Fed notes healthy US demand for PVC.
Petrotahlil - US demand for polyvinyl chloride (PVC) was healthy during the past several weeks, the Federal Reserve said on Wednesday in its periodic survey of business conditions.
The Fed released its comments its Beige Book, a summary of US economic activity during the past six weeks among the 12 districts.
The latest Beige Book is based on information collected on or before 4 January.
The Federal Reserve received the comment about PVC in its Dallas district, which includes Texas and northern Louisiana. Demand for the resin was being driven by construction.
Demand for plastic packaging remained very strong, the Fed said.
Manufacturing in the district continued to recover in December, with growth being led by nondurables, particularly petrochemicals, the Federal Reserve said.
Despite the recovery, nearly half of the manufacturers contacted by the Fed in the Dallas district said that revenues were still below normal. The majority expect sales will increase in 2021, with growth peaking in the third quarter.
For crude production in the Dallas district, business activity increased for the first time since the coronavirus pandemic, the Fed said. The increase was noted in the oilfield services sector as well as in exploration and production.
In the Atlanta district, the Fed heard anecdotes of renewed interest for some of the stalled petrochemical expansion projects in the district. The same goes for liquefied natural gas (LNG) export terminals.
The Federal Reserve did not specify the state, but these projects are likely in southern Louisiana, given its large chemical and energy base.
The Atlanta district also includes southern Mississippi as well as all of Alabama, Florida, Georgia and Tennessee.
For refineries in the Atlanta district, output remained low and demand for oil and fuel remains weak.
For the US as a whole, most districts reported a modest increase in economic activity.
In some districts, retail sales fell and demand for leisure and hospitality services declined, mainly because of the surge in cases of the coronavirus.
More consumers continue to shift towards online shopping.
Manufacturing continued to recover in nearly all of the districts, despite reports of problems with supply chains.
Residential real estate remained strong, while commercial real estate remained weak.
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