The world this week

11 June 2012 00:00  [Source: ICB]

AMERICAS

EXXONMOBIL PLANS TEXAS WORLDSCALE ETHYLENE
US-headquartered ­ExxonMobil is planning a multi-billion dollar petrochemical expansion at its facility in Baytown, Texas, which would include a new 1.5m tonne/year steam cracker. The ethane cracker will provide ethylene feedstock for two new 650,000 tonne/year high-performance polyethylene (PE) lines at the company's nearby Mont Belvieu plastics plant. The "world-class" project, due to start-up in 2016, will also include premium ­product ­facilities at the integrated Baytown complex and will ­capitalise on the North American shale gas boom.

OXYCHEM TO TAKE CRACKER DECISION IN 2012-2013
US-based Occidental Chemical (OxyChem) is exploring options for a worldscale cracker in the US and expects to make a decision by the end of 2012 or early 2013, its president said last week. "We are still exploring all options, and that includes talking to potential partners," said Chuck Anderson, president of OxyChem, on the sidelines of the American Chemistry Council (ACC) annual meeting in Colorado Springs. "The spread between [natural gas liquids] and ethylene should continue to be wide, and we want to benefit from the cheap shale gas dynamics," he added.

NORTH AMERICA REVIVAL TO GROW - ACCENTURE
The industrial revival taking place in North America is poised to accelerate, boosting demand for chemicals and investment in new production plants, a consultancy said. "Based on an analysis of around 96,000 manufacturing projects worldwide, it is clear that North America will increase its share versus the rest of the world," said Paul Bjacek, global chemical research lead at international consultancy Accenture. "Asia's share is also growing, and although EU investment is growing, its share of new investment is declining," he added.

US EXPORT DEMAND SLOWS IN ASIA AND MIDDLE EAST
Export demand for US ­petrochemicals has slowed over the past six weeks as a result of rising US plastics prices, as well as weak growth in Asia and the Middle East, the US Federal Reserve (Fed) said. The Fed's "Beige Book" report on the US economy also noted that domestic demand for petrochemicals was moderate. "Outlooks for the petrochemical industry were positive, and announcements for new construction or expansion continue at a rapid pace," the Fed said.

PENNSYLVANIA PLANS $1.65BN TAX CREDIT
The governor of Pennsylvania is proposing that Netherlands-headquartered Shell and any future ethylene producers in the state could each receive up to $66m/year (€53m/year) - for a total of $1.65bn - in tax credits, a ­spokesman for a government agency said. The proposal comes as states in the northeast US compete to attract petrochemical producers, which, in turn, are attracted to supplies of natural gas liquids in the Marcellus Shale.

DEMAND FOR NANO TO REACH $5.5BN BY 2016
Global demand for nanomaterials will increase to $5.5bn (€4.4bn) by 2016, driven by increased market penetration and the development of new materials and applications, according to a US-based research group. The most rapid expansion will occur in the energy storage and generation and construction markets, The Freedonia Group said. China and India will have the fastest demand growth for nanomaterials until 2016.

EUROPE

EUROPEAN CHEMICAL INDUSTRY AT RISK
The European chemical industry is at risk of being left behind as US production grows faster with the advantages of shale gas, global analyst Bernstein Research said. "Producers in other regions such as the Middle East and China will supply the derivatives of naphtha cracking co-products that the rest of the chemical industry needs," it said. "Consequently, producers in Europe and Asia, excluding China, face slow growth prospects and will need to specialise and drive efficiency."

BAYER MOVES TO TEST PHASE FOR CHLORINE TECH
Germany's Bayer MaterialScience (BMS) is in the test phase for its new production technology for chlorine, which it plans to license to other producers. The technology, known as the oxygen depolarized cathode process, can cut energy consumption by at least 30% and is being developed in collaboration with German engineering group Thyssenkrupp Uhde. Tony Van Osselaer, member of BMS' board of management, said: "The new technology requires around 15% more investment, but payback only takes 2-3 years." BMS has nearly completed of the conversion of all its chlorine facilities to membrane technology.

ASIA

INDIA TO RATIONALISE INVERTED IMPORT DUTY
India will correct its inverted import duty structure on chemicals and petrochemicals so that feedstocks will attract a lower duty than downstream value-added products, a senior government official said. An official from the Ministry of Chemicals and Fertilisers said: "Rationalization of the import duties, which would seek a low import duty on feedstock, and progressively move up along the value chain - would be completed by 2017, as recommended by the Planning Commission."

CHINA PE, PP TO EXTEND FALLS WITH FEEDSTOCKS
China's polyethylene (PE) and polypropylene (PP) import prices may continue to fall, in line with declines in values of crude and feedstock olefins, industry sources said. Price weakness in the Chinese polymers markets may prevail until August or September, when restocking activities begin, they added. Sharp falls in naphtha and crude prices since 1 June have dampened sentiment in the PE and PP markets, with a number of importers expecting prices to fall in July, or at best hover around the June levels.

CHINA POLYESTER PLANS SHUTDOWNS AS PET FALLS
Some Chinese polyester ­producers are planning to shut their plants as domestic bottle-grade PET chip prices fell below yuan (CNY) 10,000/tonne ($1,570/tonne) following declining feedstock purified terephthalic acid (PTA) costs and amid increased inventories, market sources said. "Because of weak macroeconomic conditions, domestic and foreign demand for beverages is not as good as estimated. So, we have slowed down our rate of purchase for bottle-grade PET chips," an official from beverage producer Tingyi (Cayman Islands) Holding said.

ETHYLENE DERIVATIVES DEMAND TO RISE 30%
Global demand for ethylene derivative products is expected to total 157.5m tonnes in 2016 - a 30.4% increase from 120.9m tonnes in 2010, Japan's Ministry of Economy, Trade and Industry (METI) said last week. The average annual demand growth rate for ethylene derivatives over the period is expected to be 4.5%, METI said. Asia demand is predicted to increase by 21m tonnes to 73.1m tonnes in 2016 from 52.1m tonnes in 2010 - a 5.8% per year increase between 2010 and 2016 - led by growth in India and China, METI added.

OUTPUT CUTS AT ASIA CRACKERS MAY TEMPER BD
Production cuts and shutdowns at some Asian crackers could temper the continuous slide in butadiene (BD) prices in the region, although demand is expected to remain weak, industry sources said. With supply diminishing, BD prices may get a reprieve and bottom out in June, and possibly stage a rebound in July, they said. Spot BD prices have declined by $600/tonne (€480/tonne), or 24%, from early May to $1,850-1,900/tonne CFR (cost and freight) northeast (NE) Asia in the week ended 1 June.

MIDDLE EAST & AFRICA

SABIC SHIPS ITS FIRST CARGO IN MIDEAST
Saudi petrochemical major SABIC has shipped its first consignment of ethanolamines and ethoxylates from its plant in Jubail, making the company the first to market these chemicals in the Middle East. The first shipment of the chemicals has gone to customers in Saudi Arabia and the Gulf region, SABIC said in a statement. "We hope to be a major supplier of solutions for our customers in Saudi Arabia and the surrounding region," vice president of performance chemicals Koos Van Haasteren said.

CHEVRON PHILLIPS TO STUDY IRAQ PLANT
US-based chemical major ­Chevron Phillips Chemical has signed a letter of ­intent to study the feasibility of building a ­petrochemical complex in Iraq. A non-binding letter of intent was signed with Iraq's Ministry of Industry and Minerals to jointly evaluate the feasibility of developing an integrated petrochemical complex in Iraq, according to Chevron Phillips spokesperson Melanie Samuelson.


By: Will Beacham
+44 20 8652 3214



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