This week's world news

18 April 2011 00:00  [Source: ICB]

CHINA RE-EXPORTS PE ON WEAK DOMESTIC DEMAND
Weak domestic demand prompted China traders to re-export a few thousand tonnes of Middle East polyethylene (PE) last week, industry sources said. Most of the material consisted of linear low density polyethylene (LLDPE) and high density polyethylene (HDPE), which were sold at $1,410-1,420/tonne (€973-980/tonne) FOB (free on board) China and $1,390-1,400/tonne FOB China, respectively, China-based traders said. Among the recipients of the re-exported cargoes are Vietnam and Europe. The re-export transaction prices were equivalent to import prices of around $1,370-1,380/tonne CFR (cost & freight) China for HDPE film and $1,390-1,400/tonne CFR China for LLDPE, traders said.

JURONG AROMATICS SIGNS $1.56BN FINANCING DEAL
Jurong Aromatics Corp. (JAC) has signed project financing worth $1.56bn (€1.08bn) for its petrochemical project in Singapore, its financial adviser, ING Bank, said last week. "The debt financing package reflects the strong [South] Korean interest in the project," ING Bank said. JAC plans to develop a condensate splitter and aromatics facility on Singapore's Jurong Island to produce 1.5m tonnes/year of aromatics and 2.5m tonnes/year of transport fuels. Korea Trade Insurance (K-sure) will provide $618m in a covered loan, while The Export-Import Bank of Korea (Korea Eximbank) will grant $278m in a guaranteed loan and $340m in a direct loan.

GLENCORE PLANS TO RAISE UP TO $11BN IN IPO
Swiss commodities giant Glencore International plans to raise up to $11bn (€8bn) through an initial public offering (IPO) on the London and Hong Kong bourses. Glencore will list about 20% of its shares in the offering and expects to sell 2.5%-10% to Hong Kong retail investors. The company is targeting an offer size of $9bn-11bn, comprising a primary component of around $6.8bn-8.8bn, and a secondary sale by existing shareholders of approximately $2.2bn. Glencore will use the proceeds from the listing to fund future expansion and acquisitions. The listing will value the company, which deals in commodities including oil, metals, minerals and agricultural products, at up to $60bn, according to media reports.

EGYPT'S OPC RUNS PP AT 80% ON LACK OF LIBYA FEED
Egypt's Oriental Petrochemicals Co. (OPC) is running its polypropylene (PP) plant at an operating rate of about 80% because propylene (C3) supply from Libya has ceased, a company source said. OPC is Egypt's sole PP maker and its 160,000 tonne/year unit is located in the industrial zone in the northwestern Gulf of Suez. Libya has stopped supplying feedstock propylene as a result of ongoing political tension there. "We have another supplier from Europe, while finding more alternative sources. High propylene prices in Europe are also squeezing our margins," the source added.

XINJIANG TIANLI PLANS EXPANSION OF ADA
China's Xinjiang Dushanzi TianLi High & New Tech plans to expand its adipic acid (ADA) capacity by building a 75,000 tonne/year line in the northwestern Xinjiang region, a company source said last week. "Our schedule is to complete a feasibility study and submit it for governmental approval within this year," the source said. The company expects domestic ADA demand to continue to rise. Construction of the line may take one to two years, the source added. The company's existing ADA plant at the same site, which has a nameplate capacity of 75,000 tonnes/year, is running at 100% at present, the company source said.

INDIA PVC AT 32-MONTH HIGH, MAY REMAIN FIRM
Spot prices of polyvinyl chloride (PVC) in India are expected to remain firm in the coming weeks after hitting a 32-month high on the back of tight regional supply, market sources said last week. Ongoing outages at several PVC plants in Japan and strong regional demand currently limit availability of spot cargoes, market sources said late last week. Indian PVC spot prices were assessed at $1,200-1,240/tonne (€828-856/tonne) CFR (cost & freight) India on 8 April, an increase of $220/tonne, or 22%, since the beginning of the year. PVC prices were last seen at these levels in August 2008.

TECHNIP WINS CONTRACT FOR METHIONINE PLANT
French engineering firm Technip has been awarded an engineering, procurement and project management services contract by China's Bluestar Adisseo Nanjing for a new 140,000 tonne/year methionine plant at Nanjing, in Jiangsu province. It will be the first integrated liquid methionine unit in China, according to Technip. The plant's mechanical completion has been scheduled for the second quarter of 2012. Technip's operating center in Shanghai will execute the contract. Methionine is an amino acid containing sulfur found in most proteins and is commonly used as a supplement in animal feed.

A. SCHULMAN TO ADD LINE TO PLANT IN SAO PAULO
Compounder A. Schulman is adding a line to its plant in Sao Paulo, Brazil. The line, the plant's fourth, will begin operating by November. The new line will add 8m-10m lb/year (3,600-4,500 tonnes/year) of capacity to the plant, bringing its total capacity to 22m-24m lb/year. The plant makes chemical additives for the masterbatch-plastics market, as well as engineered plastics compounds. "Consumers in Brazil are demanding an ever-increasing level of sophisticated masterbatch and engineered plastics products," said Sergio Dulcini, the company's general manager for Brazil.

US OSHA MAY FINE LION COPOLYMER $182,000
The US Department of Labor is proposing to fine Lion Copolymer $182,000 (€125,580) for workplace violations at a plant in Baton Rouge, Louisiana. Lion Copolymer, a synthetic rubber manufacturer, employs about 120 workers at its Baton Rouge facility. The Labor Department's Occupational Safety and Health Administration (OSHA) said following an investigation that began last October, it is citing Lion for one wilful, 19 serious and three other-than-serious violations for exposing workers to possible fires, explosions and other hazardous conditions. Officials at the company did not immediately respond last week.

CHINA TIGHTENS CONTROLS ON COAL-TO-CHEMICALS
China is implementing stricter controls on proliferating coal-to-chemical projects as the nascent technology has yet to fully evolve, according to industry sources and analysts. None of the major projects that have been approved have successfully started commercial operations in the country, they said. "High pollution and technology hurdles are [the] biggest challenges. Due to immature processing technology, some plants could not even be started up after being built," said Xiao Hui, an analyst at Shenzhen-based broker China Huatai United Securities. Last Tuesday, China's top economic planner, the National Development and Reform Commission (NDRC), set up centralized approval of these projects, stripping local governments of such power.

BRAZIL CHEMICALS TRADE DEFICIT GROWS ON FERTS
Brazil's fertilizer imports for the first three months of 2011 fueled a 16.9% increase in the country's chemicals trade deficit from last year, chemical association Abiquim says. Brazil's chemical trade deficit was $5bn (€3.5bn) in the first three months of 2011. Chemical imports in January-March rose 15.9% year on year to $8.4bn, while exports climbed by 14.6% to $3.4bn. The rise in imports was mainly caused by an influx of fertilizer intermediates. Fertilizer imports in January-March rose by 56.2% to $1.2bn.

US REGULATOR ACTS ON CONCERNS ABOUT MDI, TDI
The US Environmental Protection Agency (EPA) has released action plans to address the potential health risks of methyl di-p-phenylene isocyanate (MDI), toluene di-isocyanate (TDI) and related compounds. Measures could include bans or restrictions on consumer products containing uncured MDI or TDI, the agency said. "There has been an increase in recent years in promoting the use of foams and sealants by do-it-yourself energy-conscious homeowners, and many people may now be unknowingly exposed to risks from these chemicals," said Steve Owens, assistant administrator for the EPA's Office of Chemical Safety and Pollution Prevention.

RHODIA STARTS UP €14M CELLULOSE ACETATE UNIT
Rhodia has started up its €14m ($20m) cellulose acetate production unit at its Freiburg site in Germany. The Paris-based specialty chemicals firm said this would increase the competitiveness of its cellulose acetate production and ensure the future development of the Freiburg site. Rhodia did not disclose the unit's capacity. According to the ICIS plants and projects database, it produces 40,000 tonnes/year of cellulose acetate at its Freiburg plant. It is not known if this includes capacity from the new unit.

NOVOZYMES AND M&G PLAN CELLULOSIC PLANT
Italy-based polyethylene terephthalate (PET) producer Mossi & Ghisolfi (M&G) and Denmark-based enzymes company Novozymes plan to build the world's first commercial-scale cellulosic ethanol plant. The facility, in Crescentino, near Turin, northern Italy, will produce 13m imperial gal/year (59m liters/year) of cellulosic ethanol using biomass, Novozymes said. It said the plant would be 10 times larger than any current cellulosic ethanol facility, and is designed to operate on a multitude of cellulosic feedstocks. Production is expected to start in 2012. "This plant proves cellulosic bioethanol can be produced in a sustainable manner for the environment and for the industry," said Vittorio Ghisolfi, president of M&G.

BASF STARTS BUILDING MDI COMPLEX IN CHONGQING
Germany-based chemical major BASF has started building its newly approved methyl di-p-phenylene isocyanate (MDI) complex at Changshou Economic and Technological Development Zone in Chongqing, China. The Chinese government gave its approval in March, four years after BASF and Chongqing signed a memorandum of understanding for the complex. A groundbreaking ceremony was held in Chongqing on April 11, said BASF. The company's facility, which is expected to start up in 2014, will cost yuan 8bn ($1.22bn) and consist of a 400,000 tonne/year MDI plant, a nitrobenzene plant and an aniline plant.

SHAANXI SHENMU SHUTS METHANOL LINE
China's Shaanxi Shenmu Chemical has shut down its 200,000 tonne/year methanol line at Shenmu county, in Shaanxi province after an accident, a company source said. An explosion on April 12 caused a hydrogen leak followed by a fire, according to media reports. There were no reported casualties. The temporary shutdown is to repair the damaged part of the line, but the company does not know when it will be restarted, the source said.

STYRON TO CHANGE ITS NAME TO TRINSEO
US-based styrenics producer Styron plans to change its name to Trinseo. "The name change will be fully effective in all countries later in 2011," the company said, without mentioning a specific date. The Styron brand will continue to be used as a trade name for the firm's polystyrene (PS) products, according to the statement.

PCC SHUTS AROMATICS UNIT; PX FORCE MAJEURE
Iran's Petrochemical Commercial Co. (PCC) has declared force majeure on paraxylene (PX) supply for April loading after shutting down its 750,000 tonne/year unit in Asaluyeh, a company source said. "We shut the unit on April 11 after experiencing issues with the heater. We will need at least three weeks to perform the required repairs to the tubing," said the source. The company can export 50,000-55,000 tonnes/month of PX. "We have also canceled all vessels due for loading in April," he added. PCC sells PX to end-users in Pakistan and China, as well as Southeast Asia.

JAM PETROCHEMICAL EYES CRACKER RESTART
Iran's Jam Petrochemical is in the process of restarting its 1.32m tonne/year cracker in Assaluyeh, but a force majeure on ethylene and butadiene (BD) supply will continue until at least the end of the month, said a company official. The facility was taken off line on March 24 after its cooling system failed. The official did not comment on whether the force majeure on polyethylene (PE) and propylene (C3) is still in effect. Jam's cracker can produce 300,000 tonnes/year of propylene and around 115,000 tonnes/year of BD.

NAN YA PLASTICS SET TO RESTART ITS MEG PLANT
Taiwan's Nan Ya Plastics plans to restart its 350,000 tonne/year No. 1 monoethylene glycol (MEG) plant in Mailiao in late April after an outage, a company source said. The unit was taken off line at the end of March because of mechanical problems. "We plan to restart the plant around April 20, but it would also depend on the maintenance progress," the source said. It is estimated that the shutdown will result in a production loss of around 30,000 tonnes. Separately, Nan Ya plans to conduct major turnarounds at its four MEG plants in Mailiao in the second half of this year. The plants have a total capacity of 1.8m tonnes/year.

PETRON TO EXPAND REFINERY; RAISE C3 OUTPUT
Philippine energy major Petron is investing $1.8bn (€1.2bn) at its refinery complex in Limay, Bataan, to beef up its capacity to produce high-margin products, including propylene (C3), a company official said. Petron will upgrade the conversion capabilities of its refinery to yield more liquefied petroleum gas (LPG), gasoline, diesel and petrochemicals, the official said. Its current propylene production will be tripled, based on the company's plan that was unveiled on April 6. The company runs a 140,000 tonne/year propylene recovery unit at its Bataan production site. The refinery expansion, called RMP-2, is expected to be completed by the end of 2014, the official said.

LG CHEM RESUMES RUBBER PRODUCTION IN DAESAN
South Korea's LG Chem has resumed production at its synthetic rubber plants in Daesan after a turnaround. "We restarted all the lines earlier this week on Sunday [April 10]," a company source said. LG Chem shut down all its synthetic rubber plants on March 20 for maintenance. The company operates a 135,000 tonne/year styrene butadiene rubber (SBR) plant, a 100,000 tonne/year butadiene rubber (BR) plant and a 55,000 tonne/year nitrile rubber (NBR) line, all at Daesan.

GUARANI AND PETROBRAS ANNOUNCE ETHANOL PLANT
Brazil ethanol producers Guarani and Petrobras announced plans to build an ethanol plant in Colina, Sao Paulo. When completed, the plant will have capacity to produce 107,000 m³/year of ethanol, Petrobras said. In addition, Guarani will invest reais 767m ($485m) to expand its sugarcane-to-sugar processing capacity, ethanol production and power cogeneration in the next four years.

CZECH FIRM SPOLCHEMIE RESTARTS PERC PLANT
Czech chemical producer Spolchemie has restarted production at its 15,000 tonne/year perchloroethylene (perc) plant at Usti nad Labem, in the Czech Republic, after technical problems in a heat exchanger led to a shutdown on April 9, a company source said. The company lost 180-200 tonnes of material during the hiatus.

SINOPEC BUILDS AROMATICS IN KAZAKHSTAN
China-based chemical and refining group Sinopec's subsidiary, Sinopec Tenth Construction, is building a 500,000 tonne/year aromatics complex at Kazakhstan's Atyrau oil refinery. Sinopec Tenth Construction is building the aromatics complex, which includes nine storage tanks for heavy and light refined oil products, reformate and xylenes. The aromatics facility will be capable of producing up to 133,000 tonnes/year of benzene and 496,000 tonnes/year of paraxylene (PX), and is expected to start up in 2013, according to a statement issued by China's Ministry of Commerce.

CHINA CRACKS DOWN ON TRUCK STRIKES
The Chinese government has cracked down on striking truck drivers in Maoming in the southern province of Guangdong, with cargo deliveries said to be resuming gradually, sources said last Tuesday. A local transportation association had called for a five-day strike from Monday to protest against the local government's policy of imposing annual fees for truck permits instead of the previous road toll fees, media reports said. "Several active members were captured by police today and many others were threatened and told to remain calm," said a source from Maoming Petrochemical. She said that most protesters were inexperienced and quickly returned home after the capture of their leaders.

CHINA TO SPARE NO EFFORT TO KEEP PRICES STABLE
China should spare no effort to maintain stable domestic prices to ease inflation pressure, China's central government said last week. In an executive meeting of the State Council on April 13, premier Wen Jiabao said China should make every effort to keep prices stable this year. The meeting said inflation has expanded to the developed countries from the emerging nations in line with rising global food and crude prices. China will take the necessary measures to cope with the increasing price pressure and to keep price rises within an affordable limit.

FRANCE'S AIR LIQUIDE TO BUILD AIR-SEPARATION UNIT
French industrial gases firm Air Liquide will invest more than €22m ($32m) to build an air-separation unit (ASU) at Luzon, in the Philippines. The new ASU will produce gaseous nitrogen, as well as more than 200 tonnes/day of liquid gases, mainly oxygen and nitrogen, to address increasing demand from high-tech manufacturers in the Luzon area.

By: Will Beacham
+44 20 8652 3214

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