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Making sense of cheMical prices

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ICB_010615_301.indd 1 28/05/2015 17:52

volume 287 number 20

rex

Feat

ures

; PCG

In Europe the aging population is driving changes in demand for chemicals P26

Malaysias PCG is planning to finalise investment plans for the Refinery and Petrochemicals Integrated Complex. P18. US pesticides targeted as bee colonies disappear P10

Alam

y

Cover storyAs the number of force majeures continues to rise across Europe, people are blaming a lack of spending on anything more than basic maintenance for the spate of breakdowns.See P11, 12, 14, 15, 16

news BrIeFInG6 TPC Group does not expect impact on

bD from fire8 Chinas purified terephthalic acid imports

fall 39% month on month

FoCus9 Despite slowing economic growth,

China to beat uS as top oil importer

trends market IntellIGenCe10 uS efforts to save honey bees place a

heavy focus on the use of pesticides 11 unplanned outages hit europe

PrICes & markets12 europe chlor-vinyl production falters. unprecedented number of force

majueres hitting european crackers

13 mideast Pe, PP diverts to south Asia for higher prices.

SAbIC to start up elastomers project in 201514 europe PP spot prices rise on supply. Huntsman sees TiO2 improvement15 europe acrylate contract spikes. borealis, Agrifos agree on world-scale

ammonia project in Texas16 europe melamine faces outages. europe epoxy contract prices climb as

market tightens17 europe Sbr settles up on feedstocks. uS biodiesel production ramps up ahead of

renewable Fuel Standard18 PCG to finalise rAPID project line-up. Turkey Pe, PP impossible to predict21 uS benzene plummets on long supply. uS June bD nomination at plus 7 cents

amid outages22 Pakistan boosts ethanol to China23 India phenol price outlook weakens

Plants & ProjeCts24 new projects and permanent plant

shutdowns, 16-22 may 2015

market outlook26 eu can win despite ageing population if it

adapts business models28 Huge debt levels may lead to widespread

bankruptcies in China this year

ChemICal ProFIle34 Southeast Asia mA demand is expected

to peak in the middle of the year 35 uS ePS continues to face efforts to ban it

from food packaging

reGulars5 Commentary31 whats on32 Conferences & events33 marketplace

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commentary


Celebrating its 150th anniversary, Germa-ny-based BASF is not only reflecting on its culture of innovation thats allowed it to survive and thrive all these years, but also looking forward to meet the next big challenges. One such challenge is the

theme of urban living. With more people moving into major cities, expanding their populations even further in the coming years, urban planning and development to foster better lifestyles will play a greater role its a pro-cess that BASF wants to firmly embed itself into.

In a week-long event in New York City from 26 May which is part of BASFs global Creator Space tour, the company focused on the urban living concept, featuring the quickly developing neighbourhood of Red Hook, Brooklyn, as a case study on public/private partner-ships to find solutions to real problems. Urban issues include efficient mobility, safe water supply, waste management and quality affordable housing.

BASF is taking a holistic view on helping solve major challenges such as urban development, collaborating with policy makers, communities, designers, architects and scientists essentially embedding itself in the pro-cess of change.

The purpose of the Creator Space events is to con-nect and exchange ideas and opinions on global chal-lenges with a wide variety of experts and thought lead-ers, said Wayne Smith, chairman and CEO of BASFs North American arm BASF Corp. It is about collabora-tion and engagement, as we search for new ideas and possible solutions for these topics.

Companies must of course work to understand and meet their customers needs, but its easy to become myopic when looking just at particular products and end markets without understanding the larger process and its multi-faceted drivers.

How can we design and plan cities to improve the quality of life? This will require multiple perspectives. We want to develop collaborative solutions, said Peter Eckes, president of global bioscience research and North American research representative at BASF. Chemical science has changed dramatically. Its not just thinking about chemical processes but connecting chemistry with biology, with physics exploring mate-rial space in a different way.

It is critically important that we keep rejuvenating. We also realize that we cant solve everything our-selves, said Smith. We look for partnerships, dealing

with material suppliers, architects, owners and design-ers. Its important to find these partnerships so we can be a stakeholder at the table.

One example of where BASF can help provide a so-lution to the urban challenge is in concrete. Concretes importance to urban living isnt limited to the sky-scrapers rising overhead. Its just as crucial to the side-walks under foot, said Eckes. Our pervious concrete technology lets air and water flow right through it, re-ducing the urban heat island effect and preventing streets and basements from being flooded in extreme weather.

Other areas include flexible white roof coatings made from acrylic dispersions to reduce interior build-ing heat, next generation polyurethane (PU) insulation panels less than half as thick as conventional panels while retaining the same insulation properties (thus fa-cilitating space and design), and compostable and bio-degradable plastics for packaging to reduce waste.

Even more important than buildings in a city are the public spaces they are the heart of the city and make it more livable. Some of the most transformative changes in cities are happening in these public spac-es, said Amanda Burden, former New York City plan-ning commissioner (2002-2013).

As part of the event, BASF is hosting a Design Com-petition for professionals and students in diverse disci-plines to create a vision to improve the Red Hook neighbourhood from a social, transportation and de-sign standpoint, noted Smith.

The strategies we develop related to habitat, citizen-ship and resilience may be applicable to other neigh-bourhoods in North American cities facing similar situ-ations, said Smith.

Jose

ph C

hang

BASFs North America CEO Wayne Smith speaks on a moderated panel at a special New York event

Its easy to become myopicwithout understanding thelarger process and its drivers

BASFs 150th anniversary event in New York casts spotlight on the process of improving city living as populations are expected to grow. The company aims to play a greater role

The urban challengejOSEph ChANg New York

Do you agree? email [email protected]

news

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briefing

For real-time news and analysis from our global team of reporters, visit:icis.com/about/news

pic of the week

BASf celebrates 150th anniversaryAs part of BASFs 150th anniversary event, former New York City planning commissioner Amanda Burden details the Red Hook neigh-bourhood in Brooklyn where BASF will collaborate on urban planning.

Jose

ph C

hangAmericAS

tpc SeeS No impAct to ButAdieNe from fireUS butadiene (BD) producer TPC Group does not expect a 25 May fire at its Houston, Texas plant to have any significant impact on production. According to a com-munity awareness emergency re-sponse (CAER) line message to neighbours, TPCs plant alarm sounded at approximately 23:40 Houston time because of a fire in one area of the facility. The situ-ation was resolved soon after late last night, said Sara Cronin, a spokesperson for TPC on 26 May. The company did not say what caused the fire. TPC has BD ca-pacity of 430,000 tonnes/year at its Houston site.

BASf LookS LoNG-term with mtp proJect Germany-based BASF is targeting mid-2016 for a final investment decision (FID) on its planned 475,000 tonne/year methane-to-propylene (MTP) project in Free-port, Texas, according to the head of its North American arm. We are very confident that for the long term, methane will have a significant competitive advantage in North America, said BASF Corp CEO Wayne Smith. The long-term analysis and outlook on oil versus gas will be decisive. Its not about short-term move-ments. BASF is now undergoing FEED (front-end engineering and design) work, he noted.

uS chemicAL ActiVitY riSeS iN mAYUS chemicals sector activity rose sharply in May, a key survey showed, suggesting the broader US economy also will see continued gains into 2016. The American Chemistry Council (ACC) said that its monthly chemical activity ba-rometer (CAB) rose by 0.7% in May, reaching an index level of 99.3. That level was last seen in November 2007, just before the US slipped into the 2008-2009 Great Recession. Because chemicals hold an early position in the nations

supply chain, the industry can presage activity in the broader economy, according to the ACC.

epA, citGo reAch AGreemeNt oN emiSSioNSThe US Environmental Protection Agency (EPA) has reached an agreement with Citgo Refining and Chemicals for emissions vio-lations at a facility in Corpus Christi, Texas. Citgo will be re-quired to correct each of the viola-tions, pay a civil penalty of $360,000, and provide the Corpus Christi Fire Department with $117,000 worth of equipment to help improve response to suspect-ed chemical leaks. The EPA made an unannounced inspection of the Citgo facility in June 2012, based on a tip from the Chemical Safety Board. Violations included equip-ment and controls, auditing pro-cedures and training.

Air LiQuide to BuiLd co2 LiQuificAtioN pLANtFrance-based Air Liquide has commissioned a new 408 tonne/day carbon dioxide (CO2) lique-faction plant in California, US.

The plant in Tulare County, north of Los Angeles, recovers CO2 emissions from an ethanol plant by Calgren Renewable Fuels. The CO2 is purified and the liquefied CO2 is then sold to customers in the food, beverage and manufac-turing sectors. Financial details were not disclosed.

eVoNik to BuiLd New SiLicA pLANtGermany-based Evonik said its new precipitated silica plant, its largest investment in North Amer-ica in five years, should be com-pleted in late 2017 to meet grow-ing demand for energy-saving tyres. The plant will offer a silica-silane combination that reduces rolling resistance and can save up to 8% on fuel. The project, expect-ed to cost in the upper double-digit million euro range, will be located near major tyre manufac-turers in the southeast US.

kmco SeLectS foLeY AS New ceoUS-based specialty and custom chemical company KMCO has appointed John Foley as its presi-

dent and CEO. Foley will be re-sponsible for leading the KMCO (Crosby, Texas) and KMTEX (Port Arthur, Texas) businesses. Foley joins KMCO after a 26 year career at Solvay, most recently as vice president and general manager of Solvays Novecare North Ameri-ca business. KMCO serves the automotive, petroleum, industri-al and agricultural markets.

wiLLiAmS crAcker Shut dowN After StormWilliams Olefins cracker in Geis-mar, Louisiana, US suffered a temporary shutdown following a 20 May lightning storm. A Wil-liams spokesperson said a power outage at a local utility affected several other area companies as well, but electricity had been fully restored by late the next day. Some market sources said the Louisiana outage, which has an ethylene capacity of 884,505 tonnes/year, along with a number of plant outages in Europe, could be a possible counterforce to a downward slide in US spot ex-port prices for polyvinyl chloride (PVC) in May.

crude SLowdowN drAGS dowN meXicoS GdpMexicos economy grew by 2.5% in Q1 as the slowdown in mining and energy production partially offset growth in most other parts of the economy, state statistical agency Inegi says. Primary activi-ties rose by 6.8% year on year. These include agriculture, live-stock, forestry and fishing. Sec-ondary activities, which include manufacturing and energy pro-duction, rose by 1.4%. Within this segment, the petroleum sector fell by 5.8%. The Bank of Mexico lowered its forecast for 2015 GDP growth to 2.0-3.0% from 2.5-3.5% because of the slowdown in the petroleum industry.

BrAZiL coNSumer coNfideNce worSeNSBrazilian consumer confidence fell in May as the nations eco-nomic outlook continues to wors-en, according to the Brazilian In-

news

www.icis.com 1-7 June 2015 | ICIS Chemical Business | 7

voices from the web

most-read

China to beat US as top oil importer as demand growsNEWS FOCUS P9

The top five stories for the week just gone:1 Unprecedented number of FMs hitting European crackers

LONDON -- Supply restrictions have become a feature of the olefins market so far in 2015.

2 INEOS declares olefins, derivatives FM at LaveraLONDON -- INEOS has declared force majeure on supply of olefins and derivatives from its Lavera, France petrochemicals site.

3 China PE, PP may fall further on rising supply, weak demandSINGAPORE -- Chinas PE and PP prices may continue falling as availability of spot supply will increase late this month.

4 Europe PE buyers expect June tightnessLONDON -- Polyethylene (PE) buyers are expecting current tightness in the European market to continue into June.

5 BASF declares FM on MEG and EO in EuropeLONDON -- BASF SE declared force majeure on ethylene oxide (EO) and monoethylene glycol (MEG) supplies in Europe.

The conflict at the heart of Germanys energy policy is finally coming to a head. Can Germany claim to be an environmental leader while continuing to burn more coal than any other developed country apart from the US?Financial Times Nick Butler on the burning issue of German coal. blogs.ft.com/nick-butler

Reluctant and overcautious managers continue to avoid social media. Because we operate in hyper-regulated industries, we fear risk and exposure. Or we play the what we dont know wont hurt us version of roulette.SOCMA Blog on to engage, or not to engage: evaluating a social media crisis. blog.socma.com

Globalisation is under attack. It was meant to be the unstoppable economic force bringing prosperity to rich and poor alike, but that was before the financial crisis ripped up the rule book.The Guardian: Borders are closing and banks are in retreat. Is globalisation dead? www.theguardian.com/uk/business

Four years ago, India could do no wrong. The Incredible India campaign had captured imaginations around the world, and almost everyone seemed to believe that it was destined to become a major player in any market that it chose. Analysts were particularly excited about the potential for the auto market.Paul Hodges on Indias auto market remains dominated by motorbikes. www.icis.com/blogs/chemicals-and-the-economy

KMCO

KMCO selects Foley as CEO

Check out the ICIS blogs at icis.com/blog

These are the most read stories taken from ICIS news last week. To find out more visit: icis.com/about/news

stitute of Economy, part of the think tank Fundacao Getulio Var-gas. Consumer confidence fell to 85.1 points in May from 85.6 in April. Consumers felt more pessi-mistic, especially about family fi-nances. Analysts expect GDP to contract by 1.24% in 2015. They expect inflation will average 8.37% this year, well above the central banks upper limit of 6.5%.

eurOPe

SASOL DeCLAreS FM ON eO, DerIVATIVeSSasol has declared force majeure on ethylene oxide (EO) and its derivatives in Europe because of upstream ethylene supply prob-lems, a company source said. Sasols force majeure, declared on 22 May, was linked to the on-going cracker problems and a force majeure on olefins for BP Refining & Petrochemicalss (BPRP) in Gelsenkirchen, Germa-ny. Sasol has a nameplate capac-ity of 215,000 tonnes/year of EO and 28,000 tonnes/year of ethan-olamines, according to the com-pany source.

MALAYSIAS KLK TO ACQuIre eMerY ASSeTSMalaysian plantation firm Kuala Lumpur Kepong (KLK) is plan-ning to acquire Emery Oleochem-icals assets at Dusseldorf, Ger-many, for 40.5m, the company said in a stock exchange disclo-sure. The deal will include Em-erys plant, tangible assets and inventories associated with the oleochemicals business conduct-ed at Emerys oleochemical site at

Holthhausen, Dusseldorf, KLK said in a filing to Bursa Malaysia. The transaction is expected to be completed in the third quarter of this year.

uS KBr WINS ANOTHer CONTrACT IN ruSSIAKBR has won a contract from Russias OJSC Togliattiazot (ToAZ) to provide licensing, basic engineering design, front-end engineering and design ser-vices to revamp ToAZs seven ammonia plants at Togliatti in Russias Samara region, the US-based petrochemicals engineer-ing major said. In 2013, KBR al-ready won a contract for a study of the revamp project. Under the terms of the latest contract KBR will supply ToAZ with its propri-etary ammonia technology to in-crease overall ammonia produc-tion capacity while at the same time increasing energy efficiency.

GerMAN BIOTeCHS uPBeAT ON GOOD BuSINeSS VCIThe biotech arm of the German chemical trade group VCI said trading conditions in 2015 have so far been good, with 84% of bi-otech companies surveyed saying business will improve in the re-maining months of this year. Al-most 70% of biotech companies surveyed by the German Associa-tion of Biotechnology industries (DIB) said they expect to increase their research and development (R&D) spending during 2015. However, 23% of respondents said spending would remain the same as in 2014, with only 9% saying it would decrease.

GerMANY BuILDING INDuSTrY OrDerS FALL Orders in Germanys building in-dustry fell 2.2% in March month on month, the countrys federal statistic agency said. In building construction orders fell 1.7 %, and in civil and underground en-gineering they fell 2.8%. Com-pared with March 2014, overall orders rose 1.7% year on year, and for the first quarter they were up 1.6% year on year. Overall building industry sales, in firms employing more than 20 people, rose 1.2% year over year to 4.8bn in March.

news



regulation

Companies unaware of reach 2018Some producers and sellers of chemicals in the EU are unaware of the 2018 Reach deadline for chemicals produced in volumes of 1-100 tonnes/year, says the European Chemicals Agency (pictured).

Euro

pean

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als

Agen

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gerMan BuSineSS CliMate DiPS aFter SiX MontHSGermanys business climate edged down in May, from April, follow-ing six consecutive months of im-provements, the countrys Ifo eco-nomic research group said. Ifo said that its business climate indicator for Germany was at 108.5 points in May, compared with 108.6 in April. While companies were once again more satisfied with their cur-rent business situation, they ex-pressed slightly less optimism about the months ahead, Ifo said. Nevertheless, the German econo-my remains on track, Ifo added.

SPain iQoXe CutS eo, Meg outPut at tarragona SiteSpain-based IQOXE has reduced production at its ethylene oxide (EO) and mono-ethylene glycol (MEG) plant in Tarragona because of a shortage of raw material ethyl-ene following a force majeure at Repsols cracker at the same site, a company source said. IQOXE has consequently cut its production rates by 30%, the source said. The plant can produce up to 140,000 tonne/year EO of which 80,000 tonne/year can be used to trans-form 106,000 tonne/year of MEG, according to IQOXE.

eu auto SeCtor ContinueS reCoVerYNew commercial vehicles regis-trations in the EU increased 12.2% in April year on year, sig-nalling a sustained recovery in the automobile sector in the region, the European Automobile Manu-facturer Association (ACEA) said. New registrations were also up, by 13.0%, in the January-April period, year on year. All major countries improved their regis-trations figures in April, with double-digit growth in several countries, including the UK (up 22.8%) and Spain (18.5%). The number of vehicles registered during the month stood at 169,746 vehicles.

aSia

CHinaS Pta iMPortS Fall 39% MontH on MontHChinas imports of purified tere-phthalic acid (PTA) fell to 38,777 tonnes in April, down by 39%

compared to the previous month, the countrys customs data showed. This was largely due to less material coming from South Korea as China becomes more self-sufficient, market sources said. The countrys exports of PTA increased by 46% month on month to 55,593 tonnes in April, the data showed.

aKZonoBel to BuilD tHai CoatingS PlantAkzoNobel is investing more than 30m to build a new perfor-mance coatings production facil-ity at Chonburi in Thailand. The facility will have an initial capac-ity of 45,000 tonnes/year and is scheduled to start production in the third quarter of 2016. The new plant will support several performance coatings businesses, including metal coatings, protec-tive coatings, specialty coatings and marine coatings, as well as certain products from the com-panys decorative paints busi-ness, it added.

KMCi runS SoutH Korea MDi Plant at 100%Kumho Mitsui Chemicals (KMCI) is running its 200,000 tonne/year methyl di-p-phenylene isocyanate (MDI) unit in Yeosu, South Korea,

at full capacity after completing a turnaround, a company source said. The unit was restarted on around 15 May after it was shut since 21 April for regular mainte-nance, the source said. KMCI is a joint venture between Japans Mit-sui Chemicals and South Koreas Kumho Petrochemicals.

S KoreaS HanWHa total reStartS DaeSan CraCKerSouth Koreas Hanwha Total Pet-rochemical has produced on-spec ethylene and propylene at its Daesan cracker, which re-sumed operations on 25 May, a market source said. The plant was shut on 15 April for mainte-nance and to expand its ethylene nameplate capacity by around 100,000 tonnes/year from 1m tonnes/year. A company official declined to comment on the crackers operations.

S KoreaS HanWHa Fine CHeMiCal to reStart tDi South Koreas Hanwha Fine Chemical is planning to restart its two 50,000 tonne/year toluene di-isocyanate (TDI) lines in Yeosu on 1 June after shutting them for regular maintenance, a company source said. Both lines were taken off line on 18 May and

maintenance at the lines will be conducted until 29 May, the source said. Hanwha Fine Chem-ical was running the two lines at full capacity prior to the turna-round, the source said.

CHina iMPortS oF MiDDle eaSt CruDe inCreaSe 10%China imported 16.6m tonnes of crude oil from the Middle East in April, an increase of 10.1% year on year and 18.3% month on month, official customs data showed. Chinas April intakes of Middle East crude accounted for 54.8% of its total imports, up from 52.4% in March, according to China Customs. Saudi Arabia continued to be the biggest crude supplier to China in April.

JaPanS MitSuBiSHi CHeM to reStart MiZuSHiMaJapans Mitsubishi Chemical is ex-pected to restart its 500,000 tonne/year naphtha cracker in Mizushi-ma around 25 June or 26 June after completing maintenance and ex-pansion works, a company source said. The shutdown has com-menced on 20 May as planned, the source said. Ethylene capacity will be raised by 70,000 tonnes/year as part of the companys plans to merge its cracker opera-tions with Asahi Kasei Chemicals, which will permanently shut its 500,000 tonne/year cracker in Mi-zushima by April 2016.

SingaPore PetCHeMS outPut riSeS BY 4.5% Singapores petrochemicals out-put grew by 4.5% year on year in April following a rise in new pro-duction capacities, official data showed. Overall output of the chemicals cluster which in-cludes the petrochemicals, spe-cialties, petroleum and other chemicals segments rose by 3.9 in April, the Economic Develop-ment Board (EDB) said.

CorreCtionIn the article on page 14 in the 18 May issue titled Phenol produc-tion to lift benzene, Taiwans Tuntex Petrochemicals purified terephthalic acid (PTA) plant ca-pacity was erroneously listed at 40,000 tonnes/year. The correct figure is 440,000 tonnes/year.

news focus


Efforts to save US honey bees focus on pesticides INTELLIGENCE P10

China is expected to become the worlds largest crude importer by 2017, beating the US, which is expected to cut its crude intake from abroad amid robust domes-tic oil and shale gas production, industry sources said on 25 May.

Demand for crude in China, meanwhile, is expected to out-pace its domestic production, ne-cessitating higher imports.

In April, Chinas daily average volume of crude imports hit a re-cord high at 7.37m bbl, exceeding the volumes imported by the US for the first time, based on official data from the two countries.

For the whole of this year, however, US total crude imports at 340m tonnes or 6.82m bbl/day will remain higher than Chinas 327m tonnes or 6.54m bbl/day.

But Chinas net crude imports are projected to grow at an annual average of 5.9% to 434m or 8.68m bbl/day in 2020. By the end of the decade, imports will account for as much as 66% of the countrys total crude requirements, accord-ing to projections from ICIS China.

Crude consumption in the worlds second biggest economy is predicted to grow at a com-pound annual growth rate (CAGR) of 4% in 2015-2020, dur-ing which period the country will likely continue to build up strate-gic petroleum reserves and com-mercial crude reserves on crude security concern.

Its demand for oil products will keep rising amid sustained economic growth, ICIS China re-search showed.

On the other hand, Chinas crude output is expected to grow at a much slower annual pace of 0.9%, supported by higher yields from on-shore oilfields in north-west China and off-shore oilfields.

Major oilfields, such as Daqing and Shengli, face declining ex-ploitable resources and increasing difficulty in crude exploitation.

In contrast, US crude imports will slow down in 2015-2020, while domestic output is pro-jected to rise at a CAGR of 2.6%, against a 0.5% growth in demand, according to the US

Energy Information Adminis-tration (EIA).

US annual crude imports are expected to hit a low of 300m tonnes (6.05m bbl/day) in 2019 before picking up to 307m tonnes (6.14m bbl/day) in 2020.

With China becoming a major influence in the global crude market, major oil producers are shifting their focus to the East.

Everyones eyes are glued to Chinas economic data and its crude demand, commented an analyst from Unipec, Chinas top crude importer.

The Chinese economy has been continuously weakening over the past four years, with GDP growth in 2015 projected at 7% the slowest in 25 years.

Its crude consumption will slow down but will remain higher com-pared with those of other major economies, industry sources said.

Major crude exporters are seek-ing opportunities to cooperate with China, including Russia, the Middle East and South America.

Meanwhile, China has been also strengthening partnership with oil producing countries to guarantee security in its crude supply.

China National Petroleum Corp (CNPC) and Russias state-owned oil company Rosneft reached an agreement in late 2013 to increase supply of Russian crude to China.

A 13m tonne/year refinery, co-invested by Saudi Aramco, Petro-China and Yuntianhua United Commerce, is scheduled to come on stream at Kunming in Yunnan province in the first half of 2016.

China has also signed loan-for-oil deals with several oil produc-tion countries in South America.

In 2014, the country has be-come the largest oil export desti-nation of OPEC. It has a 40% share of Irans crude shipments and a 49% share of Angolas crude exports, according to official data.

Russia has been increasing its crude exports to China. China is second to the Netherlands in con-sumption of Russian crude, and will likely become the leading market for Russia eventually, in-dustry sources said.

oil Jean Zou singapore

China to beat US as top oil importer Despite slowing economic growth, China will see an unrelenting rise in demand with only tepid supply growth

iNoRGANiCS aLeXIS Gan singapore

China Xuzhou Titanium Dioxide Chemical to begin trial production in JuneChinas Xuzhou Titanium Dioxide Chemical will in June begin trial pro-duction of rutile-grade titanium diox-ide (Tio2) at its 80,000 tonne/year sulfate-process facility at Xuzhou, Jiangsu province, sources close to the company said on 22 May.

The company is a subsidiary of

nanjing Titanium Dioxide Chemical (Jinpu Titanium).

parent company nanjing Titanium has a 100,000 tonne/year Tio2 sulfate-process plant at nanjing, Jiangsu province.

nanjing Titanium was delisted from the shenzhen stock exchange

on 18 May, leading to talk of another Tio2 merger and acquisition (M&a) in the country.

The company was listed under the name of Jilin Jinpu Titanium on the stock exchange.

Further details on the M&a were not immediately available.

However, some market sources said there is a possibility that nanjing Titanium will take over an anatase-grade Tio2 plant at panzhihua, which is in Chinas sichuan province. additional reporting by Tina Zhang

urbanised China will continue to use more oil and derivativesre

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US pesticide and herbicide producers and their products will be getting increased scrutiny and face possible bans as the fed-eral government ramps up a major cam-paign to rescue the nations honey bee pollinators.

The White House has announced a federal strategy to restore the health of honey bee populations, a campaign that in part will focus on the potential role of pesticides, herbicides and other chemicals in bee colony collapse disorder (CCD).

The Environmental Protection Agency (EPA) may move immediately to prohibit any new or broader uses of suspect pesticides and may prohibit the use of those substances in existing applications during polli-nation periods.

In a 64-page plan of action by the White House polli-nator health task force, the Obama administration said it and 16 federal agencies will work on a comprehen-sive approach to tackling and reducing the impact of multiple stressors on pollinator health.

The new federal strategy identifies bee colony threats as pests and pathogens, reduced habitat, lack of nutri-tional resources and exposure to pesticides. But the focus on pesticides appears to be very strong.

Pesticides and herbicides, used individually or in combination, can have direct and/or indirect effects on non-target organisms and have been identified as one of the factors contributing to declines in pollinator health, says the task forces action plan.

As many as 121 different pesticides have been iden-tified in honey bee colonies and within pollen, honey and wax, the action plan says, adding that There is a limited understanding of chronic exposure effects on insect pollinators in general.

The pollinator health task force was established by President Barack Obama in June last year. The heads of the US Department of Agriculture (USDA) and EPA are co-chairs of the task force that includes 14 other agen-cies or departments.

The task force also broadened the issue of honey bee colony collapse to concerns over significant loss of pol-linators other than honey bees, including native bees,

birds, bats and butterflies, especially the iconic mon-arch butterfly.

The continued loss of commercial honey bee colo-nies poses a threat to the economic stability of commer-cial beekeeping and pollination operations in the US, the White House said, which could have profound im-plications for agriculture and food.

Colony collapse disorder is an epidemic character-ized by a sudden disappearance of a colonys bees with few, if any, dead bees left behind. For reasons unknown, a colonys bees will fly off and never return.

Although the disorder may have been building for several years, it first came to crisis-level attention after the 2006-2007 North American winter season, when 32% of US cultivated bee colonies disappeared.

Since its onset in 2006-2007, colony collapse disor-der has been blamed for an annual loss of about 30% of the US bee population. That rate of year-by-year loss is not sustainable, according to the USDA, and continuing impact of the disorder puts a major part of US food pro-duction at risk.

USDA officials say that about one-third of the US diet including most fruits, vegetables and vine crops de-pend on bee pollination. Major staple crops, such as corn, wheat and rice, are wind pollinated and have not been affected by the disorder. Although the rate of CCD has declined recently, bee colony losses remain higher than historical averages, according to the USDA.

In addition, if the cause of CCD remains unknown, federal officials worry that the phenomena could accel-erate at any time, posing an increasing and perhaps cat-astrophic risk to agriculture and significant food groups.

In the task force report and strategy issued in late May, the bee rescue effort is to focus on three main goals, including reducing the annual bee colony losses to no more than 15% within ten years.

The other two goals include the restoration or devel-opment of 7m acres of feeding and breeding lands for pollinators over the next five years, and development of special breeding areas for the Monarch butterfly.

US pesticides targeted Federal efforts to save the nations honey bees place a heavy focus on the use of pesticides

In the US, 30% of bee colonies have been lost annually

joe kamalick washington, D.C.

one-third of the US diet including fruits, vegetablesand vine crops dependon bees for pollination


think tank

market intelligence

As part of the campaign, the EPA is to work to bal-ance the unintended consequences of chemical expo-sure with the need for pest control.

Pesticides have long been considered a potential cul-prit in the CCD epidemic, and recent research has point-ed at a pesticides group known as neonicotinoids as more directly related to the colony collapse disorder phenomenon. But pesticides manufacturers have chal-lenged claims that their products are to blame. Even so, the new federal task force is focused in large part on what it suspects is a key role in CCD by neonicotinoids.

Concern for honey bee health has centered on pub-lished reports of chronic neurotoxicity to bees posed by the widespread use of the neonicotinoid family of pesti-cides, according to the task forces National Strategy to Promote the Health of Honey Bees and Other Pollinators.

Neonicotinoid pesticides are absorbed by plants and distributed systemically to various plant tissues, with some of the pesticide residue being transferred to pollen and nectar, then to honey, over potentially prolonged periods, the strategy document said.

Because of this systemic mechanism, EPA says it is most concerned that neonicotinoids present the most like-ly threat, so much so that the agency is going to immedi-ately deny any new uses or applications of neonicotinoids.

The strategy relates that EPA has already sent letters to registrants of neonicotinoid pesticides with outdoor uses, informing them that EPA likely will not be in a position to approve most applications for new uses of these chemicals until new bee data have been submit-ted and pollinator risk assessments are complete.

ONLY NEW USES AFFECTED FOR NOWThis de facto ban will affect only new uses sought for neonicotinoids, not current applications although those too may face prohibitions depending on further research outcomes.

EPA also is considering a ban on use of these pesti-cides in treating soybean seeds.

A current agency assessment of this role for neonico-tinoids is already open for public comment, and the EPA expects to determine the biological and economic impacts of not allowing the use [of neonicotinoids] to continue on soybeans.

The agency suggests that such a use ban could be jus-tified because some scientific publications claim that treating soybean seeds has little value in combating agriculture pests at planting. In addition, EPA is con-sidering additional restrictions on a broader range of pesticide products to further reduce the likelihood of acute exposure and mortality to bees from the foliar (leaf) application of acutely toxic compounds.

In this area, the agency is looking at risks posed when honey bee colony managers offer their hives to growers to pollinate particular fields, known as con-tractor pollination.

Application of a toxic pesticide in this scenario is near certain to result in adverse effects to pollinators, the strategy argues, adding: EPA believes that strong regula-tory measures should be in place on the contracted ser-vice scenario to mitigate these potential problems.

EPA will propose to prohibit the foliar application of acutely toxic products during bloom for sites with bees on-site under contract, the strategy says.

Rex

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Europes crackers and downstream plants are not running smoothly

Plant availability is one of, if not the driv-er of profitability in petrochemicals. Running your plants at optimum efficien-cies is the key. Most big petrochemical units are designed to be run hard and continuously. Feedstock conversion, en-ergy consumption and product yields are optimised. It is easier to meet environ-mental criteria.

But smooth running requires meticu-lous attention to detail which chemical producers are very good at and a level of maintenance investment which keeps plants old and new on their toes.

So should producers, customers and investors be overly concerned about the spate of unplanned outages seen over the past few months, particularly in re-cent weeks? Have producers invested enough in their plants through a period of subdued growth and uncertainty? And have they been caught out by a sudden uptick in demand. Or have they just been unlucky? But luck hardly comes into it. It cannot in such a sophisticated and poten-tially hazardous manufacturing operation.

Force majeures have been declared at sites across Europe this year resulting in tightened ethylene, propylene, polymers and derivatives markets. Search ICIS news and you will find 68 mentions of force majeure in articles published in May to date compared with 47 in March, 57 in February this year and 52 in all of May in 2014. Im tempted to draw the graph.

There are not 68 unplanned outages,

of course, but the topic is hot it has been getting hotter for weeks.

Polymer markets have tightened re-markably in Europe some old plants have been shut down, exports to Europe have not been attractive. Outages have restricted supply and prices have in-creased significantly. Some customers have found themselves on allocation.

Imports have fallen as import duties have been imposed on polyethylenes from the Middle East. That effect started to be felt last September. The weak euro meant

that Asia became a more attractive market.The rally in crude oil in March served to

tighten the market as buyers became nervous about future costs. And there are continued concerns about availability.

Surprisingly, perhaps, unplanned out-ages have popped up in other markets but it is Europes crackers that appear to be creaking the most. And, as everyone in this industry knows, when there are prob-lems at a cracker, downstream units and customer industries suffer.

No-one wants their plant to come down unexpectedly, or to be down for too long for planned maintenance. Companies want to keep the cash flowing.

nIgEl davIS lONdON

UNpLANNED OUTAgES hiT EUROpE

The topic is hot ithas been gettinghotter for weeks

price & market trends


For up-to-date information on more than 120 global commodities, visit:icis.com/about/price-reports

europeChrIS Barker london

europe chlor-vinyl production faltersFrequent shutdowns are being caused by a lack of investment and aging plants running too hard, market sources say

Lack of reinvestment in Europe-an chlorovinyl and ethylene pro-duction has contributed to pro-duction problems which have tightened availability, according to sources in the market.

Several major producers, in-cluding INEOS, Vinnolit and Solvay, are experiencing un-planned shutdowns at chlorovi-nyls plants either due to technical problems or upstream ethylene constraints, with several crackers also having production difficulties over the past few months.

In the week ending 15 May, Vinnolit declared force majeure on polyvinyl chloride (PVC) and caustic soda at its Cologne and Knapsack plants due to ethylene supply constraints following a fire at Shells refinery in Wesseling.

Many other downstream in-dustries have not been running on reinvestment levels for many years, we had no new plants and all plants which exist in Europe are decades old, one producer said.

It added that it is almost im-possible to build new chloro al-

kali plants in Europe due to the high financial risks associated with their construction.

This has been the classic case of when you start running units hard. Plants have been running with essential maintenance but not much more for a long time, one trader said regarding ethyl-ene production difficulties.

Another trader said many pro-ducers only carry out one short maintenance stop every year in order to reduce the amount of production time lost.

planned and unplanned european cracker issues in 2015*

company location Timing

Shell 2A, Wesseling,Germany Planned 16 oct- 5-6 dec 2014,restart delayed 16-18 January

Shell Moerdijk, netherlands 2 oct 2014 July-August 2015

Versalis Porto Marghera, Italy Restarted Feb 2015 possible re-closure oct 2015

INeOS Rafnes, norway Planned spring maintenance took place in Jan during unplanned downtime

SaBIC Wilton, UK Power outage 4 March, running normally by 6 March

Dow Boehlen, Germany 20 March technical issues, running by 25 March

Total Feyzin, France Planned March-delayed restart running as of 15 May

OMV Schwechat, Austria Reduced ops confirmed 19 March,ethylene, propylene FM heard declared, further full shutdown in April, back online as derivative FMs lifted as of 13 May

Dow Terneuzen 3, netherlands

Planned mid March delayed restart 30 April

repsol Puertollano, Spain Planned March

INeOS Rafnes, norway Was planned for spring maintenance took place in Jan during unplanned downtime

BPrP Gelsenkirchen,Germany Power outage 27 March, whole site affected, 2 crackers restarted afterwards but ethylene, propylene supply remains on FM

LyondellBasell Muenchmuenster, Germany Propylene FM declared 31 March,as HdPE outage forced reduction of cracker since 24 March, FM lifted 13 April

Total nC2 Antwerp,Belgium 25-26 April shut down due to mechanical valve failure, FM on all cracker products declared, back online around 14 May, FMs reported lifted 20 May

Versalis Brindisi, Italy Planned May-June

MOL-TVk Tiszaujvaros, Hungary Planned May-June

BaSF ludwigshafen, Germany Shut a reactor 8 May, normal ops soon after

Shell Wesseling, Germany Fire 10 May, ethylene, propylene FM declared, duration unclear

Naptachimie lavera, France Fire 17 May, InEoS confirmed FM on its olefins, derivatives at the site, duration unclear

repsol Tarragona, Spain Unplanned outage,ethylene, Bd FM confirmed declared 20 May technical boiler issue

LyondellBasell Munchmunster,Germany Sep-oct

Dow Boehlen, Germany September

Borealis Stenungsund, Sweden Sep-oct*not confirmed unless stated otherwise

/tonne, pipe, spot FD NWE

EUROPE PVC

650

700

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900

May2015

May2014

europeNeL WeDDLe london

Unprecedented number of FMs hitting crackers Supply restrictions have become a feature of the olefins market so far in 2015, a complete reversal of fortune considering that several thousand tonnes of ethylene were removed from the market through export primarily to Asia over the same period last year.

Spot ethylene pipeline prices have risen by 79% since the start of the year, from a low of 700/tonne FD (free delivered) NWE (northwest Europe) in January, to 1,250 FD NWE in the week end-ing 15 May, primarily on the back of supply tightness but also driv-en in part by gains in the up-stream crude oil and naphtha since the beginning of the year.

The key question on all play-ers minds is how long will it take the market to rebalance?

In mid-May some views that the market had peaked were be-ginning to emerge, but with two additional outages and force ma-jeures (FM) declared - INEOS at Lavera and Repsol in Tarragona - and no indication as to when these latest issues might be re-solved, sources plans have gone back to the drawing board.



World-scale ammonia plant in Texas moving aheadMARKET TRENDS P15

middle eastmuhamad fadhIl guangzhou

mideast Pe, PP diverts to south asia for higher pricesWith China market at a standstill, Middle East sellers are finding better demand elsewhere

Middle East polymer suppliers are more keen to sell to south Asia, where polyethylene (PE) and polypropylene (PP) prices are at least $80/tonne higher than in their key China market, indus-try sources said on 20 May.

On 15 May, PP injection prices were assessed stable week on week at $1,280-1,300/tonne CFR (cost and freight) China, while high density polyethylene (HDPE) film prices fell by $20-30/tonne to $1,340-1,380/tonne CFR China, according to ICIS.

In south Asia, PP injection prices were assessed at $1,400-1,420/tonne CFR India and $1,400-1,430/tonne CFR Pakistan on 15 May, while HDPE film prices stood at $1,420-1,440/tonne CFR India and $1,440-1,460/tonne CFR Pakistan, ac-cording to ICIS.

JUNe OFFeRs tO COmeMiddle East producers are ex-pected to announce their June of-fers to Asia amid concerns that the current weakness in China could spill over to other markets.

With backlog cargoes arriving in the trading hubs of Mumbai and Karachi after some delays, increased polymer availability is set to exert downward pressure on spot prices in these markets, industry sources said.

Spot markets in Turkey, India and Indonesia are showing signs of weakness. Buyers are all ask-ing why China is not buying enough polymer resins, a major petrochemical supplier in the Middle East said.

An impasse on Chinas polymer trades can also be also attributed to stable-to-soft feedstock prices in Asia, as well as sluggish demand for downstream plastic product.

At midday on 20 May, ethyl-ene prices stood at $1,370-1,400/tonne CFR NE Asia, while pro-pylene prices were at $1,000-1,030/tonne CFR NE Asia, ac-cording to ICIS data.

Over the past three months, Chinese demand for PE and PP has been strong on the back of re-stocking activity while supply was tight due to production is-sues in Saudi Arabia in March and April, industry sources said.

PP injection and HDPE film prices have gained by more than $250/tonne over the past three months, after hitting their lowest levels this year in end-January, according to ICIS data.

On 30 January, PP injection prices stood at $950-1,000/tonne CFR China, while HDPE film was at $1,070-1,130/tonne CFR China, the data showed.

China, which is the worlds second-biggest economy, contin-

ues to show signs of weakness. The economy is expected to post a 2015 average GDP growth of 7% down from the 7.4 % pace recorded in 2014 and its weakest in 25 years.

The countrys economic ex-pansion is expected to deceler-ate for the most of this year, leading to sluggish polymer de-mand, an Asian petrochemical source said.

Polymer markets are sensi-tive to any changes in GDP. China will not rank highly in polymer growth this year, the source said.

mideast BUYeRs HesitateWith the Chinese market at a standstill, polymer buyers in the Middle East and south Asia start-ed having second thoughts about procuring cargoes, industry sources said.

We are looking for signs from China. The market is without di-rection now, according to a major Saudi PP producer.

Converters in Asia and Middle East often look to China, a major importer of both PE and PP, for price direction, particularly dur-ing periods of volatility.

Spot prices in Asian markets, such as India and Pakistan, will likely track price declines in China, should demand in the country weaken further, industry sources said.

Meanwhile, Middle East pro-ducers must also brace against Chinas bid for self-sufficiency in chemicals, as more and more coal-to-olefins (CTO) and metha-nol-to-olefins (MTO) capacities are due to start production in the country in the near term, indus-try sources said.

Middle East producers will just need to compete harder once CTO and MTO capacities hit the market, a source close to a Euro-pean producer said.

$/tonne, spot flat yarn (Raffia)

CFR Asia SE monthly settlement CFR China

CHINA PP PRICED LOWER THAN SE ASIA

900

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May2015

May2014

SABIC is expected to start produc-tion at its high performance 400,000 tonne/year synthetic rub-ber plant at Al-Jubail in Saudi Ara-bia by the end of 2015, a company statement said late on 21 May.

The project is a 50:50 joint ven-ture (JV) between SABIC and Exx-onMobil called Kemya. SABICs synthetic rubber will meet emerg-ing demands from transportation, building construction, industrial solution as well as consumer & wellbeing driven by urbanisation and increased consumerism in China and Asia, the statement re-leased on the sidelines of China-plast exhibition in Guangzhou, China, said.

The [elastomers] project is ex-pected to establish a domestic supply of more than 400,000 tonnes of rubber [butyl, styrene butadiene rubber (SBR), butadi-ene rubber (BR) and ethylene-propylene-diene monomer (EPDM)], thermoplastic specialty polymers and carbon black, a separate statement emailed to ICIS added.

Elastomers are used in the manufacture of tyres.

middle eastTahIr Ikram SingaporE

SaBiC to start up elastomers project in 2015

Elastomers go into tyre manu-facture

rex

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Polypropylene (PP) spot prices in Europe are climbing above 1,400/tonne FD (free delivered) NWE (northwest Europe) in some cases as supply remains tight, sources said on 21 May.

At the end of February, homopolymer was trading as low as 1,120/tonne.

There were signs the previous week that tightness was easing, as some cases of force majeure were lifted, but another force majeure has been called by INEOS from Lavera, France, so sources remain very cautious.

We are finding that caveats are being put on order forms, said one spot buyer. Subject to feedstock availability, is now ap-pearing on some.

Force majeures from Borealis have been lifted from Schwechat, Austria and Kallo in Belgium, but restrictions called by Total, on the entirety of its PP supply, are still in place, along with those called by LyondellBasell on some PP grades from two German sites.

Restrictions in supply are due to

technical issues but also propylene supply problems, said sources.

Some PP buyers have taken the step of importing their own mate-rial, at high cost, to be able to keep lines running.

Some traders have been offer-ing product for July delivery, but often on a back-to-back basis as it is not clear how long the tight-ness will continue.

We are seeing the early signs that things are changing, said a distributor. In the last few days I wont buy for July. The behaviour of people is slightly changing.

FORCE MAJEURE AT LAVERAThe most recent force majeure from INEOS at Lavera, where Total production is also affected as both companies have a 50:50 joint venture share in the plant, could affect buying behaviour again.

Another problem in Europe, at Repsols cracker site in Tarragona in Spain, could also affect supply.

They [Repsol] didnt declare force majeure on the polymer side but they told their sales or-

ganization that PE [polyethylene] and PP copolymer will be affect-ed and will be very short, said a source close to the company.

Repsol was not immediately available for comment but on 20 May the company declared force majeure on ethylene supplies from its Tarragona cracker.

The company was heard to be adding an extra 50/tonne on May business, leaving spot

homopolymer prices well above 1,400/tonne.

Reasons that PP supply has been so tight in recent weeks in Europe include the weakness of the euro that has led to fewer imports and stronger exports, several cases of force majeure, and also the low state of inventories along the chain when buyers came back to the mar-ket at the end of the first quarter.

Propylene availability issues have also played a role, as has the increase in import duties that have left netbacks better in other regions for traditional GCC suppliers.

The start of Ramadan on 18 June is also expected to restrict imports into Europe, even though prices are now looking better for importers.

PP is used widely in packag-ing, the manufacture of house-hold goods, and also in the auto-motive industry.

/tonne, homopolymer injection, spot FD NWE

EUROPE PP

1,000

1,100

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1,300

1,400

May2015

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EUROPElInda naylor london

PP spot prices rise on supplyA fresh force majeure from InEoS and production problems with Repsol are adding to existing tightness of supply

Huntsman sees titanium dioxide improvementnORTh AMERiCAStefan Baumgarten HouSton

Huntsmans titanium dioxide (TiO2) pigments business is set to improve next year because of re-structuring measures the compa-ny is taking, said CEO Peter Huntsman on 19 May.

Huntsman, speaking at an in-vestor event in New York, also reaffirmed the companys plan to spin off or sell that TiO2 busi-ness later.

Huntsman last year expanded its position in TiO2 with the ac-quisition of Rockwoods TiO2 business, but said at the time that the combined operations would

eventually be spun off or sold as a stronger business.

Doing nothing was not an op-tion for us, Huntsman said about the Rockwood deal.

If we were sitting here today without the Rockwood acquisi-tion, we would be sitting here with a legacy TiO2 business that has a negative EBITDA (earnings before interest, tax, depreciation and amortisation), and we couldnt sell that, he said.

Despite being at near record-low [TiO2] margins today, when we are completed with our restruc-

turing in 12-14 months from now, we will be with a pigments and ad-ditives business that is operating with $300m-plus of EBITDA, and that is a valuable asset, he said.

The company could then spin off that business, separate it through an initial public offering (IPO) or sell it outright a num-ber of options that we otherwise wouldnt have, Huntsman said.

Commenting on a grassroots TiO2 project in Mexico by a com-petitor, Huntsman said the indus-try needed that capacity like a hole in the head.

Huntsman optimistic on tio2 separation

We are finding thatcaveats are being puton order forms.Subject to feedstockavailability, is nowappearing on somePP SPOT BUYER

Hun

tsm

an



Malaysias PCG to finalise RAPID project line-upMARKET TRENDS P18

EuropEHelena StratHearn london

Europe acrylate contract spikesArkema is now running its GAA facility, but the force majeure remains in place, and it is unknown when it will be lifted

European May acrylate esters contract prices have increased sharply on reduced availability, an increase in demand and a rise in the cost of major feedstock pro-pylene, sources said on 20 May.

Prices increased by 60-105/tonne, depending on ester and starting point.

Acrylate esters include methyl acrylate (methyl-A), ethyl acrylate (ethyl-A), butyl acrylate (butyl-A) and 2-ethylhexyl acrylate (2-EHA).

The largest increases have been agreed on butyl-A. Despite more supply limitation on acrylic acid (AA), with a force majeure declaration in place on glacial acrylic acid (GAA) at Arkemas Carling facility, increases in bu-tyl-A have been higher than those agreed for AA in May.

May AA prices increased by 80-90/tonne.

There is some talk that this could be because butyl-A prices had seen more severe price drops in the latter half of last year, falling to lows which, in

some cases, gave zero to negative returns for producers.

Methyl-A prices are at 1,550-1,580/tonne FD (free delivered) NWE (northwest Europe), while ethyl-A contract prices are at 1,690-1,710/tonne FD NWE.

Butyl-A contracts settled at 1,720-1,770/tonne FD NWE, while 2-EHA contract prices are at 1,870-1,890/tonne FD NWE.

Acrylate esters are used to make paints, coatings, textiles, adhesives, polishes and plastics.

Demand from the coatings sec-tor has picked up slightly, but it has not shown a marked increase as it has done in past years.

Hexions acrylates facility in Sokolov, Czech Republic, has re-started and is running at full speed following planned maintenance. The specialty chemicals producer began maintenance in the middle of April that was set to last three-to-four weeks. Hexion has the capaci-ty to produce around 55,000 tonnes of AA per year.

Russias SIBUR restarted its Dzerzhinsk AA and acrylate es-

ters facility earlier in May follow-ing planned maintenance that began on 16 April. The producer has the capacity to produce 36,000 tonnes/year of butyl-A at the facility, which is based in Nizhny Novgorod, in Russia.

Arkema is now running its GAA facility, but the force ma-jeure remains in place, and it is unknown when it will be lifted. There has been no declaration on acrylate esters at Carling. The cause of the outage at Arkema re-

mains unconfirmed. The produc-er has the capacity to produce 276,000 tonnes/year of crude AA from the Carling site.

Dow Chemical began a sched-uled turnaround at its AA plant in Boehlen, Germany, in early April, which is expected to last for ap-proximately 45 days. The produc-er has an annual AA capacity of 80,000 tonnes, and can produce 40,000 tonnes/year of butyl-A from its Boehlen facility in Saxo-ny, according to ICIS data.

/tonne, contract FD NWE

EUROPE ETHYL ACRYLATE

1,500

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May2015

Jun2014

Borealis, Agrifos agree on Texas ammonia projectnorth amEricamark mIlam housTon

Borealis and project developer Agrifos Partners announced on 20 May that the two firms have reached a preliminary agreement to jointly establish a world-scale ammonia project in Texas.

The partners will advance the project through Agrifos Gulf Coast Ammonia LLC (GCA) which was started to establish an ammonia plant in Texas, a project which has been in development since 2012.

Officials said the project will be established at an existing chemical site located along the Gulf Coast. Site negotiations are underway with a final decision expected within a few months.

The project is being described as a brownfield, hydrogen-based fa-

cility with an estimated start-up in early 2019, and officials said it will benefit from existing infrastructure and excellent logistics allowing supply to a variety of customers.

Although production capacity

has not been revealed, Austria-based Borealis said it would enter into a long-term offtake agreement for approximately 40% of the am-monia produced by the plant.

We have a clear strategy of ex-

panding our global nitrogen busi-ness. By participating in the de-velopment of, construction of and offtake from a world-scale project in the US, Borealis is able to secure long-term supplies of ammonia based on the attractive economics of US natural gas, said Markku Korvenranta, Borea-lis executive vice president of base chemicals.

It also is a key step in the Bo-realis goal to sell 10 million tons [9.07m tonnes] of nitrogen-based fertilizer products per year by 2020. Gulf Coast Ammonias pro-ject is all the more compelling because it builds on existing site capabilities and assets along the US Gulf Coast.

Plans are moving ahead for construction of world-scale plant

Rex

Feat

ures





LER SER

EUROPE LER AND SER EPOXY RESINS

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Jun2014

European epoxy resin contract prices have risen in May follow-ing higher upstream costs, good demand and a tighter market, ac-cording to sources on 19 May.

The ICIS liquid epoxy resins (LER) contract price range in-creased by 70/tonne at the lower end of the range, taking the range to 2,600-2,645/tonne FD (free delivered) NWE (north-west Europe).

The ICIS solid epoxy resins (SER) contract price range in-creased by 50/tonne at the lower end of the range, leading to a range of 2,410-2,480/tonne FD NWE.

In May, market players saw a range of contract price move-ments, from rollovers to increas-es of 100/tonne. These price movements were largely de-pendent on the price movements seen in April.

50-70/TONNE CONFIRMEDSeveral buyers, distributors and a producer confirmed price in-creases of 50-70/tonne.

Although two producers tar-geted increases of 100/tonne in May, such increases could not be widely confirmed. No prices above the published range were heard.

One producer said: We have implemented 170-180/tonne [increases] over two months... a few above and a few below.

Higher feedstock prices and

rising upstream costs have placed upward pressure on epoxy resin prices.

Demand on the European epoxy resins market is strong. One producer said it is sold out for May and that it could have sold 10-20% more material, had it been available.

Another producer said: There is limited offer on the market. We are sold out.

A buyer said: [The] epoxy market is tight. It attributed this tightness to higher demand and a lack of imports on the market.

DOLLARS RISEIn recent months the strength of the US dollar against the euro and low prices on the European market led to buyers turning to European suppliers.

This currency shift in turn led to a reduction in import material available in Europe.

This shortfall in imported ma-terial is seen as one of the causes of the existing tightness on the European market.

However, one buyer said: Now the Asian and European prices are the same level.

EuROpELuke MILner london

Epoxy contract prices up as market tightens

There is limited offeron the market. We aresold outEpOXY RESIN pRODuCER

The European melamine market is braced for a series of planned and unplanned outages that could continue to tighten its bal-ance, sources said.

There has been a series of main-tenance announcements over the past few weeks, with Borealis and Eurochem confirming mainte-nance in the coming weeks.

These were added to by the an-nouncement this week that Qatar Melamine Company will carry out a partial shutdown of its 60,000 tonne/year Mesaieed plant at the end of May. The partial shutdown is expected to last from 28 May to 12 June, the producer said.

There was some relief to the market balance with OCI Mela-mine confirming that it is now running both of its Geleen plants at full capacity. The producer had been running its 120,000 tonne/year and 30,000 tonne/year facilities at reduced capaci-ty following a technical problem that affected both lines.

Stocks at the supplier are now depleted because of the fault which came after a planned maintenance stop and a period of good demand, the producer said. The supplier added that it ful-filled its contractual agreements during the fault and will continue to do so throughout the quarter.

The market could tighten more, with talk of a potential production problem at another producer, but this has not been confirmed.

One buyer said that despite the array of outages, its contracts were being fulfilled and it cur-rently had no problems with availability. However, it added that with the turnarounds and technical faults there could be a shortage of availability in the coming weeks.

The availability of product in third quarter is something that has been of interest this week, with a number of sources expecting a tightening of the market balance.

One producer said it expects the market to shorten because of an in-crease in demand from the US.

However, one European pro-ducer has already stated that it would prioritise existing Europe-an customers over short-term overseas gain.

The opportunity to increase ex-ports to the US from Europe comes following antidumping leg-islation last month that virtually priced Chinese and Trinidadian producers out of the US market.

Some participants had been ex-pecting an increase of Trinidadian material in the European market, but this has not materialised, ac-cording to a couple of sources.

EuROpEkatherIne Sweeney london

Europe melamine faces outagesRecent strengthening of the euro against the dollar is not yet said to be influencing trade flows


EUROPE MELAMINE

1,200

1,250

1,300

1,350

1,400

Apr2015

Apr2014



Pakistan boosts ethanol shipments to ChinaMARKET TRENDS P22

europenel weddle london

europe SBr settles up on feedstocksSources said supply and demand balance has improved because excess volumes have been exported to Asia

May European styrene butadiene rubber (SBR) prices have been fi-nalised at higher levels than seen in April on the back of recent gains in upstream butadiene (BD) and styrene, market players said on 20 May.

A wide range of price change increments had been reported by buyers and sellers alike over the past three weeks. Producers had targeted increases of 60-70/tonne at the start of the month, but settlements in most cases were lower than this.

Increases of anywhere between 35/tonne and 60/tonne were heard achieved for dry 1500-1502 SBR grades. However the consen-sus centred on increases of 40-50/tonne, taking the price range to 1,270-1,335/tonne FD (free deliv-ered) NWE (northwest Europe).

Increases of 20-50/tonne were talked for oil extended 1783 and 1723 SBR grades, but on balance and taking into account the start-ing points, most accounts settled up by 30-40/tonne from April.

SBR grade 1723 was assessed at 1,180-1,220/tonne FD NWE and SBR grade 1783 was assessed at 1,170-1,250/tonne.

The spread between dry and oil-extended grades has widened again. The differential had nar-rowed considerably in the fourth quarter because of oversupply and extremely competitive offers, especially from Russia, as the market approached the year end.

Supply length remains an

issue in general, but while buyers say they get offers for additional truck volumes, the actual vol-umes on offer has reduced.

Before I was offered 20 trucks, now maybe two-to-six, a buyer said.

Sources said the supply and demand balance has improved because excess volumes have been exported to Asia.

European exports have been benefiting from a weak euro and

firming Asian SBR prices but this could get more challenging with the strengthening of the euro and weakening Asian prices. Prices in the region have been weakening on the back of competitively-priced Russian and eastern European im-ports, according to some sources.

We are still keeping up the ex-port opportunities, but [there are no] incredible margins, a sup-plier said.

From a demand point of view, SBR producers said May was largely in line with forecasts, al-though a couple of producers mentioned that offtake from some tyre manufacturers was below ex-pectations for the month.

The reasons for the reduction in offtake were not clear. Some attrib-uted it to the month being punctu-ated by several public holidays across Europe despite the holi-days being well known in advance and others said strong competi-tion between suppliers meant that buyers could still pick and choose volumes to a certain extent.


SBR 1783 SBR 1500 SBR 1723

EUROPE SBR

1,000

1,100

1,200

1,300

1,400

1,500

1,600

May2015

Jun2014

US biodiesel production ramps up ahead of RFSnorth americaleela landreSS medellin

US biodiesel production looks to be gaining speed and the market is seeing more supply of co-prod-uct crude glycerine as the sector awaits the federal blending man-date expected by 1 June.

The Environmental Protection Agency (EPA) has said it plans to base the 2015 Renewable Fuel Standard (RFS), scheduled to be released by 1 June, on a combina-tion of actual biofuels production to date and a projection of future production through the end of the year.

Under a consent decree reached in April between the EPA and two oil industry groups, the agency is scheduled to propose the 2014 and 2015 rules by 1 June and finalize them by 30 November.

The EPA had said it would also propose and finalize the 2016 RFS for all fuels and the 2017 biodiesel requirement on that same timeline to get the pro-gram back on schedule, follow-ing years of delays.

The agency sent its proposed RFS volumes for those years to the White House Office of Man-agement and Budget for final re-view, but has not revealed the rules contents.

GLYcerine price impactA co-product of biodiesel pro-duction, 80% spot crude glycer-ine prices have been heard trad-ing at lower levels as the biodiesel sector is said to be in-creasing production.

Crude glycerine was assessed the week of 18 May at 5.25-6.25 cents/lb on an FOB (free on board) basis in the US Midwest.

Prices along the US Gulf have

been heard at a slight discount to the Midwest numbers and play-ers in the sector are watching for a trade window to open to China as US prices decline.

Cents/lb, spot US Midwest

US CRUDE GLYCERINE

4

5

6

7

8

9

10

May2015

May2014




Buyers in the Turkish polypro-pylene (PP) and polyethylene (PE) markets are pushing for re-ductions in June offers of up to $50/tonne for some grades be-cause of weak demand, but pro-ducers remain bullish and the outlook for June is unclear, mar-ket sources said on 20 May.

Prices in Turkey have been ris-ing since February because of limited availability, but demand levels in the country remained poor because of the weak Turkish lira versus the US dollar, cash flow issues and a drop in exports of finished plastic goods.

ALMOST NO INTERESTFor June the feeling from buyers is that they are looking for a $50/tonne decrease and demand has

already weakened significantly, a Middle Eastern producer said. We made several offers at the end of last week and there was almost no interest to purchase more material at May prices. So,

expectations are for a decrease but its impossible to predict.

Other producers remain more bullish in their June outlooks, with at least two Middle Eastern suppli-ers not expecting any downward

movement next month due to re-duced availability.

The market in general [is] bal-anced. We do not expect softening during June, [but] maybe in July availability in all polymers are still tight at least [from] our side due to production problems in the plant, one of the two Middle Eastern producers said, speaking of its linear low density polyethyl-ene (LLDPE) and high density polyethylene (HDPE) film.

The second producer said its current prices for HDPE non-spot material in May were above $1,500/tonne CFR (cost & freight) Turkey, but that it now limits it-self to working with key custom-ers and not spot because margins in Turkeys spot markets are no longer attractive.

ASIAnurluqman Suratman kuala lumpur

PCG to finalise RAPID project line-upThe projects product slate will include key feedstocks, polymers, and other derivative products and specialty chemicals

Malaysias PETRONAS Chemi-cals Group (PCG) is planning to finalise investment plans for the Refinery and Petrochemicals In-tegrated Complex (RAPID) in southern Johor state by the end of this year, the companys presi-dent and CEO said on 19 May.

Our team has already started evaluating which are the areas what we want to participate in By the end of this year, we will most likely know and finalise our participation in RAPID, Sazali Hamzah told ICIS on the sidelines of the 18th Asia Oil & Gas Confer-ence (AOGC) in Kuala Lumpur.

The petrochemical product slate for RAPID will only be final-ised following completion of the complexs design configuration, as well as the engineering, pro-curement and construction (EPC) of the refinery and cracker that will be operated by PETRONAS, Sazali said.

Malaysias oil and gas major PETRONAS is the parent firm of

PCG. The $16bn RAPID project is slated to start operations in the middle of 2019, PETRONAS CEO Wan Zulkiflee Wan Ariffin said at the AOGC event.

RAPID is part of the proposed Pengerang Integrated Petroleum Complex (PIPC), which will con-sist of a 300,000 bbl/day refinery and a petrochemical complex.

EPC contracts for other petro-chemical units within RAPID have yet to be awarded, Wan Zulkiflee said.

If given approval to handle all the petrochemical projects under RAPID, PCGs overall capacity will nearly double, with some 7.7m tonnes/year of new prod-ucts expected to come on stream upon the projects completion, Sazali said.

The projects product slate will include key feedstocks, poly-mers, as well as other derivative products and specialty chemi-cals, he said.

RAPIDs output may include

synthetic rubbers and high-grade polymers, according to the Malay-sian Petrochemicals Association.

In addition to the RAPID pro-ject, PCG has finalised its other key projects in other parts of Ma-laysia that are due to come on stream in the near term the Sabah Ammonia Urea (SAMUR) project in Sipitang, Sabah and a new world-scale 2-ethylhexano-ic acid (2-EH) plant in Kuantan, under BASF PETRONAS Chem-icals a joint venture with Ger-manys BASF.

These two projects are expect-ed to be completed sometime next year, Sazali said.

BASF PETRONAS Chemicals is also expected to start opera-tions at its new integrated aroma ingredients complex in Kuantan, by the end of 2016, he said.

PCG had set a capital expendi-ture budget of Malaysian ringgit (M$) 3bn for this year and next year, excluding funding for RAPID projects.

Turkey pE, pp becomes impossible to predictEuROPEmatt tudBall london

$/tonne, fibre spot CFR Turkey

LLDPE PP

TURKEY LLDPE VS PP

1,000

1,200

1,400

1,600

1,800

May2015

May2015

the project will nearly double PCGs overall capacity

pCG

28 29 July 2015, Johannesburg, South Africa

FOR MORE INFORMATION AND TO REGISTER YOUR PLACEwww.icisconference.com/africanpolymers +44 (0)20 8652 3887 [email protected] quote code: RPY47824 when registering your place

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In-depth analysis of the global polymers market and Africas position

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Excellent networking opportunities to enable you to make those essential business connections

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Hear from experts including: Hendrik Lourens, Company Owner,

Stratflow Facilitators

Annab Pretorius, General Manager, SAPRO

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Europe can win despite ageing populationsOUTLOOK P26

north americajeSSIe waldheIm houston

US benzene plummets on supplyDownstream, the us styrene shutdowns have been compounded with south Korean styrene outages

US benzene spot prices have dropped more than 17% since breaking the $3/gal threshold in late April on lower crude oil val-ues and long supply.

US spot benzene traded at $3.025/gal FOB (free on board) on 23 April, after climbing for several weeks as both upstream crude oil futures and down-stream styrene prices strength-ened.

On 18 May, spot benzene trad-ed at $2.50/gal FOB (free on board) as increased imports lengthened supply. By 19 May, bids for spot benzene had dropped to $2.30/gal, with no of-fers heard. A trade for June ben-zene, with the forward month running at a 2-4 cent/gal premi-um to the prompt month, was heard at $2.35/gal.

Part of the decline in benzene values can be attributed to a drop in oil values. But a significant fac-tor in declining benzene values is

long supply as US imports in-crease and outages in downstream styrene impacts demand.

In the US, styrene producer Ly-ondellBasell is in the middle of a 65-day turnaround of one of its more than 600,000 tonne/year lines at its Channelview, Texas, facility. An Americas Styrenics plant, with styrene capacity of 950,000 tonnes/year, was shut down for several days in late April due to severe weather. The Total-SABIC joint venture styrene plant in Carville, Louisiana, plans a 21-day turnaround for one of its 550,000 tonne/year lines in June.

GLoBaL oUtaGeSThe US styrene shutdowns have been compounded with global styrene outages. About two-thirds of South Koreas more than 3m tonnes of styrene capac-ity was shut down for turna-rounds in March and April, leav-ing a significant amount of

benzene available for export.About 80,000 tonnes of ben-

zene arrived in the US from South Korea in April and anoth-er 39,500 tonnes have arrived in May, a US benzene market source said.

According to ITC data, US im-ports from South Korea totalled 39,000 tonnes in March and 72,000 in February.

The increased imports, com-bined with the US styrene out-ages, are increasing inventories in the US Gulf.

Long supply for benzene is likely to continue until US sty-rene plants restart, arbitrage from Asia closes or another outlet is found for South Korean benzene, a benzene producer said. additional reporting by lane Kelley

$/gal, barges, spot FOB US Gulf

US BENZENE

1

2

3

4

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6

May2015

May2014

June BD nomination at plus 7 cents amid outagesnorth americatraCy dang houston

US butadiene (BD) contracts for June was nominated by one pro-ducer at a rise of 7 cents/lb, mar-ket sources said on 20 May.

If accepted by buyers, the nomination would put June con-tracts for that producer at 43 cents/lb ($948/tonne), a signifi-cant increase from its May pric-ing of 36 cents/lb.

No nominations were heard yet from the other three produc-ers, two of whom had settled their May contracts at 30 cents/lb and one of whom had settled its pricing at 27 cents/lb.

Market participants had specu-lated that BD contracts would rise in June, although the targeted hike was much greater than the 3-5 cent/lb increase that some had been expecting.

Ive always thought that [pro-

ducer] was a little out of step, a source said. Well see what the others do.

Nevertheless, the initial nomi-nation emerging at an increase came as no surprise.

[The producers] move is cer-

tainly based on the price of Euro-pean and Asian material, a buyer said. With the increase of pricing overseas, they can go up as much as possible before opening the ar-bitrage door back to the US.

European producers were like-

ly to target another price increase for June contracts there.

While Asia BD spot prices had been softening, they remained at high levels around $1,100/tonne.

I think if theres a solid nine on it, then it would slow [the global uptrend] down, said a buyer, who had been expecting US June BD contracts to increase by 5 cents/lb.

Additionally, market partici-pants acknowledged that global supply was tight amid planned and unplanned cracker and plant outages worldwide, as well as light feedstock cracking in Europe.

A recent export of 7,000 tonnes to Asia had considerably shortened spot availability, and US buyers were said to be pull-ing higher volumes on contrac-tual volumes.

Cents/lb, contract

US BD

20

30

40

50

60

70

May2015

May2014




globalvICky ellIS & fahIma khaIl london

Pakistan boosts ethanol to China Supply tightens west to Europe during second quarter as a result of new trade flow towards the east

China has pull

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