News in brief

02 June 2014 00:00 Source:ICIS Chemical Business

Americas

KOCH TO BUY PETROLOGISTICS IN DEAL
Koch Industries’ subsidiary Flint Hills Resources has agreed to acquire PetroLogistics in a deal valued about $2.1bn. PetroLogistics operates the only propane dehydrogenation (PDH) facility in the US. The plant near the Houston Ship Channel has a capacity of 1.45bn lb/year of propylene. The all-cash transaction includes the assumption of debt. Flint Hills will acquire all of PetroLogistics’ outstanding common units for $14/unit in cash, except for those common units owned by Lindsay Goldberg, York Capital Management, and PetroLogistics’ executive chairman and its president and CEO, which will be acquired for $12/unit in cash.

EXXONMOBIL TO LIFT HDPE ALLOCATION
US polyethylene (PE) producer ExxonMobil will discontinue allocating sales of high density polyethylene (HDPE) produced out of its Baton Rouge, Louisiana plant on 1 June, according to a customer letter obtained by ICIS. The company has been allocating material from the plant since late 2013 following the shutdown of the US Evangeline Pipeline, which carries ethylene from Texas to Louisiana. The pipeline was restarted in the first week of May and has been ramping up since then. Producers have pointed to tight supply in the US PE market, particularly in the HDPE sector, as one reason why prices should not fall in May. However, once the allocation by Exxon is lifted, some sources have said that the supply situation will quickly improve.

ROCKWOOD COMPLETES TALISON LITHIUM DEAL
US-based Rockwood has completed the $475m acquisition of a 49% stake at Australia’s lithium manufacturer Talison Lithium, a joint venture with China’s Sichuan Tianqi Lithium Industries. Rockwood defined the move as a “strategic step” towards increasing its market share in the lithium segment. Tianqi will control the remaining 51% stake.

HF CHLOR ALKALI SELECTS INEOS TECH
US-based chlorine and caustic soda producer HF Chlor Alkali has selected INEOS Technologies’ Bichlor electrolysers for a new chlor-alkali plant in Iowa, US. INEOS will deliver four Bichlor bipolar electrolysers for HF Chlor Alkali’s new plant, which will produce caustic soda, muriatic acid and bleach to an adjacent food processing facility and other facilities in the US Midwest, said INEOS.

US CHEMICAL PRODUCTION ACTIVITY ADVANCES
The American Chemistry Council’s (ACC) Chemical Activity Barometer (CAB) posted its largest year-on-year gain in May since September 2010 and is at its highest level since February 2008. The CAB increased 0.7 point to 96.9 in May from 96.2 in April. On a three-month moving average (3MMA), the CAB rose 0.7 point to 96.2 in May from 95.5 in the prior month. The monthly CAB index is up 4.1 points since May 2013 and 3.8 points on a 3MMA from a year ago.

GLOBAL CHEM PRODUCTION REGIONAL INDEX RISES
The global chemical production regional index (CPRI) rose 0.3% in April month on month and 4.8% year on year, the American Chemistry Council (ACC) said. The CPRI, measured on a three-month moving average (3MMA), increased in all regions except Latin America month on month and increased in all regions over last year. The highest regional gain year-on-year in the April CPRI was in Africa and the Middle East at 8.3%, followed by Asia-Pacific at 8.1%, western Europe at 3.5%, central and eastern Europe at 2.1%, North America at 1.3% and Latin America at 0.2%.

US APRIL NEW HOME SALES RISE 6.4%
US sales of new single-family homes rose by 6.4% in April from March, the Commerce Department, but sales were still below the pace set in the same month of 2013. The department said that sales of new one-family homes in April were at a seasonally adjusted annual rate of 433,000, a gain from the upwardly revised March figure of 407,000. Even with the upwardly revised figure, March sales were still 9% lower than February’s.

US EXPECTS ONLY 1 OR 2 MAJOR HURRICANES
The Atlantic hurricane season this year is likely to see eight to 13 tropical storms forming in the June-November period, with three to six of those systems becoming hurricanes but only one or two major storms, US weather officials said. Kathryn Sullivan, chief of the National Oceanic and Atmospheric Administration (NOAA), said that the 2014 Atlantic hurricane season forecast anticipates a below-average number of storms. A normal Atlantic hurricane season would see six hurricanes, with three classified as major storms.

US APRIL DURABLE GOODS UP 0.8%
US orders for durable goods rose marginally by 0.8% in April from March, the Commerce Department said, but the gain was wholly due to federal purchases of warplanes, without which overall sales were down by 0.8%. In its monthly report, the department said that new orders for durable goods rose in April by $1.9bn or 0.8% to $239.9bn, marking the third consecutive month of gains. However, the April gain was much lower than the upwardly revised 3.6% jump seen in March.

Europe

WESTLAKE TO BUY VINNOLIT FOR €490M
US-based Westlake Chemical is to acquire German polyvinyl chloride (PVC) producer Vinnolit for €490m from private equity fund Advent International. The company has five production facilities in Germany: Gendorf, Burghausen, Cologne, Knapsack and Schkopau; and one in Hillhouse, the UK, with combined capacities of 780,000 tonnes/year of PVC, 665,000 tonnes/year of vinyl chloride monomer (VCM) and 475,000 tonnes/year of membrane grade caustic soda. “[The acquisition] will allow us to expand our chlorvinyl business globally and adds important specialty PVC products and technology to our existing portfolio,” said Westlake CEO Albert Chao.

BORSODCHEM PLANS Q3 MDI MAINTENANCE
BorsodChem’s methyl di-p-phenylene isocyanate (MDI) operations in Kazincbarcika, Hungary, are due to undergo a routine maintenance turnaround in the third quarter, said a company source. The plant outage is due to begin at the end of July and last for around four weeks. Borsodchem has an operational capacity of 260,000 tonnes/year for its MDI M2 plant. Its MDI M1 unit also at the site, which has a nameplate capacity of 60,000/tonne, has been idled since 2009 for market reasons.

PETKIM AGREES 20-YEAR NAPHTHA, XYLENES DEAL
Sole major Turkish petrochemical producer Petkim has signed a 20-year agreement to buy xylene and naphtha from Star Refinery for 20 years. The agreement, for up to 270,000 tonnes/year of xylene and up to 1.6m tonnes/year of naphtha, would enable Petkim to cut its feedstock costs by $30/tonne. Substantial cost savings would be made in transport and warehousing costs because the xylene and naphtha would be sourced from a refinery, once constructed, adjacent to Petkim’s petrochemical production complex in Aliaga.

ATT NYLON 6 FORCE MAJEURE TO CONTINUE

ATT Polymers will not exit force majeure at its 46,000 tonne/year nylon 6 plant in Guben, Germany, until at least the second half of July, a company source confirmed. The delay follows a failed restart. “For us the picture is not quite clear due to force majeure - we still have some problems. We tried to go onstream but it unfortunately was not successful and they’re working on that,” the source said. Two lines at the plant are currently off-line.

SME DISTRIBUTORS MAY FACE EXTINCTION IN EUROPE
Small and medium sized distributors in Europe face virtual extinction over the next 20 years if they do not adapt to current difficult market conditions, Peter Overlack, CEO of German distributor Overlack, said at the 2014 European Assocation of Chemical Distributors (FECC) conference in Rome. The CEO identified three key trends which he believed were having a disproportionately negative impact: increased expense from regulatory requirements, growing logistics costs and the need for distributors to have “global competence”.

TVK PP PLANT BACK UP AFTER SHUTDOWN
Hungarian petrochemical producer TVK has restarted its polypropylene 4 (PP4) installationfollowing a two-week shutdown for a general overhaul, the company said. The 180,000 tonne/year unit is located at the company’s production site in the industrial town of Tiszaujvaros in northeastern Hungary. TVK currently has other shutdowns under way, including a 14-day stoppage of its 370,000 tonne/year ethylene steam cracker for technology cleaning works that began on 18 May.

POLAND LNG IMPORT TERMINAL FOR MID-2015
Commercial production at Poland’s planned Baltic Sea coast liquefied natural gas (LNG) regasification terminal has been pencilled in for June next year, a full year behind the original schedule, the Polish economy ministry said. The ministry had hoped the launch of the €700m Swinoujscie terminal could at least take place by the end of this year.

ALIGNMENT NEEDED FOR PRODUCERS, DISTRIBUTORS
Chemical producers and distributors must attempt to align growth and opportunity strategies in order to be foster a more productive relationship, Dow Europe’s director of distribution and channel management Martin Sutcliffe said at the European Assocation of Chemical Distributors (FECC) conference in Rome. Sutcliffe stressed the dialogue between players must be enhanced. “Communication must go beyond just product information and logistics,” Sutcliffe said. “We must try to have an alignment on strategy, but without force fitting it of course.”

SIBUR LAUNCHES NEW BOPP FILM LINE
Biaxplen, part of Russia-based major SIBUR Holding, has launched a new biaxially-oriented polypropylene (BOPP) film production line in Novokuybyshevsk, SIBUR said. Following the launch of the 30,500 tonne/year line, manufactured by German company Bruckner Maschinenbau, Biaxplen ‘s BOPP-film nameplate production capacity at Novokuybyshevsk increased to 55,500 tonnes/year. SIBUR said investment in the project exceeded roubles (Rb) 1.9bn (€40.9m) and created over 100 new jobs.

BASF BUILDING NEW LUBRICANT FACILITY
BASF is building a new polyalkylene glycol (PAG)-based lubricants plant at its Ludwigshafen site in Germany, the company said. The facility will start operations by the start of 2016 and produce PAG lubricant base stocks and formulated blends, the company said in a statement. “With this double-digit million euro investment, BASF continues to support the global growth of synthetic lubricant formulators who use these BASF products in their final formulated lubricants,” it said.

Asia

JAC TARGETS AROMATICS PLANT START-UP IN AUGJurong Aromatics Corp (JAC) is targeting commercial operations at its new aromatics facility in Singapore in the first-half of August, a source familiar with the matter said. With the start-up of the new aromatics facility, JAC will be able to produce 800,000 tonnes/year of paraxylene (PX), and 400,000 tonnes/year of benzene. “Commercial operations are expected by the first half of August, but could also be as early as second-half July,” the source said. Trail runs at the new facility might start in second-half June/first-half July, the source added.

SUMITOMO TO RESTART EPDM PLANT IN JUNE
Japan’s Sumitomo Chemical will restart its 40,000 tonne/year ethylene propylene diene monomer (EPDM) plant in Chiba prefecture in early June after completing the unit’s turnaround, a company source said. The plant was shut early this month for about three weeks of maintenance. On 21 May, medium grade EPDM prices were stable at $2,550-2,650/tonne CFR (cost and freight) southeast Asia, ICIS data showed.

PERTAMINA TO BOOST C3 BY 115,000 TONNES/YEAR
Indonesia’s Pertamina is expected to start up a new propylene unit at its Cilacap refinery in the middle of 2015, a source close to the company said. The state-owned refiner is installing a residual fluid catalytic cracker (RFCC) with a propylene capacity of 115,000 tonnes/year, the source said. Pertamina is currently supplying propylene from two units located in Balongan, West Java. Its RFCC and residual catalytic cracking off-gas to propylene (ROPP) unit have a propylene nameplate capacity of 250,000-260,000 tonnes/year and 178,000 tonne/year, respectively.

FORMOSA OPERATES ITS C3 UNIT AT 90%
Taiwan’s Formosa Petrochemical Corporation (FPCC) is operating its olefins conversion unit (OCU) in Mailiao at around 90% capacity after the unit restarted on 25 May following maintenance, a company source said. The unit has attained on-spec propylene production this week, the source said. The OCU, which can produce 250,000 tonnes/year of propylene, was shut on 27 March for more than two months.

OCI TO SHUT BENZENE UNIT IN OCTOBER
South Korea’s OCI Chemical plans to take its 150,000 tonne/year coal-based benzene unit in Yeosu in October for a 20-day planned turnaround, a company source said. The exact shutdown dates have yet to be confirmed, the source said. The unit is currently operating at 95% because of a shortage of pygas and crude benzene feedstock, the source added.

KPX RUNS ETHANOLAMINES UNIT AT 100%
South Korea’s KPX Green Chemical is currently operating its 25,000 tonne/year ethanolamines unit in Daesan at full capacity, said a source familiar with the situation. The run rates at the unit remain the same as in April. Meanwhile, there are no plans to conduct maintenance at the plant this year, the source said.

UBE TO SHUT THAI CAPRO LINE FOR MAINTENANCE
Japan-based Ube Industries planned to shut its 130,000 tonne/year caprolactam (capro) line in Rayong, Muang, Thailand on 1 June for a planned maintenance, according to a company source. The maintenance is scheduled for 40 days until July, the source added. Meanwhile, the company has another 100,000 tonne/year capro plant in Yamaguchi, Ube City, Japan, which is currently under maintenance and will be restarting in the first week of June.

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