This week's world news

05 March 2012 00:00  [Source: ICB]

EUROPE

GREEK CHEMICAL INDUSTRY SEEKS SUPPORT

Chemical producers in Greece are operating in a "hectic" environment but expect to continue servicing customers and suppliers effectively, the Hellenic Association of Chemical Industries (HACI) said. "The Hellenic chemical industry will deliver despite the economic turmoil," HACI said, in responding to the insecurity that dominates the Greek economy and investors in the country, while asking for their continued support. "Negative publicity for the last couple of months has created a sense of insecurity for the stakeholders of the Greek economy as well as to all those who trade with Greek enterprises," HACI said.

GERMANY TO SHOW ZERO Q1 GDP GROWTH

Germany's economy is likely to show zero growth in the first quarter of 2012, narrowly avoiding a recession, after a 0.2% sequential decline in the 2011 fourth quarter, an economics research group has said. "Germany's economy has, for now, withstood impacts from the crisis in the eurozone," DIW Berlin said in an update. DIW said its assessments of Germany's first-quarter performance so far showed continued weakness in industrial orders. It expects Europe's largest economy to register more perceptible growth rates, beginning in spring, it said.

LANXESS PLANS SYNTHETIC RUBBER UNIT BUILD IN SEPT

German specialty chemicals maker LANXESS will break ground on its 140,000 tonne/year neodymium polybutadiene rubber plant in Singapore on September 11. The company will spend about €200m ($267m) on the construction of the plant, which will be built next to its new 100,000 tonne/year butyl rubber plant. The butyl rubber plant is already under construction and is scheduled to come on stream in the first quarter of 2013. The neodymium polybutadiene rubber plant is expected to start up in the first half of 2015. Lanxess claims it will be the world's largest.

REPSOL'S DOWNSTREAM PROFITS FALL 18.9% IN Q4

Spanish energy major Repsol's downstream operations reported a fourth-quarter 2011 operating income of €133m ($180m) on an adjusted current cost of supply (CCS) basis, down by 18.9% year on year on the back of weaker margins. Earnings from its refining business declined by €116m. Sales of petrochemical products in the fourth quarter fell by 12.6% year on year to 613,000 tonnes, while its sales of oil products declined by 6.2% to 9.26m tonnes.

LUKOIL SLOW TO RESTART STAVROLEN PP UNIT

Russia's Lukoil's Stavrolen polypropylene (PP) unit remains idle despite having been due to restart at full capacity by the end of February. The PP unit has not been operational since December, when a fire damaged the ethylene and propylene units at the petrochemical plant in Budyonnovsk, in southern Russia's Stavropol region. The PP unit was affected by the consequent disruption to its propylene supply, although the blaze did not directly disturb it. Lukoil had planned to purchase propylene from other suppliers to restart the PP unit, but insufficient supplies were available in February, a company spokesman said. Lukoil now aims to restart the PP facility in March, he said.

EU to begin evaluating 90 toxic chemicals in 2012

The EU will in 2012 begin evaluating the suspected risks posed by 90 chemicals under its Reach legislation, the European Chemicals Agency (ECHA) said. Reach is the EU's chemicals control legislation. A rolling program agreed between ECHA and the EU will begin this year and involve 17 EU member states evaluating the risks posed to human health and the environment by 36 substances. The remainder of the 90 identified chemicals will be evaluated in 2013 and 2014.

AMERICAS

BASF LIFTS FM ON EO AT LOUISIANA PLANT

Germany-based BASF has lifted the force majeure (FM) on ethylene oxide (EO) produced at its plant in Geismar, Louisiana, US. The FM was lifted on February 22, said Maureen Paukert, a public relations representative for the company. Participants in the ethylene glycol (EG) market expect feedstock EO to remain snug. "EO supply is still tight," an EG producer said. "It will take a little longer for the market to recover from BASF's outage, even though they have lifted their FM." EO is primarily used to make EG, which is in turn is used to make polyesters and antifreeze. BASF declared FM on January 2 because of an extensive mechanical failure of a critical piece of equipment.

LYONDELLBASELL SETS 45% ALLOCATION FOR US BD

The Netherlands-based LyondellBasell will allocate US butadiene (BD) supply at 45% in March as a result of planned maintenance at its Channelview complex in Texas, the company said in a letter to customers. LyondellBasell has 390,000 tonnes/year of BD capacity in Channelview. BD production will be idled in March along with a planned stoppage at a cracker at the site. LyondellBasell has two crackers in Channelview, each with 873,000 tonnes/year of capacity.

BRAZIL APPROVES ANTI-DUMPING DUTIES ON PET

Brazil approved anti-dumping duties on imports of polyethylene terephthalate (PET) sheet and film, the Brazilian foreign trade council said. The Council of Ministers of the Chamber of Foreign Commerce (Camex), chaired by the Ministry of Development, Industry and Foreign Trade (MDIC), approved duties on imports of PET films, sheets, foil and strip originating from the United Arab Emirates, Mexico and Turkey, Camex said. An anti-dumping duty for product from India and Thailand has already been in effect since 2008, Camex said.

US FED CHAIRMAN SEES IMPROVING US RECOVERY

US Federal Reserve Board chairman Ben Bernanke told Congress that while the US economic outlook is improving, the recovery remains modest, unemployment is still high and consumer sentiment and spending are relatively low. In presenting his semi-annual monetary report to Congress, Bernanke told the House Committee on Financial Services that economists and policymakers at the Fed anticipated that US (GDP) growth this year would be around 2.5%. That rate of GDP expansion would be a marked improvement from the 1.7% GDP advance recorded for 2011. Bernanke noted that the 2.5% GDP forecast was considerably lower than the central bank's predictions in mid-2011 for 2012 economic growth.

TRINIDAD GAS CUTS TO LAST THROUGH 2012

Curtailed deliveries of natural gas to chemical producers in Trinidad are likely to continue, with reductions of 10-20% in 2012, an official with the National Gas Company (NGC) of Trinidad and Tobago said. "The natural gas curtailments to chemical producers in the Point Lisas Industrial Complex will continue for the foreseeable future as BP continues to systematically perform safety maintenance procedures on its well platforms," said NGC vice president Wade Hamilton. BP is the largest of four companies that supply natural gas to Trinidad.

CHILE'S PE PRODUCTION CUT BY 50% UNTIL MARCH

Polyethylene (PE) production in Chile has been cut in half until late March on diminished ethylene supplies, a source with US-based Dow Chemical said. A reduction in ethylene output at the Enap Talcahuano refinery is the root of the shortages, downstream sources said. The Enap plant had been down a couple of weeks ago to repair a pinhole on a steam line, a procedure that flared some ethylene, leading neighbors in the city of Concepcion to believe the problem had been a fire. The plant recovered from that incident, but no details have surfaced about the reasons for the current slowdown in ethylene production. Enap has not immediately returned calls seeking comment. Dow Chemical's low-density polyethylene (LDPE) plant in Chile has a capacity of 46,000 tonnes/year. The diminished ethylene supply is expected to generate significant shortages of PE in the domestic market.

CHEMTURA SEES RAW MAT DECLINE AS SHORT-LIVED

US-based chemical firm Chemtura believes that the decline in raw material costs from which it benefited in the 2011 fourth quarter will be short-lived. CEO Craig Rogerson said that 2011 fourth-quarter margins in Chemtura's industrial businesses improved because of lower raw material costs compared with the third quarter, as well as Chemtura's own product price increases. "We saw, for the first time, some decrease in general raw material costs," Rogerson said on the company's fourth-quarter results conference call. However, Rogerson said that Chemtura was already seeing signs that raw material costs would go up again. Many of Chemtura's petrochemical raw materials are based more on oil than natural gas, which means that as oil prices go up, the company will see upward pressure on those costs, he said. He pointed in particular to benzene-related raw materials, which are likely to be affected early by any raw material cost increase.

US DURABLE GOODS ORDERS FALL 4% IN JAN

US orders for manufactured durable goods fell by 4% in January from December, the Commerce Department said, marking a reversal to what had been three consecutive months of gains. In its monthly report, the department said that durable goods orders fell by $8.6bn (€6.4bn), or 4%, in January to $206.1bn, more than offsetting the 3.2% gain reported for December. Durable goods are manufactured products built to last three years or more and include items such as automobiles, appliances, transportation and manufacturing equipment.

BRAZIL COULD EXPORT RICE-BASED ETHANOL

Brazil could one day export rice-based ethanol as the country has developed a strain that contains more starch, local refiner Vinema Biorefinarias do Sul said. The company is in the Rio Grande do Sul state, which is the nation's largest producer of rice, with 60% of Brazil's rice production. Rio Grande do Sul state may quadruple its rice production for ethanol from 1m hectare to 4m hectares, said Vilson Machado, research and development director at Vinema. The state's current rice harvest is around 7m tonnes/year. According to Machado, Brazil could sell and even export the rice-based ethanol at the same prices as US corn-based ethanol.

ASIA

SINOCHEM EYES NEW QUANZHOU CRACKER

China's Sinochem is planning to build a new cracker that can produce around 1m tonnes/year of ethylene at Quanzhou in Fujian province, with the start-up slated for 2016, a source close to the company said. The company still needs to finalise the derivative units that will be built with the cracker before submitting the proposed project for government ­approval, the source said. Sinochem had earlier said it was planning to start up a 12m tonne/year crude distillation unit (CDU) at its upcoming refinery in Quanzhou next year.

ASIA PHENOL TRADE FLOWS TO SHIFT ON INDIA ADD

India may lift the anti-dumping duty (ADD) imposed on phenol cargoes exported from the US, Taiwan and South Korea in a move that may cause a shift in trade flows in Asia, industry players said. Market players expect India's Central Board of Excise and Customs to announce the lifting of the ADD in the next two months, although the date of the announcement remains uncertain. "We suspect the removal of ADD will take effect in April as the government's financial year runs from April 1 to March 31," an Indian trader said.

SAMSUNG TOTAL CUTS DAESAN AROMATICS

South Korea's Samsung Total has cut aromatics production at its Daesan-based facility because of technical woes, market sources said. The facility can produce up to 650,000 tonnes of paraxylene (PX) and 470,000 tonnes of benzene. The company is considering bringing forward a one-month turnaround for the aromatics facility that was originally scheduled for April, market sources said.

HUAFON COMMISSIONS POLYAMIDE 6,6 PLANT

China's Huafon Group has successfully commissioned a 40,000 tonne/year polyamide 6,6 (or nylon 6,6) plant at Ruian in China's Zhejiang province, said Germany-based chemical engineering firm Uhde Inventa-Fischer, which provided the technology for Huafon's plant. It said the unit could produce high-quality granulate for use in applications such as textiles, tire cord, engineering plastics and copolymers. A key feature of Huafon's plant is that it runs on a continuous process, using the feedstocks hexamethylenediamine and adipic acid, that also produces AH salt, Uhde said. AH salt, or adipic hexamethylene diamine, is the monomer for the production of polyamide 6,6 polymers.

JX NIPPON OIL REDUCES MIZUSHIMA BTX RATES

JX Nippon Oil & Energy was forced to reduce the production of benzene, toluene and mixed xylenes (BTX) at its Mizushima complex due to technical problems at a unit, a company source said. One of the plants in Mizushima was shut last Tuesday and it is unclear when that unit can be restarted, the source said. As a result of this plant problem, overall production of BTX at Mizushima, in southern Japan, has been reduced, the source added. The company produces about 240,000 tonnes/year of benzene and 200,000 tonnes/year of toluene from reformers and a toluene disproportionation (TDP) unit. It also produces another 100,000 tonnes/year of benzene from a hydro-dealkylation (HDA) unit in Mizushima.

MITSUI TO SHUT CHIBA PHENOL/ACETONE IN OCT

Japan's Mitsui Chemicals will shut its phenol/acetone plant in Chiba in the second half of October for annual maintenance, a company source said. The plant, which can produce 190,000 tonnes/year of phenol and 114,000 tonnes/year of acetone, will remain off line until the end of November, the source said. The facility is currently running at full capacity. Meanwhile, Mitsui Chemicals' phenol/acetone plant in Osaka is scheduled for annual maintenance in June, while its Chiba joint venture plant with Idemitsu Kosan will be shut down in March for maintenance.

RELIANCE HIKES PE, PP ON TIGHT SUPPLY, HIGH COSTS

India's Reliance Industries Ltd (RIL) has raised its list prices for all grades of polyethylene (PE) and polypropylene (PP) by rupees (Rs) 1.00-3.00/kg (Rs1,000-3,000/tonne, $20-61/tonne), on persistently short supply and high raw materials costs, a source close to the company said. The tight ­domestic market is a result of the forthcoming shutdowns at facilities of Indian Oil and Gail India, the source said. Lower Middle East imports and soaring naphtha prices caused pressure, he said.

FCFC PLANS JULY CLOSURE OF PHENOL-ACETONE PLANT

Taiwan's Formosa Chemicals & Fibre Corp. (FCFC) plans to shut its phenol-acetone plant in Mailiao on July 1 for annual maintenance, a company source said. The plant, which has two lines with a combined capacity of 400,000 tonnes/year of phenol and 250,000 tonnes/year capacity of acetone, will remain off line until August 5, the source said.

MIDDLE EAST & AFRICA

SANCTIONS ON IRAN DISRUPTING CRUDE OIL

Western-led sanctions imposed on Iran over its nuclear program are disrupting the country's crude oil exports, the US Energy Information Administration (EIA) says. Both the US and the EU have acted to tighten sanctions against the Islamic republic, including immediate and future measures. "These measures may already be causing some adjustments in oil supply patterns," the EIA said.

SABIC SIGNS TECH LICENSE DEAL WITH MITSUI

Saudi Arabia's SABIC has signed a technology license agreement with Japan's Mitsui Chemicals for toluene di-isocyanate (TDI) and methyl di-p-phenylene isocyanate (MDI) production. The agreement covers joint technology development for TDI and MDI, which are raw materials for the production of polyurethane (PU). "Through this technology license agreement, we will strengthen our product capabilities with high-quality TDI and MDI and expand into the polyurethane business," said SABIC CEO Mohamed Al-Mady. "The agreement will spur our strategic business plan to penetrate the global polyurethane market."

QAFAC RAMPS UP PRODUCTION AT MTBE UNIT

Qatar Fuel Additives Co. (QAFAC) is currently ramping up production at its 610,000 tonne/year methyl tertiary butyl ether (MTBE) facility at Mesaieed after it was restarted, a company source said. The unit, which uses methanol from its own 835,000 tonne/year methanol unit on the same site, was halted on January 15 for maintenance, added the source. MTBE is used as a gasoline additive that provides clean burning fuel to reduce the tail-gas pollution generated by motor vehicles.

KAROON EYES JUNE OR JULY START-UP OF FIRST MDI UNIT

Iran's Karoon Petrochemical is planning to begin commercial production at its new 40,000 tonne/year di-p-phenylene isocyanate (MDI) unit in Bandar Mahshahr in June or July this year, a company source said. The plant - Iran's first MDI facility - was initially scheduled to start up in the first quarter of this year, the source said. Karoon's 40,000 tonne/year toluene di-isocyanate (TDI) plant at the same site is running at full capacity, the source added.

SABIC PLANS WEEK-LONG SHUTDOWN AT PP PLANT

Saudi Arabia's SABIC plans to shut one of its polypropylene (PP) facilities at Al-Jubail, Saudi Arabia, in March for a week of scheduled maintenance, a company source said. The affected PP plant is one of the smaller units of Ibn Zahr (Saudi European Petrochemical Co.), with a nameplate capacity of 320,000 tonnes/year. SABIC's other PP units will continue to run at full tilt during the shutdown. "The shutdown is brief, so our sales allocations for March are not much affected," the source said.


By: Joseph Chang
+1 713 525 2653



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