News in Brief

29 November 2013 09:35 Source:ICIS Chemical Business

AMERICAS

SHELL DECLARES FORCE MAJEURE ON STYRENE
Shell Chemicals declared force majeure on styrene out of its Alberta, Canada, facility, a source close to the company confirmed on 26 November. The source said it is a result of a shutdown of the company’s styrene unit because of inability to obtain enough benzene feedstock from its Scotford refinery. The outage is expected to last between two to three weeks, the source said. Shell Chemicals Canada has a 450,000 tonne/year styrene unit at the facility.

TECHNIP TO DO FEED WORK ON SASOL GTL PROJECT
Sasol has awarded Technip with the front-end engineering and design (FEED) contract for its proposed gas-to-liquids (GTL) plant in Louisiana, the France-based engineering firm announced. The $11bn-14bn facility (€8bn-10bn) will be built in two phases, with the first phase expected to be in operation by 2018 and the second a year later. When fully operational, the plant should produce 96,000 bbl/day of fuel, included GTL diesel. The FEED contract falls within the engineering alliance Technip and Sasol formed earlier this year.

BRASKEM SHELVES PLAN TO SELL DISTRIBUTION
Brazilian producer Braskem has shelved plans to sell its chemical and petrochemical distribution business quantiQ, a spokesperson for the company said. Braskem announced in November last year that it intended to sell quantiQ – Brazil’s largest chemical distributor – by the end of 2012. Meanwhile, Braskem has confirmed that it remains interested in acquiring polyvinyl chloride (PVC) assets in Brazil and Argentina from Belgium-headquartered chemicals producer Solvay. Solvay announced in February it is in discussions to sell its 70% stake in Latin American PVC producer Solvay Indupa.

PEMEX POSTS $39M PETCHEM TRADE SURPLUS
Mexico’s state-owned energy firm Pemex posted a $39.0m (€28.9m) trade surplus in petrochemical products in the first 10 months of 2013 compared with a surplus of $13.2m in the prior-year period. Exports of petrochemicals in the January-October period totalled $146.8m, while the cost of imports was $107.8m. In October, the company registered a petrochemicals trade surplus of $1.5m compared with a deficit of $6.8m in the same month last year.

PEMEX ACQUIRES 51% STAKE IN SPANISH SHIPYARD
Mexico’s state-owned energy firm Pemex has acquired a 51% stake in the Hijos de J Barreras (HJB) shipyard in Spain’s northwestern Galicia region, Mexico’s state-run oil monopoly said. The contract, signed by Pemex’s global trading arm, PMI Comercio Internacional, follows a letter of intent (LOI) signed by the Mexican company in May. The deal was aimed at reviving the Spanish shipbuilding industry and developing over the medium term the capacity to build specialised tankers mainly for the Mexican oil industry, Pemex said.

CAB SIGNALS CONTINUING US GROWTH IN 2014
The US economic recovery should continue into the new year, with slow but continued growth through 2014. The American Chemistry Council (ACC) said its monthly chemical activity barometer (CAB) for November rose by a slim 0.1 percentage points to 93.6 from the October reading of 93.5 on the three-month moving average basis. The CAB remains up 2.8% over a year ago and is still at its highest point since June 2008.

US PETROCHEMICALS TO GROW FASTER THAN GDP
US petrochemical manufacturing should grow “in the mid-single digits”, a pace slightly ahead of projected GDP growth, through 2018 due to increasing demand from key buyers such as plastic and rubber makers. Chemical manufacturing in the US through the remainder of 2013 and the beginning of 2014 should be similar to 2012’s growth of 1.6%, said Euler Hermes in its US Chemicals Industry Outlook. Downstream demand from makers of appliances, computers and electronics, plastics, and rubber products will fuel near-term growth.

US CONSUMER CONFIDENCE FALLS IN NOV
US consumer confidence fell in November, the Conference Board said, with worries about employment and income instability driving the decline. The board’s closely watched consumer confidence index (CCI) fell to 70.4 in November from the October reading of 72.4. It was the second month of declines and followed a sharp downturn in October. The CCI measures current consumer confidence against a baseline level set at 100 in 1985.


EUROPE

GERMANY CHEMICAL INDUSTRY SHIFTING TO US
Germany’s chemical industry keeps increasing its investments in the US, attracted by that country’s low energy costs on the back of growing shale gas production, German chemical industry trade group VCI said. In 2012, German investment in new chemical plants or expansions in the US rose 54% to €3.2bn ($4.3bn), the group added. The US now accounts for 41% of the German chemical industry’s foreign investments, up from 28% in 2005.

INEOS COLOGNE NO 5 CRACKER RESTARTS
Swiss-headquartered INEOS has restarted the No 5 cracker at its Cologne, Germany site on 25 November following planned maintenance, a company spokesman said, adding that it would not be at full rates for several days. The cracker, which has a nameplate capacity of 660,000 tonnes/year of ethylene, according to ICIS data, was shut down for maintenance in mid-September and is one of two owned and operated by INEOS at the site.

POLAND CONFIRMS POSSIBLE SALE OF CIECH STAKE
The Polish treasury ministry is considering selling its 39% stake in soda ash producer Ciech on the Warsaw stock exchange, a deputy treasury minister confirmed. “This is one of the options,” Rafal Baniak said when asked if the stake, valued at just under €200m ($270m) by investment banks, could be privatised on the bourse. However, the ministry had not given up on a good, strategic investor stepping forward to make an offer for the Ciech stake.

SOLVAY CUTS TARGET FROM €3BN T0 €2.3BN-2.5BN
Solvay expects its recurring earnings before income, tax, depreciation and amortisation (REBITDA) to reach €2.3bn-2.5bn by 2016, supported by changes in its business portfolio, the Belgium-based producer said. “Solvay expects to deliver annual double-digit REBITDA growth on average in the next three years and to outperform the market while significantly increasing capital return,” Solvay CEO Jean-Pierre Clamadieu said. Solvay also plans to “selectively invest” €700m-800m annually to 2016 focused on consumer chemicals and advanced materials. It previously targeted €3bn REBITDA by 2016.

DUTCH CHEMICAL INDUSTRY FACES ORDERS DECLINE
The Dutch chemicals industry is facing a decline in orders and a fall in production on the back of an unstable economic climate and the weakening global competitive position of Europe, the Association of the Dutch Chemical Industry (VNCI) said. Data the trade body collected confirmed the chemical industry in the Netherlands is structurally falling behind because of the rise of China, the growth of Middle East specialty chemicals and high raw material and energy prices in Europe relative to the US.

REPSOL TARRAGONA CRACKER TO RESTART
Repsol will restart its cracker at Tarragona in Spain by 1 December, a company spokesman for the Spanish petrochemicals company said. The cracker currently has the capacity to produce 702,000 tonnes/year of ethylene. It has been on planned maintenance since early October. Restart was originally anticipated around 25 November.

INEOS GRANGEMOUTH CRACKERS ONLINE
INEOS’ two crackers in Grangemouth, the UK, are both running on-specification following an unplanned shutdown mid October. A company spokesman said the KG gas cracker was on-spec on 11 November and the G4 naphtha cracker was on-spec on 20 November. The crackers, which have the capacity to produce 1.02m tonnes/year of ethylene, were shut down alongside the refinery and all other petrochemical units in mid-October in reaction to a threat of strike action. The units were brought back online from 25 October.

BASF PRODUCES ITS FIRST COMMERCIAL-SCALE BIO-BDO
Germany-based chemicals producer BASF said on it has produced its first commercial volumes of 1,4-butanediol (BDO) from renewable raw material. Produced using process technology licensed from US sustainable chemicals specialist Genomatica, BASF claims the batch of bio-BDO is comparable in quality to petrochemical-derived BDO. The fermentation process uses dextrose as a renewable feedstock. BASF added it is planning to branch out into BDO derivatives from renewable feedstocks, with materials to be produced including polytetrahydrofuran.


ASIA

NIHON OXIRANE TO END CHIBA OPS BY 2015
Nihon Oxirane’s production of styrene monomer (SM), propylene oxide (PO) and propylene glycol (PG) at Chiba Works in Japan will end by May 2015, the top executive of the company’s parent firm Sumitomo Chemical said. The joint venture company will halt sales of these chemicals by May 2015, Sumitomo Chemical president Masakazu Tokura said. The move is part of Sumitomo Chemical’s efforts to restructure its businesses to respond to declining domestic petrochemical demand.

SUMITOMO EXPECTS PETRO RABIGH FINANCE APPROVAL
Japanese chemical producer Sumitomo Chemical expects to receive approval for the project finance for phase two of its joint venture in Saudi Arabia – Petro Rabigh – in the first half of 2014, company president Masakazu Tokura said on 27 November. Sumitomo Chemical and its partner Saudi Aramco announced in May 2012 that the $7bn (€5.2bn) Rabigh II project, which includes an expansion of its ethane cracker, was expected to start coming on stream in the first half of 2016.

DEATH TOLL AT CHINA OIL PIPELINE BLAST RISES TO 55
Fifty-five people were killed by the explosion that rocked an oil pipeline in China’s Shandong province on 22 November, Chinese refiner Sinopec said on 25 November. Nine people are still missing while 136 are hospitalised after the incident that occurred at the company’s Dongying-Huangdao crude oil pipeline in Qingdao on 22 November, Sinopec said, correcting earlier Chinese media reports that the leakage occurred at the Huangdao-Weifang oil pipeline.

LUOYANG PETCHEM TO SHUT DOWN PP PLANT
China’s Luoyang Petrochemical plans to shut down its two polypropylene (PP) lines in Luoyang, Henan province, with a total capacity of 220,000tonnes/year on 1 December for maintenance on feedstock shortage, a company source said. The oil pipeline at Huangdao District in Qingdao exploded on 22 November, and was taken off line. Crude oil transmission was in temporary suspension, leading to the PP shortage for Luoyang PC.

GHARDA PLASTICS TO BUILD ENGINEERING RESINS UNIT
Gharda Plastics is planning to build a new specialised engineering resins plant in Panoli, India, the producer said. The company aims to start up the plant – which is expected to produce polyetherketone, polyetheretherketone and polybenzimidazole engineering resins – in April 2015, Gharda Plastics. The company will decide later this year on the final capacity of the plant, it said.

VOPAK SELLS MALAYSIA TERMINAL TO WILMAR
Vopak has sold a 20,160cbm chemicals terminal it owned near Johor Bahru in southern Malaysia, the Dutch chemicals storage and logistics major said. Vopak said that it sold its 100%-equity interest in Vopak Terminals Pasir Gudang to a subsidiary of Singapore-based agribusiness and oleochemicals group Wilmar. The divestment was “part of the continuous drive to further align our terminal network with long-term market developments,” Vopak said.

INDIAN REFINERY TO SELL NAPHTHA TO SPOT MARKET
India’s Numaligarh Refinery Ltd (NRL) is looking at selling the naphtha output from its newly commissioned splitter to the spot market for the time being, given delays in project start-up of its prospective captive user, a company official said. The splitter in Assam province that can produce 160,000 tonnes/year of naphtha can produce petrochemical grade naphtha, the source said.

PETRONAS TO STOP KERTEH LLDPE FILM PROD JAN 2014
Malaysian state-owned petrochemicals major Petronas plans to stop producing linear low density polyethylene (LLDPE) film grade resins at its Kerteh site from January 2014, a source close to the company said. The plan is to make only high density PE (HDPE) injection and LLDPE rotomoulding grades at its 120,000 tonne/year No 1 plant in Kerteh from January, he said. The plant will focus on making HDPE injection grade with a melt flow index of four.

TOYO TIRE & RUBBER PAY US DOJ $120M FOR PRICE FIXING
Japan’s Osaka-based tyre producer Toyo Tire & Rubber has entered into a plea agreement with the US Department of Justice (DOJ) to pay a fine of $120m (€89m) for violating anti-trust laws in relation to sales of automotive parts installed in US cars, the DOJ said. Toyo Tire & Rubber took part in two separate conspiracies from as early as March 1996 until at least May 2012, the DOJ said on its website.


MIDDLE EAST & AFRICA

SABIC TO START UP NEW PET PLANT IN JANUARY 2014
Saudi Arabia’s SABIC plans to start up its new 420,000 tonne/year polyethylene terephthalate (PET) plant at Yanbu in January next year, a company source said. The plant was originally expected to start up at the end of fourth-quarter in 2013. Minor delays in construction had pushed back the plant’s start-up date, the source said. SABIC has an existing 330,000 tonne/year PET plant at the site. Meanwhile, the company will expand the capacities of its upstream paraxylene and purified terephthalic acid (PTA) plants that are also located in Yanbu.

SHARQ SHUTS NO 4 MEG UNIT ON MECHANICAL WOES
Saudi Arabia’s Eastern Petrochemical (SHARQ) shut its 700,000 tonne/year No 4 monoethylene glycol (MEG) plant in Al Jubail on 26 November because of mechanical issues at the unit’s reactor, a source close to the company said. The company is looking into the problem and has yet to come up with a detailed restart schedule for the plant, the source said, but added that the shutdown could last at least a month. SHARQ has earlier cancelled a planned shutdown at its No 4 unit, which was planned in mid-June, citing “good operating status” at the unit.

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