News of the Week
SIGNS HINT AT SLIP IN CHEMICAL RECOVERY U.S. chemical companies steamed through the late summer and fall of 1980 on a decided pickup in business after the recession crunch of last spring. However, even at the time, progress was somewhat jerky, and many executives warned that there could be more declines as well as upswings before a solid recovery takes hold. Unfortunately, a number of signs in the past few weeks hint that slippage has indeed hit the chemical industry's rebound. Leading-indicator product areas, especially polymers, have broken their rapid upward march with small increases or declining volume. Industrywide data show a similar hesitation in basic chemical shipments in late fall. And broader surveys of purchasing trends and consumer sentiment give the worst news of all—a sharp dropoff in new manufacturing business and consumer confidence in December. As a result, skepticism is increasing on the financial health of basic chemicals this winter. In particular, the wave of price increases due this month is more and more under downward pressure (see C&EN, Jan. 5, page 12). Gulf Coast sources say many of the increases could be trial balloons resulting in heavy discounting or cancellations. Some may be delayed. Already, the spot price of benzene, regarded as solid only a month ago, has drifted down several cents from
Inventories/shipments ratio is higher than year ago lnventories-to-shipments ratio3 1.60
Chemicals |
and allied. products
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1979 a Seasonally adjusted.
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C&EN Jan. 12, 1981
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its former $1.80-per-gal level. And it is commonly expected that a price increase in ethylene will be discounted possibly 50% to give a figure of perhaps 24 cents a lb. Such a price retreat, if it continues, would indicate considerable market weakness. Chemical companies face sizable cost increases in oil and natural gas raw materials and would not be giving ground on product prices without a lot of pressure from soft markets and their own excess plant capacity. Company spokesmen say it is too early to pin down the pattern of new orders in 1981, but they are increasingly cautious. Their caution arises from regularly published data from several sources showing what happened from October through December, and, of course, the cost of borrowing has gone through a scary bulge with soaring interest rates. Although the latest data could represent blips in a solidly upward curve, there are a lot of them. For example, in polymers, synthetic fiber shipments in November slipped 4% from October after three months of good gains, according to the Textile Economics Bureau. And plastics sales, although still rising, slowed way down in October, according to data from the Society of the Plastics Industry. Overall chemical industry figures from the Commerce Department show a similar 4% dip in industrial chemical shipments in November from October, with a 3% rise in inventories. For the chemical industry as a whole, November shipments remained nearly the same as in October after rising every month since the recessionary pit in June. Overall chemical inventories also rose in November after falling steadily in recent months. More hints of forced inventory increases emerge in the December survey of the National Association of Purchasing Management. NAPM thinks it knows why—the steepest month-to-month drop in new orders in manufacturing since World War II. Except for one month in 1973, the same holds true for the production drop in December. "The brakes are on hard," NAPM concludes. Although the chemical production situation is buried somewhere in NAPM
data, the overall statistics cannot be comforting, since most chemicals are sold to other parts of manufacturing. Another jolt from a December survey comes from the Conference Board's monthly sampling of consumer sentiment. Consumer confidence sank 11 points from November on the Conference Board's index to a reading of 72.5 (1969-70 = 100). The index had risen the previous six months. Conference Board director of consumer economics, Fabian Linden, comments: "Before there can be a convincing economic recovery, there must be a strengthening in consumer expectations and in their wherewithal to spend. Both of these factors, which seemed to be gaining strength only a month or so ago, now appear to be receding." For the record, not all survey results are negative. For example, business chief executives polled by the Conference Board, including a separate category of chemical executives, have scored a big jump in their own confidence in the U.S. economy. •
Most science societies lack ethics strategies There is little evidence of formal strategies for implementing or enforcing ethical rules in scientific and engineering societies. This is the conclusion of a justreleased report by the Professional Ethics Project of the American Association for the Advancement of Science. The project, funded by a grant from the National Science Foundation and the National Endowment for the Humanities, surveyed the professional ethics activities of the scientific and engineering societies affiliated with AAAS. The survey found that the societies appear to share a common assumption that complaints involving ethical concerns or code violations should be handled in an informal and private manner. There is much interest but few visible programs in the professional societies directed toward encouraging attention to ethical concerns in science and technology.
For its survey, the project defined "ethics" as "those rules that are intended to define the rights and responsibilities of scientists and engineers in their relationship with each other and with other parties including employers, research subjects, clients, students, etc." Of more than 170 AAAS-affiliated societies responding to the survey, 46, or about 30%, have adopted their own ethical rules of conduct, most commonly in the form of codes of ethics. About half represent social and behavioral sciences and medicine and health sciences. Less than half the societies reported that they had sanction procedures available to enforce their ethical rules. An informal reprimand is the most frequently applied sanction. The report highlights selected ethics activities from 13 societies including excerpts from ethical codes and procedures for investigating complaints. Included is the American Chemical Society's "Professional Employment Guidelines." Among its recommendations, the project suggests that societies distinguish between broadly defined ethical principles and more narrowly prescribed rules of conduct in their formal ethics statements. Indeed, on the basis of survey replies, the working definition of ethics had to be modified by changing "principles" to "rules." The report notes that, increasingly, the professions and the public have become aware of the ethical concerns associated with the development and use of science and technology. This, in turn, has prompted a widespread re-examination of the present status of professional self-regulation and has stimulated interests in the ethics activities of the professional scientific and technical societies. •
Misleading cloning reports circulated Misleading reports about the first cloning of mice were widely circulated last week. Those reports revolved around research of Karl Illmensee and his colleagues at the University of Geneva in Switzerland in collaboration with Peter Hoppe at Jackson Laboratory in Bar Harbor, Me. Their research is now being published in the journal Cell, but was made public at scientific meetings at least 18 months ago (C&EN, July 30,1979, page 19). The research of Illmensee and
Hoppe is best described as nuclear transplant manipulations of mouse cells. Those manipulations are skillful, and they represent significant progress toward understanding how mammalian cells work. However, they do fall short of being outright cloning, which would involve producing mature mice from a single cell of another mature mouse. The scientists doing the nuclear transplantation research have not claimed success at mouse cloning; it is just that accounts of their research have been misinterpreted. The actual experiments start with mouse cells obtained from early embryos, called blastocysts, having a total of 64 cells. One such cell is injected into a fertilized egg cell, obtained from a genetically distinct mouse. The technique for the injection is painstaking, and Illmensee has developed delicate procedures to prepare the recipient egg cell properly. Afterward, the sperm and egg
nuclei are removed from the recipient cell, leaving only the transplanted nucleus that had been obtained from the embryonic cell. Next, that newly amalgamated cell is implanted in the uterus of another mouse, a foster mother of yet another genetic makeup. In a very few cases so far, such an egg cell has developed more or less normally into a mouse. Genetically and biochemically, such mice (there have been at least three) display the properties derived from the embryo cell nucleus, indicating the success of the transplant. The mice produced this way do not have the genetic makeup of either the mouse that supplied the egg cell (used to receive that nucleus) or the foster mother. Illmensee has said that such experiments ought not to be undertaken in man, and that their value resides in what can be learned about normal and abnormal cell development. •
Industry continues to cut energy demand The U.S.'s 10 most energy-intensive industries are continuing to reduce their energy demand, with the chemical industry emerging as a leader in industrial energy conservation, says the Department of Energy in a report to Congress. The chemical industry is one of the largest consumers of energy among U.S. industries. In 1979 the 171 chemical companies reporting to DOE through the Chemical Manufacturers Association used a total of more than 3.8 quadrillion Btu of oil, natural gas, electricity, and other fuels, excluding feedstocks. But the chemical industry's successful push for energy conservation is illustrated by its total energy consumption rising only 3.37% since 1972, while production output increased almost 28%. The other industry sectors are not doing so well as the chemical industry, but all are successfully conserving, DOE says. The absolute level of energy consumption by the 10 industries has fallen 2.25% since 1972; at the same time output in manufacturing industries has risen more than 17%. Total energy savings amounted to 2.2 quadrillion Btu per year. In other words, the reporting industries would have consumed an additional 1 million bbl of oil per day to achieve their 1979 product output if they were still operating at 1972 levels of energy efficiency. Companies in the reporting industries have reduced their natural gas consumption 14% since 1972 and
residual oil use has declined almost 5%, the result of an evident trend toward more reliance on electricity. However, there is no indication, DOE says, of any emerging trend toward direct substitution of coal for primary fuels. Although progress has been made, DOE warns that industrial energy conservation is at a turning point. The industry sector now uses about 37% of the nation's total energy and could be using 50% by 1990. To offset
Chemical industry has exceeded energy goals, increased output Energy isavings3 1986 1979 target actual
Machinery, except electrical Transportation equipment Chemicals and allied products Fabricated metal products Textile mill products Paper and allied products Food and kindred products Petroleum and coal products Stone, clay, and glass products Primary metals
Change In output*
24.7%
15%
34.3%
23.4
16
-28.8
22.1
14
34.3
21.5
24
8.2
17.7 16.9
22 20
19.8 26.6
15.3
12
23.7
14.7
12
36.6
12.9
16
20.6
7.8
9
-9.0
a Reduction in energy demand per unit of output based on 1972 ef, ficiencies. b Compared to 1972 levels.
Jan. 12, 1981 C&EN
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