This week's world news

02 April 2012 00:00  [Source: ICB]

EUROPE

BASF TO DIVEST SWISS PRODUCTION ASSETS
German chemicals major BASF plans to divest its production and logistics assets at Schaffhausen, Switzerland, including its CONICA Sports Surfaces business. BASF employs 150 staff at Schaffhausen. CONICA develops and produces synthetic sports surfaces. BASF acquired the business in 2006 when it bought Evonik's construction chemicals business, Degussa. BASF said that while CONICA had a strong position in Europe, growth markets for sports surfaces lie outside the continent.

AKZONOBEL TO SEE MARGIN GROWTH IN 2012: ANALYSTS
Analysts Bernstein Research expects Dutch paints and coatings producer AkzoNobel to see margin expansion in 2012 as prices keep ahead of raw material cost inflation. "We expect prices to more than offset slowing raw material cost inflation in 2012. As a result, we expect margin expansion in all three of Akzo's segments in 2012 and 2013," Bernstein said. "We expect the majority of raw material cost inflation to come from the decorative paints division (+15%) in 2012," it added.

RUSSIA'S SIBUR SIGNS KYOTO C02 DEAL
Russian petrochemical company Sibur has signed an agreement to sell emission reduction units (ERUs) as a part of a major Joint Implementation Project (JIP). Sibur sold ERUs equivalent to 1.2m tonnes of carbon dioxide (CO2) to investment bank JP Morgan in a deal coordinated by Russia's ERU operator Sberbank. ERUs are trading units under the Kyoto Protocol, which seeks a reduction of greenhouse gas emissions. One ERU represents one tonne of CO2. Total volume of the JIP project is 8m tonnes of CO2, achieved by building the second stage of Sibur's Yuzhno-Baliksky gas processing plant in partnership with Russian oil company Rosneft. Both companies will share earnings from ERUs.

AMERICAS

US PETCHEMS MAY ANNOUNCE DERIVATIVES
The US shale gas boom could lead producers to announce derivative projects in the near future, Jim Gallogly, CEO of Dutch polyolefins producer LyondellBasell said. The advent of shale gas has provided US petrochemical producers with increasing supplies of natural gas liquids (NGLs), leading several companies to consider or announce ethylene expansions and on-purpose propylene plants. Producers will next consider derivative products, Gallogly said. "I think you will see some announcement over the next year or so."

US COULD STILL DROP THE BALL ON SHALE GAS - DOW
The US still has the potential to squander its shale gas resources unless it has the right policies in place, a Dow Chemical executive has said. The US petrochemical industry stands "on the precipice of either the biggest boom or the biggest bust in modern history," said Jim Fitterling, Dow executive vice-president and president, feedstocks, energy and corporate development. "This will either be the golden age of low-cost energy security and feedstock that powers the wellspring of economic growth, or a precautionary talk about short-sighted policies and bad decisions," he added at the World Petrochemical Conference hosted by IHS Chemical in Houston. "As a nation and as an industry, we have the capacity to drop the ball on this," he said.

GEORGIA GULF, GALATA TO MAKE BIO-BASED PVC
US-based vinyls producer Georgia Gulf and Connecticut-headquartered Galata Chemicals are collaborating to develop a line of flexible polyvinyl chloride (PVC) made with a bio-based plasticiser. The plasticiser, Drapex Alpha, is produced by Galata, and vinyl compounds with the plasticiser can be used for wire and cable and medical uses. The compounds can be custom-blended at four Georgia Gulf facilities in Mississippi, the companies said.

CEOS ARE MORE OPTIMISTIC ON US ECONOMIC GROWTH
Top US business executives are increasingly optimistic about the nation's economic recovery, a key survey stated, although they see high oil prices, the eurozone crisis and uncertain Asian markets as potential hazards to US growth. In its quarterly survey of more than 125 US chief executive officers at major corporations, the Business Roundtable said it found "an upturn in expectations for sales, capital spending and hiring for the next six months."

US MYRIANT FILES PATENT FOR BIO-BASED ACRYLIC
US-based renewable chemicals producer Myriant has filed a patent to protect its process for making acrylic acid from renewable feedstocks. Myriant said it plans to offer customers samples of its bio-based acrylic acid in the second half of 2012. Myriant expects its acrylic acid will be cost-competitive compared with petroleum-derived acrylic acid.

US PROPOSES FIRST LIMITS ON CARBON EMISSIONS
The Environmental Protection Agency (EPA) has proposed the first US restrictions on carbon emissions by electric power plants. EPA administrator Lisa Jackson said the proposed rule limiting greenhouse gas emissions by power plants would allow 1,000lb (454kg) of carbon releases for every megawatt of electric power generated. The limit will only apply to new facilities and will affect future coal-fired power plants.

ASIA

CHINA'S INDUSTRY PROFITS FALL BY 5.2% IN JAN-FEB
China's industrial producers saw a 5.2% year-on-year fall in profits in the first two months of 2012, according to figures from the National Bureau of Statistics (NBS). The total profit for domestic industrial producers with annual revenues above yuan (CNY) 20m/year ($3m/year) in January and February was CNY606bn, said NBS. The figures reflect the impact of the faltering economic recovery on Chinese manufacturers, especially state-owned enterprises, as exports have been hit by falling global demand.

MITSUBISHI CHEMICAL TO PERMANENTLY SHUT UNIT
Japanese chemical producer Mitsubishi Chemical will permanently shut its 30,000 tonne/year butanediol (BDO) facility, which produces 1,4-butanediol, at Yokkaichi in Mie prefecture by the end of March 2012. The producer is shutting the plant to increase the competitive edge of its butylenes (C4) business, Mitsubishi Chemical said. The company will only operate its 60,000 tonne/year BDO plant at the same site to improve its profits in the BDO sector, it said.

NORTH CHINA BENZENE WEAKENS ON SOFT DEMAND
North China's benzene prices have been falling because of weak demand from downstream aniline and styrene monomer (SM) ­sectors from the middle of this month, regional traders have said. Producers cut offers gradually after a lack of purchasing demand following two weeks of negotiations made them lose confidence. Benzene prices in North China fell to CNY8,500-8,550/tonne ($1,348-1,356/tonne) ex-tank on close of business on 27 March, down by CNY50-100/tonne, compared with prices on 14 March.

TOYO, EGYPT'S ENPPI BUILD ETHYLENE, BUTADIENE
Japan's Toyo Engineering and Egypt's Engineering for the Petroleum & Process Industries (ENPPI) have won a contract from Egyptian Company for Ethylene and Derivatives to build two petrochemical units at Alexandria in Egypt. The total value of the contract for both projects - a 460,000 tonne/year ethylene plant and a 20,000 tonne/year butadiene (BD) extraction unit - is approximately $600m (€452m) and the plants are scheduled to be started up in early 2015.

DOW OPENS THAILAND CHEMICALS COMPLEX
US Dow Chemical has officially opened a complex in Rayong province, Thailand, with domestic producer Siam Cement Group (SCG) and Belgium's Solvay, including a naphtha cracker and several downstream plants. The joint-venture complex is part of a $3bn (€2.26bn) investment announced in 2006, including a 900,000 tonne/year naphtha cracker plant as well as polyethylene (PE), specialty elastomers, propylene oxide (PO) and hydrogen peroxide units.

MIDDLE EAST & AFRICA

IRAN'S PCC EYES MONTH-LONG TURNAROUND
Iran's Petrochemical Commercial Company (PCC) is planning to shut its Borzuyeh aromatics complex in early May for a month-long turnaround, a company source said. The Assaluyeh-based unit has a nameplate capacity of 750,000 tonnes/year of paraxylene (PX), 100,000 tonnes/year of orthoxylene (OX) and 430,000 tonnes/year of benzene and is being operating at 70%capacity at the moment, the source added. PCC typically exports about 10,000-15,000 tonnes of PX from the complex to purified terephthalic acid (PTA) makers in India, Indonesia and China.


By: Will Beacham
+44 20 8652 3214



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