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    Home > Coatings News > Paints and Coatings Market > Trade war strikes industry confidence, the pace of capital expenditure of chemical industry slows down

    Trade war strikes industry confidence, the pace of capital expenditure of chemical industry slows down

    • Last Update: 2019-06-14
    • Source: Internet
    • Author: User
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    Recently, industry insiders have said that the escalation of Global trade tensions has hit corporate confidence and curbed the demand for chemicals Jim fitlin, Dow's chief executive, said: "consumers are reducing their purchases of large quantities of goods, such as cars, housing and consumer electronics This led to a slowdown in economic growth Capital expenditure will also be adjusted according to market conditions " Kevin swift, chief economist at ACC, said the global economy was facing multiple disadvantages European economic growth is weak, China's economy has slowed down, India's economy is slowing down, and Brazil has not yet fully entered the economic recovery Although the ACC chemical activity barometer, a comprehensive indicator of the U.S economy, has shown strong momentum in recent months, bringing a glimmer of hope that things may improve by the end of the year, this hope may be short-lived "In terms of trade, the US is also facing a global economic slowdown and reduced external demand for chemicals due to trade barriers," he added One of the biggest concerns is that we will get further into a bad trade war Because tariffs are a blow to both production and consumption " ACC expects us GDP to grow by 2.5% in 2019 driven by growth in business investment However, this is lower than 2.9% in 2018, and growth is expected to slow to 1.9% in 2019 and 1.8% in 2020 The industry is looking forward to the normalization of trade Although tax reform, deregulation and low-cost raw materials in the United States provide favorable conditions for the country's petrochemical producers, the trade headwind indicates that the growth prospects will slow down In the near future, the United States had planned to impose tariffs on all products imported from Mexico Although the plan was abandoned, it still had a negative impact on the industry In addition, the Sino US trade war shows no sign of ending These threats are undermining business and consumer confidence "The development of global industry is based on international trade," Jim fitlin told the ACC annual meeting The US Mexico Canada trade agreement (usmca) needs to be approved We need to make more progress in international trade " Rising trade tensions, falling solvency of European banks and rising global debt levels are all affecting the economic environment Frank bozich, chief executive of trinseo, said: "the Chinese and European auto markets continue to be weak and there is no sign of recovery In particular, the weakness of China's automobile industry is leading to oversupply of many major plastic products in the world For downstream products, the Chinese market is very important China's market demand for polycarbonate, ABS, hips and other products has reached or exceeded 50% of the world's total demand " ACC pointed out that the sales volume of light vehicles in the United States will drop from 17.2 million in 2018 to 16.8 million in 2019, 16.6 million in 2020 and 16.5 million in 2021 Obviously, the cycle of the auto industry has peaked Bozik also said the European auto market has been more stable than Asia, but it is too early to predict a recovery in the second half of the year It depends on international trade and consumer confidence According to ACC data, US shale gas continues to attract a lot of investment By the end of May 2019, the United States has announced 336 new chemical projects with a total investment of US $204 billion, 70% of which is foreign investment However, the pace of investment will slow down in the future, especially when the trade outlook is uncertain ACC expects us chemical industry capex to grow by 5.4% to US $35 billion in 2019 However, the growth rate of capital expenditure in the US chemical industry will slow down to 4.9% in 2020 and 4.1% in 2021 However, ACC predicts that in 2019, U.S chemical exports will increase by 5.9% to US $148.5 billion, while imports will increase by 2.4% to US $111.7 billion, which will lead to a US chemical trade surplus of US $36.7 billion in 2019 and US $31 billion in 2018 Even in the face of tariff resistance, the US chemical trade surplus will continue to grow, reaching US $42.3 billion by 2020 and US $47.5 billion by 2021.
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