This week's world news

12 March 2012 00:00  [Source: ICB]

AMERICAS

DOW AUTHORIZES CAPITAL FOR TEXAS PROPYLENE
US-based chemical major Dow Chemical's board of directors has authorized capital to finalize detailed engineering and to purchase equipment for the company's planned world-scale propylene facility in Texas. Dow said basic engineering work for the on-purpose propylene production facility has begun. The project is on track for production start-up in 2015. The project will run on Honeywell UOP process technology to produce propylene from propane.

CPCHEM STILL MULLING US SITE FOR NEW PE PLANTS
US-based Chevron Phillips Chemical (CPChem) is still evaluating sites for its new polyethylene (PE) plants, said executive vice president of olefins and polyolefins Mark Lashier at the CERAWeek energy conference in Houston, Texas, last week. CPChem plans to build a 1.5m tonne/year ethane cracker and two PE plants, each with a capacity of 500,000 tonnes/year. The company has already chosen its Cedar Bayou site in Baytown, Texas, for its cracker.

KRONOS Q4 NET INCOME RISES ON HIGHER TIO2
US-based titanium dioxide (TiO2) producer Kronos Worldwide's fourth-quarter 2011 net income rose steeply to $85.8m from $36.4m in the year-ago period on the back of higher selling prices. Net sales in the fourth quarter were $437.4m (€332.4m), 17% higher than in the same period of 2010.

PROSPECTS RISE FOR US ON-PURPOSE BD PLANTS
Rising prices for butadiene (BD) have increased the prospects for on-purpose production for the monomer, said Mark Lashier, executive vice president, olefins and polyolefins, for US-based Chevron Phillips Chemical. "BD values have soared in the recent past," he said at the CERAWeek conference in Houston, Texas, last week. "Companies will look at butane dehydrogenation." Already, US-based TPC Group plans to start production at an on-purpose BD plant in Houston in 2015.

US PETCHEM EXECUTIVES EXPECT EXPORTS TO CLIMB
Increased US exports of natural gas liquids (NGLs), petrochemicals and end-use products will result from the natural gas shale boom, said Jim Morris, vice president of raw materials for US trash bag manufacturer Heritage Bag. "A few years ago, we were expecting a Middle East buildup so we decided to stop building polyolefin and olefin plants here, and even shut some down," he said at the CERAWeek conference in Houston, Texas, last week. Morris said the US is looking to export chemicals.

TIGHT PROPYLENE PUSHES PLANS FOR ON-PURPOSE C3
Propylene supplies from US crackers and refineries are tightening, pushing producers to consider making the monomer from propane, said Mark Lashier, executive vice president of olefins and polyolefins for US-based Chevron Phillips Chemical, on the sidelines of the CERAWeek conference in Houston, Texas, last week. Shale gas is increasing supplies of propane, which PDH plants would use as a feedstock. "You will see PDH investigated," Lashier said. "There are consumers out there who will take the propane risk."

US INFRASTRUCTURE OPTIMAL FOR SHALE GAS
US infrastructure and shale gas developments have allowed companies looking for advantaged feedstocks to turn their focus away from the Middle East and other markets to the US, executives said at the CERAWeek conference in Houston, Texas, last week. There is no other place in position that has the infrastructure needed to manufacture shale gas, said Mark Lashier, executive vice president, olefins and polyolefins at US-based Chevron Phillips Chemical. "There is an economic benefit across the board [in the US]," Lashier said. "We want to upgrade here and support the economy here versus other places."

ACC URGES CONGRESS TO PASS FREIGHT RAIL RULES
The American Chemistry Council (ACC) urged lawmakers to allow chemical shippers to have more input on freight rail policies that deal with transporting toxic chemicals. The trade group is pushing lawmakers to adopt three key provisions that are part of a transport bill under consideration by Congress. The provisions would ensure chemical producers' ability to continue to safely ship their products in the US, and would encourage further investment in US chemical production, the group said.

EXXONMOBIL SHUTS DOWN REACTOR AT TEXAS PE PLANT
US polyethylene (PE) producer ExxonMobil shut down a reactor line at its Beaumont plant in Texas following an emissions event, according to a filing with the Texas Commission on Environmental Quality. The company said a tube leak caused ethylene to be released from a high pressure reactor. It was not known whether the unit was still down. A company spokesperson did not immediately respond to a request for comment.

EVONIK TO SELL COLORANTS BUSINESS TO ARSENAL
Germany-based chemical firm Evonik Industries has agreed to sell its global colourants business to US private equity firm Arsenal Capital Partners for an undisclosed sum. The acquisition is expected to be completed in April 2012. In 2011, Evonik's colorants business generated sales of about €130m ($171m). The sector's facilities are in the US, Canada, Brazil, Australia, China, Malaysia and the Netherlands.

BRASKEM AMERICA CEO TO HEAD ETH BIOENERGIA

Braskem America CEO Luiz de Mendonca will leave the company to become head of Brazil-based ethanol producer ETH Bioenergia, sources said. Calls to ETH Bioenergia were referred to a spokeswoman at parent company Odebrecht, who was not available for comment. Braskem America did not immediately respond to a request for comment. Mendonca will replace Jose Carlos Grubisich, who left ETH Bioenergia to become the president of Eldorado Celulose, a Brazilian cellulose producer.

EASTMAN RESTARTS UNITS IN TEXAS HIT BY POWER CUT

US-based Eastman Chemical has restarted two of its Longview crackers in Texas that were downed by a power outage. The two units each have a 141,000 tonne/year ethylene capacity. The crackers were restarted during the weekend ended March 4, according to a filing with the Texas Commission on Environmental Quality. Eastman has a third cracker in Longview with 358,000 tonnes/year of capacity.

EUROPE

BASF EARNINGS TO FALL - BERNSTEIN RESEARCH
Global investment research firm Bernstein Research expects Germany-based BASF's earnings to fall in 2012 on the basis that recent fixed-cost inflation trends will continue and on the company's plans to grow from highly taxed Libyan oil production. "Fixed-cost inflation significantly exceeded volume and portfolio growth in 2011. We believe German chemicals industry wage inflation of plus 5% (compared [with] the long term trend of 2-3%) was a key driver," Bernstein said. He believes analysts have interpreted management's guidance of flat earnings before interest and tax as stable without taking into account the impact of Libyan taxes.

PERSTORP LIFTS FORCE MAJEURE AT CHLOR-ALKALI
Sweden-based chemical firm Perstorp has lifted force majeure declarations at its chlor-alkali and toluene di-isocyanate (TDI) facilities at Pont-de-Claix in France, a company source said. The units were restarted over the weekend of February 18-19, but the force majeure on both products at the site remained in place until March 2. The source said that material remained tight and strict allocation would continue until further notice. On February 4, the chlor-alkali unit was unexpectedly shut down because of strike action and the downstream TDI facility was affected as a result.

OMV ASSURES PROTESTERS ON SHALE GAS INTENTIONS
Austria-based energy and petrochemical firm OMV has assured green movement protesters that it will not submit any shale gas project applications to the authorities until environmental and social impact assessments have been completed and considered. Its commitment follows a pledge given in late January that any hydraulic fracturing, or fracking, that forms part of possible future shale gas operations would not use chemicals. "Our objective remains the ecologically-friendly, Austrian way of exploring shale gas [as part of making] the country energy secure," said OMV spokeswoman Alexandra Seidl.

PETROPLUS UK NEEDS $1BN TO KEEP REFINERY GOING
The administrators of Petroplus's business in the UK need about $1bn (€760m) to continue operations at the insolvent company's refinery at Coryton, Essex, over the medium term, they said in a proposal to creditors. Without it, they will sell or close the 220,000 bbl/day refinery, they said. Switzerland-based Petroplus filed for insolvency in January after lenders froze about $1bn in credit lines in late December. The insolvency affected Petroplus's five refineries in Europe, including the one in the UK.

PETKIM HAD 'DISASTROUS' Q4 ON MARGINS - ERSTE
Turkey's Petkim petrochemical company suffered a "disastrous" fourth quarter, with margin deterioration hitting the producer even harder than anticipated, Erste bank said. Petkim suffered a net loss of Turkish lire (TL) 40m ($22.6m, €17.1m) in the fourth quarter, compared to a net profit of TL46m in the same quarter a year ago, while sales revenues rose to TL974m from TL780m. "Its figures were very poor, as the company suffered severe losses."

GERMANY'S INDUSTRIAL ORDERS FALL BY 2.7%
Germany's industrial orders fell 2.7% in January from December. The country's economics ministry said the main reason was a drop in orders for big items such as trains, ships and aircraft. Excluding those items, orders declined by 0.5%. The ministry also said that German domestic industrial demand was relatively more robust in January than export demand.

POLAND'S ORLEN APPOINTS UNIPETROL CEO FOR CHEMS
Poland's PKN Orlen has appointed the CEO of Czech petrochemical subsidiary Unipetrol as the head of Orlen's petrochemical business. Piotr Chelminski, who became Unipetrol CEO and company chairman in December 2009, was due to become Orlen's management board member responsible for petrochemical operations from March 9. Last December, Orlen dismissed its previous petrochemical head, Marek Serafin, after he was detained by Poland's Internal Security Agency, for alleged preferential treatment of a third party and abuse of trust in business.

ASIA

PETRONAS, BASF TO BUILD MALAYSIA PLANTS
Germany's BASF and Malaysia's PETRONAS have agreed to proceed with a plan to develop new world-class specialty chemical facilities in Johor, Malaysia. The companies will create a joint venture entity that will construct the proposed production facilities for isononanol, highly reactive polyisobutylene, non-ionic surfactants, methanesulfonic acid, as well as plants for precursor materials. BASF will own 60% in the joint venture, while PETRONAS will hold the remaining 40%. The facilities will be built at PETRONAS's proposed refinery and petrochemical integrated development complex at Pengerang, Johor. It is part of the two companies' previously announced Malaysian ringgit (M$) 4bn ($1.32bn) investment deal.

CELANESE EYES WORLD MARKETS FOR ITS ETHANOL
US-based acetyls producer Celanese is looking at markets worldwide for its hydrocarbon-based ethanol, said John Fotheringham, Celanese senior vice president and general manager of advanced fuel technologies, at the CERA-Week conference in Houston, Texas, US. Celanese's recently developed technology TCX allows it to produce ethanol from natural gas or coal by using acetic acid as an intermediary, according to a recent patent. In 2013, Celanese plans to start ethanol production in China, using coal as a feedstock. With the Celanese technology, countries could use their non-liquid hydrocarbons to produce fuel ethanol, thus increasing energy independence, Fotheringham said. In addition to coal and natural gas, these non-liquid hydrocarbons could also be petroleum coke.

TAIWAN'S FCFC TO RESTART SM PLANT IN MARCH
Taiwan's Formosa Chemicals & Fibre Corp. (FCFC) plans to restart its 250,000 tonne/year No 1 styrene monomer (SM) plant at Mailiao in the middle of March, a company source said. The plant was shut on 20 February because of a technical issue. The company is still supplying long-term cargoes during the shutdown period, but spot cargoes are no longer available, the source added.

OLEOCHEMICALS SET FOR IMBALANCE - CONSULTANT
Subsidies introduced by the Indonesian government for palm oil refiners are likely to attract more producers to locate to the country, leading to an oversupply of fatty alcohols and acids in the market, said Alan Brunskill, an independent consultant. He spoke at the Palm and Lauric Oils Conference and Exhibition Price Outlook 2012 in Kuala Lampur, Malaysia. An amendment to the taxes paid by oleochemical producers, which led to a massive reduction in export duties, was introduced by the Indonesian government in September 2011.

CSPC TO SHUT HUIZHOU MEG FOR CATALYST CHANGE
China's CNOOC and Shell Petrochemicals Co. (CSPC) will shut its 320,000 tonne/year monoethylene glycol (MEG) plant at Huizhou in Guangdong province from March 20 to April 10 for a catalyst change, a company source said. The plant also produces 40,000-50,000 tonnes of diethylene glycol (DEG) annually. DEG is a co-product of MEG. The company's DEG output will fall by 2,000 tonnes during the shutdown period, the source added.

ASAHI KASEI TO BUILD ACETONITRILE IN S KOREA
Japan-based Asahi Kasei Chemicals has decided to build an acetonitrile plant in Ulsan, South Korea. The new 11,000 tonne/year acetonitrile plant will be built on the Ulsan premises of Tongsuh Petrochemical, which is a subsidiary of the Asahi Kasei group. It is scheduled to start up in January 2014. Asahi Kasei Chemicals currently operates a 14,000 tonne/year acetonitrile plant in Kawasaki, Japan.

SINOPEC TRIMS MARCH CRACKER RATES
Sinopec has reduced operating rates at its crackers in China this month, partly because of high feedstock naphtha prices, a company source says. The operating rate at its naphtha crackers was reduced to 90-95% this month from an average rate of close to 100% in February. Sinopec operates 16 crackers either on its own or through joint ventures.

INDORAMA ACQUIRES PET ASSETS IN INDONESIA
Thailand-based polyester maker Indorama Ventures will fully acquire the polyethylene terephthalate (PET) assets belonging to Indonesian producer Polypet Karyapersada for an undisclosed fee. Polypet Karyapersada owns a 100,800 tonne/year PET facility at Cilegon in Indonesia. The facility is located adjacent to Indorama's joint-venture purified terephthalic acid (PTA) plant. The deal is expected to be completed in the first quarter of this year, subject to regulatory approvals. The PET assets will be held by Indorama Polypet Indonesia, an indirect subsidiary of Indorama Ventures, the firm added

PERTAMINA MAY DELAY AROMS UNIT TURNAROUND
Indonesia's Pertamina may further delay a scheduled turnaround at its paraxylene unit at Cilacap, according to a company source. "The turnaround for the Cilacap unit might be delayed from May to September because of good current margins. Production has also been smooth so far," the source said. Pertamina can produce a total of 270,000 tonnes of PX and 110,000 tonnes of benzene per annum from its Cilacap aromatics facility.

JAPAN'S ASAHI KASEI SHUTS NO. 2 SM PLANT
Japan's Asahi Kasei shut its 320,000 tonne/year No. 2 styrene monomer (SM) at Mizushima in early March for maintenance, a company source says. The facility is scheduled to be restarted on 20 April after about 45 days of maintenance. The company's 390,000 tonne/year No. 3 SM plant at the same site is scheduled for a turnaround at the end of March. The unit is expected to be shut for around 20 days.

WACKER CHEMIE INVESTS IN CHINA POLYMERS
Germany-based chemical producer Wacker Chemie is expanding its Chinese polymer activities by investing around €40m ($52.6m) to build two production facilities at its site in Nanjing, China. A new 60,000 tonne/year reactor will be added to its existing facilities for vinyl acetate ethylene (VAE) co-polymer dispersions. This will double Wacker's total VAE diversion capacity to approximately 120,000 tonnes/year. The reactor is scheduled to come on stream in mid-2013.

ASAHI KASEI CHEMICALS, DAISO AGREE TO END JV
Japan's Asahi Kasei Chemicals has agreed to transfer all of its shares in chlorine and caustic soda maker Okayama Chemical to its joint venture partner Daiso Group on April 1. Okayama Chemical was established in 1968 as a 50:50 joint venture to supply chlorine and caustic soda to parent firms Daiso Group and Asahi Kasei Chemicals. "After its dissolution as a joint venture, Okayama Chemical will continue operating as a wholly owned subsidiary of Daiso," Asahi Kasei Chemicals said in a statement.

MIDDLE EAST & AFRICA

APC PLANS THREE-WEEK PP TURNAROUND IN APRIL/MAY
Saudi Arabia-based Advanced Petrochemical Co. (APC) plans a three-week turnaround at its polypropylene (PP) units in April or May. APC plans to shut its two PP units at Al-Jubail in Saudi Arabia for a three-week long scheduled maintenance, a source close to the company says. Each of the PP lines has a nameplate capacity of 225,000 tonnes/year. The exact dates of the planned shutdown have yet to be determined, the source said. The PP facilities produce only homo PP grades, such as yarn (raffia), injection and BOPP film, according to the source. APC is 47%-owned by the state-run Saudi Industrial Development Fund, while the remaining 53% is held byprivate investors.


By: Joseph Chang
+1 713 525 2653



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