This weeks briefings

10 September 2012 00:00  [Source: ICB]

AMERICAS

WILLAMS SET TO RESTART LOUISIANA OLEFINS PLANT
Williams plans to resume production at it olefins facility at Geismar, Louisiana, following several days of maintenance work, the US-based energy and petrochemicals firm said. Williams said that the work was not related to Hurricane Isaac. The company has 612,000 tonnes/year of ethylene capacity in Geismar.

OIL, GAS PRODUCTION RESUMES IN US GULF
Offshore oil and gas operators in the US Gulf of Mexico continued to restore production following Hurricane Isaac, the Bureau of Safety and Environmental Enforcement (BSEE) said. Some 52% of the US Gulf's daily oil production was shut in on 4 September, compared with 95% on 31 August. Shut-in natural gas production was 29%, compared with 68% on 31 August.

US BIOFUEL GROUPS DEFEND EPA'S CELLULOSIC MANDATE
Seven biofuel groups sought to defend US cellulosic and advanced biofuel requirements, which are being challenged in court by the oil industry. The groups filed a brief in the American Petroleum Institute (API) court case challenging the Environmental Protection Agency (EPA)'s 2012 cellulosic and advanced biofuel requirements under the Renewable Fuel Standard (RFS), according the Renewable Fuels Association (RFA). The RFA said the groups were defending the EPA's ability to set cellulosic and advance biofuels targets that are based on market data and seek to spur development, as consistent with the RFS as passed by Congress.

STYROLUTION LIFTS FORCE MAJEURE ON STYRENE
Styrolution said it lifted the force majeure on its North American styrene business. The company declared force majeure on its styrene business for August following a shutdown of its 455,000 tonne/year Sarnia styrene plant in Canada in late July. The Sarnia plant will remain down until the end of October for a scheduled turnaround.

CANADA'S MANUFACTURING GROWTH PACE SLOWS IN AUGUST
Canada's manufacturing sector grew again in August, although at its weakest pace in five months, a bank said. Toronto-based Royal Bank said that its monthly purchasing managers' index (PMI) for Canada fell slightly to 53.0 points in August, from 53.1 in July. PMI readings of above 50.0 indicate growth in manufacturing. Growth in Canadian manufacturing output was unchanged from July but new orders increased, partly reflecting an uptick in new export work, the bank said.

BRAZIL REDUCES TiO2 IMPORT TARIFF TO 2%
Brazil's Chamber of Foreign Trade (Camex) temporarily reduced the import tariff for titanium dioxide (TiO2) to 2% from 10%. Camex said it reduced the tariff to prevent TiO2 shortages. The reduction will last 12 months for international companies that export up to 6,000 tonnes of the material to Brazil, Camex said. Brazil has no TiO2 producers, it said.

ENTERPRISE RESUMES OPERATIONS UNDAMAGED
Enterprise Products Partners has sent personnel back to its onshore and offshore facilities affected by Hurricane Isaac, and its offshore platforms had no significant damage, the company said. Its onshore natural gas processing facilities and the Acadian natural gas pipeline system in southern Louisiana are operational, the company said. Furthermore, Enterprise said its fractionators are either operating or prepared to receive natural gas liquids (NGLs) as infrastructure that feeds its assets are in various stages of resuming operations.

MANUFACTURING ACTIVITY IN US FALLS AGAIN IN AUG
Activity in the broad US manufacturing sector declined in August for the third consecutive month and has fallen to its lowest level since the end of the recession in June 2009, a key survey said. The Institute for Supply Management (ISM) said that its closely watched purchasing managers index (PMI) fell just slightly by 0.2 percentage points in August from July to 49.6%, but it marked the lowest reading for the index since July 2009.US manufacturing industries entered a period of contraction in June 2012 when the PMI fell below 50% for the first time in 33 months.

LEHIGH RAISES FUNDING FOR RUBBER POWDER R&D
US sustainable materials company Lehigh Technologies has raised $16m (€13m) in financing from global venture capital firms led by Leaf Clean Energy and including Kleiner Perkins Caufield Byers, Index Ventures and NGP Energy Technology Partners. The funding will be used to expand the company's geographic reach, and towards research and development efforts for its micronized rubber powder (MRP) technology. Lehigh processes old tyres to produce MRP for use in new tyres and other products. It has capacity of around 140m lb/year of MRP and is currently operating at less than half of capacity, noted CEO Alan Barton.

DOW CHEMICAL ANNOUNCES NEW BUSINESS STRUCTURE
Dow Chemical announced a new, less centralised business structure, and the US-based chemicals major also announced a number of executive appointments. Effective immediately, Dow will eliminate its current business division structure and move to a global business unit model that will have business presidents, it said. The business presidents will be fully accountable for generating increased earnings.

EUROPE

INEOS DECLARES FORCE MAJEURE ON HDPE
INEOS has declared force majeure on some grades of high density polyethylene (HDPE) from its production unit in Lavera, France. The plant suffered a fire on the extruder that led to an emergency shutdown on 31 August. INEOS was not immediately available to comment. However, its statement said the fire is now controlled, but has created extensive damage to equipment that will take weeks to repair safely.

EU CHEMICAL PRODUCTION DOWN BY 2.4% IN H1 - CEFIC
EU chemicals production fell by 2.4% year on year in the first half of 2012, while output in June declined by 2.2%, European industry body Cefic said. The performance of the sector for the first half of the year was 5.8% below the peak of 2007. Declining output was marked in all sectors of the chemical industry in June - with the exception of basic inorganics and consumer chemicals, where production increased by 1.7% and 1.2% respectively, compared to June 2011. Polymers production fell by 8.4% year on year in June 2012, while production for petrochemicals and specialty chemicals fell by 2.5%.

GERMANY CHEM PRODUCERS SLASH FORECAST FOR 2012
Germany's chemical producers' association VCI cut its 2012 forecast for the country's chemical production, predicting a 3% year-on-year decline as eurozone weakness is affecting the domestic chemical business. Until now, Frankfurt-based Verband der Chemischen Industrie (VCI) had forecast zero growth in production this year. "We will have to defer our hopes for a stable recovery in the chemical business, for the time being," VCI president Klaus Engel said. "The EU debt crisis is now also affecting our domestic business. Many of our industrial customers are reducing production and order fewer chemicals."

TURKEY CHANGES DUTIES FOR PE,PP IMPORTS
The Turkish government is modifying duties on polyethylene (PE) and polypropylene (PP) imports from some countries with immediate effect, sources said. Countries affected by the changes include the Gulf Cooperation Council (GCC) countries, Iran and India. Low density polyethylene (LDPE) duties will increase from 3% to 6.5%, in line with imports from the US. Iranian LDPE will also be subject to an increase, on top of its extra tax of 7%. Sources believed that the full import duty on Iranian LDPE into Turkey would now be 13.5% but this was not fully confirmed. High density polyethylene (HDPE) will now face a 4.8% duty, from its former level of 3%, but this will be increased to 6.5% from 1 January, 2013. Similar charges will also apply for imported PP.

RUSSIAN COMPANY EYES NEW METHANOL UNIT
UralMethanolGroup's planned 600,000 tonne/year methanol production facility at Nizhny Tagil, in the Sverdlovsk region of the Urals, is due onstream in 2016, the Russian firm said. Construction work on the €300m project ($380m) is expected to start in the first quarter of 2013.

MERCK REVEALS PLANS TO CUT GERMANY STAFF BY 10%
Merck has announced plans to eliminate 1,100 jobs in Germany, the specialty chemicals and pharmaceuticals firm said. Representing over 10% of its workforce in its home country, the positions are to be cut by the end of 2015. The news follows an announcement in April that Merck plans to close plants in Geneva and Coinsins, Switzerland, in 2013 and 2014 respectively. Merck announced its efficiency programme in February 2012, citing "unprecedented" market shifts, increasing competition in key product areas, and organisational inefficiencies.

ECHA LAUNCHES SURVEY ON VERY-HIGH-CONCERN CHEMS
The European Chemicals Agency (ECHA) said it has launched a public consultation on 54 materials that could qualify as substances of very high concern (SVHCs). The majority of the chemicals have been selected as candidates for SVHC status on the basis of their classifications as carcinogenic, mutagenic or toxic for reproduction. The ECHA is also requesting information on the uses of the substances, including data on tonnage per use and on the availability of safer alternative materials and techniques. The consultation is open for 45 days, concluding on 18 October.

EU CHEMICAL PRODUCER PRICES FALL - EUROSTAT
The EU chemicals producer price index decreased by 1.0% in July from June, according to estimated eurostat figures. The index was also down by 0.7% month on month in the 17-member eurozone, the statistics agency added. Compared with the same month in 2011, chemical producer prices in July were 1.6% higher in the eurozone, and 1.1% higher in the 27-member EU. Total industrial producer prices were up by 0.4% in both the EU and the eurozone, the data showed. Year on year, industrial producer prices in July rose by 1.8% in the eurozone and 1.5% in the EU.

ASIA

HANWHA STARTS TEST RUNS AT NEW EVA/LDPE PLANT
South Korea's Hanwha Chemical has started trial runs at its new 40,000 tonne/year ethylene vinyl acetate (EVA)/low density polyethylene (LDPE) swing plant at Ulsan, as scheduled, a company official said. The company started test runs at the end of August and normal production will be achieved by the end of October. The plant's start-up will raise Hanwha Chemical's total EVA/LDPE capacity to 120,000 tonnes/year. For EVA alone, up to 100,000 tonnes/year can be produced at the Ulsan site with the new plant, according to the source. The company currently operates two EVA/LDPE swing plants, each of which has an annual capacity of 40,000 tonnes/year, in Ulsan, the official said.

CHINA'S HAIWEI GROUP SETS OUT PROPYLENE UNIT PLANS
China's Haiwei Group plans to build four 500,000 tonne/year propane dehydrogenation (PDH) units in Hebei province over a period of five years, a company source said. The company has started construction of the first unit, which will produce propylene, at Hengshui city, with the start-up expected in 2014. It has also started building a 60,000-cubic metre propane tank for the first PDH unit. Haiwei Group plans to build two PDH units in Hengshui city, and another two units in Huanghua city. Start-ups of the three propylene-producing facilities are expected in 2015-2017, the source said.

SUMITOMO CHEMICAL SHUTS NO 3 MMA LINE
Sumitomo Chemical Singapore shut its 90,000 tonne/year No 3 methyl methacrylate (MMA) line at Jurong Island as scheduled on 1 September and the turnaround will last for more than a month, a company source said. The company plans to bring the plant on line in early October. Sumitomo Chemical Singapore has 3 MMA lines with a combined capacity of 223,000 tonnes/year.

CNGC HUAJIN CHEMICAL RESTARTS ABS, PS PLANTS
China North Industries Group Corp (CNGC) Huajin Chemical restarted its 200,000 tonne/year acrylonitrile-butadiene-styrene (ABS) unit and 40,000 tonne/year polystyrene (PS) unit at Panjin in Liaoning province on Monday, a company source said. The two plants were taken off line on 1 August for scheduled maintenance. By 5 September, the company plans to run the ABS unit at 50% of capacity, and the PS unit at full capacity, the source said.

JAPAN'S JX RESTARTS OITA CRUDE UNIT ON SCHEDULE
Japan's largest refiner JX Nippon Oil and Energy Corp has restarted the sole crude distillation unit (CDU) at its 136,000 bbl/day Oita refinery as scheduled on 1 September, a company spokesman said. The spokesman declined to state the current operating rate, however. JX had shut the CDU on 16 August due to a liquefied petroleum gas (LPG) leakage from the unit. The Oita refinery is located on the island of Kyushu in southwestern Japan.

JIAXIANG PETROCHEMICAL'S NEW PTA UNIT UP TO SPEED
China's Jiaxing Petrochemical achieved on-spec production at its new purified terephthalic acid (PTA) unit in Zhejiang province on 2 September, a couple of days after the unit started up, a company official said. The 1.5m tonne/year PTA plant has two reactors, each with a 750,000 tonne/year capacity. One reactor was started up over the weekend and is currently running at about 70% of capacity, while the second reactor will be started up a week later, the source said. Output from the new PTA plant will be mainly for captive use.

COCOCHEM SHUTS DOWN OLEOCHEMICAL COMPLEX
Philippines-based United Coconut Chemicals (Cocochem) has shut last month its oleochemical complex in Batangas indefinitely because of a "plant problem", a source close to the company said. Further details on the nature of the production problem were unavailable. Market players said the shutdown could be partly due to weak economics at a time of growing capacity and a slowdown in global demand. Cocochem has an annual nameplate capacity of 36,000 tonnes/year of fatty alcohols and 100,000 tonnes/year of fat splitting capacity.

TAIYO OIL INVESTS IN TRANSALKYLATION UNIT
Japan's Taiyo Oil plans to build a 10,000 bbl/day transalkylation unit (TAU) at its 120,000 bbl/day Shikoku refinery in Ehime prefecture for yen (Y) 6bn ($76m). The TAU will be able to produce 300,000 tonnes/year of mixed xylenes. The company said the investment is meant to strengthen the refinery's flexibility at switching between producing petroleum and petrochemical products, citing Japan's declining demand for gasoline.


Author: MSL MSL



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