Celanese extends carbon monoxide feedstock contract in China

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, announced that its subsidiary, Celanese (Nanjing) Chemical Co. Ltd., has recently extended its long-term contract with Nanjing Chengzhi Clean Energy Co., Ltd for the supply of carbon monoxide to its chemical facility in the Nanjing Chemical Industrial Park, Nanjing City, in eastern China (Jiangsu Province), said the company.

Fiinancial details of the contract were not disclosed. Carbon monoxide is a key feedstock in the production of acetic acid. The extended contract will provide Celanese’s Nanjing facility with an ongoing and reliable supply of carbon monoxide for its 1,200 kiloton acetic acid plant.

"Chengzhi has been a valued partner of Celanese for many years, and this extension will continue to provide Celanese with a flexible and reliable supply of carbon monoxide supporting the acetyl chain in the region,” said John Fotheringham, Celanese Senior Vice President, Acetyls. “I am delighted that our close cooperation with Chengzhi has enabled Celanese to lower its manufacturing cost in China while enhancing our operational flexibility in support of our long-term growth strategy."

With manufacturing and distribution in all regions, Celanese is a leading producer of acetic acid, which is a basic chemical used in paints and coatings, adhesives, plastic bottles, food packaging and construction materials.

As MRC reported earlier, the company last raised its VAM prices for China on 22 May, 2020, by RMB350/mt.

According to MRC's DataScope report, April EVA imports to Russia dropped by 5,85% year on year to 3,050 tonnes from 3,250 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation increased in January-April 2020 by 1,55% year on year to 12,540 tonnes (12,350 tonnes a year earlier).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
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MOSCOW (MRC) -- Hyundai Motor Group and LG Chem Ltd are considering establishing an electric vehicle (EV) battery manufacturing joint venture in Indonesia, said Chemweek.

The investment size and production capacity have not been decided, the person said, declining to be identified as discussions are private.

Global automakers are moving to secure batteries in anticipation of a rise in EV sales due to government subsidies and quotas designed to cut carbon emissions.

In recent years, LG Chem has set up ventures with General Motors Co and Geely Automobile Holdings Ltd. LG Chem also supplies batteries to automakers including Hyundai and Tesla Inc.

As MRC informed earlier, LG Chem is carrying out emergency inspections at all 40 of its factories worldwide in response to two fatal accidents this month, including a leak of styrene vapour at the LG Polymers India plant in Visakhapatnam that killed at least 12 people. The inspections will be done by internal and external safety experts and will be completed by the end of June. Safety upgrades will be made as needed, but LG said any plants with questionable prospects for being made safe may be closed indefinitely. The company did not indicate if the inspections will disrupt production at the plants.

According to MRC's ScanPlast report, March 2020 estimated consumption of PS and styrene plastics dropped by 2% year on year, totalling 42,130 tonnes. The estimated consumption totalled 121,880 tonnes in the first three months of 2020, down by 2% year on year. Overall, Russian plants produced 42,790 tonnes in March 2020. Overall output of high impact polystyrene (HIPS) and general purpose polystyrene (GPPS) totalled 32,100 tonnes in March 2020. 98,390 tonnes of HIPS and GPPS were produced in January-March 2020. The decrease in Russian plants' output was 3%.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
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MOSCOW (MRC) -- Chemical production in the US fell by 2.0% in May on a three-month moving average (3MMA) basis, the third consecutive month of declines as the COVID-19 pandemic continues to put a dent into demand, reported Chemweek.

The decline softened a bit from April, which saw a 2.7% drop in production. “The lower level of activity is directly related to supply chain disruptions and continued restrictions across much of the country during May,” the American Chemistry Council (ACC) says.

All segments except plastic resins posted production declines in May, according to ACC. Production of some particular materials did increase, however, including products tied to personal protective equipment (PPE) supply chains and disinfectants.

One a year-on-year (YOY) basis, US chemical production fell 6.0% in May, the 12th consecutive month of YOY declines, ACC says.

As MRC reported earlier, Russia's output of chemical products rose in May 2020 by 4.4% year on year. Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May.
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MOSCOW (MRC) -- Belarusian refineries will buy 1.58 million tons of oil from Russian companies in July, according to Hydrocarbonprocessing with reference to Belarus state oil company Belneftekhim's statement.

Belneftekhim said almost 1.5 million tonnes would be supplied through oil pipelines, 85,000 tonnes by rail, and the remainder through tanker deliveries.

As MRC informed earlier, two workshops shut down at the Polymir plant, which is part of Naftan, on June 16, due to a decrease in the supply voltage. As a result of the reduction in ethylene production, the technological process was partially stopped in workshop No. 105 (production of propylene) and in workshop No. 402 (production of polyacrylonitrile fiber). There were no injuries.

According to ICIS-MRC Price report, Polymir was forced to shut its second low density polyethylene (LDPE) line on 16 June because of power surges, but production had been resumed by 18 June. The short outage at the domestic producer did not affect the balance of the local market partially because of higher export sales.
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MOSCOW (MRC) -- BASF and one of the leading automotive manufacturers in China, Guangzhou Automobile Group New Energy Co. Ltd. (GACNE), a subsidiary of GAC, signed a cooperation agreement earlier this week in Guangzhou, China, to further strengthen their strategic partnership to explore digital coatings solutions for the automotive industry, said the company.

Launched in China for the first time, the new platform will support paint shops to improve quality and enhance efficiency. "We are excited to embark on the path of digitalization with GACNE, an innovative and pioneering partner,” said Patrick Zhao, Senior Vice President, BASF Coatings Solutions Asia Pacific. “Digitalization is one of BASF’s strategic levers and has become an integral part of our coatings business. With this collaboration, we not only create a new customer experience for GACNE, but also grow our mutual business through new business models and eventually enhance our overall competitiveness and efficiency."

Under this cooperation agreement, BASF will provide a digital platform that enables GACNE to digitalize and integrate initially scattered data, and to measure its data readiness and maturity through data analysis. BASF’s digital platform will be customized to focus on improvement of GACNE’s paint shop operations and decision making with more efficient ways of data reporting, processing and analyzing. BASF experts have provided training sessions to GACNE’s users of the platform. Further modules and solutions can be added and customized based on GACNE’s feedback and evolving digital needs.

"Digitalization and smart manufacturing are key concepts when we designed and built the plant. Digitalization level will be a KPI to evaluate our company’s performance,” said Xi Zhongmin, Vice General Manager of GACNE. “BASF has been GACNE’s trusted partner since 2018, and we are the first OEM to utilize total-layer coating solution from BASF. I look forward to further cooperation in new technologies and other digital solutions between the two companies."

Since starting their collaboration, BASF has supported GACNE to launch its paint shop and provided technical expertise, including comprehensive color development and paint shop management. BASF has become the 100% coating supplier of GACNE since then, including e-coat, primer, basecoat and clear coat. The portfolio also includes digital solutions for quality and efficiency improvement of the whole coating process, based on the automotive industry’s challenges and digital needs.

We remind that BASF has restarted its No. 1 steam cracker following a maintenance turnaround. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.

Guangzhou Automobile Group Co., Ltd (GAC) was established in 1997 and has set up joint ventures with multiple international partners, located across Guangdong, Zhejiang, Hubei and Xinjiang in China. The company produces passenger and commercial vehicles, engines, car parts, car accessories, motorcycles and parts, and conducts research in automotive engineering technology. GAC owns two brands: Trumpchi, and Aion – an electric car brand under GACNE, one of the leading new energy vehicle manufacturers in China.
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