In this week's Chemical Market Reporter

24 February 2003 00:30  [Source: ICIS news]

Top Headlines

PP tight on strong demand and feedstock pressure

The market for polypropylene (PP) is tightening rapidly in the wake of high feedstock costs, propylene outages and stronger than anticipated demand. Producers are confident that they will see a second consecutive year of robust growth and improved pricing. Analysts are more guarded and caution that the market's health in the second half of the year will depend on the overall strength of the US economy. If the economy holds up, PP will indeed enjoy a strong year but if the economy falters, the polymer's demand and pricing could fall off in the second half.

Health of US economy appears tied to energy

The strength of the US chemical industry in 2003 will largely depend on the health of the domestic economy and the outlook for the economy remains unclear. Most indicators are positive but energy costs have gotten very high.

Chemical stock rally fizzles as shares slide to new lows

Following a robust rally off their October 2002 lows, chemical stocks have fizzled once again. Early hopes of a sustained economic recovery in first half 2003 have been dashed by geopolitical instability and the resulting elevated energy and feedstock costs. Earnings uncertainty prevails, as some key companies have pulled back on giving guidance on future earnings.

White House plans for protecting US infrastructure

The White House has released a plan for protecting the nation's critical infrastructure that directs US agencies to work with Congress to develop legislation reducing the vulnerability of chemical plants to terrorist attacks. The administration's National Strategy for the Physical Protection of Critical Infrastructures and Key Assets notes that currently there is no clear legal or regulatory authority at the federal level to help ensure comprehensive, uniform security standards for chemical facilities.

ACC urges Congress to boost domestic natural gas production

The chemical industry is urging Congress to look for ways to promote abundant and diversified sources of domestic energy, including natural gas, coal, nuclear and cost-competitive renewable sources. In a letter to the chairmen of various House and Senate energy-related committees, American Chemistry Council (ACC) president Greg Lebedev notes that chemical manufacturers, the largest industrial consumers of natural gas in the US, have been severely affected by the steep increases in natural gas prices.

Cyber security initiative launched

The Chemical Industry Data Exchange (CIDX) Initiative on Cyber-security Practices, Standards and Technology (CIDX Cyber-Security Initiative) held its first organisational meeting earlier this month in Baltimore, Maryland. The initiative was jointly launched in early January in conjunction with the Chemicals Sector Cyber-Security Information Sharing Forum. The Forum, created in early 2002, consists of ten chemical industry trade associations representing more than 2000 companies.

CIDX moves forward with cyber security initiative

The Chemical Industry Data Exchange's (CIDX) cyber security initiative is off and running as it capitalises on momentum achieved at its launch meeting held earlier this month in Baltimore, Maryland. The Chemicals Sector Cyber-Security Practices, Standards and Technology Initiative, which operates as a newly formed business unit within CIDX, focuses specifically on cyber security. It was formed in January by CIDX and the Chemicals Sector Cyber-Security Information Sharing Forum.

In the News

Harmonised health claims could benefit functional food makers

Tough regulatory barriers are delaying the European introduction of functional foods with active ingredients that promise specific health benefits. Some products are having their national launches pushed back for years.

Toxic pollution linked to serious health effects, activists charge

US industries annually discharge several billion pounds of toxic chemicals linked to cancer, reproductive and developmental disorders and other health problems, activists charge in a new report.

Kemira to spin off Agro as Kemira GrowHow

Kemira is establishing its former Agro operation - now called Kemira GrowHow - as an autonomous, financially independent entity that could shortly have a different shareholder structure from its parent.

NSP, Enzon to merge in $1.6bn deal

NSP Pharmaceuticals and Enzon Pharmaceuticals have agreed to a merger of equals involving a stock-for-stock transaction with a combined value of around $1.6bn (Euro1.48bn), based on the closing share prices of both companies before the announcement.

Transformed Degussa ready for growth

Two years after the merger between Degussa-Huls and SKW Goldschmidt, the new Degussa is poised to become a greater force in the global specialty chemicals industry. Through the merger of four companies - Degussa, Huls, SKW and Goldschmidt - the new Degussa has nearly completed its massive divestiture program and has made select acquisitions toward a path of growth.

Dynea to renegotiate loan terms

After experiencing an unexpectedly poor fourth quarter last year, Dynea International had to renegotiate credit arrangements to avoid breaching financial covenants.

Clean power bill seen as ill-conceived

US manufacturers are criticising as "ill-conceived" and "overly stringent" legislation reintroduced in the Senate that would require US regulation of carbon dioxide and other pollutants. The bill, sponsored by senators Jim Jeffords (Independent-Vermont) and Joseph Lieberman (Democrat-Connecticut), would force power producers to make significant cuts in emissions linked to smog, acid rain, respiratory disease, mercury contamination and global climate change.

Koch Nitrogen to buy Farmland assets

Koch Nitrogen, based in Wichita, Kansas, has signed agreements with Kansas City, Missouri-based Farmland Industries to buy most of Farmland's nitrogen fertiliser production assets, including the assumption of the assets' liabilities, in a deal with a total value of about $270m.

CSPA unveils new program

The Consumer Specialty Products Association (CSPA) has launched a new product stewardship program that is designed to promote the production and distribution of safe and effective formulated products for household, commercial, institutional and industrial consumers.

Major Markets

Oxo alcohol producers look to lift pricing

Puerto Rico builds on initial advantage to promote growth

Blizzard good news for calcium chloride producers

Feedstock costs hit PET, polyester

Biodiesel industry maintains momentum with proposed incentives

Plastic additives makers under global antitrust scrutiny

Interferons back under the microscope following sceptical study

Titanium dioxide market still faces hurdles to recovery

Further News

Louisiana high court overturns asbestos ruling

Atofina performance expected to improve

Varsal opens new fine chemicals facility in China

Kyowa Hakko launches US antibody business

Air Liquide wins Shell hydrogen contract

Perstorp, Hansol form S Korean jv

Pharmacia posts robust Q4 earnings

Syngenta to enter animal feed with phytase

Human testing needed to establish pesticide exposure levels

Merck eyes expansion of liquid crystals business

FDA to make drug approval process more efficient

Bill promoting greater use of generics is introduced

Zuellig Botanicals makes bid for Hauser

New suitor emerges for Aventis blood plasma unit

Avecia acquires chiral technologies from Synthon Chiragenics

Syngenta to conduct more frequent Atrazine testing

For further information, including subscription details, access CMR on its Web site at: http://www.chemicalmarketreporter.com

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