27 July 2012 00:00 [Source: ICB]
Dow chemical Q2 profits fall 34% on weak prices
US-based Dow Chemical's second-quarter earnings fell by 34% year on year to $649m ($527m) on 10% lower sales of $14.5bn. Earnings per share of $0.55 came in 9 cents shy of Wall Street estimates. Volumes declined by 1% on an adjusted basis with prices down 5%. Performance plastics sales fell 6% year on year with volumes up 3% and prices down 9%. "World economic activity saw marked deterioration throughout the second quarter, driven primarily by Europe's persistent recessionary conditions," said CEO Andrew Liveris. He added that US economic activity is moderating while activity in China and elsewhere in emerging markets has decelerated. The company will accelerate its cost reduction and efficiency programs, said Liveris.
DuPont Q2 profits down, lowers guidance
US-based DuPont's second quarter net profits were 3.3% lower year on year at $1.19bn (€976m) as its life science and agriculture businesses offset weakness in some industrial and public sector markets. Sales were up 7.2% at $11.0bn on 1% lower volumes and 6% higher prices in local currencies. DuPont saw profits drop by 27.1% in its electronics & communications segment and by 11.2% in safety & protection. DuPont expects full year earnings to be towards the lower end of its previous outlook at $4.20 to $4.40 a share due to macroeconomic and currency uncertainties as well as a higher tax rate.
BP declares force majeure on acetic acid
UK-based BP declared force majeure on acetic acid from a plant in Texas, US, thanks to production issues. The 590,000 tonne/year Texas City plant is operated by BP and owned by US-based Eastman Chemical. BP said in a July 23 letter to customers that it had not received acetic acid from the plant since July 3, and it did not expect to receive any in the near future as a result of production issues. The company cited an unspecified incident on July 20 that involved a Praxair unit that supplies carbon monoxide to the acetic acid plant.
NOVA restarts cracker after 45-day turnaround
Canada's NOVA Chemicals has restarted its Joffre E1 cracker in Alberta after a 45-day turnaround. The 726,000 tonne/year facility resumed operations on July 21, a spokesperson said. The unit was taken off line in the first week of June. NOVA has two other crackers in Joffre, one of which is under a partnership with US-based Dow Chemical, with a combined 2.1m tonnes/year of capacity.
CAB indicates further slowing in US economy
A key indicator of US industrial activity and the overall economy was flat in July after falling for three consecutive months, the American Chemistry Council (ACC) said, suggesting a weak second half and slowing exports. The council said that its new chemical activity barometer (CAB) held steady at 88.5 in July, the same reading in June. "July data continue to suggest that broader US economic growth in the second half of 2012 will be weak, while the CAB also suggests a slowing of US exports during the rest of the year," said ACC chief economist Kevin Swift.
Celanese Q2 earnings up by 3%, sales down by 4%
US-based Celanese's second quarter earnings rose 3% year on year to $210m (€174m) while sales declined 4% to $1.68bn on lower pricing in its acetyls intermediate division and unfavorable currency valuations. The current weakened economic environment in Europe and slower growth in Asia also contributed to lower sales.
RIN lawsuit, federal raid hits Fuel Streamers
US-based biofuels trader Fuel Streamers was sued by another company - accusing it of selling phony biofuel credits - before federal agents raided one of its offices last Tuesday. The credits, called Renewable Identification Numbers (RINs), serve as credits for the production and blending of renewable fuels. They are used for compliance purposes under the Renewable Fuels Standard (RFS) regulations of the Environmental Protection Agency (EPA). The company, NIC Holding, alleged that it paid Fuel Streamers and related company Green Diesel almost $257,000 (€211,000) for more than 856,000 RINs. After paying for the RINs, NIC learned that the credits were allegedly fraudulent.
Wanhua to build a plant in North America
China-based isocyanates producer Wanhua Industrial Group has decided to set up a production plant in North America. The producer, which expanded into Europe in February 2011 when it gained control of Hungary-based isocyanates company BorsodChem, is seeking new markets because the European economic environment remains in crisis, said Ding Jiansheng, who is both CEO of Wanhua and the chairman-CEO of BorsodChem. No other details on the schedule or production parameters were available from Wanhua.
BASF cautious on H2, sees chemicals weaker
BASF does not expect global economic growth to pick up in the second half of the year and believes it unlikely that earnings from its chemical businesses in 2012 will match those of 2011. The company said its goal is to increase group sales and earnings but growth will be underpinned by the Oil & Gas and Agricultural Solutions segments. CEO Kurt Bock said that chemicals volumes declined as customers continued to act cautiously. "They reduced their inventories further, also in expectation of falling prices due to declining raw material costs we could not have anticipated that the Chinese growth engine would start to stall."
SABIC to increase PP composite capacity
Saudi Arabia-based SABIC's Innovative Plastics business plans to expand the capacity of its long-glass fiber-filled polypropylene composite resins in Genk, Belgium, to meet rapidly growing demand from automotive customers. A new production line, which started being built in June, is expected to start up in the second half of 2013. Details on capacity and cost of the expansion were not disclosed.
Shandong Hongxin starts new PA unit
China's Shandong Hongxin Chemical started a new 60,000 tonne/year phthalic anhydride (PA) plant in Shandong province on July 21, a company source said. The current operating rate of the unit was not immediately known. Production at the new facility will ease the tight domestic PA supply in north China, a local market player said.
Shandong Yankuang to shut ethyl acetate plant
China's Shandong Yankuang Chemical plans to shut down its 200,000 tonne/year ethyl acetate (etac) plant in Shandong province in early August for annual maintenance, a company source said. Its upstream 600,000 tonne/year acetic acid plant at the same site will also be taken off line at around the same time, with the turnaround expected to last for about 15 days, the source said.
MIDDLE EAST & AFRICA
Saudi Polymers starts up new complex
Saudi Polymers will begin commercial production at its new cracker and polymers project in Al-Jubail, Saudi Arabia, "in the very near future," said Dennis Holtermann, vice president for research and technology at Chevron Phillips Chemical (CPChem). "Mechanical completion was achieved late last year, and we're in the process of starting all the units up," he said. Saudi Polymers, which is 35% owned by CPChem subsidiary Arabian Chevron Phillips Petrochemical (ACP) and 65% by Saudi Arabia's National Petrochemical (Petrochem), had planned for a first quarter start-up. The project includes capacities for 1.165m tonnes/year of ethylene, 440,000 tonnes/year of propylene, 1.1m tonnes/year of polyethylene (PE), 400,000 tonnes/year of polypropylene (PP), 200,000 tonnes/year of polystyrene (PS) and 100,000 tonnes/year of 1-hexene.
In the ICIS Top 100, Chemical Distributors listing published on July 16, we incorrectly listed Switzerland-headquartered Chemical distributor DKSH as No. 9 in the Asia leaders list. The company is actually No. 3 in Asia with sales estimated at around $557m in the region. In Europe, DKSH is No. 24 with estimated sales of $185.6m.
In the July 16 issue, US-based Barton Solvents was not included in the list of North America Chemical Distribution Leaders although it was on the overall ICIS Top 100 Chemical Distributors listing as No. 63 with $172.7 million in 2011 sales. With 100% of its sales in North America, Barton Solvents should have been ranked at No. 22 in the North America listing.
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