23:51 PM | April 15, 2013 | Robert Westervelt
Expectations for first-quarter earnings have dimmed as weaker demand led companies to issue warnings and industry analysts to trim quarterly estimates. Weak demand in Europe and the absence of a strong rebound in Asia after the Chinese New Year are cited.
One thing that cannot be blamed is volatile or choppy demand patterns for US chemicals. Overall US chemical demand growth has been nothing if not consistent, and lackluster, for two years now. The American Association of Railroads (AAR; Washington) says that for 20 straight months through March, year-over-year carloads of chemicals have been no more than 3.4% higher or lower than the same month the previous year. "No other major commodity category has seen that level of traffic consistency,” AAR says. US chemical rail shipments fell 1.3% in March from the same year-ago quarter, according to AAR. Quarterly rail shipments for chemicals over the same period are no more than 1.5% higher or lower.
ACC’s regional production index figures show an even tighter range. Monthly demand since January 2011 on a 3-month moving average has been no more than 1.5% higher or lower than the year-ago period (chart). Overall North American production of chemicals was up 1.1% year-over-year in February on a 3-month moving average, which ACC uses to smooth out seasonal irregularities.
US chemical production has has been on a flat line following the early stages of recovery in 2010, when demand growth was in the 3–4% range over that year (after double-digit declines for most of 2009). Production has been range-bound between 0% and 1% for the past 2 years, and early indications in 2013 are that the sideways pattern is not about to change.