The global chemical industry got off to a positive start in 2017 with January seeing a rise in chemical production on gains across most regions, according to the latest monthly report from the American Chemistry Council (“ACC”).

Encouraging January Readings

The Washington, DC-based chemical industry trade group said that the Global Chemical Production Regional Index (“CPRI”) rose 0.6% in January on a monthly comparison basis. The Global CPRI, which is measured using a three-month moving average, measures chemical production volumes for 33 major nations, sub-regions and regions. It is comparable to the Federal Reserve Board (“FRB”) production indices.

Gains in production were witnessed across North America (up 0.4%), Western Europe (up 1.2%), Central & Eastern Europe (up 1.7%) and Asia-Pacific (up 0.6%) in January. The results were also positive on a product basis for the reported month. On a year over year comparison basis, strongest growth was witnessed in coatings (up 6.8%). Synthetic rubber saw a 3.4% rise while both plastic resins and inorganic chemicals racked up 2.7% gains.

The ACC also note that the Global CPRI went up 3.3% year over year on a three-month moving average basis. Capacity utilization for the global chemical industry moved up 0.4 percentage points to 79.2% in January.

Chemical Industry Looking Up

The chemical industry – which had long been out of favor – is finally getting its groove back. Despite a spate of headwinds, the highly cyclical industry put up a decent performance in 2016, helped by continued strength across automotive and housing markets – two major end-use markets for chemicals.

The automotive sector continues its healthy run. In particular, U.S. light vehicles market continued to show strength in 2016, supported by an improving job market, rising personal income, low fuel prices and attractive financing options, and the momentum is expected to continue this year.

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