This week's world news

03 September 2007 00:00  [Source: ICB]

Kyowa Hakko ups isononanoic acid

Kyowa Hakko Chemicals will increase production capacity of isononanoic acid at its manufacturing facility in Chiba, Japan for the second time in recent years. The company will boost capacity from 12,000 tonnes/year, to over 20,000 tonnes/year. The expansion is scheduled to begin early in 2008 and will be completed by the end of the year.

Finland sells 32.1% Kemira stake

The Finnish government has sold a third of Kemira's shares for €655.6m ($896m), making private company Oras Invest its biggest stakeholder. Oras paid €349.6m and purchased 21.4m shares of the chemicals company, giving it a 17.1% share. They were purchased for €16.35 each. The Finnish government sold another 15% of its shares to Varma Mutual Pension Insurance Company, Ilmarinen Mutual Pension Insurance Company, Suomi Mutual Life Assurance Company and Sampo Life Insurance Company. The state remains the second-biggest shareholder in the company, with a 16.5% stake.

Europe VAM hits new record highs

European vinyl acetate monomer (VAM) buyers are having to "pay through the nose" due to ongoing tight supply in order to maintain operating levels. Traders and buyers reported deals at levels as high as €1,400/tonne ($1,917) free delivered (FD) northwest Europe (NWE) last Tuesday, a fresh record high, as four major European suppliers retained allocation levels in place for as long as four months in some cases.

Deza restarts PA plant and looks to expand

Phthalic anhydride (PA) producer Deza has restarted its 36,000 tonne/year PA plant at Valasske Mezirici, Slovakia. The company also plans to expand capacity at the plant by 10,000 tonnes/year during 2008, although no dates have been scheduled as yet. The plant restarted on August 28 following a one-month outage for a catalyst change. The new catalyst was supplied by BASF. The shutdown was one of five scheduled stoppages and one unplanned outage during the month of August, leaving the PA market tight in Europe.

Eastman's Argentine Petchem plant restarts

Eastman has lifted its force majeure on PET deliveries in South America as operations at its Argentina plant have returned to normal. The company sent a letter to its customers stating that, as of August 27, the causes that originally led to the force majeure have disappeared. Eastman declared force majeure on June 14 because of a labor strike that paralyzed the petrochemical complex of Zarate and Campana, which is based northwest of Buenos Aires.

US fertilizer barges returning to normal

US domestic fertilizer barge movements up the Arkansas River are slowly returning to normal after recent heavy silting. The Army Corps of Engineers dredged an area around lock 17 where the Arkansas meets the Verdigris River, and where two major fertilizer terminals at Inola and Catoosa are situated.

Malaysia promotes biodiesel B5 blend

The Malaysian government will proceed with the implementation of its National Biofuels Policy at a time of an improving outlook for local biodiesel producers. Nurmala Abdul Rahim, deputy secretary-general of the Plantation Industries and Commodities Ministry, said that the Malaysian government intends to start using B5 -a blend of 5% biodiesel with 95% regular diesel - for its own vehicles. A timetable for the project was not specified.

Hercules buys Dexter specialty surfactants

Hercules has completed the acquisition of Dexter Chemical's specialty surfactants arm. Hercules acquired the business, which is related to Dexter's product portfolio of phosphate ester surfactants sold under the Strodex and Dextrol trademarks. Dexter makes phosphate ester surfactants used in paints and coatings where the products are used to enhance gloss retention, promote surface wetting and improve color stability.

Migao plans to build sixth plant in China

Toronto-listed fertilizer firm Migao will build a 40,000 tonne/year potassium sulfate plant in Zunyi, China. The plant - Migao's sixth fertilizer project in the country - is expected to be completed by the end of 2008 and could later be expanded by an additional 40,000 tonnes. The new facility will sell its output to local fruit, vegetable and tobacco industries in Guizhou province.

Sharp drop seen for September benzene

Falling spot prices for European benzene indicate a significant decrease for the September contract settlement. With spot prices at $970-980/tonne (€708-715) CIF (cost, insurance, freight) ARA (Amsterdam, Rotterdam, Antwerp), a fall of €54-61 could be anticipated, they said. Prices have fallen from $1,065-1,070 on August 1to $970-980 on August 29, a drop of $90-95 or 8-9%, due to lower crude oil prices.

GAEL to set up corn-based ethanol plant

India's Gujarat Ambuja Exports Limited (GAEL) is planning to set up an Indian rupees (Rs) 960m ($23.5m, €17.2m) corn processing plant to produce ethanol at Nashik in the state of Maharashtra. "The plant will process 500 tonnes/day of maize, of which 160 tonnes/day will be used for ethanol production, while the remaining will be used for producing liquid glucose, starch, dextrose and sorbitol," said Kaushik Khona, chief financial officer. The plant is expected to come start up at the beginning of 2008.

Europe biodiesel demand shifts

Biodiesel blenders' demand for more resilient material as autumn approaches has led to a shift in buying interest in Europe. While fatty acid methyl ester (FAME) biodiesel, with a cold filter plugging point (cfpp) of 0°C, has been a cheap and efficient product through the summer, end-users are now looking for material that will continue to function effectively in much colder temperatures. This has led to a rise in demand for FAME with a cfpp of -10°C, and rapeseed methyl ester (RME), with a cfpp of -13°C.

Romania investigates Rompetrol stock price

Bucharest launched an investigation into a surge in Rompetrol Rafinare shares, less than an hour before a stock exchange announcement that the refiner's parent had a new majority owner, the Romanian National Securities Commission (CNVM) said. Rompetrol shares rose by 14.3%, just under the maximum allowed for one day, before investors informed the exchange that oil refiner Rompetrol Group had sold its 75% stake to Kazakhstan energy company KazMunaiGaz.

Energy restrictions end for Argentine chems

Argentina's chemical industry was operating at normal rates early last week following the end of government-imposed energy supply restrictions. Last Monday, the central government lifted the last of the restrictions that were put in place more than two months earlier to make sure the population would be able to heat their homes during an unexpectedly cold winter.

China approves river clean-up

China's environmental agency said last week the government has approved over 200 projects worth yuan (CNY) 13.4bn ($1.8bn) to clean up the Songhua river by 2010. The government has completed or started work on 38% of the 222 projects, the State Environmental and Protection Administration (SEPA) said in a statement on its website. The projects included three new waste-water treatment plants and technical revamps at 15 facilities, it added.

Toy recalls hit China butyl acetate

Toy recalls in the US are curbing China's appetite for paint solvent butyl acetate, even as producers worry about buyers substituting the solvent with competitively priced methyl isobutyl ketone (MIBK). Domestic butyl acetate prices in southern China fell yuan (CNY) 100/tonne to CNY13,100-13,200/tonne ($1,732.80-1,746.03) ex-tank.

Tight Asia SM supply set to continue

The current tight availability of styrene monomer (SM) in Asia could possibly extend into October, with prices $10-15/tonne higher than a week ago. A delay in US shipments bound for Asia, coupled with turnarounds and outages across several facilities in the region, have fueled concerns of persistently tight supply lasting beyond September.

New Zealand warns of DEG in toothpaste

New Zealand on Wednesday asked retailers and distributors to stop selling 16 Chinese-made brands of toothpaste as they were found to contain unacceptable levels of diethylene glycol (DEG). The country's Director-General of Health also warned consumers not to use the toothpastes, which had been sold through specialty stores and discount chain stores, the Ministry of Health said on a government website.

Jebel Ali chemical fire under control

A major fire that broke out at a chemical storage facility in Jebel Ali Free Zone, Dubai, early last week has been brought under control. There were no reports of casualties or environmental damage, and the reason for the fire is still under investigation. The fire, which erupted at Chemstore, a hazardous chemical storage facility located near Jebel Ali Port, at 3:57a.m. local time, was soon contained within the facility premises. A Chemstore spokesperson said more than 100 different chemical products were stored at their facility, for over 30 clients.

Russia's Renova takes over Khimprom

Russian holding company Renova Orgsintez has finalized a series of transactions to buy a controlling stake in Khimprom Novocheboksarsk, a producer of chlorine, caustic soda and other chemicals. The deal, estimated at $200m according to Russian media reports, was an important move towards creating a major chemical holding company, Renova Orgsintez head Alexander Zarubin said.

India's PCCPL to buy Dutch agrochem firm

Punjab Chemicals and Crop Protection Limited (PCCPL) has agreed to buy Dutch herbicide, insecticide and fungicide manufacturer Pegevo Beheer for €39.5m ($54.1m). PCCPL's wholly owned subsidiary SD Agchem (Europe) has entered into a share purchase agreement with Beheer's parent group Pevobel and Gevobel to acquire a 100% stake in Pegevo Beheer.

Asia caustic soda bullish in near term

Asian caustic soda prices are expected to be firm in the near term on strong demand from the US and Canada, major market players said last week. "A supply gap caused by the closure of Dow Chemical's facility in Canada has been driving Asian caustic soda prices firm this year, aside from robust demand from the Australian alumina sector and the cancellation of export subsidy from China," a major Taiwanese producer said. The Dow plant has a capacity of 500,000 dry tonnes/year located in Fort Saskatchewan, Alberta.

BASF eyes expansion

BASF's catalysts division is planning to expand its automotive catalyst plants in China and India to meet the growing demand from the industry over the next few years. The German company will nearly double manufacturing capacity in Shanghai, and triple capacity in Chennai. Capacity expansions at both locations are expected to be completed by early 2009

ABB agrees to sell Lummus for $950m

The Swedish-Swiss engineering group ABB is to sell its entire Lummus Global business to Dutch-based Chicago Bridge & Iron Company for $950m (€693.5m). "The divestment of Lummus Global is the final milestone in our strategy of focusing on our highly successful core business in power and automation technology," said Fred Kindle, ABB president and CEO.

Lanxess lifts force majeure after strike

Lanxess has lifted a force majeure on the production of leather chemicals issued in July at its site in Zarate, Argentina, which was hit due to a union strike. The employers and the union negotiated a joint wage agreement on August 15.

Basell posts a 31% profit increase

Basell reported a 31% gain in second-quarter profits to €371m ($506m), driven by good market conditions in polyolefins, stabilization of cracker margins in Europe and a more favorable North American market. Basell's revenues increased by 14% to €3.04bn. European polyolefins market conditions continued to be strong with good demand and very tight supply, while cracker margins stabilized with naphtha pricing leveling off.

China statistics reveal soaring urea exports

Chinese urea exports look set to reach record levels after government statistics revealed that 515,000 tonnes of product were exported in July, which compares to just 49,000 tonnes in July 2006. Last year, only about 1.4m tonnes were exported overall. However, 2007 looks likely to be the year with the largest exports yet, with some 1.7m tonnes of urea exported in the first six months - nearly 200% higher than last year.

German production forecast is raised

Germany's chemical industry association Verband der Chemischen Industrie (VCI) slightly upped its forecast for the country's chemicals production in 2007, following a strong second-quarter performance. Full-year production is now expected to grow by about 4%, compared with VCI's forecast of a 3.5-4% range in July, with sales growth seen at 7.5%. The latest forecast compares with a 2% production growth projection by VCI at the start of the year.

India's Shalimar mulls paint expansion

Shalimar Paints is considering expansion of its paints capacity either by acquisition or by setting up a greenfield project. The company plans to raise its integrated paints capacity to 60,000 tonnes/year from 48,000, CEO Sandeep Sarda told ICIS news. "The company prefers to acquire two small paint companies, which it has short-listed in the southern part of India," Sarda said. However, if the acquisitions fail to materialize, the company will build a greenfield project, he added.

UK plastics firms fined £400,000

ICL Plastics and ICL Tech were fined £400,000 ($800,000, €590,000) at the High Court in Glasgow after admitting to four health and safety charges relating to an explosion in 2004 that killed nine factory workers. An official for the Crown Office and Procurator Fiscal Service said the two companies had each received a fine of £200,000. They pleaded guilty to the charges, which included failing to ensure the safety of employees and failure to carry out adequate risk assessments.

Felda completes buy of twin rivers in US

Malaysia's Federal Land Development Authority (Felda) has marked its foray into the North American oleochemical market with the 100% acquisition of US-based Twin Rivers Technologies (TRT) for $71m (€52m). Felda says TRT is the third-largest fatty acid producer and the largest biodiesel producer in North America. TRT has a fatty acid plant in Quincy, Massachusetts and a Cincinnati, Ohio, facility producing natural food ingredients.

Syngenta uses sugar beets for food, fuel

Syngenta is cultivating sugar beet in India's tropical conditions, which will be used for processing sugar for food and for conversion to bioethanol. Tropical sugar beet brought significant agronomic, environmental and output advantages and it delivered similar output yields to sugarcane for both food and biofuels, the Swiss company said.

Kroger to sell E85

Kroger is opening 20 stations that will sell ethanol supplied by VeraSun, the company said on Tuesday. The fuel blend will contain 85% ethanol (E85), VeraSun said. The fuel will be sold at Kroger convenience stores in Ohio and Kentucky. Kroger is the first national retailer to sell VeraSun's fuel, the company said. VeraSun's fuel is now sold at more than 100 stations in the US.

EU targets wine for bioethanol use

Excess wine supplies in four European countries are to be used in the production of bioethanol, the EU's Official Journal announced on Tuesday. The EU opened bids for a tender to sell surplus wine from France, Greece, Italy and Spain, amounting to almost 700,000 hectoliters. "A tendering procedure for the sale of wine alcohol for exclusive use as bioethanol in the fuel sector in the European community should be organized with a view to reducing European community stocks of wine alcohol and ensuring continuity of supplies," the journal said. Industry participants played down any potential market impact.

US BioEnergy to buy Millennium

Ethanol producer US BioEnergy will pay for its acquisition of Millennium Ethanol with $11.8m (€8.6m) in cash and 11.5m in newly issued shares. US BioEnergy, whose stock trades at around $10, said the acquisition will cost about $133m. Millennium is building a 100m gal (379m liter)/year plant that should come on line in the first quarter of 2008, the company said. The Millennium acquisition will increase BioEnergy's capacity to 700m gals/year.

China to step up on quality checks

China said it will set up a system to conduct checks throughout the production chain by the end of this year to ensure its products meet quality and safety standards. These checks will be done at each level - product design-ers, raw material producers, processors and exporters, Li Changjiang, director of the General Administration for Quality Supervision, Inspection and Quarantine, said. Meanwhile, New Zealand is looking intoformaldehyde levels in Chinese-made clothing.

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