MOSCOW (MRC) -- Dow Chemical, one of the largest US petrochemical companies, saw packaging, construction materials and coatings, industrial and electronics markets surge in the second quarter amid strong demand and higher chemical and resin pricing, reported S&P Global with reference to CFO Howard Ungerleider's statement July 22.
"Strong consumer trends continue in retail, housing, and the manufacturing sectors and inventory levels remain low across most of our value chains," Ungerleider said during the company's Q2 earnings call. "We expect these dynamics to continue to support price strength in (Q3) as the industry works to fulfill pent-up demand."
The company reported USD1.9 billion in profits, up from a USD225 million loss in Q2 2020, when demand cratered for many products amid the height of coronavirus pandemic-related shutdowns in many global regions.
While some coronavirus restrictions remain or have resurfaced amid the spread of the delta variant, demand has largely roared back for single-use and durable plastics, polyurethane foam, electronics, and industrial uses as vaccinations and economic activity increase.
At the same time, downstream converter and brand owner inventories "remain at all-time lows, with balances very tight," Ungerleider said, on continued fallout of the deep freeze that hit the US Gulf Coast and much of the US in mid-February, forcing weeks-long shutdowns of petrochemical plants.
"Around the world, increasingly positive trends indicate we remain in the early stages of economic recovery with an extended runway for growth," he said.
While industrial production is up nearly 20% over the year-ago low, it has not reached pre-pandemic levels, Ungerleider said. He also noted that retail inventory to sales was at its lowest levels in more than 30 years, and strong demand continued to counter near-term restocking efforts.
US housing starts also show continued growth amid a limited supply of single-family homes after a decade of underbuilding, he said. And the slow-to-improve personal care market showed a rebound in Q2, with higher sales of cosmetics and beauty products as consumers return to offices, he noted.
"We anticipate the strong demand we experienced in (Q2) across our polyethylene, polyurethane, acrylic, and silicone chains to extend through the second half of 2021," Ungerleider said.
As MRC wrote earlier, Dow Chemical began the process of restarting operations at its cracker No.7 in Freeport (Freeport, TX, USA) on 19 July, 2021, after a technological disruption on 4 July, 2021.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased.
Dow Chemical is an American diversified chemical company headquartered in Midland, Michigan. It is a major manufacturer of polymer products, including polystyrene, polyurethane, polyethylene, polypropylene and synthetic rubbers. The company produces more than five thousand products at 188 production facilities in 37 countries.