30 January 2012 00:00 [Source: ICB]
DUPONT Q4 NET FALLS ON STEEP VOLUME DECLINE
US-based DuPont's underlying fourth-quarter 2011 net income fell by 30% year on year to $325m, reflecting a higher tax rate. Higher selling prices offset lower volumes and increased costs and spending, the company said. Sales volumes were down sharply in electronics and the company's materials and chemicals businesses, and lower in all segments apart from agriculture. "Volume declines in all regions were driven by destocking in photovoltaics, polymer and industrial supply chains, as well as weaker demand for products supplying consumer electronics and construction," DuPont said. The company expects 2012 earnings to rise by 7-12% compared with 2011.
KULLMAN EXPECTS Q1 VOLUMES TO FALL
Ellen Kullman, CEO of US-based DuPont, voiced caution regarding the company's expectations for 2012 first-quarter volumes, saying they would be down year on year, but up from the fourth quarter of 2011. DuPont reported a 10% year-on-year decline in volumes in the fourth quarter of 2011, reflecting decreases across in all regions: US and Canada down by 1%; Europe, Middle East and Africa down by 13%; Latin America down by 3%; and Asia-Pacific down by 23%. "At this point, many of our supply-chain inventories are low, and we expect demand to pick up slowly, starting late in the first quarter or early in the second quarter," Kullman said.
TIO2 VOLUMES SHOULD RISE IN 2012 - DUPONT VP
Sales volumes of titanium dioxide (TiO2) for US-based DuPont should rebound in 2012, the company said. The rebound would come after substantial short-term demand decline and destocking as TiO2 markets were hit by fiscal tightening in China as well as the uncertainties in the eurozone. Karen Fletcher, vice president of investor relations at DuPont, said leading indicators pointed to an improving TiO2 outlook in 2012, with North American order patterns consistent with recovery. "For 2012, we expect global demand growth and see signs of strengthening, first in North American markets," Fletcher said on DuPont's 2011 fourth-quarter results conference call. "Our confidence in TiO2 demand fundamentals remains intact, and we are proceeding with our TiO2 capacity expansion, as announced."
W VIRGINIA PASSES TAX BILL TO LURE CRACKER
West Virginian legislators passed a tax-incentive bill that would help lure an ethane cracker to the state. Governor Earl Ray Tomblin proposed House Bill 4086, which reduces personal property taxes for a company that invests at least $2bn (€1.5bn) in an ethane cracker in West Virginia. The bill would lead to tax on the property at 5% of its depreciated sale value, or salvage value, for 25 years, instead of 5% for 10 years on the property's initial value. The incentives would become effective on July 1.
COURT UPHOLDS DOW'S $61.7M VERDICT VS NOVA
Canada-based NOVA Chemicals said it is reviewing what steps it will take after it lost an appeal challenging a $61.7m (€48m) verdict that US-based Dow Chemical won against it in a patent lawsuit. The verdict dates from mid-2010, when a jury at the US District Court in Delaware awarded Dow $4.3m in royalties and $57.4m in lost profits. In the lawsuit, Dow accused NOVA of infringing on two of its patents for polyethylene (PE). In its appeal to the US Court of Appeals for the Federal Circuit, NOVA alleged that Dow had lacked the standing to file the lawsuit and that Dow's patents were invalid. The appeals court rejected NOVA's argument. Because of pre- and post-trial interest, the award now stands at more than $76m, noted Dow, which is seeking additional monetary damages and injunctive relief against NOVA.
ADS TO BUILD NEW HDPE PIPE PLANT IN MICHIGAN
US-based high density polyethylene (HDPE) pipe manufacturer Advanced Drainage Systems (ADS) will open a new US plant in Clifford, Michigan, to meet growing demand for the company's corrugated HDPE pipe. The plant's capacity was not disclosed. The plant, which will be the company's second pipe plant in Michigan, is expected to begin operations during the second quarter. The expansion is part of a $10m (€7.6m) program ADS announced in August 2011 aimed at improving and expanding its capacity in the US Midwest. First used in agricultural field drainage systems, ADS pipes are now used in sports stadiums, highways, building complexes, airports and other infrastructure projects, the company said.
ASHLAND FISCAL Q1 NET INCOME RISES 30%
US-based chemical firm Ashland's underlying fiscal first-quarter net income jumped 30% year on year to $95m (€73m). Sales during the quarter ended December 2011 grew by 35% year on year to $1.93bn. "We are off to a great start in fiscal [year] 2012, with overall pricing efforts generating significant improvement in margins and profitability," said CEO James O'Brien. "Our enhanced position in stable, less cyclical markets should enable us to produce strong results and be less affected by volatility in the broader economy."
BASF DECLARES FM ON EO AT US PLANT - SOURCES
Germany-based BASF has declared force majeure on ethylene oxide (EO) produced at its US plant in Geismar, Louisiana, market sources said. BASF itself did not identify the plant in a letter it sent to customers and did not immediately respond to a question regarding the location of the plant. In the letter, BASF said it declared force majeure because of an extensive mechanical failure of a critical piece of equipment. As a result, BASF declared force majeure on EO and on its EO-containing Pluracol products, including conventional and graft products. The force majeure will continue through February 2012.
LYONDELLBASELL CUTS PRODUCTION AT LDPE PLANT
Netherlands-based polyolefins producer LyondellBasell is expected to reduce temporarily production at its US low density polyethylene (LDPE) plant in Morris, Illinois, sources said. A buyer said it had received confirmation of the production problems from LyondellBasell, which stemmed from a minor disruption at one of the plant's reactors. The problem is expected to result in minor delays in meeting shipping dates, the buyer said. A company spokesman declined to comment on the production issues. LyondellBasell operates a 275,000 tonne/year LDPE plant in Morris, according to ICIS plants and projects.
EXXONMOBIL CONFIRMS US LDPE ALLOCATION
US polyethylene (PE) producer ExxonMobil confirmed on January 20 that it remains on allocation on specific low density polyethylene (LDPE) grades produced at its 235,000 tonnes/year LDPE plant in Beaumont, Texas. The company notified customers of the allocation in late December, a company spokeswoman said. A buyer said it had received confirmation of the production problems from ExxonMobil, which said the problems were isolated to an LDPE line that produces primarily fractional melt material. The buyer said the company indicated it expects to be on allocation through March. Other sources heard similar reports about the facility, with one source saying it had heard the facility was operating at two-thirds of its capacity.
BRAZIL 2011 CAUSTIC CONSUMPTION RISES 2.4%
Brazil consumed 2.507m dry metric tonnes (dmt) of liquid caustic soda in 2011, up by 2.4% from the 2.449m dmt consumed in 2010, said the country's association of chlor-alkali industries, Abiclor. Brazil's domestic production of liquid caustic soda in 2011 totaled 1.353m dmt, 5.0% less than the 1.424m dmt produced in 2010. Liquid caustic soda imports were 1.174m dmt in 2011, up by 10% from 1.064m dmt imported in 2010. The US was Brazil's principal source, exporting 1.061m dmt to the country, representing to a 90% share of imports.
RHODIA BRASIL PLANS PHENOL EXPANSION
Rhodia Brasil is planning to put its phenol-acetone plant in Brazil into turnaround in March for maintenance and expansion, a source said. The company's Paulinia plant in Sao Paulo has a nameplate capacity of 220,000 tonnes/year for phenol and 135,000 tonnes/year for acetone, the source noted. The expansion will give it a capacity of 250,000 tonnes/year for phenol and 153,000 tonnes/year for acetone, the source said. The source said it expected the maintenance to take until April. Attempts to contact the company were unsuccessful.
RHODIA, AVANTIUM TO DEVELOP BIO-POLYAMIDES
France-based chemical firm Rhodia and the Netherlands-based biotechnology company Avantium have entered into a partnership to develop jointly a range of new bio-based polyamides. Financial details of the deal were not disclosed. "Together with our existing partnerships in polyamides, we are now completely covering all application areas for polyamides on the basis of our green building blocks," said Tom van Aken, CEO of Avantium.
PETROPLUS PREPARES TO FILE FOR INSOLVENCY
Switzerland-based refiner Petroplus will file for insolvency as soon as possible after negotiations with creditors to extend deadlines for loan repayments broke down, the company said last Tuesday. Petroplus had been negotiating with lenders to reopen credit lines needed to maintain operations and meet financial obligations, while also trying to arrange alternative financing and liquidity facilities. However, the company said negotiations had been unsuccessful and that lenders "have served notices of acceleration, commenced enforcement actions and appointed a receiver in respect of Petroplus Marketing AG's assets in the UK."
CORYTON REFINERY A PRIORITY FOR PETROPLUS
Switzerland-based refiner Petroplus's administrators said their immediate priority was to continue to operate the Coryton refinery in the UK, while restructuring options are explored. Petroplus announced it will file for insolvency as soon as possible after negotiations with creditors to extend deadlines for loan repayments broke down.
LYONDELLBASELL LDPE PRODUCTION PARTLY SHUT
The Netherlands-based LyondellBasell's low density polyethylene (LDPE) output at its polyolefins production site in Wesseling, near Cologne, Germany, remains partly shut following an explosion over the weekend ended January 22. The blast, which occurred at one of two LDPE plants at the site on Saturday morning, January 21, injured seven workers. LyondellBasell said that the second LDPE plant and all other units at the site were unaffected and are running normally. The company was unable to disclose how much of its LPDE capacity has been affected by the explosion. According to ICIS, LyondellBasell has a total LDPE production capacity of 430,000 tonnes/year at the Wesseling site.
LONZA STUDIES OPTIONS TO FEED SWISS CRACKER
Switzerland-based chemical firm Lonza has set up a task force to look at new supply routes and vendors to feed its cracker in Visp, Switzerland, following the shutdown of Petroplus's refinery at Cressier earlier this month. Lonza's small cracker is at the start of the company's "in-house needs, and as such has a certain importance," said Lonza spokeswoman Pia Schaefer. According to ICIS, Lonza's cracker has an ethylene capacity of 25,000 tonnes/year. Petroplus temporarily shut down the 68,000 bbl/day Cressier refinery in Switzerland, as well as its refineries in Petit Couronne, France, and Antwerp, Belgium, after lenders froze some $1bn (€760m) in credit lines. Schaefer said that Lonza's cracker was continuing to operate normally and the "potential impact of Petroplus' current situation is limited."
SINTEZ RESTARTS ETHANOLAMINES UNIT
Russia-based ethanolamines producer Sintez restarted one unit ahead of schedule at its plant in Dzerzhinsk, Russia, but closed another unit, a source at the company said. The newer unit - which went on line in 2001 - stopped production of triethanolamine (TEA) 99% on January 23 because of minor technical issues, but other grades are not affected. It was originally scheduled to be down for just a week, but frosty weather conditions mean the plant could be down for double that time. The unit has a total ethanolamines capacity of 25,000 tonnes/year, including a TEA 99% output of 3,600 tonnes/year. Meanwhile, Sintez's older 15,000 tonne/year unit was also restarted on January 23 - a week earlier than scheduled - as demand across Europe improved.
ETHANOLAMINES MAKERS EXPECT ADD EXTENSION
The European Commission should renew an anti-dumping duty (ADD) on US-originated ethanolamines material after the current measures expired on January 22, EU domestic producers said. The Commission gave a notice of initiation of an expiry review in the Official Journal of the European Union on January 21. The investigation should be concluded within 15 months, during which time the current duties will remain in place. A request for review had been lodged on October 21, 2011 by three European manufacturers, which fear ed the expiry of the tariffs might lead to a continuation of dumping and consequent injury to EU industry. The Commission said in its January 21 notice that the dumping margin - calculated by comparing domestic prices in the country concerned with the export prices to the EU of the relevant product - was large enough to justify a review.
POLAND CANCELS CIECH ADVISER TENDER
The Polish treasury ministry has canceled a tender to select an adviser for the privatization of its controlling stake in chemical group Ciech, the ministry said. The economic situation was too "volatile and unpredictable" to guarantee the sale process would fetch a reasonable price for the stake in Ciech, Europe's second-largest soda ash maker, it added. In mid-December last year, the ministry indefinitely postponed a decision on when to relaunch the privatization of all major chemical assets that remain in state hands, but said it would at least continue to look for a Ciech selloff adviser to make substantial progress with sale preparatory work.
CHINA'S MANUFACTURING ACTIVITY CONTRACTS IN JAN
China's manufacturing activity shrank for the third consecutive month in January amid uncertainties over the global economy, raising expectations of further monetary easing by the government, global investment bank HSBC said. The preliminary HSBC purchasing managers' index (PMI) stood at 48.8 in January 2012, up slightly from a final reading of 48.7 in December 2011. A figure above 50 indicates an expansion, while a figure below 50 indicates contraction. "The third consecutive below-50 reading of the manufacturing PMI suggested that growth is likely to moderate further," said Qu Hongbin, HSBC's chief economist for China. "We expect more policy easing to stabilize growth."
SICHUAN VINYLON RESTARTS VAM PLANT
China's Sinopec Sichuan Vinylon Works has restarted its 300,000 tonne/year No. 2 vinyl acetate monomer (VAM) plant at Chongqing after feedstock natural gas supply increased, a company source said. The plant restarted on January 16 and will remain in production during the Lunar New Year holiday from January 22-28, the source added. The No. 2 plant was taken off line on December 25 because of a feedstock shortage, the source said. Currently the 200,000 tonne/year No. 1 VAM plant at the same site is running at 50-60% capacity prior to an expected maintenance shutdown in February, the source said.
YNCC ON TRACK TO SHUT YEOSU AROMATICS UNIT
South Korea's Yeochun NCC (YNCC) is on track to shut its No. 2 aromatics unit in Yeosu on March 20 for a month-long turnaround, a company source said. The No. 2 unit can produce 120,000 tonnes/year of benzene, 60,000 tonnes/year of toluene and 40,000 tonnes/year of solvent xylene, according to the source. Benzene supply in the first quarter of this year is expected to remain balanced to tight as a result of several shutdowns, including the one at YNCC's No. 2 unit.
KEYUAN TO BUILD ABS FACILITY IN CHINA
China's Keyuan Petrochemicals has signed an agreement with the city of Fangchenggang in Guangxi province to build an acrylonitrile butadiene styrene (ABS) facility in the city. Construction should begin in February. Once complete, the Guangxi Keyuan New Materials Industrial Park will have an annual ABS capacity of 400,000 tonnes/year, Keyuan said. The company did not indicate when the project will be completed.
MIDDLE EAST & AFRICA
AL-JUBAIL PLANTS RESTART AFTER POWER OUTAGE
Polyethylene (PE) and polypropylene (PP) plants at Al-Jubail in Saudi Arabia were able to restart production on Friday, January 20 after an earlier power outage that forced several to shut down, sources said. SABIC was able to restart the majority of its plants at the Al-Jubail industrial park on Friday morning, while LyondellBasell resumed its February offers for PE and PP in Southeast Asia, India, China, the Middle East and Africa following the restart of most of its joint venture polymer units, according to sources. Production losses at SABIC's plants are a "lot less than expected," a source close to the company said, but the impact of the losses on February allocations have yet to be fully assessed.
SABIC RESOLVES VAT ISSUES ON PE EXPORTS
Saudi Arabia-based chemical producer SABIC has successfully concluded its negotiations with South African local authorities on Value Added Tax (VAT) payments for its polyethylene (PE) exports into the country, a company source said. "We have completely resolved our VAT issues in South Africa," the source said, but declined to elaborate further. The producer had resumed shipments into South Africa in the second half of December last year after suspending them in November on concerns over tax changes in the country.
Pilots began boarding vessels on the Houston Ship Channel last Wednesday following an 18-hour delay due to heavy fog. The backlog of vessels included 32 inbound and 11 outbound ships.
Kullman: DuPont profits to rise
Houston Ship Channel clears up
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