Dow: Considering big investment after China-US trade situation is clear

In recent news, the Dow CEO said on Thursday that Dow hopes to further clarify how the trade relationship between the United States and China will develop before pursuing large-scale chemical projects.

Dow CEO Jim Fitterling said: "We are still far away from large projects. I think it's too early." At the investor webinar hosted by Sanford C Bernstein, he made his comments.

He said: "Before we start thinking about a large export-based project, I want to see how global trade develops and how the trade relationship between the United States, China and the rest of the world develops."

The United States and China have imposed tariffs on a large number of their imported products, including many products such as chemicals and plastics. After the two sides reached the first phase of the trade agreement, trade tensions have eased, but it is not clear whether the two sides can fulfill their import commitments under the agreement.

Other disputes between the two countries can be manifested through more trade restrictions.

Fitterling said the trade climate may cause other chemical companies to hesitate before undertaking any large-scale projects.

"If we have a trade dispute with China for a long time, I think anyone who is working on a large capital expenditure project will say, 'Wait a minute, we'd better wait and see how to resolve it from trade.'" Fitterling said.

He didn't know what kind of factory it was, but he made his comments in a broader discussion about polyethylene (PE).

In other words, Dow has been thinking about how the next wave of chemical expansion will take place once demand rebounds and the market tightens.

Fitterling said: At present, the Dow silicone business is one of the most attractive investment areas. These materials have different grades of quality and can be used in a variety of products.

He said Dow also hopes to increase its plastics business. About 25% of them are functional products that Fitterling said. These include elastomers and high-end materials. This makes them less sensitive to fluctuations in oil prices, so their prices are less volatile.

He said that anything Dow can do in the polyurethane field will benefit the isocyanate and polyol fields. Paints, adhesives and sealants are also very attractive.