News in brief

15 November 2013 10:00 Source:ICIS Chemical Business

EUROPE

GERMANY’S LANXESS Q3 NET PROFIT FALLS 88%
German specialty chemicals maker LANXESS reported an 88% year-on-year decline in its third-quarter net income to €11m, because of lower product prices and negative currency effects. Its sales fell by 5% year on year to €2.1bn in the September quarter, while pre-exceptional earnings before interest, tax, depreciation and amortisation (EBITDA) were down by 26.4% at €187m. The company now expects its pre-exceptional EBITDA to be between €710m and €760m – which is within the previous forecast of €700m-800m.

HUNGARY’S MOL BOARD ISSUES SALE ALERT
The board of directors at Hungary’s MOL has authorised management to start preparations for the potential sale of the group’s 49.2% stake in Croatian refining subsidiary INA, the oil, gas and petrochemicals group. MOL and the Croatian government, which holds a 44.84% stake, are in ongoing negotiations over how INA should be run, with MOL having warned in mid-September it would commence legal action for damages from the government if a workable solution to certain disagreements could not be found.

GERMANY’S HENKEL Q3 NET INCOME UP 12.8%
Henkel’s adjusted third-quarter net income rose by 12.8% year on year to €476m ($635m) on strong organic sales growth across all business sectors, the company said. Organic sales, which exclude the impact of foreign exchange and acquisitions/divestments, grew by 4.2%, the home, personal care and adhesives group said.

OPEC RAISES 2013 OIL DEMAND GROWTH FORECAST
OPEC in its latest monthly oil report for November revised its world oil demand growth forecast for 2013 up by 34,000 bbl/day from last month’s report to 860,000 bbl/day. This revision was a reflection of actual and preliminary data for the first half of the year becoming available, generally coming from all organisation for economic co-operation and development (OECD) regions.

NEW RESOURCES DO NOT TOP MIDEAST IMPORTANCE
The opening of new oil resources on the back of improved technology and higher prices does not reduce the importance of Middle East supply, the International Energy Agency (IEA) said in its World Energy Outlook (WEO) 2013. Despite technology unlocking new types of resources, such as light tight oil and ultra-deepwater fields, national oil companies and their host governments still control 80% of the world’s proven-plus-probable oil reserves.

POLAND TO STICK WITH MULTI-BILLION EURO COMPLEX
Poland is likely to go ahead with a multi-billion euro project to build a petrochemical complex aimed at cutting the country’s trade deficit in chemicals and exploiting the modernisation of a refinery, a bank said.

Concerns have grown that the financing required for the investment may be unattainable, said sources at the two treasury ministry-controlled companies that are considering rolling out the project, refiner Grupa Lotos and largest Polish chemical producer Grupa Azoty.

PARTIAL RESTART AT GERMANY POTASH SITE
K+S confirmed that it partially resumed underground crude salt extraction at its Unterbreizbach potash site in Germany’s Thuringia state following a fatal accident in October. Three miners died on 1 October from carbon dioxide (CO2) exposure. K+S said that full production at Unterbreizbach was not expected to restart before the end of November.

DOW TO CLOSE TARRAGONA CRACKER FOR FEW WEEKS
Dow Chemical will temporarily close its cracker at Tarragona in Spain from 1 December because of challenging market conditions. A company source said because the demand picture for polyethylene (PE) across the Europe, Middle East and Africa region was unclear, Dow would be adjusting operating rates at its Tarragona PE site in an effort to match expected demand levels. Because of the reduced ethylene consumption, the cracker, which has the capacity to produce 370,000 tonnes/year of ethylene, would have to be taken off line.

ISRAEL’S ICL Q3 NET PROFIT SHRINKS 80% ON TAXES
ICL’s third-quarter net income fell by 80% year on year to $78m (€58m), partly on higher tax expenses, the Israeli fertilizers and specialty minerals firm said. “The increase in the tax rate in the quarter was influenced primarily by a non-recurring tax expense totalling around $118m following the company’s decision to release trapped profits and due to the increase of the corporate tax rate from 25% to 26.5%,” it said in a statement.

EU SEPTEMBER CHEMICALS PRODUCTION FALLS 0.7%
EU chemicals production fell by 0.7% in September compared to the previous month, data provider Eurostat said. Production levels also fell month on month for the eurozone, with output levels falling by 0.8% compared to August, Eurostat added. Annual chemical industry data for September is not currently available. Chemicals production levels had fallen by 0.6% in the EU in August, but earlier estimates of a 0.9% month on month contraction in the eurozone were revised to a 0.7% output drop.

AMERICAS

MEXICO ETHYLENE XXI TO REACH 85% COMPLETION
Brazil-based thermoplastic resins producer Braskem expects the construction of the Ethylene XXI petrochemical complex in Mexico to be 85% complete by the end of 2014. The $3.2bn (€2.4bn) joint venture between Braskem and Mexico’s Grupo Idesa will produce 1.05m tonnes/year of polyethylene (PE). At the end of the third quarter, construction of the complex was 48.4% complete, with work focussing on the assembly of the cracker’s charge gas compressor and the low-density polyethylene (LDPE) plant’s primary compressor.

US WESTLAKE’S GEISMAR PLANT NEARS START-UP
Westlake Chemical’s new chlor-alkali plant in Geismar, Louisiana, should start up within the next month, said CEO Albert Chao and chief financial officer Steven Bender. Westlake will bring up the plant through the end of the fourth quarter and have it operating going into 2014. The plant, which will utilise membrane-based technology, is adjacent to Westlake’s existing vinyl chloride monomer (VCM) and polyvinyl chloride (PVC) units at its Geismar complex. Capacity of the plant is to be 350,000 electrochemical units (ECU)/year.

CITGO SHUTS REFORMER AFTER FIRE AT REFINERY
CITGO has shut down a reformer unit at its Lake Charles refinery in Louisiana after a fire occurred in the unit, the company said. The fire at the 427,800 bbl/day refinery took place on Thursday afternoon and was contained inside a heater. The equipment affected was shut down according operational procedures, the company said in a statement. There were no injuries resulting from the fire, and the rest of the refinery is maintaining normal production, CITGO said.

BRAZIL BRASKEM SWINGS TO PROFIT, EARNINGS SOAR
Brazilian petrochemical giant Braskem reported a third-quarter net income of Brazilian reais (R) 394m ($173m, €128m), reversing a net loss of R124m in the prior-year period on improved operating performance. Braskem attributed the increases to a recovery in thermoplastic resin and basic petrochemical spreads in the international market and a reduction in PIS (social integration) and COFINS (social contribution) tax rates on feedstock purchases that has boosted the sector’s competitiveness.

US ROCKWOOD Q3 NET INCOME JUMPS TO $1.1BN
US-based specialty chemicals firm Rockwood reported third-quarter net income of $1.1bn compared with $59.6m in the same period a year ago, as results included a $1.06bn gain primarily related to the divestment of its Advanced Ceramics business. Excluding this gain, adjusted net income for the quarter was $48.2m (€36.2m), down from $73.3m in the same period a year ago, mainly because of lower selling prices for titanium dioxide (TiO2).

US KRONOS POSTS $29.9M Q3 LOSS ON LOWER SALES
US-based Kronos reported a net loss of $29.9m (€22.1m) for Q3 2013, compared with a net income of $35.2m during the same period last year. The pigment producer cited lower average titanium dioxide (TiO2) prices and a litigation settlement charge in 2013, as well as higher raw materials costs in the year-to-date period. Kronos generated $419.1m in Q3 net sales, down 11% year on year from $472.9m. The company said its average TiO2 selling prices in Q3 decreased 18% year on year.

US TRONOX POSTS $49M NET LOSS ON EXPENSES
US-based titanium dioxide (TiO2) producer Tronox had a net loss of $49m (€36m) in Q3 2013, down from a $3m loss in Q3 2012. Tronox did incrementally increase net sales in the third quarter of this year to $491m from $487m. But losses from interest, debt and other expenses increased to $42m from $18m year over year, and the company suffered a lost of $8m on income tax after gaining $34m from the benefit in Q3 2012.

US WESTLAKE CHEMICAL NET INCOME ALMOST DOUBLES
Westlake Chemical’s third-quarter net income in 2013 almost doubled to $170.3m (€126m) from $87.0m in the same period last year. Net sales stood at $1.0bn, a rise of 22% year on year, mainly because of higher sales volumes for styrene and caustic, higher sales prices for most of Westlake’s major products and sales contributed by its specialty polyvinyl chloride (PVC) pipe business. Styrene sales volumes were negatively impacted by a turnaround of its styrene plant in Lake Charles, Louisiana.

BRAZIL ULTRAPAR Q3 NET INCOME UP 13%
Brazil-based fuel retailer and specialty chemicals producer Ultrapar posted a Q3 net income of Brazilian reais (R) 328m ($144m, €107m), up about 13% compared with R291m in the prior-year quarter. Ultrapar attributed the increase in net income to growth in all its businesses that was driven by higher sales volumes in the company’s fuel distribution subsidiaries Ipiranga and Ultragaz and an increase in operating scale due to recent investments.

PROPOSED PIPELINE TO TRANSPORT NGLS
Kinder Morgan Energy Partners and MarkWest Utica EMG plans to build a pipeline to transport natural gas liquids (NGLs) from the northeast US shale formations to the Mont Belvieu hub in Texas. The project will convert more than 1,000 miles (1,609 km) of pipeline that is currently transporting natural gas from Pennsylvania to Louisiana. The companies will add about 200 more miles of pipeline from Louisiana to a proposed Kinder Morgan/MarkWest Utica EMG joint venture fractionation facility with a third party that has existing facilities at Mont Belvieu.

ASIA

PETRONAS RAMPS UP BUTAC PLANT RUN RATE
Malaysia’s PETRONAS Chemicals Group (PCG) is in the process of ramping up the operating rate at its 50,000 tonne/year butyl acetate (butac) unit at Kerteh in Terengganu after restarting the unit over the weekend of 9-10 November. The plant restart was delayed from late October because of technical issues. The producer took its butac plant off line in early September as part of a major overhaul at the company’s Kerteh petrochemical complex.

CHINA’S SINOPEC TO START UP HAINAN AROMATICS UNIT
China’s Sinopec plans to start up its new aromatics facility in Hainan province in December this year. The facility can produce 600,000 tonnes/year of paraxylene (PX) and 220,000 tonnes/year of benzene. “The plan to start-up in December looks to be quite firm, and we expect output at the aromatic facility by January,” said a company source.

Market participants said that the bulk of the new aromatics facility’s PX output will be supplied to Yisheng Petrochemical’s 2m tonne/year purified terephthalic acid (PTA) unit in Hainan.

JAPAN’S NIPPON SHOKUBAI RESTARTS AA UNIT END-NOV
Nippon Shokubai plans to restart its 160,000 tonne/year acrylic acid (AA) unit in Himeji, Japan at the end of the month after a scheduled shutdown. The Japanese company shut the unit in the beginning of November for a month-long maintenance and inspection.

Meanwhile, Nippon Shokubai plans to shut its new 80,000 tonne/year AA unit and its 90,000 tonne/year super absorbent polymer (SAP) unit in Cilegon, Indonesia from end-November to mid-December for scheduled maintenance.

MALAYSIA’S PETRONAS CHEM RESTARTS AMINES UNIT
Malaysia’s PETRONAS Chemicals Group (PCG) has restarted its 75,000 tonne/year ethanolamines unit in Kerteh, Terengganu, following regular maintenance. On-spec production of monoethanolamines (MEA) and diethanolamines (DEA) has been achieved. The plant was taken off line on 1 September.

S KOREA’S OCI RUNS GUSAN TDI PLANT AT NEAR 100%
South Korean producer OCI Chemical is back to almost full production at its 50,000 tonne/year toluene di-isocyanate (TDI) plant in Gusan. The plant was taken off line for annual maintenance for 10 days from 20 October. Because of the shutdown, the company had tried to control the number of deals for October and November to maintain its products inventory. OCI is now only offering early-December cargoes to the Middle East.

KUMHO RUNNING ULSAN STYRENIC UNITS AT 50%
Korean Kumho Petrochemical Co is running its styrenics units in Ulsan at 50% of capacity because of weak market conditions. The company operates a 250,000 tonne/year ABS unit, a 230,000 tonne/year polystyrene (PS) unit and a 110,000 tonne/year styrene acrylonitrile (SAN) plant in Ulsan. These units recently completed their maintenance in the second half of October.

TORAY PLASTICS TO SHUT TWO ABS LINES
Toray Plastics Malaysia planned to shut two of its acrylonitrile-butadiene-styrene (ABS) lines in Prai, Penang, on 16-17 November for maintenance. The two lines, each with 55,000 tonnes/year of capacity, are expected to be shut for up to a month. The company operates a total of six ABS lines with a combined output of 330,000 tonnes/year at the Prai site. ABS is used to make appliances, toys, consumer electronics as well as in the construction and automotive sectors.

CHINA OCTOBER PE, PP IMPORTS FALL 18.2%
China’s polyethylene (PE) and polypropylene (PP) imports in October are estimated at 1.04m tonnes, down by 18.2% from the previous month. The country took in some 66,200 tonnes of PE and 374,000 tonnes of PP last month.

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