These effects are largely attributed to the cost of the raw materials which squeeze the margins of large commodity chemical producers. The trend in 1996 was one of increasing costs for raw materials. A survey of CMA members has found them in an optimistic mood, hoping for continued improvement in 1997, reports Lenz. The Standard and Poor's chemical index is comprised of 10 major chemical companies. The stock prices of chemical producers tends to correlate with the state of the US economy.
Manufacturing is the largest end user of chemical products.
The key to the US chemical industry is export and globalization. US investment in foreign plants will lead to increased usage of US produced goods and an increase in revenues for the US chemical producing companies. Almost all of the larger firms target most of their investments in North America. One sector of chemical manufacturing is water treatment chemicals. Water treatment chemicals include large volume commodity chemicals, as well as specialty chemicals and proprietary formulations sold on performance basis.