Consequences of US shale gas boom on global ethylene markets

MOSCOW (MRC) -- About 130 mln tons of ethylene were processed worldwide in 2013, said Plastemart.

A study by Ceresana analysis the consequences of the shale gas boom in the USA until 2021. The shale gas boom in the USA has far-reaching consequences for the global ethylene market: The substantial decline of prices for ethane led to the construction of several new ethane crackers. In contrast to other feedstocks such as naphtha or propane, the cracking of ethane yields a rather high amount of ethylene.

Should the current downward slide of oil prices continue, however, the US fracking industry might lose its foothold; Ceresana analyses the long-term implications. Forced by much higher production costs in Europe, several European produces have already announced to close crackers or to change over to using imported ethane as feedstock. Ceresana expects the global supply of ethylene to increase much more quickly than demand, due to massive capacity expansions. As a result, capacity utilization will fall, increasing pricing pressure. Therefore, Ceresana forecasts revenues generated with ethylene to rise by 3.2% p.a. until 2021 and thus at much lower growth rates than in the previous eight year period. Following a growth rate of 9.1% p.a. between 2005 and 2013, the Middle East became a center of the global ethylene industry.

Production volume in this region is projected to increase by up to another 10 million tonnes until 2021. One of the main customers is China that imports large amounts of ethylene and ethylene-based plastics such as HDPE, LLDPE, and LDPE. Many producers of ethylene and polyethylene are dependent on these exports to China. The Chinese government, however, is trying to significantly increase self-sufficiency in regard to ethylene and its downstream derivatives. China intends to open additional naphtha crackers and to increase the use of coal in the production of olefins. Eastern Europe, dominated by development in Russia, and Africa are also expecting to see a high relative increase of production volume. As a response to pricing pressure, ethylene output in Western Europe will fall.

The majority of all ethylene produced is consumed in the polyethylene industry. Depending on density and rigidity of the product, polyethylene is classified as either HDPE, LDPE or LLDPE. Two thirds of global demand for ethylene in 2013 stemmed from the production of these plastics. While demand for LDPE will increase only moderate, Ceresana forecasts a notable expansion of capacities for HDPE and LLDPE, in Asia-Pacific and the Middle East in particular. Another application area of huge growth potential is the production of ethylene oxide. Ethylene oxide is mainly used to produce ethylene glycol which is a pre-product for polyester. The production of textile fibers is growing significantly, especially in Asia. Additionally, producers of ethylene oxide are profiting from the substitution of glass by PET bottles.

As MRC wrote before, about 85 million tonnes of propylene, the second most important petrochemical feedstock, were consumed worldwide last year, according to a recent study. The study by market research institute Ceresana pointed out that its direct applications include production of important chemicals such as propylene oxide, acrylonitrile, cumene, butyraldehyde and acrylic acid, besides the plastic polypropylene.
MRC

PET prices in Russia rose by Rb5,000 tonne

MOSCOW (MRC) - Russian producers continued to rise domestic polyethylene terephthalate (PET) prices on the back of the increased costs pf imported material. The upper end of PET price grew by Rb5,000/tonne, according to ICIS-MRC Price Report.

The price of Russian PET ranged last week at Rb64,000-71,000/tonne FCA, including VAT. Local buyers were reluctant to accept the rapid rise in prices. However, comparing prices, there is no any alternative to Russian PET at the moment.

Buying activity in the market continued to be sluggish. The reason for the increase in prices was falling rouble. The production cost of PET chips has also increased.

The rate of devaluation of the national currency has overtaken the falling prices in the foreign markets. Sources at the plants said that producers have been keeping prices steady long enough.
In the late November - early December, the market enters the Asian PET, purchased at the price of USD1,150-1,190/tonne FOB. Amid the devaluation of the national currency the delay in the payment plays against importers in Russia.

Companies that cleared up batches at the exchange rate of 52-53Rb=1USD prices of PET chips were at Rb80,500-83,000/tonne CPT Moscow, including VAT. Importers have significantly reduced purchases in foreign markets (spot) in the autumn and now the market enters only sharply needed imports and contractual volumes.

MRC

PE prices fell by USD450-500/tonne in Uzbekistan last month

MOSCOW (MRC) -- By early December, export polyethylene (PE) prices in Uzbekistan had fallen by USD450-500/tonne from November on the back of a slump in demand, according to ICIS-MRC Price report.

Starting prices of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) were at USD1,850-1,900/tonne FCA Kengsoy in export trades in Uzbekistan in early November that did not correspond to the global trends. As a consequence, deals were not registered in the trades. Starting prices had been reduced to USD1,350-1,450/tonne by early December because of the total absence of deals.

1,100 tonnes of injection moulding HDPE, 1,450 tonnes of blow moulding HDPE, 100 tonnes of HDPE for rotational moulding of large items and about 350 tonnes of LLDPE C4 were put up for auction in the first week of December in the export trades. Injection moulding HDPE and LLDPE accounted for the strongest demand in the trades, Russian companies were actively contracting PE.

All the quantities of HDPE for December shipments were sold out at USD1,350/tonne FCA Kengsoy in the trades. Deals for LLDPE were done at USD1,450/tonne FCA Kengsoy, but not all quantities were contracted.
MRC

Dynaloy unveils new products to address demand in semiconductor industry

MOSCOW (MRC) -- In response to evolving industry trends and customer preferences for products with better environmental, health, and safety (EHS) profiles, Dynaloy LLC, a wholly owned subsidiary of Eastman Chemical, is launching three new formulated products that offer exceptional performance without the use of certain chemicals, while continuing to offer its line of traditional cleaners, reported Eastman on its site.

"We understand concerns in the industry about some formulations. That’s why we’ve developed products that have the same or better functional capability but none of the chemicals that raise EHS concerns. For customers who prefer conventional cleaners, we still provide a robust selection of those products as well," said Diane Scheele, Dynaloy business manager.

The newly released Dynastrip DL9150 is a non-TMAH containing multi-purpose photoresist and post-etch residue remover. With outstanding cleaning and metal compatibility, this product raises the bar for achieving environmental, health, and safety compliance while also performing as well as comparable products that contain TMAH.

With the release of Dynastrip DL9240, it’s possible to remove tough photoresists and residue materials without the use of N-methylpyrrolidinone (NMP), a solvent. Dynastrip DL9240 shows excellent compatibility with dielectric materials while cleaning hard-to-remove photoresist in advanced packaging applications.

The third product is Dynastrip DL9005. Used for high density solder cleaning applications, this product is formulated for customers who have concerns about meeting improved waste-related guidelines. It does not contain a common photoresist stripping solvent, dimethylsulfoxide (DMSO). DMSO is a solvent that may cause nuisance odors in waste stream abatement systems.

These new Dynaloy products combine superior performance with EHS-advantaged profiles to allow companies around the world to address existing and emerging EHS concerns and regulations.

As MRC informed earlier, Eastman Chemical Company has recently announced the completion of its acquisition of Taminco Corporation, a global specialty chemical company, for a total of USD2.8 billion in cash and assumed debt. Taminco’s former Specialty Amines and Crop Protection businesses will be operated as part of the Additives & Functional Products segment and its former Functional Amines business will be operated as part of the Specialty Fluids & Intermediates segment.

Founded in 1965, Dynaloy, LLC (Indianapolis, Indiana, USA) has grown from a small regional provider of electronic cleaning chemistries to what is now an international manufacturer of chemicals for the electronics industry. A wholly owned subsidiary of Eastman Chemical Company, Dynaloy combines the responsiveness of a small company with the market knowledge, material science expertise, and vast resources of a world leader in chemical manufacturing. And as part of a global organization, Dynaloy is committed to finding innovative approaches that lead to practical solutions.

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman occupies leading positions in attractive end-markets such as transportation, building and construction and consumables. As a globally diverse company, Eastman serves customers in approximately 100 countries and had 2013 revenues of approximately USD9.4 billion. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 14,000 people around the world.
MRC

Lubrizol enables preparation for spec upgrades

MOSCOW (MRC) -- Lubrizol Corporation has enhanced its blending plant operations in Deer Park, Texas, as pending heavy-duty diesel, passenger car and marine diesel specification upgrades drive demand for higher-performing engine oils, as per the company's press release.

The USD28 million expansion will improve blending efficiency and increase capacity to ensure supply reliability as the market shifts and grows.

In addition to responding to market specifications, Lubrizol is also committed to improving service to its customers by investing in materials handling operations. An additional USD37 million will provide infrastructure improvements to railcar loading and unloading operations and enhance tank truck and isotainer handling.

The expansion strengthens Deer Park's position as an efficient, high-volume finished product supplier. It includes installation of new component storage tanks, state-of-the-art automated piggable component manifolds, new automated unloading locations and additional capability in the company's automated inline blending technology. The project also reduces manual labor and improves flexibility and customer response time.

"We are in a unique position to be nimble and highly responsive to the needs of our customers," says Fries. The upgrades at Deer Park are a great example of our underlying commitment to investing in our people, processes and products to help our customers succeed around the world."

As MRC wrote before, in June 2014, Lubrizol Corp. received all necessary regulatory approvals to proceed with its previously announced chlorinated polyvinyl chloride (CPVC) joint venture with Sekisui Chemical Co. in Thailand. Lubrizol said the partners will invest about USD50-million to build a 30,000-t/y CPVC resin plant in the first phase. This phase, for which a specific location was not given, is expected to be fully operational by late 2014 or early 2015. A second phase will double capacity to 60,000 t/y with a further USD50-million investment and is scheduled to begin production by the end of 2016.

The Lubrizol Corporation, a Berkshire Hathaway company, is an innovative specialty chemical company that apart from its production develops and supplies technologies to customers in the global transportation, industrial and consumer markets. Lubrizol's advanced polymer technology delivers exceptional performance for the plumbing, fire sprinkler, industrial and other building and construction related applications. Lubrizol is providing innovative solutions for its customers high-performance application needs and remains committed to ongoing investment in its CPVC capabilities that support future growth.
MRC