EPCA '08: Summary of Sunday's top stories

28 September 2008 18:05  [Source: ICIS news]

MONTE CARLO (ICIS news)--Here is a summary of Sunday’s main news and events from the European Petrochemical Association (EPCA) meeting.

· Anglo-Dutch oil major Shell is planning a multi-year investment in chemicals at four refinery and petrochemicals sites in the US Gulf, the global head of base chemicals Graham van’t Hoff said in a video interview. The investments were likely to be made at its Deer Park, Texas, and Norco, Louisiana, manufacturing sites and at the Deer Park and Motiva refineries.

 

· Lengthening supply-demand balances, the high oil price and the credit crunch will combine to push the petrochemical industry into a downturn in 2010, Tom Crotty, CEO of INEOS Olefins in Europe, said in a video interview.

· European chemical traders are still finding the arbitrage window logistically difficult to work, although a major European styrene consumer is moving 10,000 tonnes of material to the US to cover lost volumes, a trader source said, adding its company had lost significant volumes in the US while plants were shut down around Hurricane Ike.

· A lack of alternative sources of raw material is the main factor holding back expansion in Latin America, an official said. APLA director Graciela Gonzalez said increased demand for petrochemicals in some Latin American countries would likely have to be met with imports because the industry was already operating at or near full capacity.

· Styrene supply in Russia and Eastern Europe is increasingly being absorbed by domestic demand, limiting westward exports, several European players said. A trader based in Russia said that a burgeoning middle class and a relatively vibrant construction sector were boosting demand for PS and expandable polystyrene (EPS).

· A negotiated quarterly European methanol agreement is better than the alternatives despite its faults, said representatives of major buyer Dynea. The quarterly contract system came under fire earlier this year following massive swings in the price from quarter to quarter.

 

· US propylene contracts will steady in the fourth quarter after posting a significant drop in September on lower feedstock and downstream polypropylene (PP), a buyer said. US C3 is expected to settle down between 15-20 cents/lb ($330-440/tonne) or €224-299/tonne for September after some buyers and sellers agreed at reductions at both ends of that range last week.

· The push for shorter-term contract pricing in US markets was losing steam now that feedstock propylene has started trending lower, a major acrylates buyer said. While sellers had succeeded in getting some buyers to agree to a couple of monthly settlements in certain markets, those sellers were likely to want to revert to quarterly pricing in a downtrend.

· Atul will lift resorcinol capacity to make it world No 3 in the sector to feed the growing demand for the binder in automobile tyres and other applications, the Indian fine chemicals maker said on Sunday.

 

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By: Mark Watts
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