Dow CEO Sees Chemicals in Americas Resilient Despite Gas Crunch
Dow CEO Sees Chemicals in Americas Resilient Despite Gas Crunch
(Bloomberg) -- Chemical manufacturers in North and South America have an advantage over rivals in Europe and Asia contending with unprecedented rallies in natural gas and oil, according to Dow Inc. Chief Executive Officer Jim Fitterling.
Prices for plastics such as PVC surged to records earlier this year as a winter freeze and summer hurricanes shuttered factories along the U.S. Gulf Coast amid escalating consumer demand. U.S. gas touched a 12-year high earlier this week but Europe and Asia are enduring even more dramatic price increases.
“What’s going to happen through the winter here is it’s going to push the high-cost producers’ costs up, whether it’s oil price or gas price,” Fitterling said during a conference call on Wednesday.
North American ethane, a gas and oil byproduct that makes the building blocks of plastic, has more than doubled this year to more than 46 cents a gallon, the highest in three years, according to data compiled by DTN Energy.
“The United States is still going to be advantaged, Canada is going to be advantaged, I would say all of the Americas, Argentina as well,” Fitterling said. “This is a short term thing that’s happened, not unlike other supply chains where the demand is much stronger than many people expected and the supply has lagged because we shut the economies down last year.”
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