News in brief

27 June 2014 09:43 Source:ICIS Chemical Business


Dow to begin building Freeport cracker
Dow Chemical plans to start construction on its ethane cracker in Freeport, Texas, US on 30 June. The 1.5m tonne/year cracker remains on track to start production in the first half of 2017. Downstream, Dow will build metallocene ethylene propylene diene monomer (EPDM) capacity of 200,000 tonnes/year, elastomers capacity of 320,000 tonnes/year, “enhanced” polyethylene (PE) capacity of 400,00 tonnes/year and “specialty” low density PE (LDPE) capacity of 350,000 tonnes/year. Dow is also building a 750,000 tonne/year propane dehydrogenation (PDH) plant in Texas, which is more than 30% complete. “Collectively, Dow’s US Gulf Coast investments serve as an integral component of our global growth strategy, where we are leveraging our first-mover advantage to deliver significant shareholder value,” said CEO Andrew Liveris.

US approves US condensate exports
US oil and gas producer Pioneer Natural Resources said the US Department of Commerce (DOC) has authorised the company to export hydrocarbon condensate without a specific licence. The authorisation is seen as the first easing of the longstanding US prohibition on exports of crude oil. Under the US Export Administration Regulations (EAR), exports of US crude have been banned since the Arab oil embargo of 1973. US energy firms have been allowed, however, to export refined products, such as gasoline and diesel fuel. Pioneer noted that EAR restrictions on crude oil exports “do not apply to hydrocarbons that have been processed through a distillation unit”. The move could result in increased exports of US naphtha.

Braskem PVC deal hit by Brazil antitrust ruling
Braskem’s proposed acquisition of a controlling stake in Argentina-based polyvinyl chloride (PVC) and caustic soda producer Solvay Indupa should be blocked as it would be potentially anti-competitive, the superintendent general of Brazil’s antitrust regulator CADE said. Brazil-based Braskem signed a binding agreement last December to acquire 70.59% of Solvay Indupa, a subsidiary of Belgium-based Solvay which operates in both Brazil and Argentina. The ruling, which can be overturned by CADE’s tribunal, was disputed by Braskem.

ASTHA Chemicals to upgrade Ohio plant
ASHTA Chemicals plans to invest $60m to upgrade its plant in Ashtabula, Ohio, US to membrane cell technology, the producer of chlorine and potassium-based chemicals said. ASHTA said the upgrade would improve the plant’s energy efficiency by about 20%, eliminate mercury from the manufacturing process and increase capacity. It will take 24-30 months to replace the plant’s current mercury cell with membrane cell technology.

US Q1 GDP falls, worst drop since recession
The US economy contracted by 2.9% on an annualised basis in the first quarter, the Commerce Department said, the sharpest downturn since the 5.4% downturn seen in first quarter 2009 in the midst of the Great Recession. US Q1 GDP was initially reported as a 1% decline. The department said that economic output fell even further because consumer spending was lower than initially estimated, and the decline in US exports was more pronounced than in earlier measures.

US durable goods orders fall 1% in May
US orders for durable goods fell by 1% in May from April, the Commerce Department said, a decline that was attributed almost wholly to a sharp 4% drop in purchases of commercial airliners and parts. In its monthly report, the department noted that with commercial aircraft and other transportation items backed out of the overall total, the decline in durable goods orders was a more moderate 0.1%. The overall decline was the first in four months and followed a 0.8% gain in April.

OMNOVA Q2 results miss expectations
OMNOVA Solutions’ Q2 net income rose 17% year over year to $3.4m, but despite the improvement overall results did not meet the company’s expectations, the CEO of the US-based producer of emulsion polymers, specialty chemicals, and functional and decorative surfaces said. OMNOVA’s sales for the three months ended 31 May were $266.4m, down 1.6% from $270.8m in the same period a year ago. Gross profit was $52.6m, for a margin of 19.7%, down from $57.3m and a margin of 21.2% in the year-ago period.

US CAB continues rising in June
The chemical activity barometer (CAB) continued its upward trend with a 0.5 point increase in June over May, following a gains every month this year, the American Chemistry Council (ACC) said. On a three-month moving average (3MMA) basis, the CAB increased to 96.7 in June over 96.2 in May. Year over year, the June CAB gained 4.3 points. Components of the CAB were mixed, with production flat, equity prices down, product prices up and inventories up.

CM&E to honor DuPont’s Connelly
The Chemical Marketing & Economics (CM&E) group, the technology and business group of the American Chemical Society’s New York Section, will give the Leadership Award for Remarkable Innovation to Dr Thomas Connelly, executive vice president and chief technology officer of DuPont. The award ceremony will take place on 4 December 2014 at the Yale Club in New York City. The event will also mark the group’s 60th anniversary serving the local and international communities in the Greater New York area. The honorees in the categories of Lifetime Achievement and Distinction in Private Equity will be announced shortly.


Wilmar closes Huntsman Europe surfactants deal
Wilmar Europe has completed the acquisition of Huntsman’s European commodity surfactants business for an undisclosed sum. The sale includes an ethoxylation facility in Lavera, France, and a multi-year arrangement for Wilmar to buy sulphated surfactant products from Huntsman’s facilities in St. Mihiel, France and Castiglione delle Stiviere, Italy. In October 2013, Huntsman announced plans to exit a number of commodity surfactant product lines in Europe to focus on developing its remaining differentiated surfactants businesses.

Clariant ups metallocene polyolefins capacity
Switzerland-based Clariant plans to increase production capacity of metallocene polyolefins by 50% at its Frankfurt-Hochst, Germany site. The capacity expansion, which is to be achieved by debottlenecking the company’s existing production line at the site, represents a low single-digit million Swiss franc investment and is expected to come onstream by the first quarter of 2016. A spokesperson declined to specify the current capacity of the site.

SABIC Wilton cracker maintenance ongoing
Planned maintenance at SABIC’s cracker at Wilton, UK is ongoing. “I can confirm that the turnaround of the Wilton cracker is running according to plan,” a company spokesperson said, adding that “maintenance activities are still ongoing.” The turnaround of the cracker, with capacity to produce 865,000 tonnes/year of ethylene, began in early May. Restart of the cracker as well as the 100,000 tonne/year butadiene (BD) unit was expected around 22 June, according to market sources.

Novapet PET reactor outage may lead to FM
One of Novapet’s three polyethylene terephthalate (PET) plants in Barbastro, Spain, is not functioning due to a breakdown in a main reactor which may lead to a force majeure declaration, a company source said. Following talk in the market of a force majeure on 20 June, the source said it had not been declared yet it did not “exclude [the possibility of a FM] because we don’t know the impact it will have on our clients [yet]”.

Germany June business climate index drops
Germany’s business climate index fell for a second straight month in June, with the latest decline mainly due to fears among manufacturers about possible impacts from the crises in the Ukraine and Iraq on business prospects. Munich-based Ifo centre for economic studies said that its business climate index for Europe’s largest economy fell to 109.7 points in June, down from 110.4 in May. The index is based on about 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing.

Eurozone PMI momentum continues to slow
Eurozone manufacturing and service sector output growth slowed for the second consecutive month in June, as France’s private sector contraction deepened further, according to market analysis firm Markit. The eurozone flash composite purchasing managers’ index (PMI) data for June data slowed to 52.8 compared to 53.5 in May, a six-month low, as growth in Germany faltered slightly at 54.2 compared to 55.6 in May, obscuring strong gains in other eurozone countries. PMI figures above 50.0 indicate growth, while figures below indicate contraction.

Bayer appoints Adrian Percy as new head of R&D
Germany-based Bayer has appointed its current senior vice president of global regulatory affairs at Bayer CropScience, Adrian Percy, as its new global head of R&D, effective 1 August. In his new role, Percy will also become a member of the Bayer CropScience excecutive committee. Percy will succeed David Nicholson, who will leave the company on 31 July “to pursue other career opportunities outside of Bayer”.


Mitsubishi Chemical restarts MEG unit
Japan’s Mitsubishi Chemical restarted its 280,000 tonne/year monoethylene glycol (MEG) plant in Kashima on 24 June, after a turnaround that lasted for about 40 days, a company source said. The turnaround included works on its pipelines related to its ethylene oxide (EO) supply.

Shenhua Baotou to shut PE, PP plants
China’s Shenhua Baotou Charcoal Chemical plans to shut its 300,000 tonne/year linear low density polyethylene (LLDPE)/high density polyethylene (HDPE) swing plant and its 300,000 tonne/year polypropylene (PP) unit in Inner Mongolia for maintenance in August for 45 days, a company source said. Maintenance work was originally scheduled for July, but it had to be postponed to August because some replacement parts had not arrived at the site.

OUCC restarts Nanjing FAE unit
Taiwan’s Oriental Union Chemical Corp (OUCC) restarted its fatty alcohol ethoxylates (FAE) unit following the completion of maintenance, according to a company source. No information on the exact restart date and the current run rate was provided. The FAE unit was shut on 1 June for three weeks of scheduled maintenance, the source said. The FAE unit can produce 60,000 tonnes of surfactants, including alcohol ethoxylates, every month.

Xiangsheng Group shuts polyester unit
China’s Xiangsheng Group on 21 June shut down its 400,000/tonne polyester unit at Suqian in Jiangsu for 20 days of regular maintenance, a company source said. The unit was operating at about 55% before it was shut for maintenance, according to the source. The unit produces mainly polyester staple filament (PSF), the source added.

KKPC to further cut SR output in July
Korea Kumho Petrochemical Co (KKPC) will further reduce its synthetic rubber (SR) production in July because of poor margins, a company source said. It plans to cut operating rate at its 340,000 tonne/year butadiene rubber (BR) plant at Yeosu, South Korea to 35% in July from 45% currently, the source said. Run rates at its 560,000 tonne/year styrene butadiene rubber (SBR) plant in Ulsan, on the other hand, will be cut to 75-80% in July, down from 85% currently, the source said.

Shen Hua extends shutdown for A SBR line
China’s Shen Hua Chemical will extend the shutdown of one of its three styrene butadiene rubber (SBR) lines by about a week to 16 July, due to prevailing weak market conditions and negative margins, a company source said. “SBR is now losing money as the rising feedstock butadiene costs have wiped out our margins,” a company source said. Costs of feedstock butadiene (BD) have increased by 13% since the end of May to an average of $1,475/tonne CFR (cost & freight) northeast (NE) Asia on 20 June, ICIS data showed.

UPC to start up two China plasticizer plants
Taiwan’s UPC Technology Corp (UPC) plans to start up two plasticizer plants in China by July 2015, a company source said. One plant, with a nameplate capacity of 140,000 tonnes/year, will be located at Nanchong in Sichuan province. It will largely be used to produce dioctyl phthalate (DOP), diisononyl phthalate (DINP) and dioctyl terephthalate (DOTP). The other plant, with a capacity of 240,000 tonnes/year, will largely produce DOP and DINP. It will be located at Panjin in Liaoning province.

TPPI eyes August restart of aromatics facility
Indonesia’s Trans Pacific Petrochemical Indotama (TPPI) is targeting to restart its aromatics facility in Tuban in August, a company source said. The aromatics facility has a nameplate capacity of 550,000 tonnes/year of paraxylene (PX) and 360,000 tonnes/year of benzene. The facility, which was shut at the end of May because of weak market conditions, is being eyed to resume production after the holidays marking the end of Ramadan, the source said.

LG Chem plans phenol/acetone overhaul
South Korea’s LG Chem plans to shut its phenol/acetone plant in Yeosu for a turnaround starting in late October, a company source said. The plant, which can produce 300,000 tonnes/year of phenol and 180,000 tonnes/year of acetone, will be off line for about 40 days to undergo regular maintenance. LG Chem does not plan to carry out maintenance at its other phenol/acetone plant in Daesan, which has identical phenol and acetone capacities, this year, the source added.

On page 17, we indicated an 11 July price of yuan (CNY) 9,850/tonne ($1,584/tonne) for polyester filament yarn. This should have been 11 June. On page 21, we indicated that US PP contract prices for April were 79.5-81.5 cents/lb DEL (delivered) for homopolymer injection and raffia-grade material for medium to small volume buyers. This should have been June prices. On page 23, we indicated FOB prices of $1,490/tonne selling into Turkey. This should have been to into the China market. On page 47, in the table listing Asia BD capacity, the JSR plant was listed as being in Yokkaichi, China. This should have been Japan. We apologise for the errors.

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