4.9 percent in 2020,” said Jonny Witherspoon, portfolio at Petrochemical Update.

Based in London, Petrochemical Update is an independent division of business intelligence group FCBI-Energy.