This week's world news

16 April 2012 00:00  [Source: ICB]

AMERICAS

EXXONMOBIL ALLOCATES US HEVA LDPE

US-based ExxonMobil announced it will begin allocating specific grades of high ethylene vinyl acetate low density polyethylene (HEVA LDPE) following operational difficulties at its Baton Rouge plastics plant in Louisiana, sources said. It is not clear what the operational difficulties were, or how long the allocation would last. "We are currently assessing the impact to our HEVA production capabilities at Baton Rouge," the company said in a customer letter obtained by ICIS. "The quantity and specific grades of HEVA product that may be allocated to you is still being assessed and will be communicated to you as soon as possible." HEVA LDPE is a copolymer used in certain applications requiring different degrees of flexibility and softness.

MICHELIN TO BUILD AND EXPAND US TIRE PLANTS

France-based tire maker Michelin announced plans to construct an earthmover tire manufacturing plant in Anderson County, South Carolina, US. Along with the new plant will be the expansion of an existing facility in nearby Lexington, South Carolina. The $750m (€570m) investment for the two plants is the result of an increased demand for giant, off-the-road large tires, which for Michelin grew by more than 20% between 2009 and 2011. The tires are made of a combination of chemicals including natural and synthetic rubber, and can measure up to 63 inches in inner diameter. The expansion in Lexington will enable the company to begin production there in October. The new plant in Anderson County will start producing by late 2013.

ALPEK'S Q1 EARNINGS RISE 7% ON PET ACQUISITIONS

Mexico-based polyethylene tere-phthalate (PET) producer Alpek reported first-quarter (Q1)earnings of $156m (€119m), up 7% year on year, the Grupo Alfa subsidiary reported. Alpek attributed the increase to higher revenue, the integration of newly acquired plants and lower prices for natural gas. Utilization rates also increased, improving margins. First-quarter revenue reached $1.90bn, up by 13% from the year-ago period. Alpek attributed the increase to higher sales throughout the polyester chain. By segment, sales volumes of polyester products rose 11% year on year. Alpek attributed the increase to higher polyester demand and its recently acquired plants in Columbia, South Carolina, and Bay St. Louis, Mississippi, US.

BWA WATER HIRES THREE NEW EXECUTIVES

UK based BWA Water Additives made moves to strengthen its regional focus for the European and Americas regions, appointing Marta Farriols as sales director for the European region and Erich Dawson as vice president, sales for the Americas and European regions. In addition, a new vice president of marketing, Nozi Hamidi, has been added, while Alastair Sholl has been named vice president of technology.

EUROPEETHYLENE PIPELINE IN GERMANY COMPLETED

Germany's long-delayed 400,000 tonne/year ethylene pipeline to connect BASF's petrochemical hub at Ludwigshafen in Rhineland-Palatinate with chemical sites in Bavaria has been completed, the consortium that built the pipeline said. Ethylen-Pipeline Sud (EPS), which includes BASF and other chemical producers, also confirmed that the pipeline would start up this summer. EPS's general manager, Werner Dohler, added that a court in Stuttgart last month rejected several lawsuits brought by residents who objected to the pipeline's construction and operation. Court cases and objections delayed the project by about four years, driving costs of the 370km pipeline up to €200m ($263m). The project was estimated to cost about €150m in 2006.

EU TO REVIEW US ETHANOLAMINE DUMPING

The EU will review anti-dumping measures against ethanolamine imports from the US. It said it is reacting to a request from US-based Dow Chemical, which is exporting ethanolamine from the US to the EU. In its request, Dow argued that it had raised its export prices for ethanolamine "consistently, over a long period of time" and therefore the anti-dumping measures were no longer necessary, the EU said.

BAVC SLAMS EUROPE PENSION PROPOSALS

Proposals by the European Commission to improve the security of EU companies' occupational-pension plans could have catastrophic consequences for workers in Germ­­any's chemical sector, said Eggert Voscherau, head of German chemical employers' trade group BAVC and chairman of chemical giant BASF's supervisory board. He said the Commission's plans would lead to a cost explosion, resulting in estimated additional costs for German employers in the chemical sector and other industries of €40bn ($53bn). Under the proposals, company pension plans could be subject to the same capital requirement rules insurance companies face. This would force employers to put aside huge amounts of money to strengthen their pension plans' equity position, Voscherau said.

CEFIC CHIEF MEETS RUSSIAN CHEMISTS UNION

Cefic president Giorgio Squinzi looked to further enhance relations between Russia's chemical industry and the EU chemical body when he met with officials from the Russian Chemists Union (RCU). Squinzi met RCU president Victor Ivanov, RCU executive director Igor Kukushkin and representatives from major Russian chemical companies to explore new opportunities to work together in technical, scientific and economic areas. "The meeting today between our two groups is a culmination of more than five years of working together to foster more trade, greater regulatory expertise and improved safety," said Squinzi. Last month, Cefic's board of directors decided to allow an RCU application for associate membership into the EU chemicals trade group. Final approval is set for September 28 at the Cefic general assembly in London.

SIBUR COMPLETES BIAXPLEN TAKEOVER

Russia-based petrochemical company Sibur has finalized a deal to acquire a 100% stake in Biaxplen - one of Russia's major producers of biaxially oriented polypropylene (BOPP) film. Biaxplen's production facilities consist of three BOPP plants in Kursk, Moscow and Nizhny Novgorod, with a total capacity of 87,000 tonnes/year. Sibur also owns another BOPP producer - BIAXPLEN-NK, based in Novokuybyshevsk, in central Russia's Samara region. BIAXPLEN-NK will now become part of the BIAXPLEN Group. In 2011, Biaxplen and BIAXPLEN-NK's aggregate production totaled 82,000 tonnes of BOPP, while Sibur sold more than 65,000 tonnes of polypropylene (PP) to the companies.

ING: ORLEN AND UNIPETROL UNDERMINED ON ASSETS

Poland's PKN Orlen and Czech subsidiary Unipetrol are suffering from the retention of poor quality petrochemical assets, Netherlands-based investment bank ING said. The polyvinyl chloride (PVC) production of Orlen, operated by its Polish unit Anwil and Czech unit Spolana, and the polyethylene (PE) production of Unipetrol were picked out by Budapest-based analyst Tamas Pletser as the companies' weakest petrochemical assets in the current difficult market environment. "Overall, we expect 2012 to be a lackluster year for PKN Orlen investors," said Pletser.

ERSTE UPGRADES CZECH PEGAS ON EXPANSIONS

Erste Group Bank has upgraded its recommendation on the stock of major polyethylene (PE) and polypropylene (PP) buyer Pegas Nonwovens to "buy" from "accumulate" after analyzing the Czech company's plans to possibly double its production capacity, the Austrian bank said. Pegas, which produces synthetic nonwoven textile products such as diapers (nappies) from PP and PE filaments, is pursuing plans to gradually increase its capacity to 150,000 tonnes/year by 2016 with the addition of production lines in Egypt and an additional line in the Czech Republic.

ASIA

BASF TO INVEST IN POLYURETHANES IN INDIA

BASF India will invest Indian rupees (Rs) 10bn ($194.3m, €147.7m) to set up a chemical production site at Dahej, located on the west coast of India in Gujarat, the Germany-based chemical major said. The site will be an integrated hub for polyurethane (PU) manufacturing and will house production facilities for care chemicals and polymer dispersions for coatings and paper. The new site will be located at the Dahej Petroleum, Chemicals and Petrochemicals Investment Region, and production is expected to start in 2014. "With this new project, we expect to grow our businesses in the important northern and western regions of India," said Prasad Chandran, chairman and managing director of BASF India.

NAKODA TO DOUBLE CAPACITY AT SURAT SITE

India's Nakoda will double the polymerization capacity at its polyethylene terephthalate (PET) and polyester yarn plants at Surat in Gujaratto, west India, to 280,000 tonnes/year by 2015, chairman and managing director B.G. Jain said. The company will invest $400m (€304m) in the capacity expansion. Currently, Nakoda has three plants at the site which can produce 50,000 tonnes/year of PET, 30,000 tonnes/year of partially oriented yarn and 60,000 tonnes/year of fully drawn yarn, respectively. The capacity of each unit will be doubled. The expansion will help Nakoda work with its subsidiary Indo Korean Petrochem, which acquired polyester fiber manufacturer Kyunghan Industry in South Korea for $40m in 2010.

SHAANXI SHANHUA CUTS BDO OPERATING RATES

China's Shaanxi Shanhua Chemical Fertilizer has further reduced the operating rates at its 30,000 tonne/year butanediol (BDO) plant at Weinan, Shaanxi province, because of equipment problems, a company source said. Operating rates at the BDO plant are currently below 50% and it will take the company 2-3 days to examine the equipment issues, the source added last Tuesday. The company will ensure there is normal supply for its customers with confirmed orders, the source said.

JINZHOU PETROCHEMICAL SHUTS STYRENE UNIT

China's Jinzhou Petrochemical shut its styrene monomer (SM) unit, with a nameplate capacity of 80,000 tonnes/year, at Jinzhou in Liaoning province for 60 days of maintenance on April 8, a company source said. The SM output of the unit is about 5,000 tonnes/month, of which 2,000 tonnes is supplied to eastern China and the rest to northern China, the source said. Company sources said contractual and spot supply from the plant would be cancelled during the shutdown. The shutdown, together with Tianjin Dagu's turnaround at its 500,000 tonne/year plant from April 2, will tighten SM supply, market sources said.

SHENYANG SHUTS PO, POLYETHER POLYOL UNITS

China's Shenyang Jinbilan Chemical shut its 40,000 tonne/year propylene oxide (PO) unit at Shenyang in Liaoning province over the weekend ended April 8 after a fire broke out at the facility on April 6, a company source said. The company also shut its downstream 40,000 tonne/year polyether polyol plant because of a lack of raw material as a result of the fire, the source added. It is not known when the plants would be restarted.

BASF-YPC TO SHUT BD UNIT FOR MAINTENANCE

BASF-YPC, a key butadiene (BD) producer in China, plans to shut its 110,000 tonne/year BD unit for 18 days of maintenance from April 16, a source close to the company said. The shutdown may tighten BD supply in the domestic market, a market player said. BASF-YPC is a joint venture between German chemical major BASF and China's Sinopec, with each company holding a 50% stake.

NANJING BLUESTAR BEGINS TEST RUNS AT BDO PLANT

China's Nanjing Bluestar New Chemical Materials has been testing its new 55,000 tonne/year butanediol (BDO) plant at Nanjing in Jiangsu province since the Tomb-sweeping Day holiday on April 4, a company source said. However, the company only plans to hold test runs at both the BDO plant and a 44,000 tonne/year tetrahydrofuran (THF) plant. Even if these are successful, the facilities will not produce much for market supply, the source added. The producer has another 55,000 tonne/year BDO plant at the same site, which is operating at 100%. Nanjing Bluestar is also conducting test runs at a 50,000 tonne/year maleic anhydride (MA) plant at the same site, said market sources.

SHANDONG LIHUAYI RESTARTS 2-EH PLANT

China's Shandong Lihuayi Group restarted its 140,000 tonne/year 2-ethylhexanol (2-EH) plant in Shandong province on April 10 after shutting it on April 6 because of a fault at the unit, a company source said. The restart at the plant will ease the tight domestic 2-EH supply caused by the shutdown, a market player said.

TASCO CUTS MEK RATES ON FEEDSTOCK SHORTAGE

Taiwan-based Tasco Chemical has reduced operating rates at its 120,000 tonne/year methyl ethyl ketone (MEK) facility in Kaohsiung to 70-80% of capacity, from 80-90%, as a result of a fall in feedstock supply, a company source said. Supply of C4 to Tasco's MEK facility was disrupted following a pipeline leak and explosion at its feedstock supplier CPC Corp.'s crude butadiene (BD) tank at Kaohsiung on April 6. Tasco does not expect the reduction in production rates to affect its exports in April.

SINOPEC BEIHAI RUNS AROMATICS UNIT AT 100%

China's Sinopec Beihai Petrochemical is running its aromatics plant at Beihai in Guangxi province at full operating rates after starting up the unit in January, a company source said. The unit, which can produce 30,000 tonnes/year of benzene, is one of the auxiliary units of the company's 5m tonne/year refinery, according to the source. The facility's toluene and xylene output is used for oil blending, the source said.

JIANGSU WEITIAN CHEMICAL STARTS UP METHANOL UNIT

China's Jiangsu Weitian Chemical is currently debugging its new 150,000 tonne/year methanol plant at Jiangsu province in east China and plans to achieve on-spec production in mid-April, a source from the company said. The plant, an investment of yuan (CNY) 500m ($79m), was started up in early April and uses coke-oven gas as its feedstock, the source said.

THAI FATTY ALCOHOLS TO SHUT RAYONG UNIT

Thai Fatty Alcohols will shut its 100,000 tonne/year fatty alcohols unit at Rayong in Thailand for a catalyst change in the first three weeks of May as part of its planned annual maintenance schedule, a company official said. The plant has nameplate capacity of 100,000 tonnes/year of fatty alcohols, 200,000 tonnes/year of methyl ester and 30,000 tonnes/year of glycerin. "The shutdown will not impact on supplies in the short term," the official added. The company is owned by Thai Oleochemicals, a subsidiary of PTT Chemical.

MIDDLE EAST & AFRICAPARS RESUMES NORMAL OPERATIONS AT SM UNIT

Iran's PARS Petrochemical has resumed normal operations at its 600,000 tonne/year styrene monomer (SM) facility in Asaluyeh following an unplanned shutdown, a company source said. The SM plant was taken off line on March 14 because of technical issues, prompting a declaration of force majeure. "The plant is currently running at around 75%," the source said. The technical difficulties were subsequently resolved and the unit was restarted in late March, the source added. Pars Petrochemical is a unit of state-owned National Petrochemical.

EQUATE PETROCHEMICAL APPOINTS HUSAIN AS CEO

Kuwait's Equate Petrochemical has appointed Mohammad Husain as its new president and CEO, the petrochemicals maker said over the weekend. Husain, who will succeed Hamad Al-Terkait, was previously the deputy chairman and deputy managing director for the Mina Al-Ahmadi refinery in Kuwait. The company did not say from when the appointment will be effective. Al-Terkait has served as president and CEO of Equate since 2001. Equate is a joint venture between Kuwait's Petrochemical Industries Co. (PIC), US-based Dow Chemical, and Kuwait-based firms Boubyan Petrochemical Co. (BPC) and Qurain Petrochemical Industries Co. (QPIC). The Mina Al-Ahmadi refinery is a subsidiary of Kuwait National Petroleum Co (KNPC), the national oil refining firm of Kuwait.

SABIC TO COMMERCIALIZE NEW PET APPLICATIONS

Saudi Arabia-based polymers producer SABIC is in the middle of developing and commercializing new non-bottle applications for its polyethylene terephthalate (PET) products and will conduct trials by June, one of its scientists said. "[SABIC's] new PET unit is scheduled to start up in 2013. While most of [the output] will be bottle-grade resins, we are developing new areas, such as PET tape and tape fabric," said Zahir Basheer from its technology and innovation division. He was speaking to delegates at the third annual Gulf Petrochemicals and Chemicals Association (GPCA) Plastics Summit. The new applications are co-inventions, involving a partnership between SABIC and Austrian machinery manufacturer Starlinger, he said. SABIC has a PET unit at Yanbu, with a nameplate capacity of 330,000 tonnes/year. Its new 420,000 tonnes/year PET unit at the same site is expected to be brought on stream by 2013.

CORRECTION:

In the March 26 issue, the European chlorine profile on page 42 mistakenly listed European chlorine production share by country. In fact, the figures relate to capacity share by country. In addition, in the table, ChlorAlp should be listed as Perstorp; Solvin in Fos, France should be Arkema, and the Syndial plant in Porto Marghera, Italy should not appear, as the plant ceased production in 2009. We regret the errors.


By: Joseph Chang
+1 713 525 2653



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