Weaker US Demand for Specialty Chemicals

After a setting a blistering pace in 2014, cosmetic chemical volume slowed in recent months, acording to The Specialty Chemicals Market Volume Index, a new tool created by the American Chemistry Council (ACC). From June 2014 to June 2015, cosmetic chemical volume jumped 9.0%, but dipped 0.7% in June on a three-month moving average basis, according to the ACC.


Overall, US specialty chemical volume rose a scant 0.1% for the year ended June 2015, and declined 0.3% in June, according to ACC. In other categories, flavor and flavor volume rose 4.2% during the past year, but declined 0.6% in June. I&I cleaner volume increased 2.2% for the year, but dropped 0.1% in June.


The latest decline follows steady declines since December as weakness in oilfield chemicals and a few other segments weighed on overall volumes, according to the ACC. Of the twenty-eight specialty chemical segments included in the index, thirteen expanded in June, fourteen declined and one was flat.


According to the ACC, the overall specialty chemicals volume index was up only 0.1% year-over-year also on a 3MMA basis. Year-earlier comparisons were generally in the 4.0-6.8% range during 2012-2014 but since February of this year they have been below that range as the downturn in the oil and gas sectors affected headline volumes.


For the Council's purposes, specialty chemicals are defined as materials manufactured on the basis of the unique performance or function and provide a wide variety of effects on which many other sectors and end-use products rely. They can be individual molecules or mixtures of molecules. The physical and chemical characteristics of the single molecule or mixtures along with the composition of the mixtures influence the performance end product. Individual market sectors that rely on such products include automobile, aerospace, agriculture, cosmetics and food, among others.


Specialty chemicals differ from commodity chemicals. They may only have one or two uses, while commodities may have multiple or different applications for each chemical. Commodity chemicals make up most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time, and are relatively high value with greater market growth rates. Some areas where specialty chemicals are used include adhesives, cleaning materials, cosmetic additives, construction materials, food additives, fragrances and detergents.