Chemical and Material Shortage Alert – April 2016

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is April 2016.

Section I below lists those chemicals and materials that were on the previous month’s Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the March 2016 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the March alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   None

Section II.   Shortages Reported in April not found on the Previous Month’s List

Steel:  Indonesia, Malaysia; supply not keeping up with demand

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none

2.  Production not keeping up with demand: none

3.  Government regulations: none

4.  Sources no longer available: none

5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  steel

Comparisons between Commodity, Engineering, High Performance, and Ultra Performance Polymers

Table 1 shows approximate global market values, global consumption levels, and average prices for four broad polymer categories: commodity; engineering; high performance; and ultra performance.

Table 1	2015 global market (US dollars)	2015 global consumption (metric tons)	average price (market/consumption)
commodity	$ 323,000,000,000	225,000,000	$              1,436
engineering	$    77,000,000,000	27,000,000	$              2,852
high performance	$      8,500,000,000	800,000	$            10,625
ultra performance	$          500,000,000	5,000	$         100,000
total	$ 409,000,000,000	252,805,000

The market values and consumption levels are based on data found on the Internet.  The market value and consumption levels reported on the Internet very quite a lot.  The amounts shown in the table are what I consider to be the most likely amounts based on my analysis of what was found on the Internet.

The average prices shown in the table are simply the market values divided by the consumption levels.  The prices shown in each category agree reasonably well with prices found on the Internet for polymers.  This reasonably-well agreement for prices suggests the validity of the market and consumption amounts shown in the table.  Also the total global market value ($409 billion) and the total global consumption amount (252.8 million metric tons) agree reasonably well with amounts found on the Internet for these totals.

Polymers in the commodity category include:  polyethylene; polypropylene; polyvinyl chloride; and polystyrene.  Polymers in the engineering category include:  polycarbonate; acrylonitrile butadiene styrene; polyethylene and polybutylene terephthalate; polyacetal; and polyamide.  Polymers in the high performance category include: polyether imides; polyether sulfone; fluoropolymers; liquid crystal polymers; and specialty nylons. Polymers in the ultra performance category include; polyetheretherketone; polyaryletherketone; and polyamide imides.

Table 2 below shows the percentages for each category of the total market value and the total consumption amount (e.g., $323 billion/$409 billion)..

Table 2	total global market (US dollars)	total market value as percent of total market value	global consumption (metric tons)	consumption amount as percent of total consumption amount
commodity	$ 323,000,000,000	79.0%	225,000,000	89.001%
engineering	$    77,000,000,000	18.8%	27,000,000	10.680%
high performance	$      8,500,000,000	2.1%	800,000	0.316%
ultra performance	$          500,000,000	0.1%	5,000	0.002%
total	$ 409,000,000,000		252,805,000

A principle difference in the polymers from category to category is the degree of strength that the polymer has against chemical, thermal, mechanical, and other attacks on the polymer.  The higher the strength, the lower the damage on the polymer; the higher the strength, the higher the cost to develop the polymer – both factors that influence price.

Gross Profit Margin Percentages for Chemical Distributors

According to the National Association of Chemcial Distributors (NACD), approximately $31.2 billon of recent US chemical sales is through chemical distributors.  (Click here to read about NACD and the chemical distribution industry.)

Also according to NACD, the chemical distribution industry had approximately $14.3 billion in gross profits in 2015, based on data found at their website.  (Click here to go to the NACD page from where this data can be found.)  Using $31.2 billion chemical sales through chemical distributors and the distributors’ $14.3 billion gross profit gives a gross profit margin percentage (gpm%) of 46% ($14.3B/$31.2B).

This gpm% (46%) seems rather high.  For example, two publicly-traded chemical distributors, Brenntag and Univar, only averaged a gpm% of around 20% over the past few years.  Most chemical distributors are private companies with  a lot less in revenues than Brenntag and Univar.  Perhaps smaller, private companies are able to generate larger gpm%s than the larger, publicly-traded companies, at the expense of those buying chemicals from chemical distributors.

Chemical and Material Shortage Alert – March 2016

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is March 2016.

Section I below lists those chemicals and materials that were on the previous month’s Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the February 2016 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the February alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   Monoethylene glycol (MEG): global; production not keeping up with demand

Section II.   Shortages Reported in March not found on the Previous Month’s List

Gasoline:  Nigeria; production not keeping up with demand

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none

2.  Production not keeping up with demand: gasoline

3.  Government regulations: none

4.  Sources no longer available: none

5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none