The Chemical World This Week

Chemical & Engineering

NEWS SEPTEMBER 5, 1966

Chemicals resist housing slump If new housing starts this month follow the downtrend that has brought about a drop of 40 % since January 1964 (and a six-year low in July), the chemical industry could feel a pinch in its build­ing products operations. Reactions to the sharp July decline from the indus­try are, at the moment, mixed. Mon­santo, for instance, finds its building-products sales affected. Others don't. What perpetuates optimism among chemical and plastics producers in­volved in building products is that in­dustrial construction is booming.

Total private housing starts fell 16.4% (seasonally adjusted) in July from the previous month. After four months of decline, housing starts are almost 30% below the 1965 average, according to the Department of Com­merce. Permits (new private housing units authorized) in July dropped by 5.4% and are 27.5% below the 1965 average.

The chemical industry's stake in construction is large. In plastics alone, the industry supplied 2.7 billion pounds of material (valued at $505 million) last year to all construction. No breakdown is available on how much went into private residential housing. In 1964, the figure was 2.4 billion pounds, valued at $450 million. By 1970, predicts the Society of the Plastics Industry, total use of plastics in all construction will be between 6 and 7 billion pounds.

Edmond S. Bauer, director of mar­keting for Monsanto's plastic products and resins division, sees the drop in housing starts as having had a "de­pressing effect for some of Monsanto's business." Tight money has not only held back starts in residential hous­ing, he says, but has affected sales of products for remodeling, maintenance, and repair.

Although it is difficult to determine how much of any building material goes into private residential construc­tion and how much into industrial construction, Mr. Bauer senses that the effect of the drop in housing starts might have been worse if there were not such a boom in industrial construc­tion. Total sales to the construction industry remain at a high level for Monsanto. But the future residential

construction market is not viewed as optimistically as it was before the tight money situation.

William D. Herbert, director of marketing, residential construction for Allied Chemical's Barrett Division, says that tight mortgage money has re­sulted in curtailment of Allied's build­ing-product sales (about 8% of Al­lied's total sales) for the residential market. This holds for all of the Bar­rett Division's products (ceiling tile, roof insulation, gypsum wall board, in­terior and exterior siding, urethane insulation, and rigid vinyl and poly­ethylene pipe). However, Mr. Her­bert says, home remodeling is another story. Contrary to Monsanto's experi­ence, Allied has had an increase in sales to the home remodeling business and expects this increase to be even greater in the coming months.

When Secretary of Commerce John T. Connor predicted last year that 1966 would be the biggest year for construction in U.S. history, he warned that, among the larger construction categories, only private housing "shows prospects of slow growth in 1966." He anticipated a level of 1,565,000 new units this year, only 40,000 more than in 1965. But, as if not to daunt house builders (and their suppliers)

too much, Mr. Connor said this small advance might mark the beginning of a long upward swing through the re­maining 1960's and into the 1970's. House builders may now be wonder­ing about that upward swing and when it may come.

The chemical industry won't admit to having come to the wondering stage quite yet, even though housing starts fell to 1,064,000 units (seasonally ad­justed) in July. Johns-Manville Corp., a major supplier to the construction in­dustry, notes that although residential housing starts are down, industrial, commercial, and institutional construc­tion is up. Since many building prod­ucts go into all of these areas, the slow­down in residential housing has pretty much been offset by the boom in the other areas.

The drop in housing starts can be attributed to a number of reasons-climatic, demographic, and economic. The biggest, not surprisingly, is money. Major banks have already raised lend­ing rates to 6%. The prime rate was 4 x / 2 % last December. Since this prime rate is applied to loans made to a bank's most credit-worthy customers, it's apparent how expensive money has become.

Another indication of how expensive

Residential housing starts take nosedive

Millions of units 2.5

1960 ' 1961 ' 1962 ' 1963 • 1964 ' 1965 Sources: Department of Commerce, Federal Housing Administration, and Veterans Administration

1966

SEPT. 5, 1966 C&EN 17

Plastics in construction Residential down, total up

money has become comes from the United States Savings and Loan League. Mortgage loans made in July totaled SI.2 billion (based on 664 as­sociations holding 40% of the total as­sets of the savings and loan business). In July 1965, mortgage loans totaled $2.2 billion. And the July 1965 figure was an eight-year low for dollar vol­ume of mortgage lending. The league pessimistically predicts that declining loan commitments indicate the drop will continue in the coming months.

Pollution fight sells chemicals The current industrial and legislative assault on pollution in the U.S. will create new chemical and equipment markets and substantially alter existing ones—conservatively, to the tune of $2.33 billion per year in the next dec­ade for potential air cleanup and a to­tal of S20 billion by 1985 for water de­contamination. With this prediction, Dr. I. A. Eldib and John D. McKenna of Eldib Engineering & Research, Inc., Newark, N.J., launched into a report on pollution-centered chemicals and equipment at the conference on pollu­tion legislation held at Fairleigh Dick­inson University, Madison, N.J.

In water pollution, Dr. Eldib points to increased use of some chemicals in sewage treatment, an intensified search for phosphate-treatment materials and phosphate substitutes, a surge in neu­tralization and scum-removal chemi­cals for industrial water processing, and a possible future boom in coagu­

lants and other chemicals for advanced (tertiary) waste-water treatment.

At the same time, the consulting chemical engineer foresaw a major de­crease in the use of chlorine for sewage treatment (excluding tertiary dis­posal), a legislative pinch on DDT and other pesticides, and a possible decline in linear alkylsulfonates (LAS, now $165 million per year) and alkylphe-nol nonionics ($30 million per year) at the hands of more easily biodegrad­able compounds.

In air pollution, Mr. McKenna fore­sees stepped-up competition by new antiknock mixtures for tetraethyHead's $320 million yearly market, a possible $60 million annual increase in other additives for new gasoline formulas, favorable economics for catalytic oxi­dation or absorption compounds in the removal of pollutants from flue gases, and potential displacement of internal combustion engines by electrochemi-cally driven power units.

Dr. Eldib says that total water use in the U.S. today comes to 1380 gal­lons per person per day. Only 7% of this is actually taken up in the home and in cities; the remainder is divided about equally between industry and irrigation.

At present, 18Vc of U.S. sewage is processed by primary waste treatment, 3 4 ^ by secondary treatment, 34% by disposal in septic tanks, and 14% by miscellaneous means or with no treatment at all. This situation is not satisfactory, Dr. Eldib says, especially in already heavily polluted areas such as the regions around Lake Erie and along the Hudson River.

The consultant notes that the entire water course from Albany, N.Y., to the Narrows could be flatly classed as pol­luted. The river must somehow ab­sorb waste, 43% without treatment and 38%? with only primary treatment, from a population equivalent of 10 million persons.

This situation and others like it lead Dr. Eldib to predict that sewage treat­ment plants will enjoy a construction wave of at least $7 billion in coming

years. This, in turn, will double the volume of ferric chloride (for sludge filtration) and calcium oxide (for neu­tralization) in the 1980's. However, since secondary treatment plants re­quire less chlorine to purify effluent, chlorine use (not including tertiary treatment) will probably be cut in half. Other chemicals affected will include activated carbon (taste con­trol); aluminum sulfate (coagulation); and anhydrous ammonia, calcium hy­droxide, and sodium carbonate (neu­tralization) .

Adding a note of caution, Dr. Eldib says that the relative percentage of chemicals in sewage plant operating costs will remain small. For instance, the Detroit disposal system has needed only about 5% of total operating ex­penditures for chemicals in recent years.

In industrial purification, however, chemicals should play a greater per­centage role, Dr. Eldib estimates. There will be a large demand for neu­tralization compounds and water-con­ditioning materials in oil and scum re­moval. In addition, industry should be attracted by strong cost incentives, since industrial waste treatment con­serves money spent on feed water (by recycling), reduces charges for me­tered sewage, and brings credits for recovered chemicals. Irrigation and other agricultural waters may also be regulated indirectly by substituting degradable pesticides for DDT.

For the long run, Dr. Eldib sug­gests that advanced waste treatment may prove both necessary and econom­ically desirable in about 15 years. It could result in complete renovation and re-use of water by the year 2000. To work, such treatment would have to remove inorganic nutrients (partic­ularly those containing nitrogen and phosphorus) from single-use water and, in addition, remove organics from water being recycled.

Advanced treatment would open vast fields for application of such mate­rials as ion-exchange resins, coagula­tion and sedimentation chemicals, ab-

Chlorine in sewag* B treatment may drop nearly 5 0 %

Chemicals'1

Chlorine Ferric chloride Lime

1965

1980 a Use in million pounds per

276 31 168

143 62 336

year for primary and secondary treatment

18 C&EN SEPT. 5, 1966