Slump hits gas-based petrochemicals: Producers of ammonia, urea, methanol, and formaldehyde now hope to merely match last year's production and avoid losing money

The leading small-molecule petrochemicals made from natural gas got away with surprisingly good business through 1980 and part of 1981 while recession hit most of the U.S. chemical industry. Now they are slumping too. And their outlook for the next five years appears to have worsened radically. Blame recession with anemic fertilizer, housing, and fuel markets. Blame steadily rising costs of U.S. natural gas. Blame a little overinvesting by producers. And blame a rising tide of imports. For 1982, U.S. producers of ammonia, urea, methanol, and formaldehyde now hope just to match 1981 production. Beyond that, their hopes are few. This year might be the last one in some cases for maintaining even the current production level. Producers are holding their breath on profitability and hope they don't lose money on 1982 production when all the costs are in. Two breaks might help a bit—declines in inventory and interest costs. ...