US specialty chemicals market sees small growth

MOSCOW (MRC) -- The US specialty chemicals market volume index, a tool created by the American Chemistry Council (ACC), progressed further during the first quarter of 2016, rising 0.1% on a three-month moving average (3MMA) basis in February after a 0.1% gain in January, said Hydrocarbonprocessing.

Weakness during 2015 was centered in oilfield chemicals and a few other segments that, combined, weighed on overall volumes, the ACC said in a report made available on Monday. Of the 28 specialty chemical segments included in the index, 17 expanded in February, with adhesives, construction chemicals and electronic chemicals experiencing the largest gains (1.0% and over) in market volumes.

The overall specialty chemicals volume index was off 1.5% year-over-year (Y/Y), also on a 3MMA basis. Year-earlier comparisons were generally in the 4.0% to 6.8% range during 2012 through 2014, but since February last year, they have fallen below that range as the downturn in the oil and gas sectors affected headline volumes.

In addition, the strong US dollar has adversely affected a number of export-oriented customer industries.

Still, on a year-on-year basis, gains are fairly widespread among most market and functional specialty chemical segments. With few exceptions, however, year-earlier comparisons have been moderating. Specialty chemicals are materials manufactured on the basis of the unique performance or function and provide a wide variety of effects on which many other sectors and end-use products rely. They can be individual molecules or mixtures of molecules, known as formulations.

The physical and chemical characteristics of the single molecule or mixtures along with the composition of the mixtures influence the performance end product. Individual market sectors that rely on such products include automobile, aerospace, agriculture, cosmetics and food, among others.

Specialty chemicals differ from commodity chemicals. They may only have one or two uses, while commodities may have multiple or different applications for each chemical. Commodity chemicals make up most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time, and are relatively high value with greater market growth rates.

Some areas where specialty chemicals are used include adhesives, cleaning materials, cosmetic additives, construction materials, food additives, fragrances and detergents.

This data is the only timely source of market trends for 28 market and functional specialty chemical segments, the ACC says. Chemistry directly touches over 96% of all manufactured goods, and trends in these specialty chemical segments provide a detailed view of trends in manufacturing. The data also sheds light on how various consumer end-use markets are performing compared to others in the marketplace.

As MRC informed earlier, Specialty Chemicals Market Volume Index, a new tool created by the American Chemistry Council (ACC) trade group, remains on a soft note, falling 0.4% in May from the previous month, on a three-month-moving average (3MMA). The index has seen steady declines since December as weakness in oilfield chemicals and a few other segments weighed on overall volumes. Of the 28 specialty chemical segments monitored, 11 expanded in May, 14 declined, and three were flat.

Shanghai Wujing to shut acetic acid plant in China for maintenance

MOSCOW (MRC) -- Shanghai Wujing is likely to shut its acetic acid plant for a brief maintenance turnaround, as per Apic-online.

A Polymerupdate source in China informed that the plant is planned to be taken off-stream in the first half April 2016. It is likely to remain shut for around 5 days.

Located in Shanghai, China, the plant has a production capacity of 500,000 mt/year.

The primary use of acetic acid is the production of vinyl acetate monomer (VAM), which is the feedstock for ethylene-vinyl-acetate (EVA).

We remind that, as MRC wrote previously, Jiangsu Sailboat Petrochemical is in plans to start a new EVA/low density polyethylene (LDPE) swing plant in April 2016. Located at Lianyugang in Jiangsu province of China, the plant has a production capacity of 300,000 mt/year.

Arsenal Capital buys more PU foam businesses, creating new company

MOSCOW (MRC) -- Arsenal Capital Partners has made three more polyurethane foam acquisitions and will combine them into a single business, said Plasticsnews.

The most recent acquisitions made by New York-based Arsenal are:

Pacific Urethanes LLC of Ontario, Calif.
A majority stake in Elite Foam Inc. of Newnan, Ga.
The foam production assets of Hickory Springs Manufacturing Co. of Conover, N.C.

Arsenal will combine the three assets into a new unit called Elite Comfort Solutions, which will have 10 specialty foam production sites nationwide. The acquired businesses make PU foam for bedding, home furnishings, furniture, medical goods and packaging.

Arsenal officials announced the recent moves in a March 28 news release. No purchase prices were disclosed. Arsenal now has made 19 plastics-related acquisitions since 2012.

Earlier in March, Arsenal’s Accella Performance Materials unit bought the spray foam division of Quadrant Urethane technologies of Dallas. In late February, Arsenal acquired Flow Polymers LLC, an additives maker based in Cleveland.

As MRC informed earlier, Polymer Solutions Group (PSG), part of US private equity group Arsenal Capital Partners, has acquired Flow Polymers, a leading specialty additives and dispersions producer. Flow Polymers was sold by Geneva Glen Capital, another US private equity firm, for an undisclosed sum.

Arsenal Capital Partners is a leading New York-based private equity firm that invests in middle market healthcare and specialty industrial companies. Arsenal makes investments in sectors where the firm has significant prior knowledge and experience. Arsenal targets businesses that have the potential for further value creation, and works closely with management to accelerate growth by leveraging the firm's industry focus and operational improvement capabilities.

Iran lack of storage access limits crude exports to European refiners

MOSCOW (MRC) -- Iranian oil flows to Europe have begun to pick up from a slow start after sanctions were lifted in January, but trading sources say a lack of access to storage part-owned by Tehran's Gulf Arab rivals now looms large on a list of obstacles, said Hydrocarbonprocessing.

European countries accounted for more than a third of Iran's exports, or 800,000 bpd, before the European Union imposed sanctions in 2012 over its nuclear program. Since January, Tehran has sold 11 million bbl to France's Total, 2 million bbl to Spain's Cepsa and 1 million to Russia's Litasco, according to Iranian officials, traders and ship-tracking data. Some of these cargoes will not arrive in Europe before mid-April.

With most US sanctions still in place, there is no dollar clearing, no established mechanism for non-dollar sales and banks are reluctant to provide letters of credit to facilitate trade. A new initiative by international ship insurers has helped, but traders say exports have been hampered by Iran's unwillingness to sweeten terms for potential European buyers.

Iranian oil officials and international traders have also grown increasingly concerned by a delay regaining access to storage tanks in Egypt's port of Sidi Kerir on the Mediterranean coast, from where it supplied up to 200,000 bpd to Europe back in 2011. Four traders with western oil majors and major trading houses told Reuters Iranian officials have notified them Iran cannot get access to the SUMED-owned terminal for now and so could not supply them with crude from there.

Sidi Kerir, which connects to the Red Sea via pipelines also owned by SUMED (Arab Petroleum Pipelines Company) allows Iran to deliver oil much more quickly than if it goes by ship from Iran's Kharg Island terminal, which takes nearly a month. As global crude output has outpaced consumption, storage space has become increasingly prized, in sharp contrast with 2011, when Iran could lease tanks in Sidi Kerir and the world struggled to produce enough oil to meet demand.

Other major pre-sanctions buyers in Europe like Shell , Italy's Eni or traders Vitol, Glencore and Trafigura, have not resumed buying, traders said.

Before 2012, Iran exported around 2 million bpd of oil, most of it to Asian countries, which informally agreed to limit their collective purchases to around 1.2 million bpd once EU sanctions came into effect. The US has had sanctions on Iranian oil since the 1979 revolution in Iran.

An Iranian official said exports had risen by 900,000 bpd to 2.2 million bpd in the past two months.

As MRC informed earlier, the National Petrochemical Company (NPC) of Iran and France-based Total have signed an memorandum of understanding (MoU) to build a petrochemical complex in Iran.


Axiall Old signs liquid caustic soda distribution agreement with World Industries

MOSCOW (MRC) -- US-based Chemical company Axiall has entered into a distribution agreement with automotive and heavy-duty coolants provider Old World Industries, to market liquid caustic soda, said Chemicals-technology.

With the deal, Old World Industries expects to re-enter in the field of marketing liquid caustic soda, which is used in the production of pulp and paper, alumina, de-inking of waste paper, water treatment, and several chemicals.

Additionally, caustic soda is used as an intermediate and a reactant in processes that produce solvents, plastics, synthetic fibres, bleach, adhesives, coatings, herbicides, dyes, inks, and pharmaceuticals including aspirin.

It is also used in the soap and detergent, oil and gas, and textile industries, as well as to neutralise acidic waste streams and removing acidic elements from off-gases.

The latest deal between Old World Industries and Axiall aims to provide a distribution network for liquid caustic soda across the US by using Old World's supply chain networks and its customer service activities.

Old World Industries chemical division president Jim Bryan said: "This is yet another addition to Old World Industries' successful chemical business. "We have vast experience in the sales and marketing of Ethylene Oxide, Derivatives, and Glycols, as well as other industrial chemicals through our EPIC (Exclusive Partners In Chemistry) brand".

The company is involved in various brands such as PEAK Antifreeze, PEAK Motor Oil, BlueDEF diesel exhaust fluid, and EPIC Chemical brands.

Currently, Axiall has four plants in the US, one in Canada, and a network of terminals across North America. The company also has shares in a joint venture that owns and operates a facility making caustic soda in Taiwan.

As MRC informed earlier, Axiall Corp. and Lotte Chemical Corp. will make a combined USD3 billion capital investment in two new chemical manufacturing plants in Lake Charles, Louisiana.

Axiall Corporation is a leading integrated chemicals and building products company. Headquartered in Atlanta, Axiall has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers.