News in brief

17 January 2014 09:40  [Source: ICB]

Americas

Lion to sell sbr plant to former CEO’s firm
US-based Lion Copolymer has a tentative agreement to sell its styrene butadiene rubber (SBR) plant in Baton Rouge, Louisiana, to a company recently formed by former CEO Greg Nelson – East West Copolymer & Rubber, a Lion spokesperson confirmed. Nelson left the company in the summer of 2013. “Employees and the union have been notified about the tentative deal to close the sale of the SBR plant by the end of the month,” said one source in the financial community. The plant has capacity of 130,000 tonnes/year, said a source at the company.

Formosa considers new cracker in Louisiana
Taiwan’s Formosa Plastics Corp (FPC) is studying the possibility of building an ethane-based petrochemical project at Louisiana in the US, on top of its announced intention to build one in Texas, a company source told ICIS. Formosa Plastics chairman Lee Chih-tsuen was quoted in news daily Taipei Times detailing a plan to build a new 1.2m tonne/year cracker in Louisiana that will utilise shale gas as feedstock. “The chairman made a speech regarding this and the information regarding any new project in Louisiana was just a proposal. There is nothing definite yet, it’s all in discussion,” a source at the company’s investor relations department said.

Celanese gets air permit for methanol plant
Celanese’s air permit for a Texas methanol plant has received final approval from the Environmental Protection Agency (EPA). The EPA signalled its approval in mid-December, pending a 30-day public comment period that ended at midnight on 13 January. Celanese has a joint venture with Mitsui to build a 1.4m tonne/year methanol unit at its Clear Lake complex near Houston. A recent statement from Celanese said it plans to start construction in mid-January and that it expects the unit to begin running in mid-2015.

Alcoa completes $300m automotive expansion
US-based Alcoa has completed a $300m expansion at its site in Davenport, Iowa, to meet growing demand for aluminium sheet products in the auto industry. Alcoa said that demand for aluminium to produce vehicles - already the second-most-used material used to make cars today - is expected to nearly double by 2025. Meanwhile, the amount of aluminium body sheet content in North American vehicles is expected to quadruple by 2015 and increase tenfold by 2025 from 2012 levels, it added. Caustic soda is used in aluminum production.

KiOR shutters cellulosic ethanol plant
KiOR has shut down its cellulosic ethanol plant in Columbus, Mississippi, to optimise operations in an effort to get production to at or near nameplate capacity, the company confirmed. The facility was shut down on 17 December and will remain offline for the most part while the $10m optimisation project is undertaken, CEO Frank Cannon told analysts during a conference call. The plant will only operate in the first quarter of 2014 “to the extent we want to test and prove our optimisation projects”, Cannon said.

HIG to acquire AMPAC in $392m deal
US fine and specialty chemicals custom manufacturer American Pacific Corporation (AMPAC) has agreed to be acquired by investment firm HIG Capital in a deal valued at $392m, it said. Under the terms of the agreement, HIG will, no later than 24 January, commence a tender offer to acquire AMPAC’s outstanding common stock for $46.50/share, reflecting a premium of 18.9% over the closing share price on 9 January, AMPAC said.

Momentive GETs proppants plant in Louisiana
US-based Momentive Specialty Chemicals has acquired a resin-coated proppants plant in Shreveport, Louisiana, from CRS Proppants for an undisclosed sum. Momentive said that the 450m lb/year plant would provide it with additional capacity to meet growing demand for its oilfield chemicals and products.

Soda ash cuts a boon to US, UK producers
The planned reductions of European soda ash production capacity and the delay of trona production projects in Turkey should boost profit margins and utilisation rates of US and European soda ash roducers, according to a market report by Credit Suisse. The reduction in capacity refers to Solvay’s planned mothballing of a plant in Povoa, Portugal, and reduction in operatons at another plant in Italy. Tata Chemicals also plans to close a UK plant in Listock Cheshire in the first half of 2014.

Valero cuts proposed capacity at refinery
US refiner Valero has cut the capacity of its planned expansion at its St Charles refinery in Louisiana, according to a notice filed with the Louisiana Department of Environmental Quality. According to the notice, the company had planned to expand the refinery’s crude oil throughput capacity to 290,000 bbl/day, but is trimming that back to 275,000 bbl/day. The filing was for air permits on projects Valero is considering for the site, company spokesperson Bill Day said.

Europe ATT Polymers delays lifting nylon 6 FM
ATT Polymers has delayed the forecast force majeure exit date at its 46,000 tonne/year nylon 6 plant in Guben, Germany, until March, a company source confirmed. Two lines at the plant are currently off-line. The combined capacity of the lines is 1,200 tonnes/month, the source confirmed. ATT Polymers’ Guben plant was shut down on 23 August after a leakage of highly flammable vapours from a nylon 6 (or polyamide 6) production line.

AkzoNobel CFO to step down
AkzoNobel’s chief financial officer Keith Nichols will step down at the end of June, the Netherlands-based coatings major said. Nichols spent five years in his current role and eight at AkzoNobel. Prior to joining the company, he was treasurer at Corus Group - now named Tata Steel Europe. “Making a decision like this is never easy but I leave the company well placed to deliver its 2015 financial targets,” said Nichols.

Total takes stake in UK shale gas
Total has acquired a 40% interest in two shale gas exploration licenses in the UK for an undisclosed amount, the French energy firm said. “The interests are in Petroleum Exploration & Development Licenses 139 and 140 in the Gainsborough Trough area of the East Midlands region of the UK,” Total said. The region covers an area of 240 square kilometres. The acquisition marks the French oil and gas firm’s first entry into shale gas exploration in the UK.

Eni lets two Polish shale gas licences expire
Italy’s Eni has let two of its three shale gas exploration licences in Poland lapse, the country’s environment ministry said, making it the latest international firm to reduce its presence in the sector. The company currently retains one exploration concession in Elblag, a spokesman for Poland’s Ministry of Environment said. ExxonMobil, Marathon Oil and Talisman Energy are three other firms that had been enticed by the potential of shale gas in Poland but have since pulled out of the sector.

Poland watchdog slams progress on shale
Poland’s independent public spending watchdog the Supreme Audit Office (NIK) blamed the “indolence” of public authorities for slow progress in developing the country’s shale gas industry. The office said despite the award of 113 shale gas exploration licences covering almost 30% of Poland’s territory, little work has taken place, due in large part to legislative delays and unwieldy bureaucracy. A key issue is the delays in drafting laws on the search and extraction of shale gas, according to NIK.

Zotefoams sees lower sales on weak demand
UK-based foam producer Zotefoams said it expects full-year sales revenues for 2013 to be lower than in the previous year on the back of weaker demand for polyolefin foam from continental Europe. The company forecast that full-year sales for 2013 would be 5% below 2012, when the company posted record sales of £47.2m. According to Zotefoams, the dip in European polyolefin foam demand is largely due to a single client, augmented by downstream destocking.

EU urges tougher rules for plastics recycling
The European Parliament urged tougher rules for plastics recycling, including binding recycling targets and bans on the most hazardous plastics. In a resolution, the parliament said that plastic wastes were damaging the environment because of weak enforcement of EU legislation and the lack of specific EU laws on the materials. Fully enforcing EU legislation on waste could save €72bn/year boost the sales of EU waste management and recycling firms by €42bn/year and create over 400,000 jobs by 2020.

Sika posts record sales in 2013
Sika’s overall sales last year grew 6.5% to a record Swiss francs (Swfr) 5.14bn (€4.18bn) on the back of organic growth and “rapid integration of acquisitions”, the Switzerland-based specialty chemicals firm said. Sales increased across all regions, with Latin America and Asia-Pacific recording double-digit business growths of 15.1% and 12.5%, respectively. “The accelerated build-up of business in the emerging markets produced sales growth of 17.2% in local currencies and 11.8% in Swiss francs,” Sika said.

Eurozone chems trade surplus rises
The eurozone’s chemicals trade surplus grew 2.1% year on year in the January-October 2013 period on the back of stable exports and lower imports, Eurostat said. Exports remained flat in the 10-month period while imports fell 1% compared to the same period in 2012, said Eurostat. Eurozone countries exported a total of €263.2bn in chemical products, while imports amounted to €157bn resulting in a trade surplus of €106.3bn. In Janaury-October 2012, the eurozone’s chemicals trade surplus was €104.1bn.


Asia

Siam Cement runs MOC aromatics unit at 100%
Thailand-based Siam Cement Group (SCG) is running its joint venture Map Ta Phut Olefins Co (MOC) aromatics plant in Map Ta Phut at 100% capacity. The plant has a nameplate capacity of 160,000 tonnes/year of benzene, 80,000 tonnes/year of toluene and about 60,000 tonnes/year of solvent grade xylene. The unit was restarted in December 2013 after 45 days of scheduled maintenance. MOC is a joint venture between SCG and US major DOW Chemical.

Hebei Shenghua conducts trial runs at PVC unit
China’s Hebei Shenghua has started conducting trial runs on its smaller polyvinyl chloride (PVC) unit with a capacity of 100,000 tonnes/year at Zhangjiakou in Hebei province since 14 January following the completion of upgrades. The company has cancelled the original expansion to 300,000 tonnes/year. The company owns two PVC units with a combined capacity of 300,000 tonnes/year.

Supreme considers EPS expansion in 2015
India’s Supreme Petrochem is considering to expand its expandable polystyrene (EPS) output in 2015. The company currently produces EPS in Mumbai and Chennai with an annual output of around 80,000 tonnes. “The expansion is dependent on domestic demand growth in India and will lift the total EPS output to around 100,000 tonnes a year”, a source said. Supreme Petrochem is India’s largest polystyrene (PS) producer with an annual output of 272,000 tonnes. The other PS/EPS producer in the country is LG Polymer India.

BASF-YPC to restart EVA plant after outage
China’s BASF-YPC Co Ltd expected to restart its 200,000 tonne/year low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing line in Nanjing, Jiangsu province, on by the week ended 17 January. The plant, which was shut on 4 January because of shortage of feedstock ethylene, will resume production in tandem with the restart of its upstream cracker. BASF-YPC also operates a 200,000 tonne/year dedicated LDPE line at the same site that was also shut on 4 January. This unit was also scheduled to restart around the same time.

DFE Chem to shut PS unit in April
Philippines’ DFE Chemical is on track to shut its polystyrene (PS) unit in April for maintenance. The 30,000 tonne/year facility in Manila is expected to be shut in the first half of April for around two weeks. DFE is the sole PS maker in the Philippines.

Shaanxi Xianyang shuts methanol unit on 15 Jan
China’s Shaanxi Xianyang Chemical Industrial has shut down its 600,000 tonne/year methanol unit at Xianyang in Shaanxi province on 15 January for eight days of maintenance. This led to a reduction in methanol supply in the domestic market, which provided some support to spot prices amid the weak demand in Shaanxi province.

Sinochem to commission cdu at quanzhou refinery
China’s Sinochem plans to commission the 12m tonne/year crude distillation unit (CDU) of its 240,000 bbl/day refinery at Quanzhou in Fujian province on 15 January. However, commercial operations of the facility may only start in the second quarter as some auxiliary units are not ready for start-up yet. Earlier, sources said that the CDU could come on stream in December 2013.

Middle East & Africa
Borouge 3 units on track to start up this year
UAE’s Borouge is on track to start production at its six new petrochemical plants throughout the year, a source close to the company said. The plants – which include a 1.5m tonne/year ethane cracker; two polyethylene (PE) units with combined capacity of 1.08m tonnes/year; two polypropylene (PP) units with combined capacity of 960,000 tonnes/year; and a 350,000 tonne/year low density PE (LDPE) unit – comprise the third phase of Borouge’s petrochemical project in Abu Dhabi, known as Borouge 3. The source did not provide detailed plans on when each of the units will come on stream.

Fanavaran methanol unit shut on gas shortage
Iran’s Fanavaran Petrochemical has again shut its 1m tonne/year methanol plant in Bandar Imam Khomeini because of feedstock gas shortage caused by cold weather in the region. The plant was taken off line on 8 January, three days after it resumed production. Fanavaran Petrochemical had to cancel its methanol sale tender planned on 12 January for Indian customers because of the shutdown. The methanol facility was shut in mid-December 2013 amid the seasonal shortage of feedstock.


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