This week's world news

16 May 2011 00:00  [Source: ICB]

RISING MISSISSIPPI RIVER THREATENS CHEM PLANTS
In the US, the rising Mississippi river continued to threaten chemical operations in Louisiana, with water levels reaching 42.43 feet (12.94 meters) last Wednesday - close to the record set in May 1927. Levels near Baton Rouge, Louisiana, have now surpassed the flood stage, according to the National Weather Service, and are less than 5 feet from the 47.28 foot record. The lower Mississippi is home to several chemical plants. Plaquemine, Louisiana, and Baton Rouge have plants owned by companies including Georgia Gulf, Dow Chemical, Shintech, ExxonMobil, Formosa Plastics Corp. and Lion Copolymer. High water levels could also disrupt shipping, preventing plants from receiving feedstock and moving product on the river.

UNIGEL TO BUILD 90,000 TONNE/YEAR ABS UNIT
Brazil-based chemical firm Unigel plans to build a new acrylonitrile-butadiene-styrene (ABS) unit at its Guaruja, Sao Paulo, facility. Unigel plans to invest Brazilian reais (R) 70m ($43m) on the unit, which will produce 90,000 tonnes/year, the company said at the Brasilplast trade fair and conference in Sao Paolo. The ABS unit is expected to start production at the end of 2012. The new unit should reduce imports, which account for all of the ABS consumed in Brazil. With the new unit, Unigel expects to invoice an additional R330m/year, a spokesman said. "The main feedstocks for production of ABS - styrene and acrylonitrile - are already being produced by the Unigel group in Brazil," said Marcelo Calil Bianchi, styrenics business director for Unigel.

INDORAMA EYES FULL ALABAMA PET OUTPUT
Thailand-based polyethylene terephthalate (PET) producer Indorama has restored partial power at its plant in Decatur, Alabama, US, but may not resume full production until June, a company source said. The process of re-melting the material that was being processed at the time of the power cut is now underway, the source said. However, other operations will only be possible once full power is restored and UK major BP is able to supply the necessary quantities of purified terephthalic acid (PTA), he added. BP declared force majeure on paraxylene (PX) and PTA production after a storm-related power cut at its Decatur site on April 28, which also prompted Indorama to declare force majeure on PET production.

DUPONT TO ADD 350KT OF TIO2 CAPACITY BY 2014
US-based DuPont plans to expand its titanium dioxide (TiO2) capacity by 350,000 tonnes/year by the end of 2014. The expansion plan - coming amid tight TiO2 markets - includes a $550m (€380m) investment in a 200,000 tonne/year TiO2 line at DuPont's production site in Altamira, Mexico, scheduled for completion by the end of 2014. Meanwhile, DuPont will work on "facility upgrades" at its TiO2 sites in the US, Mexico and Taiwan, to yield an additional 150,000 tonnes/year of capacity. DuPont will continue looking at other options to increase TiO2 capacity, including a possible greenfield TiO2 project in China.

LANXESS Q1 NET PROFIT GROWS 60% TO €166M
Germany-based chemical firm LANXESS had a 60% year-on-year surge in its first quarter net profits to €166m ($241m), on the back of a 29% jump in sales to €2.1bn. The increase in sales was driven by higher volumes and price increases, which helped ­offset rising raw material costs - in particular butadiene (BD), ­cyclohexane (CX) and benzene. "We have enjoyed a strong start to the second quarter," said CEO Axel Heitmann.

CELANESE SETS US ALLOCATIONS ACETIC ACID
US-based chemical firm Celanese has put US acetic acid on 80% allocation for May and 100% allocation for June, sources said last Tuesday. The company has also put its vinyl acetate monomer (VAM) customers on the same allocation levels, marking some improvement in the availability of the material. Celanese previously imposed a 65% sales allocation. Acetic acid and VAM buyers said Celanese made the move last week. Acetic acid is a major feedstock for VAM.

EASTMAN TO DOUBLE TRITAN CAPACITY IN 2012
US-based Eastman Chemical will double the capacity for its Tritan copolyester, aiming to produce 60,000 tonnes/year by 2012, said Mark Costa, chief marketing ­officer and executive vice president for Eastman's specialty polymers, coatings and adhesives segments. Eastman plans to expand Tritan capacity at its Kingsport site in Tennessee, US. "The first 30,000 tonnes of capacity we built for Tritan we started in January 2010, and it was sold out by the end of 2010," said Costa. "We are rushing to have another 30,000 tonnes, which will be ready in the first quarter of 2012 - a total of 60,000 tonnes."

STYRON BREAKS GROUND ON S-SBR LINE IN GERMANY
US-based styrenics producer Styron has broken ground on its 50,000 tonne/year solution styrene butadiene rubber (S-SBR) production facility in Schkopau, Germany. The expansion, first announced in December 2010, takes into account the growing demand for high-performance tires, which are produced with S-SBR, the company said in a statement. The new production facility will be built alongside existing lines and is expected to be fully operational by the fourth quarter of 2012.

DOW CHEMICAL ATTEMPTS TERNEUZEN RESTART
US-based Dow Chemical is in the process of restarting its No. 1 cracker in Terneuzen, the Netherlands, following planned maintenance, a source close to the ­company said. Planned maintenance started around March 11, and the cracker was originally ­expected to be back on line in early May. An attempt to restart the cracker over the April 29-May 1 weekend failed because an unspecified problem led to repair work. The cracker, which has the capacity to produce 580,000 tonnes/year of ethylene (C2), is one of three Dow Chemical operates at its Terneuzen site.

MILLIKEN PARTNERS WITH BRASKEM TO DEVELOP PP
US-based Milliken Chemical has developed a polypropylene (PP) resin, in partnership with Brazilian chemical company Braskem, that offers an option to polyethylene terephthalate (PET) extrusion blowmolders, said Milliken market development manager Claudia Kaari Sevo, on the sidelines of the Brasilplast trade fair and conference in Sao Paolo. The technology, using a fourth-generation Milliken additive, results in a product with higher transparency and gloss than previous PP formulations, allowing the resin to better compete with PET in cosmetic packaging applications, said Sevo.

LINDE AND SAPPHIRE TO COOPERATE ON CO2
Germany-based industrial gases major Linde and US biofuels technology firm Sapphire Energy have agreed to cooperate on developing a low-cost system to deliver carbon dioxide (CO2) to commercial-scale algae-to-fuel cultivation projects. The firms aim to use CO2 from power stations, chemical plants and other emitters to produce fuel from algae. "Producing fuel from algae using CO2 from large emitters, like power stations and chemical plants, is a very promising way of reducing greenhouse gas emissions," said Aldo Belloni, a member of Linde's ­executive board.

US PE EXPORTS RISE ALMOST 10% IN MARCH
US high density polyethylene (HDPE) exports rose by nearly 10% from February to March, driven mainly by stronger sales to Mexico and Canada, according to data released by the US International Trade Commission. Mexico and Canada accounted for almost half of the 171,058 tonnes of HDPE exported in March. Total first-quarter HDPE export volumes of 459,987 tonnes were 15% lower from a year earlier, mainly because of weak sales to China. US first quarter HDPE exports to China plummeted by 93,376 tonnes (83%) year on year.

TOYOTA US AUTO PRODUCTION TO IMPROVE
Japan-based automaker Toyota announced it will boost production at its North American plants faster than initially expected, with ­operating rates reaching 70% by June. Production rates slowed in May to 30%, because of supply disruptions caused by the March 11 earthquake and tsunami in Japan, the company said. The improvement in parts availability from Japan is the result of actions taken by affected suppliers, the company said.

BRAZIL PVC DEMAND TO GROW BY 5-8% IN 2011
Polyvinyl chloride (PVC) demand growth of 5-8% is expected in Brazil in 2011 from 2010, in the face of government efforts to control inflation and keep the economy from overheating, a market participant said, on the sidelines of the Brasilplast trade fair and conference in Sao Paolo. PVC demand growth in 2010 was 18%, driven by the buoyant Brazilian economy. Irrigation piping for agriculture has grown at a robust pace of 30%/year, while cables, profiles, pipes and furniture continue to show solid performance, on strong support from public and private construction.

BASF TO INVEST IN ASIA, WITH CHINA AS FOCUS
BASF plans to focus the bulk of its €2.3bn ($3.3bn) investments in the Asia-Pacific region over 2011-2015 in China, an official with the German chemical major said last week. A large portion of the investments will be earmarked for the plastics business, said Albert Heuser, president of BASF East Asia, who was speaking at a press conference for the 2011 Chinaplas Exhibition. "Major new investments in China include a 400,000 tonne/year methyl di-p-phenylene isocyanate [MDI] project in Chongqing, expansion of the 45,000 tonne/year engineering plastic plant at Pudong, Shanghai to 110,000 tonnes/year and a new cellular special elastomers plant in Shanghai that will start operation in the second half of 2011," Heuser said. The Chongqing MDI project alone is estimated to cost around yuan (CNY) 8bn ($1.23bn), according to BASF.

BLEAK Q2 FOR JAPAN ON POWER SHORTAGE
Japan may be looking at a sharp contraction in economic output in the second quarter, reflecting the extent of the damage wrought by the March 11 disasters, analysts said. Power supply problems have been aggravated, with the country's third-biggest electricity ­operator - Chubu Electric Power - agreeing to a government request to shut its Hamaoka nuclear plant for safety reasons. Japan's economy may shrink by as much as 5% year on year in the June quarter, as the implementation of rolling blackouts has hit industries hard, said Gregory See, a Singapore-based economist at research firm Forecast.

ENTERPRISE TO BOOST PROPYLENE FRACTIONATION
US natural gas processor Enterprise Products Partners announced plans to expand polymer-grade propylene (PGP) fractionation by 10%, citing tightness in US propylene supply caused by reduced co-propylene output from steam crackers. The company plans to add 500m lb/year (227,000 tonnes/year) of PGP production at its Mont Belvieu ­facility in Texas, boosting PGP ­capacity at the site to about 5.4bn lb/year. The expansion is expected to be in service in the first quarter of 2013, Enterprise said. "The shift to natural gas liquid feedstocks by the ethylene industry, which is driven by the disparity between natural gas and crude oil prices, has led to a significant reduction in co-production of propylene at North American petrochemical facilities," said A.J. "Jim" Teague, chief operating officer of Enterprise's general partner.

DAGANG TO FOCUS ON BOPP
Dagang Petrochemical, a PetroChina subsidiary, will focus on producing biaxially oriented polypropylene (BOPP) resins from its 100,000 tonne/year plant in May, with a planned output of around 6,000 tonnes, industry sources said. Dagang Petrochemical had been producing polypropylene (PP) yarn grades at the plant, which is located at Tianjin in northern China, since starting it up in October last year. The ­producer switched to BOPP grades in early March, local distributors said. Supply from the new plant did not affect BOPP resin prices in northern China because it was a small quantity, the distributors said.

LANZHOU PETROCHEMICAL TO SHUT NBR PLANT
China's Lanzhou Petrochemical, a PetroChina subsidiary, plans to shut its 50,000 tonne/year ­acrylonitrile butadiene rubber plant for maintenance from May 20, a source close to the ­company said. The plant, located in Gansu province in northwestern China, will be down for a month, the source said. Lanzhou Petrochemical also has a 15,000 tonne/year NBR plant at the site that is running at full capacity, the source said.

CHINA VEHICLE SALES DECLINE SLIGHTLY IN APRIL
China sold 1.55m vehicles in April, down by 0.25% year on year, and down by 15.12% month on month, according to the China Association of Automobile Manufacturers (CAAM). This marked the first year-on-year decease in 27 months, the association said. Vehicle production in April was 1.54m units, 1.85% less than the same period of 2010 - and 15.98% less than March, CAAM said. Total vehicle sales in the January-April period grew 5.95% year on year to 6.53m units, while total production increased by 5.09% to 6.43m units, the association said.

BAYER ANNOUNCES CHINA APPOINTMENTS
Germany-based chemical major Bayer has announced a series of management changes to support its business growth in China. Michael Koenig will be appointed global head of Bayer Material-Science's (BMS) polycarbonates (PC) business unit and a member of the BMS executive committee, with responsibility for the Asia Pacific region. Johannes Dietsch will become senior Bayer representative for Greater China and head of finance and administration at Bayer (China). Klaus Schaefer will be appointed BMS senior country representative for China. Koenig's appointment will take effect in July, while Dietsch and Schaefer will assume their new roles in September 2011.

TIANJIN SODA OPERATES NEW 2-EH UNIT AT 50%
China's Tianjin Soda Plant is operating its new 2-ethylhexanol (2-EH) unit at its oxo-alcohols facility in Tianjin at 50% capacity, after starting it up on March 4, a company source said. The oxo-alcohols facility has a capacity of 140,000 tonnes/year of 2-EH, 85,000 tonnes/year of n-butanol (NBA) and 20,000 tonnes/year of isobutanol (IBA). The producer is currently running its NBA and IBA units at the same facility at around 90% capacity, the source added. The producer will ramp up production at all three units to full capacity if domestic demand calls for it, said the source.

LOYAL GROUP DELAYS START-UP OF EPS UNIT TO H2
Taiwan-based polymer firm Loyal Group has postponed the start-up of its 100,000 tonne/year ­expandable polystyrene (EPS) unit at Karamay, in the Xinjiang province of northwest China, to the second half of this year because of insufficient feedstock ­styrene monomer (SM) supply, a company source said. The new unit was originally scheduled to begin operating in May. Loyal Group's feedstock supplier, ­Dushanzi Petrochemical, has scheduled a 40-day maintenance at its 320,000 tonne/year SM unit in July and August, which has resulted in the short supply, the source said.

BRASKEM TO SET UP SINGAPORE OFFICE
Brazil-based petrochemical and polymers firm Braskem will open its first office in Singapore on May 18, to target the Asian market for basic petrochemicals, a company official said at the Brasilplast trade fair and conference in Sao Paolo last Monday. The Singapore office will strengthen the company's presence in Asia - a region which will be responsible for about 60% of the world's petrochemical market by 2014, said Braskem's basic petrochemicals exporter manager Rodrigo Carnauba.

DOW LAUNCHES BRAZIL PE RESEARCH CENTER
US-based Dow Chemical has launched a polyethylene (PE) ­research center in Brazil, a company official said on the sidelines of the Brasilplast trade fair and conference in Sao Paolo last ­Monday. "Our center puts our clients in contact with top-notch technology, to develop innovative solutions for their products - which brings us closer to the ­industry," said Dow plastics and development leader Jorge Caminero Gomes. The research center is in the city of Jundiai, Sao Paulo state.

FUSHUN POSTPONES ACRYLIC FIBER RESTART
China's Fushun Petrochemical, a PetroChina subsidiary, has postponed the restart of its 55,000 tonne/year acrylic fiber (AF) plant, a source close to the company said. The plant was shut down in early March because of tight feedstock acrylonitrile supply. "Now we are deciding to postpone the restart because of the soft AF market. The plant was originally restarted in the first half of May," the source said. The actual date for the restart has not been confirmed.

CONOCOPHILLIPS TO CONVERT REFINERY
US-based energy firm Conoco-Phillips will convert its idled 15m tonne/year refinery at Wilhelmshaven, in northern Germany, into a fuel terminal, cutting 270 jobs, the government of the country's Lower Saxony state said. The state and ConocoPhillips will continue looking for a potential buyer. Meanwhile, the government is also looking at alternatives, such as using the Wilhelmshaven refining site for the production of biofuels.

FCC INTRODUCES PLANT-BASED THERMOPLASTIC
Brazil-based polymers firm FCC has introduced a thermoplastic elastomer (TPE) based on feedstock from plants, said FCC product engineer Afonso Herique Felix, on the sidelines of the Brasilplast trade fair and conference in Sao Paolo last Tuesday. FCC claims its Fortiprene TPE Verde is 50% renewable. FCC invested Brazilian reais (R) 10m ($6.2m) to build a plant in Rio Grande do Sul, and expanded another unit in the northeastern state of Bahia, he said.


By: Joseph Chang
+1 713 525 2653



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