This week's world news

04 January 2013 11:23  [Source: ICB]

EUROPE

NAPHTACHIMIE DECLARES FORCE MAJEURE ON BD
Force majeure has been declared on butadiene (BD) production from Naphtachimie's unit in Lavera, France, following an incident at the associated cracker, sources at the plant's co-owners said. The Naphtachimie cracker, which has a nameplate capacity of 120,000 tonnes/year of BD, 775,000 tonnes/year of ethylene and 540,000 tonnes/year of propylene, is joint-owned by INEOS and Total. A source at Total confirmed that force majeure had been declared on BD, but declined to provide any further details. A local media report said there had been a fire on an oil compressor at the cracker.

EUROPE JAN BENZENE CONTRACT CONFIRMED
The European benzene contract price for January has been fully confirmed at €1,153/tonne, up €69/tonne from the previous month, two major producers and three major consumers said. The initial settlement, on Friday 28 December, was agreed on a US dollar concept of $1,529/tonne FOB (free on board) NWE (northwest Europe) and converted to the euro price at the agreed exchange rate of €1:$1.3266.

EUROPE JAN PROPYLENE CONTRACT FULLY SETTLED
A second propylene supplier has confirmed the European propylene contract price for January at €1,090/tonne ($1,453/tonne), down by €13/tonne from December and the fourth consecutive decrease - thereby establishing it as the European benchmark, market sources said. To date, two producers and three consumers - two non-integrated and one integrated - have confirmed settlement. A third producer is also said to be in the mix but has a no-media policy.

EUROPE ETHYLENE JAN CONTRACT ROLLS OVER
The European ethylene contract price for January has been established at a rollover €1,275/tonne ($1,700/tonne) following confirmation from three major producers and two consumers, market sources said. The contract, which is agreed on a free delivered (FD) northwest Europe (NWE) basis, marks the third consecutive rollover for European ethylene at €1,275/tonne.

EUROPE JAN BD CONTRACT DOWN €75/TONNE
An initial European January butadiene (BD) contract settlement has been agreed at €1,365/tonne ($1,796/tonne), down by €75/tonne from December, a major producer said. The contract, which is agreed on a free delivered (FD) northwest Europe (NWE) basis, has been confirmed by a second producer and two large consumers.

PETKIM AIMS TO CUT COSTS THROUGH IRAQ NAPHTHA
Sole major Turkish petrochemical producer Petkim is planning to boost profitability by sourcing substantial supplies of naphtha feedstock from Iraq, the company said. The price of the Iraqi naphtha would offer Petkim a significant advantage over current costs on the wider naphtha market and thus reduce production costs, it added.

FITCH FLAGS CAPEX DECLINE AT PETKIM
Fitch Ratings flagged up delays in essential capital expenditure (capex) at sole major Turkish petrochemicals producer Petkim while revising its outlook on the group's long-term foreign and local currency Issuer Default Rating (IDRs) to 'negative' from 'stable'. Petkim capex for 2012 was revised down to $50m from $171m budgeted at the start of the year, while capex for 2011 was reduced to $90m against an initial budget of $131m, Fitch said.

TRELLEBORG COMPLETES INDUSTRIAL TYRES DEAL
Trelleborg, through its business unit Trelleborg Wheel Systems, has finalised its acquisition of Maine Industrial Tire, the Swedish producer said. The company will be integrated into Trelleborg Wheel Systems business unit, the company said in a statement. The statement did not say how much Trelleborg will pay for the acquisition, which was first announced on 21 December 2012.

RUSSIA INCREASES CRUDE, PETCHEMS EXPORT DUTIES
The Russian government has released a decision to review export duties applicable to petrochemical products. In January, the duty levied on ethylene, propylene, butylene and butadiene (BD) increased to $198.70/tonne (€151.01/tonne) from $197.40/tonne in December. Russia reviews its export duties levied on petrochemical products once a month, largely in accordance with changes of the crude oil export duty.

SIBUR INCREASES ITS MTBE PRODUCTION CAPACITY
Sibur has expanded its methyl tertiary butyl ether (MTBE) designed capacity in Tchaikovsky, Perm Territory, from 200,000 to 220,000 tonnes/year, the Russia-based petrochemical major said. The expansion allows for the installation of additional heat exchangers and MTBE synthesis equipment. It took a year to implement the project, without interrupting production, Sibur said.


AMERICAS

US AVERTS FISCAL CLIFF
The US Representatives approved a bill late on 1 January, averting a fiscal crisis in the world's top energy consumer that had threatened to push it into a recession. By a vote of 257-167, the deal delayed $109bn (€82.8bn) in spending cuts for two months, as well as extended existing middle-class tax cuts and tax credits for working families. The bill also raised taxes for the wealthy.

US MANUFACTURING RESUMES GROWTH
The US manufacturing sector resumed growing as the Institute for Supply Management (ISM) said its purchasing managers index (PMI) rose to 50.7% in December. The month's expansion followed a two-month gain in September and October and a three-month slump in June, July and August when the index was below 50%. Comments for December's survey were mixed, with some respondents indicating a rise in demand, while others noted continuing weakness.

PPG DECLARES FM ON VCM, CAUSTIC SODA IN LOUISIANA
US-based PPG Industries has declared force majeure for vinyl chloride monomer (VCM) manufactured at its Lake Charles chemicals complex in Louisiana and for all grades of the liquid caustic soda it produces. The force majeure declaration follows a fire on 24 December that affected the VCM unit at the complex. PPG did not say when the force majeure declarations might be lifted. The negative impact of equipment damage sustained in the fire and on sales volumes is likely to be around $5m-8m (€3m-6m) in the fourth quarter of 2012 and an "incremental" $2m-5m in 2013 based on current information, PPG said.

SHELL MULLS NEW PENNSYLVANIA CRACKER
Shell said it is still considering building an ethane cracker and polyethylene (PE) and monoethylene glycol (MEG) units in western Pennsylvania after being granted a six-month extension to evaluate the site. US zinc producer Horsehead had extended the land-option agreement - signed in March 2012 - for the site located near Monaca. A Shell spokeswoman said the company is still in the assessment phase, considering factors such as ethane feedstock supply, engineering and design work, as well as customer support confirmation.

SWITZERLAND'S LONZA SELLS US BUSINESSES
Swiss fine chemicals and pharmaceutical company Lonza said it has completed the sale of its US performance urethanes and organics business in Brandenburg, Kentucky, to US-based Monument Chemical. Financial terms were not disclosed. This sale enables Lonza to focus on more core activities and helps fulfil a strategic growth area for Monument Chemical, the company said. The sale was announced in November.

US NEW HOME SALES RISE 4.4% IN NOVEMBER
US sales of new single-family homes rose by 4.4% in November, the US Department of Commerce said, a gain that offsets October's slight decline and adds fuel to the housing recovery. The department said sales of new single-family homes were at a seasonally adjusted rate of 377,000 last month, up from the downwardly revised October figure of 361,000 units. The November figure was also a 15.3% increase year on year, the department said, indicating that the US housing recovery is well underway.

DELTA SHUTS DOWN TRAINER REFINERY
US-based Delta Airlines subsidiary Monroe Energy shut down its fluid catalytic cracker (FCC) at its Trainer refinery in Pennsylvania at the end of December. The unit had a slurry circuit and is expected to be down for 10 days to two weeks, a Delta spokesman said. The refinery has a capacity of 185,000 bbl/day.

YPFB TO START BUILDING AMMONIA, UREA PLANT
Bolivia's Yacimientos Petroliferos Fiscales Bolivianos (YPFB) said the construction of an ammonia and urea plant in Carrasco, Cochabamba will begin in April 2013. The plant will produce 650,000 tonnes/year of urea, of which 10-20% will be supplied to the domestic market while the remainder will be earmarked for export. The plant will also produce 400,000 tonnes/year of ammonia for explosives, detergents, paints, disinfectants and other industrial products. Operations are scheduled to begin in the third quarter of 2015.


ASIA

EXXONMOBIL EYES OPS AT SINGAPORE CRACKER
ExxonMobil's new 1m tonne/year cracker in Singapore is currently in the commissioning phase with on-spec production expected to begin in the next few months, a senior company executive at the US-based energy major said. "The start-up teams are now on the field checking [the] equipment it's a matter of months now," said Georges Grosliere, ExxonMobil's Singapore chemical plant manufacturing director and Singapore parallel train venture executive. The company has yet to introduce any hydrocarbon feed into the cracker, he told reporters.

INDIA REVISES LOWER IMPORT DUTY ON TOLUENE
India's Ministry of Finance has lowered custom duty to 0-2.5% for toluene cargoes originating from ASEAN and South Korea with effect from 1 January 2013, according to an official document received by ICIS. Imported cargoes originating from most ASEAN countries that include Malaysia, Singapore, Thailand, Vietnam, Myanmar, Indonesia, Brunei Darussalam, and Lao People's Democratic Republic are custom tax free, from its previous duty at 2%. Import duty from Philippines remains at 3%. Imported parcels from South Korea will now be subjected to 2.5%, from its previous level of 3.13%.

FORMOSA PLANS RFCC NO 2 TURNAROUND IN MARCH
Taiwan's Formosa Petrochemical Corp (FPCC) plans to shut its No 2 residual fluid catalytic cracker (RFCC) in Mailiao for a turnaround on 19 March, a company source said. The scheduled maintenance shutdown for the No 2 unit, which can produce around 375,000 tonnes/year of propylene, is expected to last until 21 June, he said. There is no turnaround slated for the No 1 RFCC unit, which has the same propylene production capacity, this year, he added.

PCS EYES NO 1 CRACKER TURNAROUND IN JUNE-JULY
The Petrochemical Corporation of Singapore (PCS) plans to shut its 450,000 tonne/year No 1 naphtha cracker at Ayer Merbau in Jurong Island for a turnaround in the middle of next year, a company source said. The scheduled turnaround is expected to take place in June-July for around 30-40 days but the turnaround dates have yet to be finalised, he said. PCS also runs a 650,000 tonne/year No 2 naphtha cracker at the site.

TIANJIN TAISEN TO START UP EXPANDED PA UNIT IN Q2
China's Tianjin Taisen Chemical plans to start up its expanded 130,000 tonnes/year phthalic anhydride (PA) plant in Binhai of Tianjin, north China in the second quarter of 2013, a company source said. The PA plant is expanded from the capacity of 32,000 tonnes/year, the source said. The expanded unit will have two lines with capacities of 70,000 tonnes/year and 60,000 tonnes/year respectively, the source added.

ZIBO TO START UP NEW MA UNIT AT END-2013
China's Zibo Qixiang Tengda Chemical plans to start up its new 100,000 tonne/year maleic anhydride (MA) unit at Zibo in Shandong province by the end of 2013, a company source said. The construction of the unit started recently, the source added, without specifying the exact time frame. The total investment in this project is about yuan (CNY) 573m ($92m), according to a company statement on Shenzhen Stock Exchange.

SINOPEC BEIJING YANSHAN SETS IIR UNIT START-UP DATE
China's Sinopec Beijing Yanshan is planning to begin commercial production its new 90,000 tonne/year isobutylene-isoprene copolymers (IIR) unit in Beijing by the end of this year, a source close to the company said. The company began construction of the unit in March this year, according to the source. Following the completion of the new IIR unit in Beijing, Sinopec Beijing Yanshan's overall capacity of IIR will increase to 135,000 tonnes/year, the source said.

FORMOSA PLASTICS TO SHUT ACN PLANT IN JAN
Taiwan's Formosa Plastics Corp (FPC) planned to shut its 280,000 tonne/year acrylonitrile (ACN) plant at Mailiao on 4 January for annual maintenance, a company source said. The plant will be shut for a month and is scheduled to be restarted on 2 February 2013, the source said. The ACN produced by FPC is mainly used to supply feedstock for its downstream acrylic fibre (AF) and acrylonitrile-butadiene-btyrene (ABS) plants, the source said. FPC has a 70,000 tonne/year AF plant and a 390,000tonne/year ABS unit at the same site.

PERTAMINA TO START UP NEW PROPYLENE UNIT
Indonesia's state-owned refiner Pertamina plans to start up its new 178,000 tonne/year propylene facility at Balongan in West Java in January 2013, a company source said on Friday. The start-up of the residual catalytic cracking off-gas to propylene (ROPP) unit was delayed several times because of technical problems, according to an earlier story from ICIS. Pertamina is currently running its residual catalytic cracker (RCC) at the same site at around 50% capacity. This unit has a nameplate propylene capacity of 250,000-260,000 tonnes/year.

NIPPON SHOKUBAI TO SHUT AA PLANT IN MID-JAN
Indonesia's PT Nippon Shokubai plans to shut its 60,000 tonne/year crude acrylic acid (AA) plant in Cilegon, West Java in mid-January, a company source said. The plant will be shut for a short maintenance that is expected to last for about two weeks, the source said. The shutdown will be in line with the scheduled maintenance at Singapore Acrylic Acid's (SAA's) 73,000 tonne/year acrylic acid facility at Jurong Island, the source added. SAA is jointly owned by Japanese chemical producers Nippon Shokubai (51%), Toagosei (40%) and Sumitomo Chemical (9%).


By: Will Beacham
+44 20 8652 3214



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