Global roundup

27 October 2003 00:00  [Source: ACN]

China resisted US pressure to revalue the yuan, Shell announced plans to invest $5bn in a worldscale gas-to-liquids project in Qatar, and Honam's union accepted a wage-hike deal in the week 17-23 October.

From stories supplied by the CNI and ACN teams. See www.cnionline.com. For exclusive news and analysis, see the rest of ACN

US economy picks up steam

17 October. The US economic recovery is picking up steam, according to government reports yesterday, which indicated the troubled factory sector has turned around and the lagging job market is starting to improve.

Manufacturing activity in the US mid-Atlantic region soared in October, according to a Philadelphia Federal Reserve gauge of regional industry. Another report showed US industrial production rose in September as factory output posted its biggest gain since April 2000.

And in a hopeful sign for job seekers, the number of Americans filing an initial claim for jobless benefits fell last week to the lowest level since early February.

'Today's numbers really confirm that the recovery is in full swing,' said Scott Anderson, senior economist at Wells Fargo.

Agrium pulls out of NH3/urea project

17 October. Canadian fertiliser major Agrium has pulled out of negotiations to develop a world-scale ammonia/urea project on the Burrup Peninsula in Western Australia, according to a statement to the Australian Stock Exchange by its former consortium partner, Plenty River Corp.

Agrium had earlier signed a project development agreement to take a 51% stake in the Dampier Nitrogen US$725m project on the Burrup, with Melbourne-based Plenty River taking a 39% share and Australian construction and engineering company Thiess taking the balance.

DuPont Teijin to boost polyester film

17 October. DuPont Hongji Films Foshan Co, the Chinese joint venture between DuPont Teijin Films and Foshan Plastics Group Co, is planning to add a 17 000 tonne/year polyester film production line in Foshan, China, by the end of next year.

Dupont Teijin said the move was in reaction to the increasing number of its customers who were transferring production from other countries to China.

The new line is expected to start up in the fourth quarter of 2004, and will provide differentiated and speciality polyester films to packaging and industrial customers regionally and globally.

Akzo Nobel's Q3 net income falls 23%

17 October. Akzo Nobel has announced a 23% fall in Q3 recurring net income to Euro178m (US$210m), in line with expectations, and said it was preparing for further restructuring.

However, the Dutch chemicals, coatings and pharmaceuticals group said it would discuss the restructuring with its workforce before revealing further details.

LG-Caltex mulls Gorgon investment

17 October. LG-Caltex Oil is considering investing in the massive Gorgon Field natural gas project off the Western Australian coast, although no decision had yet been made on whether to go ahead with the investment, a company spokesman said. The spokesman said there was no truth to reports that the company was planning to invest US$7.2bn.

Gorgon joint venture partners Chevron Texaco (57.15%), Shell (28.57%) and ExxonMobil (14.28%) have discovered an estimated 4000bn ft3 of liquefied natural gas about 150 km off the north-west coast of Australia.

The partners recently gained in-principle approval from the Western Australian state government to start developing a multi-billion dollar gas-processing facility on Barrow Island close to the Gorgon fields, which are expected to start coming onstream in 2008.

Brazil petchems to invest $3bn in 3 years

17 October. Brazilian petrochemicals companies will invest US$3bn over the next three years on new projects and plant upgrades, Alexandrino Alencar, a vice-president for Braskem, said. Most of this capital will be invested in new projects, according to Alencar.

Braskem, for example, plans to invest in a new 250 000 tonne/year PP plant in Paulinia, S‹o Paulo state, as well as the new natural-gas petrochemicals complex in Corumba, Mato Grosso, near the Bolivian border.

Other investments in the sector include Rio Polimeros, the new 540 000 tonne/year PE plant, jointly controlled by Unipar and Suzano Petroquimica.

Blair suffers heart scare

19 October. Tony Blair has suffered his first known health scare as UK prime minister, requiring electro-cardiac treatment to regulate heart palpitations that came on top of an exhausting year over the Iraq war. Although he was released and pronounced fit after nearly five hours of treatment at a London hospital today, doctors ordered the 50-year-old Blair to rest tomorrow.

'There is no reason why this should re-occur,' a spokesman for his Downing Street home and office said. 'He will be back full-time at his desk on Tuesday morning.'

Blair was at his Checkers country home, where he often spends weekends with his family, when he took ill. He was eventually taken to London's Hammersmith hospital, where doctors regulated his heartbeat through electric shock.

Tariff cuts to boost petchems

20 October. Exports and imports of some petrochemicals between India and the Association of Southeast Asian Nations (Asean) are expected to boom once the two sides finalise tariff reductions between January 2004 and October 2007.

The petrochemicals to have their tariffs lowered include benzene, paraxylene, phthalic anhydride, monomethyl ethers of ethylene glycol or of diethylene glycol, cyclic polymers of aldehydes, and esters of methacrylic acid.

Other chemicals to be given similar treatment include nitrites, iodides and iodide oxides, calcium carbonate, sorbitol, quinol and its salts, benzoic acid, its salts and esters' amino-alcohol-phenols, acyclic amides and specified dyes.

The framework agreement on comprehensive economic cooperation between India and Asean was signed by the Indian prime minister and Asean leaders in Bali, Indonesia, on 8 October.

KPIC union calls off strike

20 October. The main union at Korea Petrochemical Industry Co (KPIC) has returned to work after its leadership reached a tentative agreement with the company's management on 18 October

A KPIC official said full operations have been restored at its petrochemical complex. He said the union would vote on the tentative agreement on 23 October. Details of the agreement were not immediately available.

The strike had started on 16 October and had the most significant impact on KPIC's PP output, although the precise level of production losses could not be immediately quantified. KPIC can produce up to 310 000 tonne/year of PP.

Atofina to build organic peroxide unit

20 October. Atofina is going ahead with plans to build a 3000 tonne/year organic peroxide plant in Changshu, China, general manager of organic peroxide for Europe and Asia, Romuald de Haut de Sigy, said.

Set for commissioning in late 2004 or early 2005, the plant will raise Atofina's worldwide peroxide capacity to 41 000 tonne/year. Production at the unit will be geared to serve the polymerisation initiator market, which accounts for 65% of Asia's growing peroxide market.

Atofina will target the PVC, ldPE and PS markets in China, as well as export peroxide to Taiwan and Southeast Asia, said de Haut de Sigy.

FTC restricts voting rights of six chaebol

20 October. South Korea's Fair Trade Commission (FTC) has restricted the voting rights that six chaebol (conglomerates) are allowed to exercise in subsidiary companies after finding that their shareholdings exceeded the legal limits.

The business groups include the SK Group, the Kumho Group, Samsung, Doosan, Dongbu and KT Corp. The full list of the 11 subsidiaries subject to the restrictions is confidential until such time as they are officially announced by the FTC, although local media have already reported that the affiliates include petrochemical firms SKC, SK Chemical and Kumho Petrochemical.

The six conglomerates are prohibited from exerting their voting rights on their stakes, worth a combined Won200.9bn (US$171.9bn), in 11 subsidiary companies, the official said.

Under the country's fair trade law, affiliates of conglomerates are prohibited from making equity investments in sister and non-affiliated companies in excess of 25% of those companies' net worth.

Degussa to take $582m Q3 write-down

20 October. Degussa is to take a Euro500m (US$582m) write-down in Q3, due to impairment charges in its fine and industrial chemicals division, where a new profitability drive could result in job losses and some plants being reviewed for closure.

A spokesman for the company said the write-down in asset value was made up of charges of Euro250m from goodwill on M&As and Euro250m from other intangible assets. Further details were not available.

Shell to spend $5bn on Qatar GTL

20 October. Shell plans to invest US$5bn to jointly build and run a worldscale gas-to-liquids (GTL) project in Ras Laffan, Qatar, with Qatar Petroleum (QP).

It said the plant will produce 140 000 bbl/day (46.2m bbl/year) of GTL products (mainly naphtha and transport fuels, with a smaller quantity of normal paraffins and lubricant base oils), as well as significant quantities of associated condensate and liquefied petroleum gas.

In a statement today, Shell said an agreement on the project had been signed with QP. Shell added that the GTL project, which it said would be the world's biggest, was part of a wider project, which includes developing a block within Qatar's North Field gas reserves to produce 1.6bn ft3/day of gas.

Shell said the two-stage project is to be built and run on an integrated development and production-sharing basis. The investment includes the development of upstream gas and liquids facilities as well as an onshore GTL plant. Around 70 000 bbl/day of GTL products are to be produced when the first stage of the project is completed between 2008 and 2009. The second stage is set to be finished within the following two years.

Norsk Hydro's $10.3m Q3 operating loss

20 October. Lower product prices and higher raw-materials costs plunged Norsk Hydro's petrochemicals business into a NKr73m (US$10.3m) operating loss in Q3, the company disclosed.

The deficit contrasted sharply with a NKr62m profit in the July-to-September period last year.

Norsk Hydro's petrochemicals business, which has been earmarked for divestment, includes production of ethylene, chlorine, PVC and VCM. With production facilities in Scandinavia and the UK, Norsk Hydro is a major player in the northern European market for PVC and VCM. It also has, through alliances, production in Singapore, China, India and Qatar.

China resists pressure to revalue yuan

20 October. China's central bank governor, Zhou Xiaochuan, said the country would stick by its policy of keeping the yuan stable, standing firm against US pressure for a revaluation. He reiterated the longstanding foreign-exchange policy that keeps the Chinese currency pegged to the dollar at a meeting of bank governors in Beijing, the official Xinhua news agency said.

Zhou also said that China would perfect the exchange rate mechanism to maintain a stable yuan and strengthen the regulation and supervision of the monetary, foreign exchange and gold markets while watching out for financial market risks, it said.

The yuan has topped the agenda at an Asia-Pacific Economic Cooperation summit in Bangkok, Thailand, where Chinese President Hu Jintao and his US counterpart, George W Bush, discussed the issue at the weekend.

Pupuk Kaltim compound fertiliser boost

20 October. Pupuk Kaltim is planning to boost its compound fertiliser production to 300 000 tonne/year from 100 000 tonne/year next year, said a company source.

The expansion will reduce significantly Indonesian imports of compound fertilisers, which are currently around 200 000 tonne/year.

Honam restarts No1, No2 PP lines

21 October. Honam Petrochemicals has restarted the No1 and No2 lines of its 440 000 tonne/year PP plant in Yeochun, South Korea, a company source said.

It had to shut most of its plants after an explosion ripped through its No3 hdPE line on 3 October, killing one worker and injuring seven others.

Honam has restarted all its facilities except for its No1 and No2 PE lines, with a total capacity of 210 000 tonne/year. Restart dates for these two facilities have not yet been fixed.

Idemitsu's C2 rate cut won't hit styrene

21 October. Idemitsu Petrochemical said the reduction of its cracker operating rate in Tokuyama, Japan, would not effect operations at its downstream 330 000 tonne/ year styrene plant, as the company has built up a fair inventory. A company spokesman said the styrene plant would continue to operate at 100%.

Earlier, the company had slashed the operating rate its 620 000 tonne/year cracker by 70% to 30% due to a technical problem. The rate cut came into effect on 19 October and will last until 2 November.

Methanex posts net loss on write-off

21 October. Methanex has reported a Q3 net loss of US$7.8m, with the company citing a US$39.8m write-off on its methanol project in Australia, which was cancelled last month.

This compares with a US$58.5m net profit for Q3 2002. Revenues for the three months ended 30 September were US$334.7m, compared with US$296.5m in the same period of last year.

Earnings before interest, tax, depreciation and amortisation (Ebitda) were US$83m, against an Ebitda of US$108m in Q3 2002.

Iran agrees to nuclear checks

21 October. Iran has agreed to snap inspections of its nuclear sites and to freeze uranium enrichment in what three visiting European ministers hailed as a promising start to removing doubts about Tehran's atomic aims.

But a senior Iranian official said Tehran would halt uranium enrichment - seen by the US as the heart of a possible bid for nuclear arms - only for as long as it saw fit, prompting analysts to suggest Iran was playing for time. UK, French and German foreign ministers, who flew to Tehran with a carrot-and-stick deal aimed at convincing Iran to comply with a 31 October UN deadline to prove it has no atomic-bomb ambitions, greeted the agreement as a step forward rather than as a breakthrough.

Apec to 'dismantle' terrorist groups

21 October. Tying security to economic growth, Pacific Rim leaders ended their annual summit yesterday with a pledge to 'dismantle' terrorist groups, block the spread of weapons of mass destruction, and try again to get North Korea to abandon its nuclear ambitions.

The declaration at the 21-member Asia-Pacific Economic Cooperation (Apec) summit came after the reclusive communist state fired off one and possibly two missile tests into the Sea of Japan in what US officials called a provocative act.

US president George W Bush campaigned for his war on terror during the two-day meeting, despite complaints that Apec's traditional economic focus had been blurred. Bush also won support for a multilateral push to end the year-old nuclear standoff with Pyongyang.

Agic to raise PIA price by 10%

21 October. AG International Chemical (Agic) has announced plans to raise its purified isophthalic acid (PIA) price by 10% on 1 December.

Agic said the planned increase is due to the high cost of xylene feedstock, the big price gap between Asia and the rest of the world (the current Asian price is US$900-1000/tonne, while in Europe and the US it is about US$1200/tonne), and expected supply tightness in the near future.

PIA is used in the manufacture of fibres, coatings, unsaturated polyester resins and PET-bottle resins.

Agic is a 50:50 joint venture between Mitsubishi Gas Chemical and BP.

SK Corp union puts off strike vote

22 October. The main trade union representing workers at SK Corp has decided to delay indefinitely a vote on whether or not to call a strike after a recent fire at the company's Ulsan refinery, a company spokesman said.

The spokesman said the union had deferred the strike vote, initially scheduled for 23-24 October, because of the fire and had not yet decided on a new date for the vote.

The heavy-oil upgrade unit of the company's Ulsan refinery was shut down after the fire on Monday.

ExxonMobil restarts mothballed PX

22 October. ExxonMobil Chemical has restarted its mothballed 400 000 tonne/year paraxylene (PX) plant on Jurong Island, Singapore, a company spokesman said.

The spokesman said the PX plant was restarted on 15 October with on-spec product.

FPCC expects C2 restart in 7-10 days

22 October. Formosa Petrochemical Corp (FPCC) will need seven to ten days to restart its 700 000 tonne/year No1 cracker in Mailiao, Taiwan, after an unplanned shutdown early this week, an FPCC source said.

The cracker was taken offline on 20 October due to mechanical problems.

Aker Kvaerner wins PTA contract

22 October. Aker Kvaerner said it has won a contract worth US$170m-180m to build two purified terephthalic acid (PTA) plants in Asia.

It declined to identify the client or the plants' location, but PTA industry sources said the facilities would be built in Shaoxing, Zhejiang province, China for Zongheng, a major producer of polyester and yarn in China.

The plants, each of 530 000 tonne/year capacity, are due for completion at the end of 2005. Work on them is due to begin at the end of November.

Eterindo sheds more Petrowidada shares

23 October. Eterindo Wahanatama has completed the second phase of its debt-to-equity conversion, leaving the company with only 23.17% shares in its major subsidiary Petrowidada.

Honam union accepts wage-hike deal

23 October. Honam Petrochemical's union has accepted the management's offer of a 5.8% annual pay hike and a one-month yearly bonus, a company spokesman said.

The union had originally demanded a 9.5% annual wage increase.

China government okays Nan Ya projects

23 October. Taiwan's Nan Ya Plastics Corp has received approval from China for its proposed plants in Kunshan, Jiangsu province, China, a spokesman said.

The projects include a 50 000 tonne/year polyester staple fibre plant and a 100 000 tonne/year polyester chip unit. Nan Ya has also planned a 50 000 tonne/year polyester filament plant, which would also be able to produce 25 000 tonne/year of drawn textured yarn and polyester oriented yarn.

No further details on the investments were immediately available.

LG Petchem's Q3 operating profit up 50%

23 October. LG Petrochemical's third-quarter operating profit rose by 50% year-on-year to Won42bn (US$35.7m) due to better margins and higher output of butadiene and hdPE.

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