This week's world news

14 June 2010 00:00  [Source: ICB]

Correction: In the article headlined, “This week’s world news,” in the 10^th paragraph, please read: “Air Products JV to build h-plant for PetroChina,” in the headline, and “Air Products’ Sichuan-based joint venture (JV) company in China plans to build a hydrogen plant for PetroChina's refinery and petrochemical plants,” in the first sentence, instead of: “Airgas JV to build h-plant for Petrochina,” in the headline and “Airgas's Sichuan-based joint venture (JV) company in China plans to build a hydrogen plant for PetroChina's refinery and petrochemical plants” in the first sentence. A corrected story follows.

 

Invista to close plants in europe; 460 jobs hit
US-based INVISTA will close carpet fiber and flooring production at sites in Germany and the Netherlands, owing to high costs and poor demand in the European flooring markets. Production at Ostringen, near Karlsruhe in Southwest Germany, and Kerkrade, the Netherlands, is expected to cease by the end of 2010 and toward the end of the first quarter of 2011, respectively. The measure will affect 400 jobs in Germany and 60 in the Netherlands.

Sanjiang to start 70,000 tonne EO line in 2011
Sanjiang Chemical plans to bring on stream a 70,000 tonne/year ethylene oxide (EO) line at Jiaxing, in China's eastern Zhejiang province, by the first quarter of next year. The line would be the third operated by the company, which has two other lines with a combined EO capacity of 130,000 tonnes/year, the source said.

GS Caltex eyes base oils capacity expansion
GS Caltex plans to expand its South Korean group II base oils production capacity by 35% to 27,000 bbl/day by 2012. "The first phase of the debottlenecking project has already been approved and we expect to have the additional 3,000 bbl/day capacity by June 2011," said Y.B. Choi, team leader of GS Caltex's base oils team in the country. In the second phase of expansion, to be implemented in 2012, the company will increase capacity by another 4,000 bbl/day.

Braskem mulls second ethanol-based PE plant
Brazilian petrochemical major Braskem said it plans to build a second plant to produce polyethylene (PE) from sugarcane ethanol. Sites are still being considered. Braskem plans to start production at its first ethanol-based PE plant, at Triunfo, Rio Grande do Sul, in September.

Obama threatens veto on EPA greenhouse rule
The White House indicated that President Barack Obama would veto a pending US Senate resolution meant to block regulation of greenhouse gases by the Environmental Protection Agency (EPA). The resolution, SJR-26, was up for a Senate floor vote late last week.

ACC adds five small AND medium-sized firms
The American Chemistry Council (ACC) has added five small and medium-size enterprises to its membership as a result of its initiative to appeal to smaller firms. "A broad and united industry base enhances our collective advocacy efforts, and our improved performance through Responsible Care brings credibility to our regulatory and legislative debates in global, national and state arenas," said ACC president and CEO Cal Dooley. The five new ACC members are ASHTA Chemicals of Ashtabula, Ohio; Miwon Commercial, of Dowington, Pennsylvania; Modular Genetics of Cambridge, Massachussetts; United Initiators of Elyria, Ohio; and OPX Biotechnologies of Boulder, Colorado.

BASF denies accusations in NGL smuggling suit
BASF denied allegations last week by Mexican state oil company PEMEX connecting the chemical giant to a smuggling ring that sold natural gas liquids (NGLs) stolen from Mexico, calling them "demonstrably false and without merit." PEMEX did not accuse BASF of knowingly buying the stolen NGLs, but rather of being the final destination in a long chain of transactions that began with NGLs stolen in Mexico by organized crime. Since 2006, PEMEX estimates, gangs have stolen more than $300m (€252m) worth of condensate.

Petkim refinery Cleared, aliaga to proceed
Petkim has obtained a permit from Turkish energy market regulator BBDK to operate a $4bn (€3.36bn) refinery that will allow it to create a petrochemical "super site." Work will start this year on the 10m tonne/year refinery, which was at the heart of Petkim's overall $5bn plan to double petrochemical capacity by building up its coastal production hub at Aliaga, in western Turkey.

Air products JV to build h-plant for Petrochina
Air Products' Sichuan-based joint venture (JV) company in China plans to build a hydrogen plant for PetroChina's refinery and petrochemical plants. The steam methane reformer (SMR), which will also produce synthesis gas (syngas), is to go on stream in early 2012.

BASF sells additives business to Techmer PM
BASF has agreed to sell a plastic additives business it gained as part of its acquisition of Swiss specialty chemicals major Ciba to US-based color and concentrates manufacturer Techmer PM. The transaction will include intellectual property and technical information, but no transfer of trademarks, tangible assets or personnel.

Shell pursues cellulosic biodiesel with Virent
Shell has taken an equity stake in US biotech firm Virent Energy Systems under a plan to develop production of biodiesel from nonfood feedstocks. No financial details were disclosed.

Cereplast to increase bioplastic shipments
Cereplast will boost its shipments of bioplastics in 2010 by 400% from 2009, the US producer said. The increased volumes were expected to raise 2010 revenues by a minimum of 190%, the company said, with the bulk of shipments expected to be delivered in the third and fourth quarters.

bag ban WILL undercut recycling, SAYS THE ACC
A ban of plastic carryout bags now being considered in the California, US, legislature would undo efforts to provide greater plastic recycling options at grocery stores, an American Chemistry Council (ACC) official said. "The unintended consequence of this bill is that it does essentially repeal a requirement that grocery stores have bins for consumers to bring back [plastic] material, not just bags," said Tim Shestek, the ACC's senior director for state affairs.

VOPAK in jv for tianjin bulk liquids terminal
Netherlands-based Vopak has established a joint venture (JV) with the Tianjin Bohai Chemical Industry Group to build a chemical bulk liquid storage terminal in Tianjin, China. The terminal will have an initial capacity of 95,300m3, with the potential of expanding this to 380,000m3 in the future. Both companies will have an equal shareholding.

PolyOne TO DISTRIBUTE Dow Corning silicone
US polymer firm PolyOne has agreed to distribute Dow Corning silicone products to health care device manufacturers and fabricators in the US, Canada and Mexico. Terms of the agreement - which added the first nonthermoplastic items to PolyOne's health care portfolio - were not disclosed.

US lowers crude price outlook for '10 and '11
The US Department of Energy lowered its outlook for crude oil pricing for the rest of this year and into 2011, citing uncertainty over the global economic recovery, especially in Europe and China. The department expects US natural gas prices to hold steady for the rest of this year, although at rates higher than in 2009, before rising in 2011. In its monthly short-term energy outlook, the department said it expected that the spot price for benchmark West Texas intermediate crude would average $79/bbl for this year and $83/bbl in 2011.

Dow more bullish on ethylene chain, SAYS CFO
Dow Chemical has become more upbeat in its outlook for the ethylene chain, chief financial officer William Weideman said. "We are more bullish on the ethylene outlook than we were even six months ago," Weideman told analysts at a webcast investor conference in New York last week. He cited improved 2010 GDP forecasts, Dow's cost-advantaged and flexible ethylene plants in the US and elsewhere, and likely delays in the start-up of new rival ethylene capacities, especially in Iran.

US propylene stocks ARE UP, REPORTS THE EIA
US propylene inventories rose by 5% in the week ending June 4 as US refineries ramped up operating rates to their second-highest level this year, the US Energy Information Administration (EIA) said. Refinery-sourced propylene stockpiles stood at 3.396m bbl, up from 3.233m bbl in the week ending May 28. US refineries operated at 89.1% of capacity, up from 87.5% a week earlier, but down from a 2010 peak of 89.6% during the week ending April 30.

German agency urges alternatives to BPA
The president of Germany's federal environmental protection agency urged producers, importers and users of bisphenol A (BPA) to switch to alternatives. "There is still a lack of data, but what is already known about bisphenol A should be sufficient to take decisions on the application of the precautionary principle and limit the use of special products containing BPA," said Jochen Flasbarth, head of the country's Federal Environment Agency (UBA). While EU regulators still consider BPA harmless for consumers, Flasbarth pointed to a large number of studies suggesting undesirable health effects.

chemical sector growth
The EU chemical industry is expected to grow by 9.5% year on year in 2010, excluding pharmaceuticals, according to the European Chemical Industry Council (Cefic). However, Cefic said a period of consolidation in the second half of 2010 and early next year will result in a lower growth rate of 2% for 2011. It also warned that the European recovery remained fragile, with capacity utilization and output still well below normal levels.

ciech could lose staff
Ciech, Poland's largest chemical group, could cut its workforce of around 7,000 by more than one-third in the next two-and-a-half years, according to the workers' union, Solidarity. There is speculation that Ciech plans to reduce its payroll by around 1,000 employees this year and by another 1,500 through 2011 and 2012.

la seda sells subsidiary
Spain's La Seda de Barcelona has sold its chemical subsidiary, Industrias Quimicas Asociadas for €23m ($27m) to US private group American Industrial Acquisition Corp. The deal is part of a major restructuring plan.

zuari to build 1m tonne/year fertilizer plant
India's Zuari Industries plans to set up a 1m tonne/year phosphate fertilizer plant, costing some Rs7.5bn ($160m, €134m) in southern Karnataka state. The company is carrying out feasibility tests, acquiring land and getting the required approvals for the plant. There was no information available about when construction would start.

outage costs methanex
The extended shutdown of the 1.7m tonne/year Atlas methanol plant in Trinidad will strip around 9% from the 2010 earnings of its Canadian majority owner Methanex. Equities firm Dahlman Rose predicted that the outage would cost Methanex 7 cents/share in the second quarter (Q2) and 9 cents/share in Q3. A delayed start for its project in Egypt would deduct another 9 cents/share, leaving total estimated earnings for 2010 at $1.48/share, the analysts said.

us chemicals cut jobs
The US chemicals sector shed more than 1,000 jobs during May from the month before, said the Department of Labor (DOL). Conversely an extra 2,600 workers joined the plastics and rubber products manufacturing industries. The DOL's monthly report said that the number of jobs in the US chemicals industry fell by less than 1% in May to a seasonally adjusted 779,600 - a decline of 1,100 from the 780,700 figure recorded in April. The May numbers show that the chemicals sector workforce has shrunk by 3% from May 2009 when 805,300 people were employed.

china to drive base oils
Massive growth in vehicle ownership in China will support demand for base oils over the next few years, said Tim Ford, vice president for Shell Lubricants Asia-Pacific. Despite uncertainties, such as the volatility of prices and the recovery of developed markets in Europe and North America, a 5-10% growth in the lubricants business in China and India could be expected, he added. Furthermore, the demand for high-quality base oils in Asia would rise and the gap in quality between western markets and Asia was set to close, he said.

German lawmakers halt solar subsidy cuts
Germany's upper legislative chamber, the Bundesrat, has stopped proposed subsidy cuts of up to 16% for the solar and photovoltaic industry. It said this would jeopardize photovoltaic production and research, and impact the country's strategies for climate protection and renewable energies. Producers of solar energy receive favorable feed-in tariffs for their electricity.

Borouge awards $71m construction project
Plastics producer Borouge - a joint venture (JV) between Borealis and Abu Dhabi National Oil Co. - has awarded a United Arab Emirates (UAE) dirhams (Dh) 260m ($70.78m) contract to Abu Dhabi-based Associated Construction & Investments Co. to build its innovation center. The center in Abu Dhabi should be complete by the end of 2011, and would develop products for the pipe, automotive and advanced packaging industries.

gas blast kills one
A natural gas pipeline erupted last week near Cleburne, north Texas, US, killing one worker and injuring at least five others. An Oklahoma electric transmission company was using heavy-duty digging equipment in the area when it struck a gas pipeline. Several people were taken to a local hospital with burns.

test run for HPPO unit
China's Tianjin Dagu Chemical has started test operation of China's first hydrogen peroxide-to-propylene oxide (HPPO) plant in the northern Tianjin municipality. "Capacity of the plant is some 50,000 tonnes/year and test running may last several months," a company source said. Its existing 180,000 tonne/year propylene oxide (PO) plant at the site will operate as normal when the plant comes on line.

rubber plant upgrade
Russia's Krasnoyarsk Synthetic Rubber Plant is to receive Russian roubles 2bn ($63m, €52.6m) to increase its nitrile butadiene rubber (NBR) production capacity, the municipal government has said. An investment programme from 2010-2014 would see the privately owned plant increase its NBR capacity to around 56,000 tonnes/year from the current 36,500 tonnes/year.

By: Andy Brice
+44 20 8652 3214

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