US construction spending flat, PVC demand falls in Nov

Market: Petrochemicals
02/01/25

US construction spending was virtually flat in November compared with the previous month as private and public spending offset one another, according to the US Census Bureau.

US polyvinyl chloride (PVC) contract prices declined by 1¢/lb in November to 57.5¢/lb, according to Argus. Producers faced pressure during the month as the softening US construction sector failed to absorb recent PVC capacity additions that had come on line.

Formosa added an additional 130,000 metric tonnes (t) of PVC capacity to its Baton Rouge, Louisiana, plant in the mid-third quarter. Shintech added 380,000t/yr of nameplate PVC capacity to its Plaquemine, Louisiana, plant in the fourth quarter.

PVC buyers increasingly focused on inventory management in November, further constraining demand. Many buyers and converters wished to avoid being oversupplied as the end of the year approached due to modest demand growth expectations for 2025.

Private residential spending grew for the second month in a row after a sharp decline in September, but recovery slowed in November.
Public spending fell for the second-straight month, offsetting minimal gains in private spending.
Public spending was virtually flat or slightly down from the prior month in various major categories.
Private manufacturing investment was above 10pc year over year, but sustained monthly growth has stalled.
A small boost in commercial spending does not reverse year-over-year decline.

By Aaron May

US Construction Spending					$mn
Column header left	24-Nov	24-Oct	+/-%	23-Nov	+/-%
Total Spending	2,152,581.0	2,152,250.0	0.0	2,090,690.0	3.0
Total Private	1,650,665.0	1,649,758.0	0.1	1,610,750.0	2.5
Private Residential	906,201.0	905,149.0	0.1	879,069.0	3.1
Private Manufacturing	234,917.0	235,231.0	-0.1	211,541.0	11.1
Private Commercial	118,206.0	118,127.0	0.1	130,707.0	-9.6
Total Public	501,916.0	502,491.0	-0.1	479,940.0	4.6
Public Water/Sewage	79,018.0	79,207.0	-0.2	71,683.0	10.2
Public Highway/Road	142,908.0	142,682.0	0.2	148,143.0	-3.5
US Census Bureau

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

02/01/25

Maersk warns of US east, Gulf coast ports strike

New York, 2 January (Argus) — Containership owner Maersk is warning clients that a potential port labor strike could disrupt cargo shipping operations on the US east coast and Gulf coast later this month. A temporary agreement on wages that was struck in October between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) is set to expire on 15 January. The short-term agreement, which ended a brief strike, was intended to provide more time for negotiating the remaining contract issues. "Considering the status, we strongly encourage our customers to pick up their laden containers and return empty containers at US east and Gulf coast ports before 15 January," Maesrk said on 31 December. "This proactive measure will help mitigate any potential disruptions at the terminals." During negotiations last year, the ILA's demands included no new automation technology at US ports that would replace workers, describing this position as "non-negotiable". US president-elect Donald Trump appeared to back the union after meeting with ILA's president and executive vice president in mid-December. "The amount of money saved [from automation] is nowhere near the distress, hurt, and harm it causes for American workers, in this case, our longshoremen," Trump said on social media. The US president does not have direct power over union negotiations, but the president can issue executive orders affecting workers and intervene in strikes, if doing so would be in the national interest. The current labor agreement covers approximately 25,000 workers employed in container and roll-on/roll-off operations at ports from Maine to Texas. Movements of dry bulk cargo, such as coal and grains, are expected to be less affected by any work stoppage, though there could be side effects from the congestion of other products being rerouted to ports not affected by the strike. Movement of crude, refined products and many petrochemicals would like be unaffected by a strike, as ILA members do not work within the private terminals that handle nearly all US dry bulk, oil, and gas exports. But some polymers that are moved by container, including polyvinyl chloride, polyethylene, and polypropylene, could be disrupted. A segment of US steel imports could also be disrupted by the strike, as about 9pc of those imports come in via containers, according to data from Global Trade Tracker. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Viewpoint: North American BZ, SM output to dip in 2025

02/01/25

News

02/01/25

Viewpoint: North American BZ, SM output to dip in 2025

Houston, 2 January (Argus) — North American benzene (BZ) and derivative styrene monomer (SM) production and operating rates may decline in 2025 as production costs climb. SM and derivative output will likely see a drop due to the permanent closure of a SM plant in Sarnia and an acrylonitrile butadiene styrene (ABS) plant in Ohio. In 2024, SM operating rates averaged about 71-72pc of capacity, up by 1-2 percentage points from the year prior, according to Argus data. In 2025, operating rates are expected to pull back closer to 70pc due to lackluster underlying demand, offsetting the impact of the two plant closures. Many SM producers on the US Gulf coast are entering 2025 at reduced rates due to high variable production cash costs against the SM spot price. The BZ contract price and higher ethylene prices recently pushed up production costs for SM producers. A heavy upstream ethylene cracker turnaround season in early 2025 will keep derivative SM production costs elevated in Louisiana, stifling motivation for some downstream SM operators to run at normal rates. Gulf coast BZ prices typically fall when SM demand is weak. But imports from Asia are projected to decline, leading to tighter supply in North America that could keep BZ prices elevated. BZ imports from Asia are expected to decline in 2025 because of fewer arbitrage opportunities, as Asia and US BZ prices are expected to remain near parity in the first half of the year. The import arbitrage from South Korea to the Gulf coast was closed for much of the fourth quarter of 2024. Prices in Asia have garnered support because of demand from China for BZ and derivatives, as well as from aromatics production costs in the region that have increased alongside higher naphtha prices. In January-October 2024, over 60pc of US BZ imports originated from northeast Asia, according to Global Trade Tracker data. Losing any portion of those imports typically tightens the US market and drives up domestic demand for BZ. But tighter BZ supply due to lower imports may be mitigated by SM producers, if they continue to run at reduced rates in 2025. The US Gulf coast is around 100,000 metric tonnes (t) net short monthly on BZ, but market sources say the soft SM demand outlook for 2025 will cut US BZ import needs almost in half. Despite fewer BZ imports to North America, reduced SM consumption could hamper run rates for BZ production from selective toluene disproportionation (STDP) unit operators. The biggest obstacle for STDP operators in 2025 will like be paraxylene (PX) demand. Since STDP units produce BZ alongside PX, there needs to be domestic demand for PX. But demand has been weak due to PX imports and derivative polyethylene terephthalate (PET). STDP operations increased at the end 2025 after running at at minimum rates or being idled since 2022. This came as BZ prices consistently eclipsed feedstock toluene prices. The BZ to feedstock nitration-grade toluene spread averaged 30.5¢/USG in 2024 and the BZ to feedstock commercial-grade toluene (CGT) spread averaged 49.25¢/USG, according to Argus data. This means that for much of the year STDP operators could justify running units at higher rates to produce more BZ and PX. But another challenge to consider on STDP run rates in 2025 is the value of toluene for gasoline blending compared to its value for chemical production. In 2022 and 2023, the toluene value into octanes was higher than going into an STDP for BZ and PX production. Feedstock toluene imports are poised to fall in 2025, a factor that would narrow STDP margins and further hamper on-purpose benzene production in the US in 2025. By Jake Caldwell Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Viewpoint: US maintenance to limit EO, derivatives

31/12/24

News

31/12/24

Viewpoint: US maintenance to limit EO, derivatives

Houston, 31 December (Argus) — Multiple ethylene oxide (EO) and derivative turnarounds may limit US supply in the first half of 2025. At least six producers of EO and derivatives are expected to be down for maintenance in February-June. Some are just two weeks while others are 30-45 days. Most US EO producers are integrated to produce derivatives such as monoethylene glycol (MEG), diethylene glycol (DEG) and triethylene glycol (TEG). This dynamic has market participants anticipating the derivatives will feel the supply squeeze in the first half of the year. The producers with planned maintenance have the capacity to produce over 3mn metric tonnes (t) of ethylene glycol during the five months of turnarounds, according to Argus data. These supply limitations are expected to tighten the spot market more than the contracted volumes, as the US is a typically a net exporter of MEG, DEG and TEG. Any delays in restarts or unplanned outages could quickly change the US ethylene glycol supply picture. Additionally, multiple steam-cracker maintenance projects are planned for the first quarter of 2025, which will limit supply of feedstock ethylene and likely raise feedstock costs in the short term. Some market participants see the US entering the heavy turnaround season at minimum inventories. The US is still rebuilding stocks of EO derivatives such as MEG, DEG and TEG after constraints in September and October tightened supply. Some planned and several unplanned outages occurred in September that were not resolved until mid-October. During this time, spot supply was harder to find but seasonal demand was starting to slow, according to market participants. Despite these supply constraints, exports of MEG rose by 32pc to 312,800t in September compared to a year earlier. The US exported 317,900t of MEG in October, a 53pc increase on the year. Overlapping turnarounds in the first half of 2025 could slow exports as the US is typically a net exporter of MEG, DEG and TEG. Market participants anticipate first-quarter demand to be similar to the last three months of the year with the addition of some restocking activity. By Catherine Rabe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Viewpoint: European BD to face tighter supply in 2025

30/12/24

News

30/12/24

Viewpoint: European BD to face tighter supply in 2025

Houston, 30 December (Argus) — European butadiene (BD) supply is expected to tighten next year, according to market participants, because of scheduled steam-cracker closures and steady demand. European domestic demand this year helped spot prices maintain a 5-7pc premium to the monthly contract price (MCP) until December, when spot prices fell to parity with the MCP. But the lower BD MCP in December protected Europe's position as the lowest cost region after three consecutive price rollovers, even as US and Asian prices fell. Market sentiment is cautiously optimistic on consumer demand for early 2025. One producer noted that interest for spot volumes remains strong into early next year and export sales should remain resilient, especially once buying interest picks up after the Lunar New Year. European BD exports — which primarily flow to the Asia-Pacific region with one-offs to the US— were stable at nearly one shipment per month from April-December, although they were down from the prior year. Europe's BD exports totaled about 109,700 metric tonnes (t) so far this year, but there are ongoing discussions for one additional long-haul shipment loading in late December. That said, the spread between Europe and the US is forecast to remain closer to parity, narrowing the premium European sellers have obtained from moving shipments eastward. Both planned and unplanned cracker turnarounds in the US may raise prices there and open space for Europe's coastal producers to periodically capture preferred access to Asian buyers, independent of logistical bottlenecks. Currency, crackers may pressure demand Currency fluctuations may dent buyers' confidence in the coming year as a stronger US dollar lifts costs for imports, affecting selling prices of European-origin exports in dollar terms. The outcome of the US presidential election rallied the dollar against the euro and other currencies, as markets price in expected tariffs from the new US administration. The comparative strength of the US economy also drove the rally. Strong European domestic demand could undercut potential BD exports as the region's supplies gradually transition from net-long to more balanced, with ongoing structural changes transforming Europe's chemical business. The closure this year of two steam crackers in France and the Netherlands along with the planned shut down of two more crackers in Italy will reduce regional supply of crude C4, a key BD feedstock. Buyers in Italy will need to rely more heavily on Mediterranean imports of crude C4 in tandem with BD to maintain derivative operations. Cracker operators next year are likely to keep throughput curbed while running lighter feedslates, limiting availability of additional volumes of crude C4 and BD. Rail logistical constraints will linger into 2025 with at least three BD consumers depending more on this mode of transportation. The European market could see additional restructuring next year, with at least one producer weighing a review of its asset portfolio. Market participants also are watchful for announcements of unexpected closures. BD producers in the region are also concerned about price volatility for natural gas, citing weaker margins. Dutch TTF on a day-ahead basis averaged €44.66/MWh month-to-date in December, rising by 27pc from the same period a year earlier at €35.24/MWh. Dutch TTF on a day-ahead basis reached a year-to-date peak on 21 November at €48.58/MWh. Higher natural gas prices are partially due to continued complications in gas transport and supply and to accelerated storage withdrawals. By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Viewpoint: Braskem eyes Brazil rebound

30/12/24

News

30/12/24

Viewpoint: Braskem eyes Brazil rebound

Sao Paulo, 30 December (Argus) — Major petrochemical producer Braskem aims to recover market share in Brazil in 2025, aided by higher tariffs and new duties on imports, after nearly two years of losses. Braskem posted $935mn of losses last year, with additional losses of $440mn spread across the first three quarters of 2024. Looking ahead to 2025, Braskem expects to increase its domestic share of polyethylene (PE) and polypropylene (PP) markets in Brazil, in part through higher import tariffs. Brazil raised tariffs on imported polymers to 20pc from 12.6pc effective on 15 October. That has already benefited the company, with sales in the fourth quarter expected to increase by $30mn from the previous quarter, Braskem said in November. Additionally, with fewer imports, Braskem's operating rates for plastic resins are expected to rise in the first quarter from around 64pc during the seasonally weak fourth quarter. In addition to the higher tariffs, Braskem is asking Brazil to apply anti-dumping duties on US- and Canada-produced PE. This could reduce the amount of this material coming into Brazil, which has surged in recent years. The case is being investigated. Braskem has requested duties on PE imports of 21.4pc from the US and 26.9pc from Canada. This would mean a 20pc import tax, plus a 21.4pc provisional dumping duty, totaling a 41.4pc tax on materials purchased from the US, and 46.9pc on Canadian PE. To put the numbers in perspective, Brazil imported 1.82mn metric tonnes (t) of PE in January-November, a 45pc increase from the same period a year before. Of the total figure, 77pc was bought from the US and Canada. Brazil's PE imports in November alone fell to 106,200t, 39pc lower than October and the lowest this year, showing the initial impact of the higher import duties. Still, November PE imports were up by 6pc from the same month in 2023 despite the 20pc import duty as well as the US dollar's appreciation to the Brazilian real since October. The Argentina case Braskem has looked to neighboring Argentina to recapture part of the sales lost to imports in Brazil during the year. Braskem's PE sales to Argentina have increased monthly through October, when the company became the largest PE exporter to Argentina. Argentina PE imports in October increased by 39pc from the same month in 2023, reaching 24,300t, a boost attributed to the reduction in the country's import duty to 7.5pc from 12.6pc in September. Brazil sold 46pc of that total, leading the market. North America lost its first position, falling to 42pc in October from 54pc a year earlier. January-October PE imports into Argentina fell to 226,800t, down by 19pc from the same period in 2023, with North America's share at 44pc and South America — represented solely by Braskem — at 39pc. Executive reshuffle As part of its efforts to become more competitive, Braskem reshuffled its executive board, aiming to improve operational efficiency and cost management. The company's new chief executive, Roberto Ramos, stepped into his role in early December, succeeding Roberto Bischoff. Ramos previously served as Braskem's vice president from 2002-2010. Ramos almost immediately announced changes for the positions of chief financial officer, head of the olefins and polyolefins South America unit, Brazil and global industrial operations, and Mexico and US operations. At the time, Braskem said that changes in the board would not affect plans for a possible sale of infrastructure company Novonor's controlling share in Braskem, Novonor said. Braskem's sale is of extreme importance to Novonor as it plans to use any proceeds to repay R14bn ($2.34bn) in debt to creditors. Braskem is the largest producer of thermoplastic resins in the Americas and a leader in biopolymer production. Fellow conglomerate Novonor holds a 38.3pc stake in Braskem with 50.1pc of voting shares, while Brazilian state-controlled oil company Petrobras holds a 36.1pc share with 47pc of voting capital. The remaining 25.6pc is split among other shareholders. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more