This week's world news

15 February 2013 09:38  [Source: ICB]

AMERICAS

SHELL CONSIDERS LINEAR ALPHA OLEFIN EXPANSION

Shell Chemical is considering the addition of a fourth world-scale linear alpha olefin unit at its Geismar, Louisiana, petrochemical facility. The unit, which would complement three existing linear alpha olefin units at the Geismar facility, is intended to help meet growing global demand for products such as polyethylene (PE) co-monomers, lubricants and lubricant additives, surfactants and offshore drilling fluids, the company said. Common end-uses for linear alpha olefins include household plastics, laundry detergents, motor oils and drilling fluids. The new production would be targeted for both US and global consumption.

SENATE HEARS OBJECTIONS TO ACCELERATED EXPORTS
US energy, chemical and environmental interests have cautioned Congress about the potential for accelerated exports of liquefied natural gas (LNG) against the feedstock and power needs of domestic industries and consumers. Dow Chemical CEO Andrew Liveris told the Senate Energy and Natural Resources Committee that "unchecked LNG export licensing can cause demand shocks, and the resulting price volatility can have substantial adverse impacts on US manufacturing and competitiveness". The hearing was called to consider opportunities and challenges raised by newly abundant US domestic supplies of natural gas from shale deposits.

CB&I COMPLETES SHAW GROUP ACQUISITION
US energy and petrochemicals engineering firm CB&I has completed the acquisition of The Shaw Group in a deal valued at about $2.0bn (€1.5bn). Announced in July and approved by CB&I shareholders in December, the company will offer $46/share to Shaw shareholders for a 72% premium to Shaw's price on 27 July, the last trading day before the agreement. CB&I said it will operate Shaw as a business sector under the brand name CB&I Shaw.

HUNTSMAN SAYS THE TIO2 MARKET SHOULD NORMALISE
The world titanium dioxide (TiO2) market should return to more normal operating conditions by the end of the year as demand recovers from a destocking binge, the chief executive of US-based Huntsman said. Destocking characterised the industry in the third and fourth quarters of 2012, said CEO Peter Huntsman, who made his comments during a fourth-quarter earnings conference call. "You definitely see destocking taking place," he said.

HUNTSMAN CONSIDERS LIQUID EPOXY RESINS MOVE
US-based Huntsman is considering rationalisation in its basic liquid epoxy resins, the CEO said, the latest head of a company who expressed pessimism about the prospects of the industry. For basic liquid resins, "there is a sense in the industry that so many people are hurting, the capacities will be rationalised. We're evaluating some of our own capacity as part of that exercise", said Peter Huntsman, the company's chief executive, during an earnings conference call.

STUDY FINDS 'NO EVIDENCE' OF STYRENE CANCER CLAIM
A study published last week supported by the styrene industry reports that there is "no credible evidence" that styrene exposure increases the risk of cancer in humans. The study, Cancer Mortality of Workers Exposed to Styrene in the US Reinforced Plastics and Composite Industry, surveyed nearly 16,000 styrene-exposed workers and found no credible evidence that such exposure increases the risk from cancers of the lymphatic and hematopoietic tissue, pancreas or lungs.

CHLOR-ALKALI PRODUCTION FALLS TO 80% IN JANUARY
US chor-alkali production in January was 80% of capacity in January, 8 percentage points below the rate the industry achieved in December, a trade group said. US chlor-alkali production in January was 919,940 tons (834,570 tonnes) of chlorine and 961,179 tons of caustic soda, according to The Chlorine Institute. December's 88% rate had been a markedly strong one for US chlor-alkali production after several months of figures in the low- to mid-80s range.

ENERGY, PETCHEMS SAY OBAMA INHIBITS OUTPUT
US energy, refining and chemical sector officials have welcomed President Barack Obama's promise for more domestic oil and gas production, but charged that his policies inhibit conventional energy development. In his State of the Union speech to Congress, Obama noted that domestic US oil and gas production have increased at record rates in recent times. "We need to encourage that," Obama said. But Charles Drevna, president of the American Fuel & Petrochemical Manufacturers said that the president's energy policy remarks "were a lesson in the art of contradiction and denial".

PE SWING PLANT RESUMES ON-SPEC PRODUCTION
The Morelos swing polyethylene (PE) plant is producing on-spec material again after a 12-day programmed maintenance, a Pemex source said. The reactivation procedures on the 300,000 tonne/year plant started on 9 February and continued throughout the first days of last week. Production of on-spec material has reached normal levels. The plant produces high density PE (HDPE) and linear low density PE (LLDPE). Availability of LLDPE butene is expected to be limited in Mexico during the coming weeks because of this outage.

EUROPE

TOTAL ASSET SALES TO HIT $15BN BY THE END OF 2013
Total's asset sales will reach $15bn by the end of 2013, amid ongoing restructuring of its refining and chemicals segment. The French energy firm said that in executing its 2012-2014 asset sale programme of $15-20bn, the group sold $6bn of assets in 2012, and anticipates reaching the low-end of its target range by the end of 2013, with the closing of the Usan sale and other divestments already in progress.

SALES EXPECTATIONS INCREASING IN UK
Optimism among chemical producers in the UK increased into the new year, industry body Chemical Industries Association (CIA) said. According to the UK trade body's latest quarterly business survey, carried out in January, 46% of chemical industry professionals polled expect higher sales volumes this year compared with 2012.

CHEMICALS PRODUCTION IN DECEMBER UP BY 0.9%
Chemicals production in the EU rose by 0.9% month on month in December, European statistics agency Eurostat said. Eurozone chemicals production in December was up by 0.3%, it added. The Eurostat data shows that chemicals production increased by 0.7% in the 27-member EU in December year on year, while production rose by 1.3% in the 17-member eurozone.

GLOBAL OIL DEMAND SET TO INCREASE IN 2013 - OPEC
Signs of recovery in the global economy, together with the colder weather seen at the start of this year, has led OPEC to forecast an increase in world oil demand growth in 2013. In its February monthly oil report, OPEC revised its forecast for world oil demand growth in 2013 at 800,000 bbl/day, up by 80,000 bbl/day from its January report.

GERMAN COMPANIES OPTIMISTIC ABOUT 2013
German companies are relatively optimistic about their prospects for 2013, especially with regard to exports, according to a survey released by the country's chamber of commerce. Deutsche Industrie- und Handelkammertag (DIHK) general manager Martin Wansleben said that DIHK's latest survey of 28,000 firms showed that "2013 has the stuff to become a good year."

WEAK ECONOMY: IEA CUTS OIL DEMAND FORECAST
The International Energy Agency (IEA) cut its forecast global oil demand for 2013 by 90,000 bbl/day to 90.7m bbl/day, despite signs of strengthening demand in the US and China, as a result of prevailing headwinds in the global economy. The France-based organisation cut its estimates of oil demand during the year following the IMF's decision to reduce its global GDP forecast for the year from 3.6% to 3.5% in January.

RUSSIA'S TITAN GROUP LAUNCHES NEW PP PLANT
Russia-based Titan group has started operation of a new 180,000 tonne/year polypropylene (PP) plant. The plant, under the name PolyOm, produced its first 500 tonnes of PP. The plant, based in Omsk, western Siberia, was initially expected to come on stream by the end of 2006, but has been subject to severe delays because of financing issues.

POLAND HAS NO PLANS TO PRIVATISE GRUPA LOTOS
The Polish treasury ministry has no plans to again attempt to privatise oil and petrochemicals group Grupa Lotos in the foreseeable future. The company had been placed on Poland's list of strategic assets that are not for sale following several failed attempts to sell it in recent years. The treasury ministry received no binding bids for Grupa Lotos in the last attempt at privatising it in December 2011.

WACKER CHEMIE PLANT BACK TO FULL UTILISATION
German chemicals producer Wacker Chemie has returned its polyisilicon plant in Burghausen to full-time operation following an increase in demand from solar sector customers. The company had introduced short-term working hours at the site in early October 2012, bringing the plant down to around two thirds of full utilisation as a result of falling demand for the material.

ASIA

KH NEOCHEM TO OVERHAUL YOKKAICHI BUTAC UNIT
Japan's KH Neochem plans to shut its 40,000 tonne/year butyl acetate (butac) plant at Yokkaichi in Mie prefecture for a turnaround in March, a company official said. The producer will take its plant off line for about 40 days between mid-March and end-April, the company official added. Butac, which is derived from acetic acid and n-butanol (NBA), is mainly used in the manufacturing of paints and coatings for the furniture, construction and automotive sectors. Paint application in the building construction, shipbuilding and automotive industries account for as much as 80% of Japan's butac demand.

PLASTIC FEEDSTOCKS PRODUCTION RISES BY 2.7%
Japan's production of plastic feedstocks rose by 2.7% year on year to 848,000 tonnes in December 2012, official industry figures showed. Among the total, production of polyethylene (PE) rose by 12% to 237,909 tonnes from the same month a year earlier, according to the Japan Plastics Industry Federation (JPIF). Output of polypropylene (PP) stood at 202,712 tonnes, a 1.8% fall from the previous year, while production of polyvinyl chloride (PVC) was up by 3.8% year on year to 117,695 tonnes, the data showed.

RELIANCE PREPARES JAMNAGAR TURNAROUND
Reliance Industries is to place one of the crude distillation units at its Jamnagar, Gujarat, complex into turnaround for planned maintenance next week, the India-based petrochemicals major said. The unit will be off line for four weeks from 18 February to carry out modifications to improve the reliability and performance of the unit, the company said. A vacuum gas oil (VGO) and diesel hydrotreater is also to undergo a routine catalyst replacement during the same period.

HANWHA CHEM TO SHUT PHTHALIC ANHYDRIDE UNIT
South Korean producer Hanwha Chemical plans to shut its 80,000 tonne/year phthalic anhydride (PA) plant at Ulsan on 10 March for annual maintenance, a company source said. The PA plant is operating at 100% capacity to build up inventories before the shutdown, which will take around two weeks, the source said. The company will also shut its 80,000 tonne/year plasticizers facility for maintenance at the same site on 10 March, added the source. Hanwha Chemical's 80,000 tonne/year plasticizers facility is able to produce dioctyl phthalate (DOP) and dioctyl terephthalate (DOTP). PA is used in the production of DOP.

OCI PLANNED TO SHUT NO 1 PHTHALIC ANHYDRIDE UNIT
South Korea's OCI planned to shut its 20,000 tonne/year No 1 phthalic anhydride (PA) unit at Pohang for scheduled maintenance on 17-22 February, a company source said. The shutdown will not affect supply to the domestic market, but the company will likely stop export sales during the maintenance period, the source said. The firm's No 2 PA unit, which has a capacity of 20,000 tonnes/year, will continue operating at 100% when the No 1 unit is shut for maintenance, the source said.

INDIA TO BUY HDPE/PP SACKS AFTER JUTE PROBLEM
India's Ministry of Textiles will have to procure about 0.67m bales (0.221m tonnes) of high density polyethylene (HDPE)/ polypropylene (PP) woven sacks for food grains following the jute industry's failure to meet demand, a ministry official said. The sacks are needed for packaging of winter crop to be harvested till the end of April 2013. According to the official, the total demand for packaging sacks during current crop season of December-April has been estimated at 1.89m bales. However, the jute industry would be able to supply only 1.22m bales, even though under the mandatory Jute Packaging Materials Act 1987 it is obliged to supply the entire requirement.

FORMOSA PLASTICS RUNS NBA PLANT NEAR CAPACITY
Taiwan's Formosa Plastics Corp (FPC) is running its 250,000 tonne/year n-butanol (NBA) plant in Mailiao at close to full capacity, a company source said. Production will be ramped up to 100% in the near term, the source said without elaborating. The NBA plant had resumed production on 12-13 January after undergoing an annual maintenance that started in November 2012, the source said. "Currently, [NBA] availability for the spot market is limited, and we are only considering to offer at the end of February for March shipments," the source said.

MARUZEN MAY KEEP CRACKER RUN RATES HIGH
Japanese chemical producer Maruzen Petrochemical may continue running its 520,000 tonne/year naphtha cracker at Chiba at close to 90% of capacity up to March, a company source said. The cracker has been operating at this rate since the start of the year, up from 85% in December 2012, the source said. Higher ethylene prices over the past four weeks underpinned the strong cracker runs in Japan, traders said.

SABIC TO SHUT DOWN YANBU PET PLANT IN MARCH
Saudi Basic Industries Co (SABIC) plans to shut down its polyethylene terephthalate (PET) plant at Yanbu in Saudi Arabia for maintenance in March, a source close to the company said. "The maintenance is expected to last around a month," the source said. The plant, which has a capacity of 330,000 tonnes/year, is the only PET plant in Saudi Arabia. "Supply in Saudi Arabia will tighten in March because of the turnaround," a trader said.


By: Will Beacham
+44 20 8652 3214



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