News in brief

22 February 2013 10:16  [Source: ICB]

Europe

SIBUR ESTABLISHES NEW POLYMER TRADING UNITS
SIBUR has registered two new subsidiary companies in Turkey and Ukraine to specialise in trading basic polymers, the Russia-based petrochemicals major said. The two companies, SIBUR International Trading Istanbul and SIBUR International Trading Kiev, will be based in the two countries' capital cities, and will target manufacturers of polypropylene (PP) bags and woven bags, rugs, biaxially-oriented polypropylene (BOPP), non-woven fabrics and compounds.

UNIPETROL 'MUST CLIMB UP THE VALUE CHAIN' - ERSTE
Czech producer Unipetrol will face a tough fight in protecting its naphtha-based petrochemical business from a flood of ethane-based exports from the Middle East and the US, Erste Group Bank said. Unipetrol - which has said it will address the issue of how to regain profitability in a delayed five-year strategy due to be published in either the first or second quarter of this year - is under growing pressure to shift up the value chain, Tamas Pletser, an analyst for the bank said.

EU PASSENGER CAR REGISTRATIONS FALL
European passenger car registrations fell in January 2013, declining 8.7% year on year, an industry body said. According to data from the European Automobile Manufacturers' Association (ACEA), 885,159 new passenger cars were registered in the region in January, down from 969,219 units registered in the same month in 2012. The industry body said the figure is the lowest recorded for a month of January, since the start of the series in 1990.

EU CONSTRUCTION OUTPUT DOWN BY 2.7% IN DEC
EU construction output levels dropped by 2.7% in December 2012 compared to the previous month, European Commission data agency Eurostat said. Construction output for the 17-member eurozone was also down by 1.7% month on month in December, Eurostat added.

FLUOR WINS GERMAN TDI CONTRACT FROM BASF
Fluor has won another contract from BASF for work on a 300,000 tonne/year toluene di-isocyanate (TDI) facility being developed at the German chemicals giant's Ludwigshafen complex, the US petrochemical engineering company said. Fluor is to carry out engineering, procurement and construction management services for the project, which is expected to begin production in the fourth quarter of 2014.

ORGANIKA-SARZYNA CAN OVERCOME SUPPLIER LOSS
Poland's Zaklady Chemiczne Organika-Sarzyna (Organika-Sarzyna) has the scope to continue with its production of epoxy resins despite the closure of its epichlorohydrin (ECH) feedstock supplier, a bank said. Organika-Sarzyna would be able to overcome the loss of ECH from fellow Ciech group company Zaklady Chemiczne Zachem's (Zachem's) 30,000 tonne/year installation by turning to other suppliers on the open market, said Dominik Niszcz, an analyst at Raiffeisen Centrobank (RCB).

KREFELD GETS APPROVAL FOR POWER PROJECT
Germany's Krefeld-Uerdingen chemical park and utility firm Trianel have received in-principle approval for a planned 1,200 megawatt (MW) combined gas and steam power unit, they said. The approval from authorities in Dusseldorf marked an important milestone for the project which would, if realised, supply chemical firms at Krefeld-Uerdingen and feed power into the regional net, said Gunter Hilken, head of chemical park operator Currenta.

DSM Q4 NET PROFIT DOWN BY 75% ON CAPRO MARGINS
Dutch DSM posted a 75% year-on-year decrease in Q4 net profit in 2012 to €21m ($28m), weighed by lower earnings from its polymer intermediates business on the back of lower caprolactam (capro) margins. The specialty chemical maker's sales rose by 2% year on year to €2.27bn in October-December 2012, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 17% to €243m.

VCI CRITICISES EU MOVES TO 'FIX' EMISSIONS TRADING
The head of Germany's chemical producers trade group VCI criticised a vote by a key European Parliament committee to curb available pollution allowances on the EU's Emissions Trading System (ETS). The parliament's environment committee voted to back what it called an "emissions trading fix" that would delay the timing of pollution allowance auctions. The measure is aimed at containing a growing surplus of allowances that is due to initial oversupply and the European economic slowdown. VCI president Karl-Ludwig Kley said that parliamentarians were intervening in the ETS, thus damaging a market system that has been working well.


Asia

CPC RUNS CRACKER AT 95%; USES LPG AS PARTIAL FEED
Taiwan's CPC Corp is running 385,000 tonne/year No 4 naphtha cracker in Linyuan at 95% of capacity, with part of production being derived from liquefied petroleum gas (LPG), a company source said. "The percentage is not much - within 10% of the total feedstock is based on LPG," the source said. High naphtha values prompted some Asian cracker operators to mix lower-priced LPG into their feedstock for production, traders said.

TPC RAMPS UP NEWLY RESTARTED VCM UNIT
Thai Plastic and Chemicals (TPC) increased the operating rate at its 140,000 tonne/year No 1 vinyl chloride monomer (VCM) unit located at Map Ta Phut, Thailand, to 100% on 19 February, a company source said. TPC restarted operations at the No 1 VCM unit on 11 February after having halted production on 16 January for a brief turnaround. Full operating rate at the VCM unit is expected to ease TPC's dependence on imported spot cargoes for downstream polyvinyl chloride monomer (PVC), said market participants.

LG CHEM FIRMS ACRYLIC ACID TURNAROUND PLAN
South Korea's LG Chem has firmed up its turnaround schedule for its crude acrylic acid (AA) lines for this year, a company source said. LG Chem operates four crude AA lines with a total nameplate production capacity of 353,000 tonnes/year. The company aims to shut its No 1 crude AA line in March for 14 days, the source said. LG Chem plans to shut its No 2 and No 3 crude AA lines in May and April respectively for 14 days, the source said. The company's No 4 line is also currently scheduled to be shut in June, for approximately two weeks.

INDIA GOVT SEEKS MORE HDPE/PP WOVEN SACKS
India's Ministry of Textiles will make higher than planned procurement of high density polyethylene (HDPE)/ polypropylene (PP) woven sacks for food grain packaging as a result of looming strike by the jute industry, a ministry official said. The shortfall in supplies of jute sacks required for harvesting the `Rabi' (December 2012-April 2013) crop is estimated to increase to as much as 50% of the required 1.89m bales where one bale weighs about 0.33 tonnes, the official said.

STYRINDO MONO BRINGS FORWARD MAINTENANCE
Styrindo Mono Indonesia has brought forward the maintenance for its 250,000 tonne/year No 2 styrene monomer (SM) facility by around a month, a source close to the company said. The unit, located in Merak, was shut in early February for a turnaround which was initially set for the first half of March. "The catalyst was performing poorly so we decided to start the turnaround sooner", the source said. The unit is expected to restart in mid-March. The company is running its 100,000 tonne/year No 1 SM unit at the same location after it emerged from maintenance shutdown in mid-January.

SINGAPORE ACRYLIC ACID RUNS PLANT AT 100%
Singapore Acrylic Acid is currently operating its 73,000 tonne/year crude acrylic acid (AA) facility at Jurong Island at 100% of capacity, a source familiar with the matter said. The AA unit was recently shut in mid-January for 10 days of maintenance, and was restarted in early February, the source said. Toagosei, a joint-owner of Singapore Acrylic Acid, is also running its acrylate esters facilities in Singapore at full capacity, the source added.

HONG KONG PETCHEM PS PLANT AT 100%
Hong Kong Petrochemical is running its 140,000 tonne/year polystyrene (PS) plant at the New Territories, Hong Kong, at full tilt after restarting it on 8 February, a source close to the company said. The facility was restarted on 8 February after a turnaround that began in early February. The plant produces both general purpose PS (GPPS) and high impact PS (HIPS) resins. Demand in China and Hong Kong is expected to gradually improve heading into March as end-users will likely replenish inventories ahead of the higher-production season in the second quarter.

GUJARAT PORT TERMINAL PLANS METHANOL STORAGE
India's Gujarat Chemical Port Terminal Co Ltd (GCPTCL) is planning to build a new methanol storage tank with a capacity of 15,000-20,000 tonnes in Dahej, a source familiar with the project said. Governmental clearances for the project have yet to be secured, said the source from Gujarat Narmada Valley Fertilizers and Chemical Co (GNFC), a part-owner of GCPTCL. "It will take around 14 months to build once approved," the source said.

GNFC - the largest methanol producer in India - needs the new storage tank as it intends to import more methanol to cater to the strong growth in domestic demand amid a dearth of supply, market sources said.


Americas

WESTLAKE CRACKER TO BE DOWN FOR 60 DAYS IN Q1
One of two ethylene crackers at US petrochemical producer Westlake's facility in Lake Charles, Louisiana, will be down for approximately 60 days in the first quarter of 2013 for an expansion, CEO Albert Chao said. The expansion will add more than 40% of capacity to the facility's ethylene production, from 460m lbs to 630m lbs. The company also plans to start up its new chlor-alkali facility in the second half of 2013, Chao said. An exact timetable for the plant's start would be discussed later in the year. Additionally, the company plans to expand its production of polyvinyl chloride (PVC) by approximately 200m lbs in 2014 and begin an expansion of the second ethylene cracker at Lake Charles in 2015.

ROCKWOOD SEEKS TIO2 EXIT BY YEAR-END - CEO
US-based Rockwood Holdings plans to exit the titanium oxide (TiO2) business by the end of the year, CEO Saifi Ghasemi said. The company said it will set a timetable that by end of 2013 and plan to divest the business either by selling it, spinning it to shareholders or reducing share ownership in this business to a very small minority position. Earlier this month, Rockwood bought Kemira's 39% stake in Germany-based TiO2 joint venture Sachtleben, giving the specialty chemicals company 100% ownership. But the buyout of the Finnish company's stake wasn ot done to further invest in TiO2 production, Ghasemi said.

Q4 NET INCOME FALLS BY 66% AT ROCKWOOD IN 2012
Rockwood Holdings' net income fell by 66% year on year to $21.2m (€15.9m) in the fourth quarter of 2012, as a result of weaker earnings for its performance additives and titanium dioxide (Ti02) business segments, the US-based specialty chemicals company said. The company's performance additives business was negatively impacted during the period as a result of lower oil and natural gas drilling activity in North America.

BMS DECLARES FORCE MAJEURE ON TDI SUPPLY
Bayer MaterialScience has declared force majeure on the supply of standard and specialty toluene diisocyanate (TDI) products in North America effective 15 February following technical issues, the Germany-based producer said. Supply was impaired due to equipment failure in one of two TDI units at the company's Baytown, Texas, manufacturing facility. Maintenance work was scheduled to take place at the TDI and methyl di-phenylene isocyanate (MDI) operations in Baytown starting at the end of January. It was expected to last for around nine weeks. The nameplate TDI capacity at Baytown is estimated to be around 220,000 tonne/year, according to ICIS plants and projects.

WESTLAKE'S Q4 NET INCOME UP 72% ON LOWER FEEDS
Westlake Chemical's fourth-quarter net income rose by 72% year on year despite lower net sales as the US producer benefited from lower feedstock costs, it said. The company's net income for the three months ended 31 December was $95.3m (€71.5m), or $1.42 per diluted share, compared with a net income of $26.4m reported for the fourth quarter of 2011. Net sales for the three-month period were $801.0m, down by $58.2 million compared with net sales of $859.2m in the fourth quarter of 2011, primarily due to lower sales volumes for feedstocks, polyethylene (PE) and styrene, partially offset by higher prices for styrene and higher building products sales volumes.

EBIH SEEKS INTEREST FOR FOUR PLANT STUDIES
Bolivia's EBIH has invited firms to join its database for the conceptual engineering studies of four petrochemical plants, the state-owned hydrocarbons industrialisation company said. The projects include an ethylene oxide (EO) and ethylene glycol (EG) plant; a polyvinyl chloride (PVC) plant; a propylene and polypropylene (PP) plant; and a benzene, toluene and xylene (BTX) plant. EBIH, a subsidiary of state-run oil company YPFB, said interested parties have until 19 April to submit details. The four petrochemical plants are part of a $2.4bn (€1.8bn) investment plan to build seven industrial complexes between 2013-2016, EBIH said.

BP'S TEXAS CITY BENZENE TO MOVE TO MARATHON IN MAR
Marathon Petroleum confirmed it will acquire benzene production from BP's 475,000 bbl/day Texas City refinery in Texas on 1 March. Financial terms were not disclosed. The acquisition of the benzene production comes on the heels of Marathon's recent acquisition of the Texas City refinery. Although Marathon will keep the benzene production, BP's Texas City chemicals complex next to the refinery will not be included in the sale. BP has said the chemicals complex is an independent facility and is still a part of its global petrochemicals portfolio.

STEPAN Q4 NET INCOME RISES 17%; SALES FALL 4%
Stepan's 2012 fourth-quarter net income rose 17% year on year to $15.4m (€11.6m) even though sales fell 4% to $427.3m, the US-based chemicals firm said. The improvement in net income was largely driven by lower raw materials costs and a better product mix in surfactants, Stepan's largest business segment, it said. Fourth-quarter gross profit in surfactants rose by 20% to $51.6m even as sales fell 6% to $310.5m. Stepan expects surfactants to continue to derive more of its profits from higher value-added products in the agricultural, oilfield and household and industrial cleaning markets.





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