03 January 2014 09:31 [Source: ICB]
BRASKEM TO BUY SOLVAY INDUPA FOR $290M
Braskem has signed an agreement to acquire vinyls and chlor-alkali producer Solvay Indupa from Solvay for $290m (€212m), the Brazil-based chemical major said. Solvay Indupa has a polyvinyl chloride (PVC) plant in Brazil and in Argentina. In all, Solvay Indupa has a PVC capacity of 540,000 tonnes/year and a caustic soda capacity of 350,000 tonnes/year. The deal establishes an industrial base in Argentina for Braskem, a country in which the company has had a commercial presence for more than 20 years.
INEOS SLASHING ACN PRODUCTION AT TX PLANT
INEOS Nitriles is cutting production of acrylonitrile (ACN) at its Green Lake, Texas, US facility by 50% of capacity in January due to “unsustainable margins”, the company announced. A “significant proportion of capacity” will be idled through the first quarter of 2014, subject to a review of markets, INEOS Nitriles said. “Our current position is unsustainable, and we are forced regrettably to take this decision to preserve the long term health of our acrylonitrile business,” said Graham Beesley, commercial director for INEOS Nitriles. The Green Lake plant has a nameplate capacity of 545,000 tonnes/year, according to the ICIS plants and projects database.
US HOME CONSTRUCTION JUMPS 23% IN NOV
US new home construction shot up by nearly 23% in November from October, the Commerce Department said, showing the strongest growth in housing development since the 2008-2009 recession. That growth rate marks the first time since the recession that housing starts have topped the 1m level. The pace of new home construction in November also increased year on year. Within the core market for housing construction – single-family homes – the rate of growth was a bit slower, but still strong at 20.8%. A 26% surge in new work on multi-unit apartment projects boosted the overall housing expansion pace.
US HOME BUILDER CONFIDENCE GAINS IN DEC
Market confidence among US home builders made strong gains in December, according to an industry survey, indicating that the key housing sector could see a continuing if gradual recovery in the new year. In its monthly survey of member contractors, the National Association of Home Builders (NAHB) said that its housing market index (HMI) rose four points this month to 58, a level 37 points higher than December 2011. The index had been flat at 54 in October and November after edging down from the 57 recorded in September.
US TYRE MARKET EXPECTED TO EXPAND 2013, 2014
US tyre shipments are expected to increase by more than 4% in 2013 and nearly 2% in 2014, the Rubber Manufacturers Association (RMA) said. Tyre shipments are anticipated to reach 297m units in 2013 and 302m units in 2014, according to the US trade group. “A declining unemployment rate, a rebound in housing, increases in vehicle sales and vehicle miles travelled, as well as other macroeconomic factors are expected to account for the 2014 increase,” the RMA said.
REG TO ACQUIRE RENEWABLE DIESEL FIRM SYNTROLEUM
Renewable Energy Group (REG), one of the largest biodiesel producers in the US, said that it has agreed to acquire Syntroleum, a renewable diesel company. Under the deal, Syntroleum will receive 3.796m shares of REG common stock. As of 17 December, REG’s stock was trading at $10.56, which would put the value of the 3.796m shares at $40m (€29m). Syntroleum has developed Fischer-Tropsch processes that convert gas to liquids. It has also developed renewable diesel technology.
PETROQUIMICA SUAPE TO OPEN PET LINE
Brazil’s Petroquimica Suape will have two new production lines of bottle-grade polyethylene terephthalate (PET) ready to operate by the end of January, a company source said. Only one line will start production, while the other may not begin operation for up to six months due to commercial reasons, the source said. Each of the two lines has a capacity of 230,000 tonnes/year, and the decision to postpone the start-up operation date of one of them has to do with pending paperwork for the “homologation”, which is a process of getting approvals by brand owners, the source added. That process can take from four to six months, the source said.
INEOS CONSIDERS PURSUING FRACKING IN UK
Switzerland-headquartered chemicals producer INEOS it is considering applying for a license to carry out hydraulic fracturing for shale gas in the UK, due to the high cost of energy in the country. The UK government has been one of the most active in Europe in pursuing the development of a shale gas industry, granting exploration licenses to energy company Cuadrilla and establishing a dedicated unit, the Office of Unconventional Gas and Oil, to promote the sector. “We haven’t applied yet, but we are looking into it. We’re looking at our options,” a company spokesperson said.
SASOL SOLVENTS GERMANY ASSETS SOLD TO INEOS
Sasol Solvents Germany has reached an agreement to sell its German assets and the associated solvents business to INEOS for an undisclosed price, Sasol said. “The increasingly challenging feedstock situation and market conditions for its products have negatively impacted the financial performance of Sasol Solvents Germany. INEOS offers a backward integration into feedstock which the current Sasol Solvents Germany business does not have, ” Sasol said. The Sasol Solvents Germany sites in Moers and Herne produce oxygenated solvents, such as ethanol and isopropanol, and fine chemicals used in the manufacturing of paint and varnishes, cleaning and anti-freezing agents and cosmetics, as well as in the pharmaceutical industry.
CARGILL TO INVEST IN NEW ETHANOL PLANT IN GERMANY
US-headquartered agribusiness and commodities trading group Cargill announced that it is to build a new ethanol plant in Germany. The company said it is to invest €60m ($82m) in building the new ethanol plant in Barby, Saxony Anhalt, Germany. The new facility will produce ethanol for the beverage, cosmetic and pharmaceutical industries in Europe. The plant will be built alongside Cargill’s wheat processing plant in Barby and will therefore principally use wheat grown locally as a feedstock. The new facility is expected to be operational by autumn 2015.
EU JAN-SEPT TRADE SURPLUS UP 2.3% AS EXPORTS FALL
The EU chemical products trade surplus for January to September increased by 2.3% from the same period last year, official data from agency Eurostat showed. The chemicals trade surplus rose to €86.3bn ($118.2bn) from €84.4bn in the same period of 2012. Non-seasonally adjusted data showed that chemical exports from the EU28 fell by 1% year on year to €204.8bn, while imports declined 4% to €118.5bn. Data for the 17-member eurozone showed exports flat year on year at €235.1bn, while import levels for the period fell 1% to €139.7bn
RELIEF AT EUROZONE FLASH PMI: MARKIT
A renewed upturn in the Markit eurozone purchasing managers’ index (PMI) composite output figure, which according to a preliminary estimate has risen to a three-month high of 52.1 in December from November’s 51.7, has ended the best quarter for the euro area for two-and-a-half-years, Markit Economics said. The preliminary estimate for the Eurozone manufacturing PMI showed December at a 31-month high of 52.7, from 51.6 in November, the financial information services company added. Chris Williamson, chief economist at Markit said: “The rise in the PMI after two successive monthly falls is a big relief and puts the recovery back on track.
RUSSIA’S JAN-NOV PETCHEM OUTPUT INCREASE
Russia’s overall production of chemical and petrochemical products was up in January-November, Russian statistical agency Rosstat said. In January-November 2013, the country’s total output of mineral fertilizers was up by 1.8% year on year at 16.6m tonnes, according to the agency. Ammonia output was 4.5% up year on year at 13.1m tonnes, it said. Plastics output was 13.5% up year on year at 5.6m tonnes, the agency said. Synthetic rubber production was 4.2% up year on year at 1.4m tonnes, it said.
SWEDEN’S TRELLEBORG EXTENDS TERM OF DEBT
Trelleborg has agreed with financial institutions to extend the maturity of its existing syndicated credit facilities worth about €1.2bn (€1.6bn) by five years to December 2018, the Swedish chemical firm said. The extension covers the company’s €750m and $625m credit facilities, with an option to extend the term for another two years, the company said. A total of 17 financial institutions from nine countries are participating in Trelleborg’s credit facilities, with Commerzbank Aktiengesellschaft, DNB, Nordea, SEB, Swedbank and UniCredit Bank Austria AG acting as coordinating bookrunners.
EUROPE END NOV LDPE STOCKS AT LOWEST LEVEL
Low density polyethylene (LDPE) stocks were at their lowest level this year in December, and linear low density polyethylene (LLDPE) stock levels were not far behind, polyethylene (PE) market sources said. On Friday 13 December Dow Europe closed its LLDPE order books for December, saying that LDPE books would be closing shortly afterwards. LDPE spot prices had risen in December, from a low of €1,260/tonne ($1,726/tonne) FD (free delivered) NWE (northwest Europe) to a range of €1,320-1,350/tonne FD, but business was still not very brisk. Some LDPE December prices had risen by more than the €30/tonne increase in the December ethylene contract price, because of the tightness in this particular sector.
EU NEW PASSENGER CAR REGISTRATIONS RISE 1.2%
EU registrations for new passenger cars rose 1.2% year on year to 938,021 units in November, according to sales data released by the European Automobile Manufacturers’ Association (ACEA). It is the third consecutive month that demand for new passenger cars in the EU has increased. “In November, the UK (+7.0%) and Spanish (+15.1%) markets contributed to the overall 1.2% upturn,” the ACEA said. “Demand in Germany (-2.0%), France (-4.0%) and Italy (-4.5%) was lower than in the same month last year,” it added.
KOREA’S LG CHEM TO INVEST W320BN TO RAISE AA, SAP
LG Chem will invest up to won (W) 320bn ($304m) to boost its acrylic acid production in Yeosu to 510,000 tonnes/year in 2015, the South Korean chemical firm said. It represents a 46% increase in the company’s AA capacity, which is currently at 350,000 tonnes/year. “The chemical firm also expects revenue increase of W400bn through the revamping, reaching up to W1,700bn by 2016,” LG Chem said. The investment covers the expansion of LG Chem’s super absorbent polymer (SAP) capacity by 80,000 tonne/year to 360,000 tonnes/year by late 2015, a company spokesperson said.
HONG KONG PETCHEM TO SHUT PS UNIT IN EARLY FEB
Hong Kong Petrochemical plans to shut its 140,000 tonne/year polystyrene (PS) unit in early February for maintenance, a company source said. The facility, located in Yuen Long industrial estate in the New Territories, is scheduled to shut on 5 February for around 10 days, the source added. Other northeast Asia producers include Chimei Corp, Formosa Chemical & Fibre Corp, LG Chem and Kumho Petrochemical. PS resins are used for packaging, toys, consumer electronics and other consumer items.
INDONESIA’S JUSTUS SAKTI RAYA MA PLANT SHUT
Justus Sakti Raya Corp’s 14,000 tonne/year maleic anhydride (MA) plant in Jakarta, Indonesia is currently shut for unscheduled maintenance of about 10 days due to technical issues, a company source said. The plant was shut on 14 December, according to the source, saying that some blocked pipes at the unit require cleaning. MA supply from Justus Sakti Raya will be tight as it has sold out its December-shipment cargoes, the source said.
INDONESIA’S POLYTAMA PROPINDO RESTARTS PLANT
Indonesia’s Polytama Propindo restarted its 380,000 tonne/year polypropylene (PP) plant at Balongan in West Java on 17 December, after more than two months of shutdown, a source close to the company said. The plant was initially scheduled to restart on 3 November from a one-month turnaround but the downtime was extended as it could not secure propylene from its feedstock supplier Pertamina. The supply has since resumed, the source said.
FLEXIBLE FEEDS EYED FOR INDONESIA CRACKER
A proposed cracker in Indonesia can have the flexibility to use either naphtha or liquefied petroleum gas (LPG), or both, as feedstocks for production, PTT Global Chemicals Group (PTTGC) CEO Bowon Vongsinudom told ICIS. Thailand’s petrochemical major, PTTGC, and Indonesian state-owned energy firm Pertamina are planning to build the cracker with a 1m tonne/year ethylene capacity as part of their joint venture petrochemical complex in southeast Asia’s biggest economy. The project is estimated to cost $4bn-5bn (€2.9bn-3.7bn), Vongsinudom said.
THAILAND’S PTTGC STARTS NEW BD, BUTENE-1 UNIT
Thailand’s PTT Global Chemical (PTTGC) has started commissioning its new 100,000 tonne/year butadiene (BD) and butene-1 plant in Map Ta Phut, company president and CEO Bowon Vongsinudom told ICIS. The unit, which can produce 75,000 tonnes/year of BD and 25,000 tonnes/year of butene-1, should be ready for commercial operations by the first quarter of 2014, Bowon added. “Butene-1, most of it is for our own use,” the PTTGC executive said.
MALAYSIA’S OPTIMAL OLEFINS RESTARTS CRACKER
Malaysia’s Optimal Olefins restarted its 600,000 tonne/year gas cracker in Kerteh, Terengganu, on 13 December after a seven-day unplanned shutdown, a source close to the company said. The current run-rates at the facility were not immediately known, the source said. The cracker and other downstream units in the Kerteh complex were shut on 6 December because of a disruption in power supply.
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