News in brief

21 April 2014 00:00 Source:ICIS Chemical Business

Americas

SHIN-ETSU APPLIES TO BUILD LOUISIANA CRACKER
Shin-Etsu Chemical’s US subsidiary, Shintech, has applied for construction permits to build a 500,000 tonne/year ethylene plant in Louisiana, aiming to “assure stable supply” of feedstock to manufacture polyvinyl chloride (PVC), the Japanese company said. The application has been submitted to the Department of Environment Quality of the US state of Louisiana. Shin-Etsu said neither the location nor timings for construction had been decided yet. The potential cost of the project has not been evaluated, either.

AXIALL VCM PLANT NOT FULLY OPERATIONAL UNTIL MAY
Axiall’s Lake Charles vinyl chloride monomer (VCM) plant that was damaged in a fire on 20 December will not be fully operational until May, and the outage will cost the company more than originally estimated, the producer announced. Axiall had estimated that the repairs and lost production would have little effect on Q4 2013 earnings but impair Q1 2014 operating income by about $25m. But Axiall said it had increased maintenance spending on the Louisiana plant by $10m more than it had projected in February.

CP RAILWAY SUED ON CHEMICAL RESTRICTIONS
Several trade groups and chemical companies have filed a lawsuit in the US against Canadian Pacific Railway, alleging that it has adopted policies that unfairly restrict railcar shipments of ammonia, chlorine and sulphur dioxide. Under the new policies which took effect on 14 April, Canadian Pacific adopted its own specifications for rail tank cars containing these materials, the lawsuit said. If tank cars do not meet specifications, then Canadian Pacific will refuse to allow the cars to travel over its lines. The plaintiffs allege that the Secretary of Transportation has the sole right of determining the specifications.

AIR PRODUCTS TO PROCESS HYDROGEN FROM PDH UNIT
US-based Air Products plans to build a 40m cubic feet/day (40 mcf/day) hydrogen plant that will process off-gas from a propane dehydrogenation (PDH) unit being built by Enterprise Products. Enterprise is building the 750,000 tonne/year PDH plant in Mont Belvieu, Texas, and operations should start in the third quarter of 2015. A PDH plant produces propylene by removing hydrogen from propane.

MPM FILES FOR CHAPTER 11 BANKRUPTCY
Momentive Performance Materials (MPM) filed for Chapter 11 bankruptcy after it agreed with key stakeholders a restructuring plan. “To implement this plan, MPM has chosen to commence a “pre-negotiated” reorganization under Chapter 11 of the US Bankruptcy Code,” it said. MPM will continue to operate normally throughout the Chapter 11 process, and has received a commitment for about $570m in new bankruptcy financing, it said, adding that the company “intends to move through the process as quickly as possible”.

US HOUSING SECTOR FACES TIGHT CREDIT
US homebuilders remained largely uncertain about the nation’s housing sector in April, as continuing tight credit conditions hamper both contractors and potential home buyers. In its monthly survey of housing contractors, the National Association of Home Builders (NAHB) said its housing market index (HMI) for April inched up to 47 from the downwardly revised March 46 reading, marking the third consecutive month of low expectations among builders. A reading of 50 or above indicates that home builders are confident about their prospects over the next six months.

RFA RAISES ALARM AS ETHANOL CROWDED OUT
US ethanol producers want rail carriers and authorities to take action as rising crude oil railcar shipments crowd out ethanol, contributing to “sheer chaos” on the country’s freight rail system, said the Renewable Fuels Association (RFA). However, railroads were quick to reject the claims. The RFA said that “explosive growth” in railcar shipments of Bakken crude from North Dakota and of Canadian crude has “reshuffled the existing fleet of railcars and locomotives, pressured lease rates, changed normal rail traffic patterns, and generally 
exerted significant stress on the rail system”.

EVANGELINE PIPELINE RESTART DELAYED TO MAY
The restart of the Evangeline Pipeline between Texas and Louisiana is expected to be pushed back to May from April, multiple sources told ICIS. A company source with Chevron Phillips Chemical, an affiliate of pipeline owner Chevron Petrochemical Pipeline, said that no update on the status of the Evangeline was available. The pipeline has been down since Q3 2013, and has created an imbalance in ethylene supply between Texas and Louisiana.

Europe

INEOS G4 CRACKER, BD SHUTTING DOWN
INEOS’ G4 naphtha cracker and butadiene (BD) extraction unit at its site in Grangemouth, the UK, are in the process of shutting down, a company spokesman said. Market sources said that the units were expected to close permanently from the week ended 20 April. The company announced last month it had brought forward the closure of the 320,000 tonnes/year G4 cracker because of the lack of feedstocks. Closure had been slated to take place by the second quarter of 2015.

INEOS RESTARTS GERMAN EO; OUTAGE DUE IN BELGIUM
INEOS Oxide has restarted its ethylene oxide (EO) plant in Cologne, Germany, following a planned shutdown, and is due to shut down EO and ethylene glycol (EG) operations at its Antwerp site in Belgium at the end of April, market sources said. The EO plant in Cologne has capacity to produce 290,000 tonne/year. INEOS Oxide’s 420,000 tonne/year EO and 290,000 tonne/year EG plant in Antwerp is due to go down from 30 April or 1 May until the middle of June.

SOLVIN VCM/PVC SHUTDOWN PLANNED FOR MAY
Solvin’s vinyl chloride monomer (VCM)/polyvinyl chloride operations in Rheinberg, Germany, will undergo planned maintenance work in May, a company source said. The maintenance is expected to last around two to three weeks. The company source said contracts will be covered from stocks during the maintenance period, but it will not have any spot availability. The nameplate capacity for PVC at the Rheinberg site is 320,000 tonnes/year, according to the company source.

EUROZONE CHEM PRODUCTION UP 0.6% IN FEB
Chemical industrial production in the 18 countries forming the eurozone rose 0.6% in February compared to January while in the EU as a whole (28 countries) it increased 0.4%, the European statistical agency Eurostat said. In more general economic sectors, industrial production in the 18 countries forming the eurozone rose 0.2% in February compared to January while the EU as a whole grew 0.4%, said Eurostat.

NKNKH LAUNCHES NEW 50,000 TONNE/YEAR PS UNIT
Russia’s leading petrochemical producer Nizhnekamskneftekhim (NKNKh) has started operating its 50,000 tonne/year fourth stage polystyrene (PS) production facility. The new unit is due to produce 13 grades of PS, the company said. NKNKh had chosen Toyo-Mitsui technology for the facility. The plant produces about two thirds of Russia’s total styrene output, more than half of which is PS.

TECHNIP AWARDED CONTRACT FOR ETHANOL UNIT
Technip has been awarded a detailed engineering, procurement and construction (EPC) contract by US agribusiness firm Cargill for a new ethanol unit in Barby, Germany, the French engineering firm said. Technip’s operating center in Dusseldorf, Germany, will execute the contract, which is scheduled to be completed by the second half of 2015. The plant in Barby will consist of a fermentation unit and a distillation/rectification unit. Technip will also assist with the start-up and performance testing of the new units.

BASF LIFTS FORCE 
MAJEURE AT CITRAL PLANT
German chemical major BASF has lifted the force majeure at its Ludwigshafen citral plant for citral-based aroma chemicals, and vitamin A and vitamin E products for human and animal nutrition, after the plant was shut down following a fire on 12 March. BASF was able to stay within the announced shutdown period of four weeks, as announced on 19 March. “Product supply will normalise within the framework of delivery lead times and respective inventory levels,” the company said.

SIKA Q1 SALES INCREASE 15.6%
Sika’s sales rose by 15.6% year on year to Swiss francs (Swfr) 1.21bn ($1.38bn) in the first quarter amid strong revenue growth across most regions, the Switzerland-based specialty chemicals maker said. The company’s sales in Europe, Middle East and Africa rose by 31% year on year to Swfr477.5m in the first quarter, while sales in the Asia Pacific was up by 22.5% at Swfr202.4m. “In particular, China and the countries of South East Asia generated double-digit growth,” it said.

Asia

SHENHUA NINGXIA TO SHUT DOWN PP LINE
China’s Shenhua Ningxia Coal is planning to shut its two polypropylene (PP) lines in the Ningxia Hui autonomous region for regular maintenance on 6 May. The two lines, with 200,000 tonnes/year and 300,000 tonnes/year of capacity, will be taken offline for 25 days. The turnaround at the two lines is expected to have a major impact on the spot supply for lower-priced PP grades, such as PP raffia Yarn, PP injection and PP copolymer.

ZHONGYUAN PETROCHEMICAL SHUTS PP UNIT
China’s Zhongyuan Petrochemical on 15 April shut its 100,000 tonne/year polypropylene (PP) unit in Hubei province for 30 days of regular maintenance. The company’s 60,000 tonne/year PP unit at the same site is currently operating at full capacity. The shutdown at the 100,000 tonnes/year unit comes on the back of turnarounds at PP plants belonging to Daqing Refining & Chemical, Dalian Petrochemical, Jinxi Petrochemical, and Yangzi Petrochemical.

DAQING REFINING & CHEM SHUTS NEW PP LINE
China’s Daqing Refining & Chemical was forced to shut its new 300,000 tonne/year new polypropylene (PP) line in Heilongjiang province because of mechanical issues. The company has yet to fix a timeline to restart the line which was producing PP injection before the shutdown. The company’s older 300,000 tonne/year PP line at the same site, meanwhile, restarted on 11 April after it was shut a day earlier due to a mechanical hitch. This line is now producing PP grade at full capacity.

LG CHEM RAMPS UP DAESAN SM UNIT
South Korea’s LG Chem is ramping up output at its 160,000 tonne/year styrene monomer (SM) unit to full capacity after a recent restart. The unit, located in Daesan, was restarted on 10 April after it was shut on 22-23 March for a scheduled turnaround. The company operates another 200,000 tonne/year No1 and 300,000 tonne/year No2 SM facility in Yeosu. There are no maintenance plans for these units this year.

AK CHEMTECH PLANS TO SHUT LAS PLANT IN DEC
South Korea’s AK Chemtech plans to shut its 100,000 tonne/year linear alkylbenzene sulphonate (LAS) plant for an annual maintenance in December. The Ulsan-based unit will be fully shut for up to 10 days. The shutdown will have little impact on LAS supply in Asia as it is very short and there is abundant material available in the region from other Asian producers. LAS is a surfactant and is widely used in the manufacture of detergents for household and industrial use.

CHINA EPOXY RESINS EXPORTS FALL 44% IN FEB
China’s exports of commodity grade epoxy resins fell by 44% month on month to 3,909 tonnes in February, weighed by reduced demand from the US and Europe as material in their domestic markets became more competitively priced. On a year-on-year basis, the country’s exports of epoxy resin fell by 13% in February, according to China Customs data.

NIPPON STEEL CHEMICAL RESTARTS SM UNIT
Japan’s Nippon Steel Chemical restarted its 230,000 tonne/year No 3 styrene monomer (SM) facility on 13 April after maintenance. The unit, located in Oita, was shut at the end of February for a scheduled turnaround. The company also operates a 190,000 tonne/year No 2 SM plant at the same location. The unit was shut for maintenance in mid-March and will be restarted the week of 21 April. The units were not affected by the 6.3 magnitude earthquake on 14 March at Japan’s southern Island of Kyushu near the city of Oita.

PCG METHANOL UNIT SHUT ON TECHNICAL GLITCHES
Malaysia’s PETRONAS Chemical Group (PCG) has shut its 660,000 tonne/year No 1 methanol unit in Labuan on 12 April due to some technical problems. “[The No 1 plant] is down,” the source said, adding that it will only restart once the plant “rectifies the issue.” The impact on production will be “very small”, a source said. The cause of the unplanned shutdown was not specified. The company’s 1.7m tonne/year No 2 methanol plant at the same site is running normally.

XINJIANG ZHONGTAI CHEMICAL SHUTS PVC UNIT
China’s Xinjiang Zhongtai Chemical planned to shut its 700,000 tonne/year polyvinyl chloride (PVC) plant in Xinjiang for routine maintenance on 15 April. The shutdown will last for about 10 days. The company has a total PVC production capacity of 1.5m tonnes/year, with its two other plants located at the same site expected to undergo maintenance in May. The inventory level at for the plant is currently low, with no new offers released by the company. Sellers in the market are taking wait-and-see stance.

BAPCO TO COMMISSION REFINERY BY 2020
Bahrain Petroleum Co (BAPCO) plans to have all the new units that are part of its refinery upgrading and modernisation project commissioned and operational by the end of 2020, according to its chairman Adel Khalil al-Moayyed. The project is part of the BAPCO modernisation programme that is “progressing well and is on track to meet stakeholders’ expectations”, al-Moayyed said. The programme will increase refining capacity from 265,000 bbl/day to 360,000 bbl/day and add “several new processing units focused on bottom-of-the-barrel upgrade and middle-distillates production”, he added.