This week's world news

12 December 2011 00:00  [Source: ICB]

EUROPE

Europe cracker margins fall to to post January-low
The European contract ethylene cracker margin has fallen by 24% to €303, its lowest level since early January, because of firm feedstock values and a drop in ethylene, coproduct propylene and butadiene (BD) December contract prices, according to ICIS margin analysis. In the week ending December 2, the contract margin slumped by €93/tonne ($124/tonne) because of a 2% rise in euro-based naphtha costs after taking into account a 1.2% weakening of the US dollar.

Austria's OMV to spend €130m on Shale gas test
Austrian oil, gas and petrochemical group OMV is to spend €130m ($176m) on two test drillings for shale gas in Austria's Vienna Basin. The drilling will take place within the next 12 to 24 months. OMV also confirmed speculation that its geological study of the shale gas reserves showed they were large enough to meet Austria's annual domestic gas consumption for decades.

Polish Orlen's Petchem margin fall €27/TONNE
Polish refining, chemicals and petrochemicals group PKN Orlen's model petrochemical margin fell to €614/tonne ($819/tonne) in November from €641/tonne in October. The company's monthly petrochemical margins peaked at €821/tonne in May this year. Its petrochemical export profits have been hit by western Europe's stalling economic recovery, investment bank Wood & Company said.

AMERICAS

US wildlife lawsuit threatens Texas sites
A trial has started in a lawsuit that could threaten the operations of five major Texas petrochemical sites. The lawsuit threatens Invista, DuPont, INEOS, LyondellBasell and Dow Chemical sites that rely on water environmentalists say should help save endangered whooping cranes. The birds spend winter at the state's Aransas National Wildlife Refuge.

Bio-plastics' world demand to reach $2.9b
Global demand for bio-degradables and bio-based plastics will more than triple to beyond 1m tonnes, with a value of $2.9bn (€2.1bn), in 2015, according to a market research study. Price consideration will be the primary factor for bio-plastics' market success and rising petroleum costs will allow some bio-plastic resins to reach price parity with conventional plastics by the end of the decade, according to US research firm The Freedonia Group.

US Vantage Specialty Chemicals sale near
US-based oleochemicals producer Vantage Specialty Chemicals is close to being sold, with a private equity firm the likely buyer, according to several sources in the financial community. "The sale of Vantage is in the final stage with a buyer already selected and an announcement likely to come within the next month," said one source. The company, owned by US-based private equity firm HIG Capital, and is likely to be sold for $400m-480m or higher.

US names another four in $82m kickback scheme
Four more men have been identified in a scheme that swindled $82m (€62m) from LyondellBasell subsidiary Houston Refining, the US Attorney's Office said last week. Alireza Etessami, Gustavo Gimeno, Denny Martinez and Guillermo Nones were all named in an indictment recently unsealed by a judge. Etessami was arrested last month at Miami International Airport. The other three are believed to be in Venezuela, the office said.

Slower growth for US manufacturing in '12
US manufacturing industries will see continuing growth in 2012, although, in some significant areas, expansion will be more modest than that seen this year, according to the Institute for Supply Management (ISM). In its semi-annual outlook, the institute said: "The manufacturing sector, overall, is positive about prospects in 2012, with revenues expected to increase in 17 industries". Some 69% of ISM's survey respondents said they expected their revenues to be greater in 2012 than in 2011.

ASIA

Bank cuts its east Asia 2012 growth forecast
The Asian Development Bank (ADB) has revised its 2012 growth forecast for emerging east Asia down to 7.2% from 7.5% after factoring in the eurozone sovereign debt crisis and the US economy's continued weakness. The bank also lowered its full-year 2011 forecast to 7.5% from 7.6% predicted in September. A deep and prolonged recession in both Europe and the US could affect east Asia "seriously", ADB said in a statement.

China's spot MIBK prices could fall even further
China's spot methyl isobutyl ketone (MIBK) prices have fallen for the eighth consecutive week and could drop further, in line with weak feedstock acetone prices and rising supply, market sources said last week. The spot supply of MIBK is increasing, with non-Asian cargoes for delivery in early 2012 offered at competitive rates. In addition to the weak acetone market, the MIBK price could soften further because of year-end destocking by non-Asian producers, the sources said.

Taiwan's CPDC to build phenol facility in China
Taiwan's China Petrochemical Development Corp (CPDC) plans to build a phenol plant and downstream facilities at Nantong in China's eastern Jiangsu province at a cost of New Taiwan dollars (NT) $11.5bn ($382m). "It is just a plan on paper," said a company source. "We need to submit it to both the government departments in Taiwan and Jiangsu province for approval."

China's Jilin Connell set to build aniline plant
China's Jilin Connell Group plans to build a 360,000 tonne/year aniline project in Inner Mongolia next year, a company source said last week. The group expects to start construction at the Tongliao city plant in April 2012, with start-up due in late 2013. The company also plans to build a 120,000 tonne/year ammonia unit and a 270,000 tonne/year nitric acid unit at the plant during the same period, the source said.

China Power Investment, Total starts MTO project
China Power Investment and France's Total Petrochemical have started building a methanol-to-olefins project at Erdos in Inner Mongolia. Ground breaking took place on December 3. The companies signed a memorandum of understanding for the project in November 2010. The €2bn-3bn ($1.5bn-2.3bn) facility should start up after 2015 and produce 800,000 tonnes/year of olefins.

Asia SBR to extend gains on strong BD pull
Styrene butadiene rubber (SBR) prices in Asia are set to rise throughout January because of soaring values of feedstock butadiene (BD), but weak demand could temper the trend, industry sources said last week. Spot prices rallied in November after slumping by 40% from early August, ICIS data show. "The main driver is increasing feedstock BD costs, rather than demand," a China tire maker said. "We are not optimistic about the first quarter of 2012 as there are concerns over a global slowdown."

China's Sinopec to build JV coal-to-olefins plant
Chinese petrochemical giant Sinopec is planning to build a joint venture (JV) 1.8m tonne/year coal-to-olefins project in Henan province, central China, a source close to the company says. Sinopec and Henan Coal Chemical Group will set up a joint coal-to-chemical company, which will be 51% owned by Sinopec. The project will cost an estimated yuan (CNY) 21bn ($3.30bn).

MIDDLE EAST & AFRICA

BASF aims to double Africa sales to €2bn
Germany's BASF aims to more than double its sales in Africa by 2020 as it sees "enormous potential" in that continent's growing economy, the company said. BASF's sales in Africa were about €1bn ($1.3bn) in 2010, excluding sales that the company made in its oil and gas business. Announcing the plans, Jacques Delmoitiez, BASF's president with responsibility for its business in Europe, the Middle East and Africa, said: "Africa is a huge continent with a wealth of raw materials and a growing population".

Saudi Arabia's Petro Rabigh ramps up LLDPE
Saudi Arabia's Petro Rabigh has ramped up the operating rate at its 600,000 tonne/year linear low density polyethylene (LLDPE) facility in Rabigh to capacity, a company source said. The plant's operating rate was raised after a regular cleaning process that is carried out every five to six months, according to the source. "The process of shipping December allocations is taking place," the source said.


By: Will Beacham
+44 20 8652 3214



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