News in brief

24 March 2014 00:00 Source:ICIS Chemical Business

EUROPE

BMS TO CONTINUE TDI AT BRUNSBUTTEL
Bayer MaterialScience (BMS) has decided to continue producing toluene di-isocyanate (TDI) at its plant in Brunsbuttel, Germany. BMS originally intended to discontinue producing TDI at the plant by the end of this year and switch it to methyl di-p-phenylene isocyanate (MDI) while concentrating TDI at Dormagen, where the company is building a 300,000 tonne/year world-scale TDI facility due to start up by end 2014. However, Bayer said current market conditions for TDI were good and it would therefore continue production.

SOCAR TO FINALISE STAR FINANCING
The final financing club for the development of the $5.5bn Star petrochemical feedstocks refinery project will be selected by the end of March, the Turkish ­subsidiary of State Oil Company of the Azerbaijan Republic (SOCAR) said. Following the withdrawal of development finance institutions the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) from the shortlist of potential lenders following due diligence, SOCAR Turkey reiterated it has binding commitment letters from 17 financiers collectively worth over $5bn.

RAC PLANS TO STRENGTHEN BPA CLASSIFICATION
A French proposal to classify bisphenol A (BPA) as a presumed human reproductive toxicant which may damage fertility has been unanimously supported by the Risk Assessment Committee (RAC), the European Chemicals Agency (ECHA) said. The RAC prepares the opinions of ECHA related to the risks of substances to human health and the environment. RAC wants to strengthen the existing harmonised classification and labelling (CLH) of BPA from a category 2 reproductive toxicant to a category 1B reproductive toxicant regarding the adverse effects on sexual function and fertility.

EU CONSTRUCTION OUTPUT RISES 1.3% IN JAN
Construction output in the EU increased by 1.3% month on month in January 2014, statistics agency Eurostat said, as the region’s economy continues its recovery. Production in construction in the eurozone expanded by 1.5% over the same period, Eurostat added. In December 2013, production in construction in the EU and eurozone, a key end market for the chemicals industry, rose by 1.2% and 1.3%, respectively.

BRENNTAG NET PROFIT RISES 1% AMID HIGHER EARNINGS
Brenntag’s net profit rose by 1% year on year to €339.2m in 2013, supported by improved results in Europe, the German chemicals distributor said. Its sales rose by 0.8% year on year to €9.77bn in 2013, while operating earnings before interest, tax, depreciation and amortisation (EBITDA) were down by 1.2% at €698.3m. The company’s outlook for 2014 remains positive, the company said. “Further growth in all relevant earnings parameters is expected,” it added.

CHEMS EXPORTS FALL IN EU, RISE IN EUROZONE IN 2013
Chemicals exports from the EU fell by 1% in 2013 compared to 2012 and rose by 1% for eurozone producers, while imports fell by 4% and 1% respectively year on year, agency Eurostat said. The EU chemicals trade surplus for the year was €115.6bn, a 3% year-on-year increase, while the eurozone chemicals trade surplus increased 4% year on year to €127.4bn.

EU NEW CAR REGISTRATIONS RISE 8%
EU registrations for new passenger cars rose by 8% month on month in February, according to data from industry body the European Automobile Manufacturers’ Association (ACEA). Representing the sixth consecutive month of increasing car EU car demand, 861,058 new passenger vehicles were registered during the month. Despite the growth, the figure stands as the second-lowest of any February since 2003, when ACEA began to record passenger vehicle registration figures for the enlarged EU.

SIBUR 2013 ADJUSTED PROFIT FALLS 15%
SIBUR’s 2013 adjusted profit fell 15% year on year to roubles (Rb) 50.94bn (€1.01bn) as revenue declined 0.6% to Rb269.8bn, the Russian petrochemical holding said. The company said profit was adversely affected by the foreign currency loss. SIBUR’s earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to Rb78.86bn, down 4.2% year on year. SIBUR’s revenue from sales of energy products increased by 12% year on year to Rb144.7bn, mainly because of higher sales volumes despite flat average selling prices.

BASF DECLARES FM ON CITRAL AROMA CHEMS
Germany-based BASF on 19 March said it shut down its citral plant in Ludwigshafen on 12 March and declared force majeure on citral-based aroma chemicals following a fire caused by technical equipment failure. The company also declared force majeure on vitamin A and vitamin E products for human and animal nutrition, from the plant. BASF added the shutdown period will last four weeks, based on current best technical estimation.

AMERICAS

METHANEX EYEING NEW METHANOL BUILD IN CANADA
Methanex is considering building a new, greenfield methanol plant at its Medicine Hat, Alberta, site and relocating some of the company’s China production facilities to the US, chief executive John Floren said. Speaking at the annual Methanol Policy Forum, Floren told industry executives that in addition tomoving two of the company’s four methanol production facilities in Chile to Geismar, Louisiana, “it is possible we’ll be moving a third Chile plant to Geismar, and we’re also looking at a new build in Medicine Hat”.

TRINSEO, DOW’S FORMER STYRENICS, FILES FOR IPO
Trinseo, which was known as Styron when it was part of Dow Chemical, has filed for an initial public offering. The company would raise up to $200m, according to the filing. Trinseo proposed to be listed under the symbol TSE. It did not say which exchange it would be listed under or how many shares it planned to issue. Trinseo was once part of Dow and was called Styron before it was sold to Bain Capital for $1.63bn in 2010.

CANADA JAN CHEMICAL SALES RISE 2.7% FROM DEC
Canadian chemical sales rose 2.7% to Canadian dollar (C$) 4.09bn ($3.68bn) in January from December, a government statistics agency said. At C$4.09bn, chemical sales were at their highest monthly level since October 2008, Statistics Canada added. Compared with January 2013, they were up 5.2% year over year, the agency said. Sales in Canada’s plastics and rubber industry fell 1.5% to C$2.05bn in January from December, but they were up 3.3% year over year from January 2013.

US HOMEBUILDER CONFIDENCE STAYS LOW
Market confidence among US homebuilders rose marginally in March, a major survey reported, but the level remains at a ten-month low and housing contractors’ expectations for sales over the next six months eased lower. In its monthly survey, the National Association of Home Builders (NAHB) said that its housing market index (HMI) rose by one point this month to 47 from the 46 score seen in February. Despite that narrow gain, the index remains at a low level not seen since May of last year when it was 44.

US MANUFACTURING ACTIVITY REBOUNDS IN FEB
US industrial activity increased in February as manufacturing output rose at a rate not seen since August, according to a report by the Federal Reserve. “Much has been made about the negative impact of weather on manufacturing output in the past couple months, and the February data suggest that production has picked back up as the temperatures warmed up, as we expected,” Chad Moutray, National Association of Manufacturers chief economist, said in a statement.

BRAZIL’S PLASTICS DEFICIT IN JAN RISES 15% Y ON Y
Brazil’s trade deficit in processed plastics totalled $254.7m in January, up by about 15% from $222.2m in the year-earlier period, plastics industry association Abiplast said. Exports in the month slipped 5.9% to $102.1m from $108.5m recorded in January 2013, while the cost of imports climbed 7.9% to $356.8m from $330.7m, the group said. In volume terms, Abiplast posted a trade deficit of 50,400 tonnes of finished products in January, an increase of 7.2% compared with a deficit of 47,000 tonnes in the prior-year month.

US PRODUCER PRICES EASE DOWN 0.1% IN FEB
US producer prices fell 0.1% in February from January, the Department of Labor (DOL) said, with most of that decline attributed to a 0.3% drop in prices for services. In its monthly report, the department noted that the narrow 0.1% decline in its producer price index (PPI) followed an increase of 0.2% in January and another slim 0.1% gain in December. The department said that the seasonally adjusted 0.1% decline in last month’s index “can be traced to the index for final demand services, which fell 0.3%”. Within the 0.3% downturn in services, the report said that more than 80% of the decline was attributed to a 9.3% drop in retailing, including lower margins for apparel, footwear and accessories.

US EASTMAN ACQUIRES FILM MAKER
Eastman Chemical has entered into an agreement to acquire Commonwealth Laminating & Coating, an independent manufacturer and distributor of window films and specialty films, Eastman announced. “Adding Commonwealth supports our strategy of providing targeted and effective product, brand and service solutions to meet the specific needs of our global, diverse customers and end-users,” Brad Lich, Eastman executive vice president, said in a statement.

ASIA

QINGDAO LIDONG RUNS AROMATICS UNIT AT 60%
China’s Qingdao Lidong Chemical is currently operating its aromatics facility at 60% of capacity. The aromatics unit in Qingdao is able to produce 800,000 tonnes/year of paraxylene (PX) and 270,000 tonnes/year of benzene. The company is still considering ramping up operating rates, but this will depend on market conditions. Qingdao Lidong was operating its aromatics facility at around 40% of capacity because of technical difficulties. “The supply of PX in Chinese domestic markets remains long, especially with poor off-take from buyers because of weak downstream conditions,” a Chinese player said.

IDEMITSU KOSAN TO CUT CHIBA PX OPERATING RATE
Japan’s Idemitsu Kosan plans to reduce the operating rate at its 265,000 tonne/year paraxylene (PX) unit at Chiba starting from the end of March. The producer targets to operate its PX facility in Chiba at 80% capacity, down from the current 100% because of squeezed margins and ample spot availability in the region. Contractual volumes to customers will not be affected during the operation cutbacks as the company has sufficient stocks and as several customers have requested for later deliveries.

CHINA’S DRAGON AROMATICS PUSHES RESTART TO MAY
China’s Dragon Aromatics has postponed the restart at its second 800,000 tonne/year paraxylene (PX) unit located at Fujian province to May. The company initially planned to restart the second PX line in March, but has pushed back the plan as the supply of PX cargoes in the country remained ample. Dragon Aromatics is currently operating its other 800,000 tonne/year PX unit at the same site at around 90% of capacity, while run rates at its 240,000 tonne/year benzene unit stands at around 50%.

CHINA’S SULPHUR LIKELY TO REMAIN STAGNANT
Chinese trading activity for imported and domestic spot sulphur cargoes will likely remain subdued until the end of March due to plants’ sufficient stocks. The sulphur market has been quiet since the end of February. Total sulphur inventory levels have risen from 1.16m tonnes in late January to 1.5m tonnes in March, after an influx of shipments arrived post-Lunar New Year. Many Chinese traders and downstream producers have remained on the sidelines because spot prices of imported sulphur are higher than domestic cargoes now and they are uncertain whether prices will decrease further.

INNER MONGOLIA JUNZHENG SHUTS WUHAI PVC UNIT
China-based Inner Mongolia Junzheng Energy & Chemical Industry Co has taken off line its 300,000 tonne/year polyvinyl chloride (PVC) plant at Wuhai in Inner Mongolia province on 19 March for three days of maintenance. The plant was running at full capacity before the shutdown. The company’s other 300,000 tonne/year PVC unit at same site is currently running at full tilt, the source said. The shutdown of the plant is expected to have little impact on the local market, because of sufficient supply.

TUNG LAM RUNS ETHANOL PLANT AT REDUCED RATES
Vietnam’s Tung Lam Company Limited is running its ethanol plant at 70-80% production capacity. The ethanol factory in the Dong Nai province of southern Vietnam has a nameplate capacity of 60,000 tonnes/year. The company has reduced operating rates to maximise their profits amid low feedstock cassava harvest and weak sales margins.

ASIA’S FAE DEMAND MAY RISE IN APRIL
Asia’s fatty alcohol ethoxylates (FAE) prices may rise in April on the back of higher downstream demand. Winter typically ends in March in China, where it is the major buying market for FAE in Asia-Pacific. As the weather turns warmer, the downstream shower and shampoo markets typically strengthen. This has improved the market sentiment of the producer who has been struggling to protect its margins amid buyers’ resistance to the higher offers amid the lull market in March despite the firm feedstock fatty alcohol costs.

CHINA’S SICHUAN PETCHEM ACHIEVES ON-SPEC HDPE
China’s Sichuan Petrochemical achieved on-spec production at its 300,000 tonne/year new high density polyethylene (HDPE) plant in Sichuan province on 17 March. The unit is currently producing HDPE injection material after it was started up on 25 February. Sichuan Petrochemical also started up a 300,000 tonne/year linear low density polyethylene (LLDPE) plant at the same site on the same day. Its new LLDPE plant is expected to produce on-spec material in March, the source said. The producer is a subsidiary of state-owned petrochemical major PetroChina.

By x x