This week's world news
17 July 2008 19:32 [Source: ICB]
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SABIC TO CLOSE ?xml:namespace>TEESSIDE, UK, PLANTS...?xml:namespace>
SABIC Europe is to close down two UK aromatics units, with the loss of around 200 jobs. “The economics of the units planned for closure have become unviable and have forced SABIC Europe to face up to this difficult decision,” the Saudi chemical company said. Plans to streamline aromatics operations include the closure of the Aromatics 2 unit at North Tees, near Seal Sands, in Northeast England, and the company’s paraxylene (PX) plant at Wilton, near Redcar, by the end of 2008, it said. SABIC has nameplate UK production capacity of 510,000 tonnes/year of benzene, 340,000 tonne/year of toluene, 500,000 tonnes/year of mixed xylenes and 365,000 tonnes/year of PX along with 330,000 tonnes/year of cyclohexane
...AS DOW REDUCES TERNEUZEN OUTPUT
Dow Europe plans to temporarily stop production of all its polystyrene (PS) resins at Terneuzen, the Netherlands, from 21 July, because of poor economics. It will continue to run other PS units in Europe at reduced rates. The company has PS production at Tessenderlo, Belgium; Bilbao, in Spain; Schkopau, in Germany; and Lavrion, in Greece, amounting to an additional output of 490,000 tonnes/year. The Terneuzen unit has a capacity of 50,000 tonnes/year.
EU’S REACH AGENCY MUST NOT FACE CASH CRISIS
The European Chemicals Agency (ECHA), responsible for assessing the safety of thousands of chemicals on sale in the EU, must not be allowed to run out of money, a politician warned last week. Chris Davies, a UK member of the European Parliament (MEP) who sits on the institution’s environment committee, was responding to claims by ECHA executive director Geert Dancet that the agency’s funding mechanism would lead to a shortfall in cash by 2011, barely three years after its creation.
HUNTSMAN ACCUSES HEXION OF BREACH
US chemical major Huntsman has filed a countersuit against Hexion Specialty Chemicals, accusing the US group of a breach of contract over the pair’s $10.6bn (€6.7bn) merger. It has asked the court to help complete the deal or award it damages and a $325m termination fee. Huntsman also accused Hexion’s corporate parent, Apollo, of interfering with the merger agreement. It also alleged both firms were guilty of defamation and that they made false and reckless portrayals of Huntsman’s financial health. Huntsman’s countersuit is in addition to the lawsuit that it filed in Texas State Court on 23 June.
EQUATE DELAYS PE EXPANSION
Equate Petrochemical has delayed its polyethylene (PE) expansion and the Olefins II project at Shuaiba, Kuwait, by a month until September 2008.
“The delay is because the extra gas supply for the new olefins project is still not available. The debottlenecking of the gas supply has not yet been completed,” said a source close to the company. The shortage of ethylene due to the delay in Olefins II had forced Equate to postpone the PE expansion, the source added.
DUPONT ON TRACK TO MEET TARGETS
US-based DuPont is on track to meet its set of emission reduction and energy efficiency targets for 2015. DuPont has achieved an overall 7% reduction in energy use from 1990 levels through initiatives launched in 2005–2006. As a result, total energy consumption was reduced by more than 8 trillion Btu, which translates to approximately $60m (€38m) in fuel, electricity and purchased steam.
CHINA EXPORTS DIVE
China’s garment exports plunged by 15% in June compared with the same month in 2007 – the sharpest drop so far this year. Exports totaled yuan (CNY) 9.87bn ($1.44bn), according to China Customs. China’s first-half garment exports were worth CNY49.96bn. The growth slowed in the first half of the year to 3.4% from an increase of 12.7% during the same period in 2007.
CRISTAL TO BUY INTO TITANIUM POWDER
Cristal US, a subsidiary of titanium dioxide producer Cristal Global, announced plans last week to buy International Titanium Powder (ITP), a US maker of high-purity titanium and titanium alloy powders. Financial terms were not disclosed. The deal could receive regulatory approval within 90 days. “The acquisition of ITP allows us to further our strategy of participating in various businesses in the titanium value chain,” said Robert Daniels, vice president of titanium metals at Cristal US.
CHINA TO BUILD ITS BIGGEST PVC UNIT
China-based Pingmei & Lantian Chemical has started building a new polyvinyl chloride (PVC) plant in Zhumadian, in Henan province. Henan Pingdingshan Coal and Henan Lantian Group, partners in the Pingmei & Lantian joint venture, will invest yuan (CNY) 8bn ($1bn) in the plant, which will have a capacity of 1m tonnes/year and will come on stream by the end of 2015.
MOMENTIVE TO BUILD HQ IN NEW YORK
US silicones and silicones derivatives producer Momentive Performance Materials plans to build a technology center and global headquarters in Rensselaer County, New York. Plans are underway to start relocating the company’s headquarters on August 1 to an interim site in Albany, said president and CEO Jonathan Rich. The company is now based at Wilton, Connecticut. Construction of the $65m (€41m) technology center is expected to begin in 2009.
SHANXI PLANS NEW UNITS
China’s Shanxi Antai Group plans to build a 200,000 tonne/year methanol unit, a 100,000 tonne/year dimethyl ether (DME) plant and is considering an acetic acid line at Antai Industrial Park in Jie Xiu City. The company aims to break ground on the project in 2009, said a company source.
PETRONAS KEEN ON IRAN DESPITE TOTAL PULLOUT
Malaysia’s Petronas is still assessing costs related to the South Pars gas field project and remains keen to invest in Iran, despite French oil major Total’s recent decision to back away from the project, the state-owned oil and gas major said last week. Total decided to pull out from collaborating with Petronas in the Phase 11 development of the vast South Pars field natural gas deposits because of political uncertainties. “We continue to be interested in operating in Iran, [and] yes, we know the situation there,” said Tan Sri Dato Sri Mohd Hassan Marican, Petronas president and CEO.
CITI RAISES YARA EPS ESTIMATES ON RECORD Q2
US investment bank Citi has upgraded its 2008–2010 earnings per share (EPS) estimates for Norwegian fertilizer major Yara following the company’s record second-quarter results. Citi’s EPS estimates for the company were raised by 6% to Norwegian kroner (NKr) 48.01 ($9.46, €5.96) for 2008. Yara more than tripled its second-quarter operating profit to NKr 4.75bn from NKr 1.33bn on strong demand for its fertilizers.
INDIA’S IOC GETS NOD FOR BARODA PROJECT
The Indian government has granted first-stage environmental approval to Indian Oil Corp. (IOC) for its proposed Indian Rupees (Rs) 58.22bn ($1.3bn) paraxylene-purified terephthalic acid (PX-PTA) project at Baroda in Gujarat State. The project will have capacity to produce 370,000 tonnes/year of PX and 560,000 tonnes/year of PTA. A government committee has asked the company to prepare an environmental impact assessment and environment management plan.
DOW CHEMICAL AND DOE TO DEVELOP BIOMASS
Dow Chemical has agreed with the US Department of Energy (DoE) National Renewable Energy Laboratory to jointly develop and evaluate a process to convert biomass to ethanol and other chemical building blocks, the US chemical major said last week. A Dow mixed alcohol catalyst was seen as a key in developing a process to convert nonfood biomass, such as the leaves from corn plants or wood wastes into synthesis gas (syngas).
SHANXI POWER CRUNCH AFFECTS FERTILIZERS
A power crunch caused by coal shortages has forced nearly 10 of the 30 nitrogen fertilizer producers in China’s Shanxi province to stop production since May, cutting output severely, said producers last week. “Many coal mines in Datong and Shuozhou, of Shanxi, have been closed on Olympics restrictions. We have to transfer coal material from Shaanxi province, hence adding to cost,” said a local producer. Shanxi province, which produces one-quarter of China’s coal output, has lost approximately 5 gigawatts (GW) of power, the highest level recorded in recent years. Shanxi-based fertilizer producer Jinyuan Co shut down its 60,000 tonne/year synthetic ammonia plant after its production costs increased by yuan (CNY) 350/tonne ($51/tonne) year on year.
PLANT CLOSURE MARKS SULFOLANE MARKET EXIT
German producer Evonik Industries is planning to close its sulfolane plant at Stanlow, in Cheshire, UK, at the end of the third quarter, marking its complete withdrawal from the business. The Stanlow site is the only sulfolane production facility in Europe. The company blames rising raw material costs, the impact of currency exchange rates, and an increasingly competitive commodity market.
ARKEMA UNITS DUE TO SHUT FOR MAINTENANCE
Arkema’s methyl ethyl ketone (MEK) and MIBK (methyl isobutyl ketone) units at La Chambre, France, are to shut for a scheduled maintenance turnaround in mid-July for approximately two weeks. This is unlikely to impact the MEK market due to stocks being built up in advance. However, the company says it will closely monitor its MIBK inventories, as the European market is already extremely tight. Arkema said it would concentrate on its contractual obligations during the outage, and would have no spot material available.
SINOPEC PERMITTED TO EXPAND NO. 1 CRACKER
Sinopec subsidiary Shanghai Petrochemical has received government approval to expand the capacity of its No. 1 cracker, and to build new chemical plants. The cracker will be expanded to 600,000 tonnes/year from 150,000 tonnes/year, while a new 300,000 tonne/year polypropylene (PP) unit and a 380,000 tonne/year monethylene glycol (MEG) facility will also be built, according to an official from the National Development and Reform Commission. A company source suggested that the cracker was likely to expand to 800,000 tonnes/year. Construction is due to start within two years.
YARA SET TO ACQUIRE SASKFERCO PRODUCTS
US fertilizer company Mosaic and Canada’s Investment Saskatchewan have agreed to sell fertilizer firm Saskferco to Yara International of Norway, for Canadian dollars 1.6bn ($1.6bn). “The timely sale of Saskferco will allow us to focus on our core potash and phosphate businesses, with the proceeds from the sale to be used for the planned expansions of our Saskatchewan potash mines and other non-US assets,” said Mosaic president and CEO Jim Prokopanko.
BALA MURUGAN PLANS A TAMIL NADU PROJECT
India’s Bala Murugan Chemicals Private – a subsidiary of Beach Minerals Company – aims to build a 15,000 tonne/year titanium dioxide unit at Tuticorin, in Tamil Nadu. The rupees 750m ($17.6m) project will produce 36,000 tonnes of ferrous sulfate heptahydrate, 48,000 tonnes/year of hydrated magnesium sulfate, 7,500 tonnes/year of iron oxide pigment and 7,500 tonnes/year of carbon dioxide.
CALCIUM CARBIDE PRICES HIT BY POWER SHORTAGE
Severe power restrictions, due to coal shortages and price rises, have forced the calcium carbide industry in China’s Shanxi province to slash operating rates to around 50%. As a result, prices surged by yuan (CNY) 300–400 ($44–58)/tonne to CNY4,000-4,100/tonne ex-works.
WORK AVAILABLE ON AROMATICS COMPLEX
Engineering, procurement and construction contractors have been invited to bid for
work on an Indian rupees (Rs) 49bn ($1.1bn) aromatics complex by India’s ONGC Mangalore Petrochemicals. The complex is expected to have a paraxylene (PX) and benzene capacity of some 905,200 and 337,900 tonnes/year, respectively. It is also expected to produce heavy aromatics, paraffinic raffinate, hydrogen and liquefied petroleum gas (LPG) as by-products.
EXPLOSIVES PLANT BLAST KILLS TWO, INJURES ONE
Two people have been killed and another badly injured after a blast at an explosives production unit run by Romanian producer Nitramonia Fagaras. It is unclear what caused the explosion in Brasov county, or how much damage was caused.
ETHANOL GROUPS ASK PRESIDENT TO KEEP TARIFF
US ethanol interest groups have asked President George W. Bush to keep a $0.54 (€0.34) tariff on imported ethanol (see page 15), according to the Renewable Fuels Association (RFA). The tariff is intended to discourage subsidized imports entering the US. “To ignore the central role ethanol has in reducing oil imports and lowering gasoline prices would hurt consumers all across the country,” said Bob Dinneen, RFA president.
FORBO EYES CONVEYOR BELTING BUSINESS
Switzerland’s Forbo Group is planning to buy the lightweight polyvinyl chloride (PVC) conveyor belting business from US-based Fenner Dunlop in order to strengthen its movement systems division. The acquisition would not only strengthen Forbo’s position in the North American market, but would also give it global reach, according to the company.
DAICEL TO SELL SHARES IN MIKUNI PLASTICS
Japanese producer Daicel Chemical Industries has agreed to sell the shares of its wholly owned subsidiary Mikuni Plastics to Aronkasei, also of Japan for an undisclosed amount. Daicel is due to hand over all shares of Mikuni Plastics, a producer of PVC fittings, plastic automobile parts and home appliance components, to Aronkasei on October 1.
OIL DEMAND FORECASTS LOWERED FOR 2008
OPEC’s world oil demand projection for 2008 has been revised downwards by 100,000 bbl/day from predictions a month ago. Oil demand growth of 1m bbl/day is expected for the year to 86.81m bbl/day, it said in its July monthly oil market report. Oil products consumption declined in the OECD in the second quarter, with slowing economic activity and lower US gasoline demand. The easing oil demand is expected to last until the end of the year, OPEC said. Strong oil demand growth in China, the Middle East and India in May, which added about 1.3m bbl/day to demand, was not enough to offset the “huge” OECD oil demand decline, it added.
MPC SIGNS PHOSPHATES DEAL FOR $1.01BN
Saudi Arabia’s Maaden Phosphate Co. (MPC) has signed a $1.01bn ($637m), 16-year loan agreement with the government’s Public Investment Fund. MPC is developing an integrated project that will exploit phosphate deposits at Al-Jalamid, in the north of Saudi Arabia, and use local natural gas and sulfur resources to manufacture diammonium phosphate (DAP) fertilizer at Ras al-Zour on the eastern Gulf coast.
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