This week's world news

26 September 2011 00:00  [Source: ICB]

AMERICAS

NOVA PLANS PAINESVILLE EPS PLANT TURNAROUND
Canada-based expandable polystyrene (EPS) producer NOVA Chemicals is expected to take its 40,000 tonne/year Painesville plant in Ohio, US, down for a week, beginning September 26, sources said. The planned turnaround is not expected to have a significant impact on the market because the company is believed to have sufficient inventory to make up for the lost production, the sources said. A company spokesman confirmed the date and duration of the turnaround.

LANXESS SET TO PRODUCE BIO-BASED EPDM IN BRAZIL
Germany's LANXESS is planning to start commercial production of ethylene-propylene-diene monomer (EPDM) rubber made from bio-based raw materials at its plant at Triunfo in southeastern Brazil by the end of 2011. Brazil-based petrochemical company Braskem will supply bio-based ethylene, made by dehydrating ethanol from sugar­cane, via a pipeline to the 40,000 tonne/year plant. The first few batches of the bio-based rubber, which is named Keltan Eco, will "amount to several hundred" tonnes, the company said.

US MONTHLY HOUSING STARTS DROP 5% IN AUGUST
US new-home construction fell again in August, dropping by 5% from July's pace and by nearly 6% from the August 2010 figure, according to the US Department of Commerce. The month's seasonally adjusted annual rate was 571,000 units, 30,000 less than the revised July estimate of 601,000, and a 5.8% decline from the total for the same month a year ago. July's figure represented a 1.5% decline from the total for June. The American Chemistry Council (ACC) estimates that each new home built requires some $16,000 (€11,680) of chemicals and derivatives.

ELEVANCE PLANS IPO IN BID TO RAISE $100M
US-based Elevance Renewable Sciences is planning an initial public offering (IPO) to raise $100m (€73m). In a filing with the US Securities and Exchange Commission, Elevance said it will use the IPO proceeds for capital expenditures, research and development, working capital, product development and operating expenses. In addition, its manufacturing platform will produce two key categories of commodity chemicals - olefins and oleochemicals. No timeframe was given for the IPO. Elevance develops applications for the specialty chemical industry.

 

EUROPE

BASF LIFTS BDO FORCE MAJEURE IN GERMANY
German chemicals major BASF has lifted its force majeure on butanediol (BDO) and is running its 190,000 tonne/year plant at Ludwigshafen at full capacity. "Force majeure is lifted now and we are back to a normal supply position," a company source said. Production of BDO feedstock acetylene had been disrupted by a fire in a precursor plant at the facility on May 30. BASF, Europe's largest BDO producer, declared force majeure on May 31. After it was lifted, a company spokesperson said: "The acetylene plant is running [at] a constant high level."

LANXESS EYES 20% GROWTH IN 2011 AND A BETTER Q3
The CEO of Germany's LANXESS says the company expects a better year-on-year financial performance in the third quarter and full-year growth of 20% in its earnings before interest, tax, depreciation and amortization (EBITDA) excluding exceptional items. In the third quarter of 2010, the company posted net profits of €118m ($162m), with pre-exceptional-items EBITDA of €244m. "We will increase our EBITDA pre-exceptionals by roughly 20%," Axel Heitmann said. "The third quarter is going very well and will be better than the third quarter of last year," he added.

INDORAMA TO ACQUIRE WELLMAN RECYCLING UNIT
Thailand-based polyester products maker Indorama Ventures has agreed to acquire Wellman International's recycling business in Europe from Germany-based industrial-holding company Aurelius. Indorama said the deal, which it expects to complete this year, is aimed at meeting ever-growing demand for products made from recycled consumer goods. Wellman International has a polyester fiber plant with a capacity of more than 80,000 tonnes/year at Mullagh in Ireland, a 45,000 tonne/year recycling plant at Spijk in the Netherlands and one capable of recycling 28,000 tonnes/year at Verdun in France.

CARLSON FEARS OLTCHIM PRIVATIZATION DELAYS
UK-based investment fund Carlson Ventures International (CVI) said it is considering selling its 14% stake in debt-laden Romanian chemical producer Oltchim as it fears substantial delays to the company's privatization. A CVI statement said: "If the Romanian state, which is Oltchim's majority shareholder, does not change its attitude and does not allow the urgent implementation of the reorganization plan which is of utmost importance, and if it will not advance the privatization process, Carlson Ventures will consider selling its share in Oltchim". The statement came after the Romanian government appointed two consultant companies to run a project to appoint private-sector managers at strat­egic state companies, including Oltchim, in advance of their privatization. This indicated the Oltchim sell-off would be "considerably" delayed, CVI said.

BASF TO OPEN RUSSIA PU SYSTEMS SITE IN 2012
German chemicals major BASF will open its second Russian polyurethane (PU) systems site in the first half of 2012 as it looks to strengthen its operations in the region. The company said it sees significant potential for growth in PU applications, especially in the automotive and construction segments. The site will provide PU customers with local sales and technology services. Just as its existing PU system house in Nizhnekamsk in the Republic of Tatarstan, which went into operation in 2000, the new site near St Petersburg will be a part of a joint venture with Russian chemical company Nishnekamskneftechim, that will allow BASF to draw on polyol production in Russia.

ECONOMIC SENTIMENT FOR GERMANY FALLS AGAIN
Sentiment about economic growth for Germany fell for the seventh consecutive month in September and is at its lowest level since December 2008, the Mannheim-based Centre for European Economic Research (ZEW) said. Its sentiment indicator for Germany fell by 5.7 points in September, to minus 43.3 points. The index is based on a poll of 289 financial market analysts. ZEW said the September decline had been caused by the eurozone debt crisis and fears of further weakness in the global economy. Company president Wolfgang Franz said: "The economic outlook is characterized by a high degree of insecurity which, according to the financial market experts, undermines investor and consumer sentiment".

CEPRO EXPLORES MERGER WITH PETCHEM GROUPS
The Czech ministry of trade and industry has instructed an inter-agency commission to work on a plan to merge state-owned crude-oil pipeline and storage operator Cepro with an oil and petrochemical group. The commission is studying talks between Cepro and three oil and petrochemical groups - Poland's PKN Orlen, which is the majority owner of Czech refining and petrochemical producer Unipetrol, Slovakia's Slovnaft, which is owned by Hungary's MOL, and Italy's ENI.

SABIC LOOKING AT GROWTH OPPORTUNITIES IN UK
Saudi chemical and industrial company SABIC is exploring opportunities for growth in the UK, CEO Mohamed al-Mady said during a visit by a UK delegation to the firm's Riyadh, Saudi Arabia, headquarters. Al-Mady told the delegation, led by Lord Green of Hurstpierpoint, who is the minister of state for trade and investment, that SABIC is seeking opportunities involving UK companies as it pursues new investments and focuses on technology and innovation. SABIC boosted its UK presence in 2006 by acquiring US chemical company Huntsman's European base chemicals and polymers business for $700m (€511m).

ECO PLASTICS BUILDING NEW RECYCLING FACILITY
UK-based bottle-recycling company ECO Plastics is building a recycling facility at Hemswell as part of its joint venture with Coca-Cola. The plant is being built on the company's Lincolnshire site and will supply the US soft drinks giant with recycled polyethylene terephthalate (R-PET). ECO Plastics said the new facility will more than double the amount of high-quality bottle-grade R-PET produced in the UK, boosting it to more than 75,000 tonnes/year. Coca-Cola has previously said the facility would be fully operational in 2012, but did not give an exact start-up date.

 

ASIA

SHANGHAI SECCO COULD RESTART CRACKER IN SEPT
China's Shanghai SECCO Petrochemical could resume operations at its 1.2m tonne/year naphtha cracker before the end of the month, market sources said. "We are hearing that the cracker could restart in late September," one said. The cracker, the country's largest ethylene plant, was shut late on September 8 together with its derivative units after a blast at an olefins pipeline. The derivative units that were taken off line as a precautionary measure include a 300,000 tonne/year ­linear low density polyethylene (LLDPE) plant, a 300,000 tonne/year high density polyethylene (HDPE) unit and a 250,000 tonne/year polypropylene (PP) plant.

FORMOSA EYES RESTART OF NO. 1 CRACKER AT MAILIAO
Taiwan's Formosa Petrochemical Corp. planned to restart its 700,000 tonne/year No. 1 naphtha cracker at Mailiao last Wednesday, a company source and traders said. The No. 1 cracker was taken off line for inspections after a pipeline fire at the company's Mailiao petrochemical complex on May 12. A company source said that naphtha was fed into the cracker on Wednesday but did not provide further details.

MITSUBISHI TO RESTART AROMATICS UNIT IN OCTOBER
Japan-based Mitsubishi Chemical Corp. is planning to restart production at its No. 2 aromatics unit located at Kashima in Ibaraki Prefecture from the middle of October after a scheduled turnaround, a company source said. The company shut the unit, which produces 370,000 tonnes/year of benzene, towards the end of August, the source said. During the shutdown, the producer is operating its 200,000 tonne/year No. 1 benzene unit at the same site and its Mizushima-based 210,000 tonne/year benzene plant at full capacity, the source said. Mitsubishi is still determining the shutdown schedule for its plants for 2012.

SCG TO ACQUIRE A 30% STAKE IN CHANDRA ASRI
Thailand's SCG Chemicals has entered into an agreement with Indonesia-based industrial conglomerate Barito Pacific and Singapore-based Appleton Investments to acquire a 30% stake in Indonesian producer Chandra Asri Petrochemical (CAP) worth around baht (Bt) 13.5bn ($441m). Indonesia's sole cracker operator, CAP produces polyethylene (PE), polypropylene (PP), styrene monomer (SM) and various other olefin products.

ELBA EASTERN DECLARES FORCE MAJEURE ON SM/PO
Singapore-based petrochemical company Elba Eastern declared a force majeure on propylene oxide (PO) supply from its Jurong Island facility on September 15, a company spokesperson said. They did not provide further details on the plant's status. Market sources said the facility, which can produce 250,000 tonnes/year of PO and 550,000 tonnes/year of styrene monomer (SM) is down because of mechanical problems. The facility in Seraya is a 50:50 joint venture between Shell Eastern Petroleum and BASF South East Asia. The plant last declared a force majeure in late August.

UPC TO BUILD PETCHEM COMPLEX IN CHINA IN 2012
Taiwan's UPC Technology is planning to start construction of a petrochemical complex at Liaoyang in China's Liaoning province at the end of March or in early April next year. The company is finalizing the design of the new petrochemical complex, a company source said. "The project is progressing well and we expect to start up the petrochemical complex in November 2013," the source said. The complex will comprise a 140,000 tonne/year phthalic anhydride (PA) plant, a 240,000 tonne/year dioctyl phthalate (DOP) plant, a 50,000 tonne/year unsaturated polyester resins (UPR) plant and a 60,000 tonne/year maleic anhydride (MA) plant.

FUSHUN TO START PARAFFIN WAX PRODUCTION BY 2012
China's Fushun Petrochemical, a subsidiary of PetroChina, is planning to start full operations at its expanded 33,000 tonne/month paraffin wax facility in Liaoning province by the end of 2011 or by April 2012, a company source said. The facility consists of two paraffin wax plants and the company expanded the combined capacity of the plants in 2010 by 10,000 tonnes/month from 23,000 tonnes/month, the source added.

TONGMEI GUANGFA PLANS METHANOL START-UP
China's Tongmei Guangfa Chemical Industry is planning to start up a 600,000 tonne/year coal-based methanol plant at Datong in Shanxi province by late 2012 or early 2013, a source familiar with the project said. The plant represents the first phase of the company's 1.2m tonne/year methanol facility, the source said. The company is expected to start building a second 600,000 tonne/year plant after it has started operations at the first plant, the source added.

SUMITOMO TO RESTART BTX PLANT IN OCTOBER
Japan-based aromatics producer Sumitomo Chemical is on track to restart its benzene, toluene and mixed xylenes (BTX) plant in Chiba, Japan, around October 20 following scheduled maintenance, a company source said. The unit was shut down towards the end of August and expected to undergo about two months of maintenance work. The facility can produce 150,000 tonnes/year of benzene, 60,000 tonnes/year of toluene and 30,000 tonnes/year of solvent-grade xylene. Meanwhile, Sumitomo Chemical does not plan to take the same BTX unit off line for a turnaround in 2012, the source added.

SHANGHAI CHLOR-ALKALI RUNS PLANTS AT LOW RATES
China's Shanghai Chlor-Alkali Chemical is running its chlor­alkali and vinyls facilities at low rates because of a shortage of feedstock ethylene, a company source said. These include a 540,000 dry metric tonne (dmt)/year caustic soda unit, a 360,000 tonne/year ethylene dichloride unit, and an 80,000 tonne/year polyvinyl chloride (PVC) plant at Caojing, the source said. The company's 150,000 dmt/year caustic soda and 400,000 tonne/year PVC units at Wujing are also running at reduced capacity, he added. Shanghai Chlor-Alkali had to cut production following the shutdown of an upstream 1.2m tonne/year naphtha cracker of Shanghai SECCO Petrochemical on September 8, following a blast at its olefins pipeline.

TAIYO TO TAKE AROMATICS UNIT OFF LINE IN 2012
Japan-based producer Taiyo Oil has tentative plans to take its Shikoku-based aromatics unit off line for scheduled maintenance around June or July 2012, a company source said. The facility, which includes a reformer and hydrodealkylation (HDA) unit, can produce 450,000 tonnes/year of benzene and 400,000 tonnes/year of isomer-grade xylene. The company is planning to shut the unit for about two to three weeks, the source added. The company is operating its benzene unit at Shikoku at about 75% of capacity on the back of negative HDA margins, the company source said.

JILIN SHUTS 120,000 TONNE/YEAR ACN LINE
China's Jilin Petrochemical, a subsidiary of PetroChina, has shut one of its 120,000 tonne/year acrylonitrile (ACN) lines at Jilin, a company source said. The company shut the line during the weekend ended September 18 to reduce its ACN production because of the poor market situation. "We don't know when to restart the 120,000 tonne/year line, and it will depend on the market trend," the source said. Jilin Petrochemical owns four ACN lines at Jilin city in northeast China. The company's other 120,000 tonne/year line and 106,000 tonne/year line are running at normal rates, while its other 106,000 tonne/year line has remained shut since late April.

BASF PETRONAS TO SHUT BDO UNIT IN MID-OCTOBER
Malaysia's BASF PETRONAS Chemicals plans to shut its 100,000 tonne/year butanediol (BDO) plant at Gebeng in Kuantan for two to three weeks from mid-October for maintenance, a company source said. The company usually has 1,000 tonnes of spot BDO for sale each month. As the company has stocked up on its inventory levels, it will have ample BDO supplies for both its contract and spot customers during the shutdown, the source added. BASF PETRONAS Chemicals is a joint venture between German chemicals major BASF and Malaysia's state-owned PETRONAS.

KOREA ALCOHOL TO SHUT ETAC/BUTAC PLANT IN OCT
Korea Alcohol Industrial plans to shut its 85,000 tonne/year ethyl acetate (etac)/butyl acetate (butac) swing plant in Ulsan for 12 days of maintenance starting October 3, a company official said. During the planned turnaround, Korea Alcohol will maintain sales from its inventory to its domestic and overseas customers. The producer's stock levels for both etac and butac are "quite high," added the official. Korea Alcohol is the only etac/butac producer in South Korea.

LG CHEM PICKS LICENSES FOR DAESAN PLANTS
South Korea's LG Chem has chosen licenses from US-based Badger Licensing for its 200,000 tonne/year cumene and 120,000 tonne/year bisphenol A (BPA) plants at Daesan, South Korea. Badger, a joint venture between affiliates of US companies Shaw Group and ExxonMobil, said LG Chem's cumene and BPA plants are expected to start up next year. Badger also provided licenses to a cumene plant and two BPA plants that LG is operating at Yeosu, South Korea, it said.

 

MIDDLE EAST & AFRICA

MIDEAST FREIGHT RATES TO DECLINE ON WEAK DEMAND
Freight rates for prompt shipments of chemicals from the Middle East Gulf to Northeast Asia are expected to decline in October on a weak Middle East export market and the growing availability of vessels, industry sources said. "Freights for a 20,000-tonne prompt shipment of methanol from the Middle East Gulf to Northeast Asia are being quoted at $48-49/tonne [€35-36/tonne]," a chemicals shipowner said. Freight rates for shipping a 10,000-tonne cargo of easy chemicals from the Arabian Gulf to the China Main Port (CMP) were at $61-63/tonne on September 16, as assessed by ICIS. "The demand for prompt shipments from the Middle East Gulf has been very weak for the last few weeks in addition to the shutdown of an Iranian methanol plant," a Southeast Asian shipowner said.

SAUDI KAYAN SHUTS HDPE PLANT ON EXTRUDER ISSUE
Middle East chemicals producer Saudi Kayan shut its high density polyethylene (HDPE) plant in Al-Jubail, Saudi Arabia, because of an extruder problem, a source close to the company said. The 400,000 tonne/year HDPE unit has not generally run at full capacity since it started trial production on January 20, because of several issues, the source added. "This outage has affected our October allocation. Despite weaker market conditions, we did not lower offers because we have little quantities to sell," he said. The source added that he was unsure when the plant will restart.


By: Joseph Chang
+1 713 525 2653



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