Initial casualty of US-China trade war
As the US$250bn US trade tariffs implemented US$110bn from China, events have started showing up and some early casualties were noted in the trade war. In the US, chemical projects that are export-oriented and planned with the huge China market in mind, their owners are now reviewing these plans.
On 27 September, Austria’s Lenzing announced that it has shelved plans for construction of a specialty (Lyocell) fibre plant at Mobile, in the US state of Alabama. It cited the rising likelihood of increasing trade tariffs, paired with the surge in construction costs due to the buoyant US labour market, as reasons for its decision. The 90,000 ton a year project, announced in 2016, entailed a US$293m investment with completion scheduled for the first quarter of 2019. Lenzing had claimed it would be the largest Tencel lyocell fibre plant in the world.
In early September, the American Chemistry Council observed that 333 US chemical projects worth US$202.4bn in total were announced since 2010. Of these, 53% were complete or underway, while 41% of projects are still in the planning phase. These projects rely increasingly on export markets apart from the availability of cheap and abundant ethane and other natural gas liquid feedstocks.
