First pieces of equipment arrive at Braskem Idesa

MOSCOW (MRC) -- The petrochemical complex being built in Mexico that is the product of the joint venture between the Brazilian multinational Braskem and the Mexican group Idesa, which is slated to start operations in 2015, has begun to receive the first pieces of large equipment for storing chemical products, as per Braskem's press release.

Six large tanks, two of them measuring more than 85 meters and weighing some 550 tons, were offloaded at the Port of Pajaritos and over the next few days will make the eight-kilometer trip to Nanchital, the city where the industrial complex is being installed.

By the end of this year, more than 50% of this major project is expected to be built, for which around 800 to 1,000 workers are being hired per month. By December, the construction project will boast approximately 10,000 workers.

When ready, Braskem Idesa will have annual installed production capacity of 1 million tons of polyethylene. Total investment in the project is USUSD4.5 billion, with 75% coming from Braskem and 25% from the Idesa Group.

Braskem is the leading producer of thermoplastic resins in Latin America and the US, following its purchase of polypropylene assets of Dow Chemical. The company serves 70% of Brazilian demand in PP, PE and PVC resins, but foreign resin imports have gained Brazilian market share in recent years. Brazil's annual consumption of PP is estimated at 1.4 million tons this year.
MRC

MOSCOW (MRC) -- BP Plc, Royal Dutch Shell Plc (RDSA) and Statoil ASA (STL) are under scrutiny by the U.S. Federal Trade Commission as the agency probes whether they manipulated oil benchmarks published by Platts, reported Shell on its site with reference to a person familiar with the matter.

The FTC’s early-stage investigation into oil prices mirrors a review by the European Union, which raided the offices of the three companies and Platts in May, two people familiar with the probe said last month.

The FTC is looking at the impact possible manipulation of the benchmark could have on physical and derivative oil markets in the U.S., said the person, who asked not to be named because the matter is confidential. The agency is interviewing third parties to clarify how Platts establishes its benchmark prices. It’s not clear whether Platts is a subject of the investigation, the person said.

We remind that, as MRC reported earlier, in May European authorities raided offices of oil majors Shell, BP and Statoil in an investigation of suspected manipulation of oil prices, one of the biggest cross-border actions since the Libor rigging scandal. Authorities sharpened scrutiny of financial benchmarks around the world since slapping large fines on some of the world's biggest banks for rigging interest rate benchmarks.

The EU oil probe, which extends to undisclosed crude-derived products and biofuels, underscores how pricing in some energy markets lacks the transparency of financial products such as stocks and US corporate bonds. It also marks the third time global pricing benchmarks have drawn the regulators’ scrutiny in the past year following investigations into bank manipulation of Libor, and ISDAFix, the benchmark for the USD379 trillion swaps market.

Joaquin Almunia, Europe’s top antitrust official, said on May 28 that if oil price manipulation did take place, it would have caused "huge" damage to consumers.

Platts, the energy news and data provider owned by McGraw Hill Financial Inc. (MHFI), publishes the Dated Brent benchmark that contributes to setting the price of more than half the world’s oil.
MRC

MOSCOW (MRC) -- Yanbu National Petrochemical Co. (Yanpet) said on Sunday its second-quarter net profit grew 3.2% on an annual basis to SR671 million (USD179 million) due to lower financial charges, despite a fall in its sales, said Gulfbase.

The company, a unit of Saudi Basic Industries Corp., one of the world's largest petrochemical companies, said gross profit had fallen by 2.1% in the same period.

However, while sales were lower than a year ago, they were higher than in the first quarter of this year, Yanpet said in a bourse statement.

The Yanpet Expansion Project (sometimes called Yanpet 2) is a major petrochemical project located in Yanbu in Saudi Arabia, on the coast of the Red Sea. The huge project got initial approval in 1996, but did not go into operation until February 2001. The overall cost of the project was in excess of USD2.8bn.

The plant includes an ethylene plant, an ethylene glycol plant and a polymer plant. The expansion will add a second 800,000t/yr ethylene cracker to the complex, making Yanpet one of the largest and most efficient petrochemical producers with a total capacity of 1.7 million tonnes per year. This can be sold as exports, or used as a feedstock for the new 535,000t/yr polyethylene plant.

This plant ranks the Yanpet site as the largest polyethylene site in the world. The existing facilities on the site will be used to supply feedstock.

Other derivative products produced include, 410,000t/yr of ethylene glycol, 260,000t/yr of polypropylene and 125,000t/yr of pyrolysis gasoline. Together with the existing plant, this will be one of the world's largest petrochemical complexes.
MRC

MOSCOW (MRC) -- Solvay Polyamide & Intermediates is investing in the adipic acid production line at its industrial plant in Chalampe, France, according to the company's press release.

The intended capital investment aims at reinforcing cost leadership by significantly reducing the site’s energy consumption.

The investment will result in a further improvement of the adipic acid manufacturing process contributing to Polyamide & Intermediates’ strategic positioning. It demonstrates the group’s commitment to operational excellence through energy efficiency programs and carbon footprint reduction initiatives.

"This new process will result in an 8MW reduction of energy consumption per year as well as 11,000-ton reduction in CO2 emissions," points out Christophe Bertrand, Industrial Director of Polyamide & Intermediates. The intervention, which will require a complete shutdown of the manufacturing process, will take place in the fourth quarter of 2013 and will last about one month.

This project is part of Solvay Group’s initiative to achieve a EUR100M REBITDA improvement of its polyamide business by 2014. It marks the first major investment in productivity and efficiency, targeting business leadership and profitability as well as Sustainable development in line with the Group Solvay Way target.

We remind that, as MRC informed previously, last year Solvay and Russian petrochemical company Sibur signed an agreement to establish Ruspav, a 50/50 joint venture for the production of surfactants and oilfield process chemicals in Dzerzhinsk, Russia. Ruspav will be located near SIBUR's petrochemicals operations, 400km east of Moscow, and is expected to be operational in 2015.

SOLVAY Polyamide & Intermediates, headquartered in Brussels, is a major global producer of polyamide 6.6 intermediates and polymers focused on being a reliable partner to customers worldwide. P&I develops and provides polyamide 66 intermediates from HMD, adipic acid, nylon salt down to polymers through its 7 industrial plants, 3 research & development centers and 7 sales offices in the world. Thanks to its fully integrated value chain, P&I is a major player on engineering plastics, textile, industrial yarns and performance fibers markets with its long lasting polymer range Stabamid and its new intermediates product offer: Rhodiamine and Rhodiacid. In 2012 the company generated EUR12.4 billion in net sales.
MRC

MOSCOW (MRC) - China's GDP growth is expected to have slowed down in the second quarter as weak overseas demand weighs on output and investment, providing a test for Beijing's resolve to revamp the world's second-biggest economy in the face of deteriorating data, said Reuters.

Second-quarter GDP figures are due to be published on Monday along with other indicators, including industrial output and retail sales for June.

A Reuters poll of forecasts by economists projected China's economy grew 7.5% in the April-June quarter from a year earlier, slowing from 7.7% in January-March.

However, trade figures last week showing an unexpected fall in exports for the first time in 17 months raised market concerns GDP could be weaker than expected.

The government's official growth target for 2013 is 7.5%, impressive by world standards but it would be the slowest pace in 23 years for China.

Last week, customs data showed China's exports fell 3.1% in June against forecasts for a rise of 4% , while imports dipped 0.7% versus an expected 8.0% rise. The customs administration added that the outlook for July to September was grim.

Other figures had shown factory-gate deflation persisted for a 16th straight month, backing the view that the economy, plagued by industrial overcapacity, is losing momentum.

Annual consumer inflation accelerated more than expected in June, but remained subdued at 2.7 percent, below Beijing's annual target of 3.5 percent.

The main worry for China's leaders is if the economic slowdown leads to high unemployment that could spark social unrest. So far government officials say employment is stable.

So for now economists do not see any major stimulus or policy shift and instead expect the government to tough out the slowdown as they pursue a longer-term vision of reforming the economy towards consumer-led, rather than export- and investment-led growth.
MRC