Celanese moves to secure sustainability of acetate tow business

MOSCOW (MRC) -- Celanese (Dallas, Texas) is to increase its prices by up to 5% worldwide for all acetate tow product grades, saying the rise is to help secure the sustainability of the business segment, reported Chemweek with reference to the company's statement.

The price hike is effective for orders shipped on or after 1 January 2021 or as contracts otherwise allow.

“To aid in securing sustainability of the Celanese acetate tow business, it is paramount that we increase prices and offset declines,” says Marcel van Amerongen, vice president/acetate tow at Celanese. The company is committed to its acetate tow business “as we continue to invest in manufacturing assets, innovation, and service,” he says. This is being done to position Celanese as the strategic partner of choice for its customers, he adds.

In July the company’s acetate tow segment reported sales of USD127 million in the second quarter of this year, down 23% year on year (YOY) from USD164 million. Adjusted EBIT was USD64 million, down 10% YOY from USD71 million.

Last year it also said it had taken steps to strengthen its competitive position in the acetate tow market by lowering raw materials cost, reducing fixed costs, and aligning with anticipated industry demand trends, such as optimizing production across all acetate tow manufacturing locations, as well as investing in manufacturing operations.

Acetate tow is used mainly in the manufacturing of cigarette filters, as well as for insulation, packaging, and nonwovens applications.

As MRC informed earlier, Celanese Corporation has announced an increase in its September prices of vinyl acetate-based emulsions sold in the Americas. The price increases below are effective for orders shipped on or after 15 September 2020, or as contracts otherwise allow, and are incremental to any previously announced increases. Thus, prices of EVA emulsions rose, as follows:

- by USD0.03/lb - for the USA and Canada;
- by USD66/mt - for Mexico & South America.

According to MRC's DataScope report, June EVA imports to Russia fell by 22,5% year on year to 2,940 tonnes from 3,800 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-June 2020 by 8,16% year on year to 17,440 tonnes (18,980 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.

European chlorine output falls in August, stocks of caustic soda rise

MOSCOW (MRC) -- Monthly chlorine production in Europe fell 7.5% year on year (YOY) in August to 768,719 metric tons, with daily output of 24,797 metric tons also down 3.5% compared to July’s equivalent figure of 25,686 metric tons, according to Chemweek with reference to the latest figures from Euro Chlor, the European chlor-alkali industry association.

The August daily figure is 7.5% lower than the 26,798 metric tons/day produced in the prior-year period. Production capacity utilization in August fell to 78.1% from 85.4% a year earlier, and was 2.8% lower than in July, it says. For the first six months of 2020, chlorine production totaled 4.54 million metric tons, down 4.5% YOY, with capacity utilization 5.2% lower YOY at 78.6% for the half-year.

Caustic soda stocks in Europe for the month of August were 8.4% higher than in July at 262,649 metric tons, and almost flat YOY at 262,649 metric tons, according to the association.

Euro Chlor’s figures are drawn from the EU-27 countries plus Norway, Switzerland, and the UK. The association represents 38 companies producing chlorine in 19 countries.

As MRC reported earlier, August production of sodium hydroxide (caustic soda) in Russia were 99,200 tonnes (100% of the basic substance) versus 89,400 tonnes a month earlier, said MRC analysts. Russia's overall output of caustic soda totalled 837,600 tonnes in the first eight months of 2020, down by only 2% year on year.

Covestro opens PC films line in Thailand

MOSCOW (MRC) -- Covestro has launched a new production line for polycarbonate (PC) films in the Map Ta Phut Industrial Estate in Thailand, according to German major's statement on Wednesday.

With the new capacity, the company aims to meet the rapidly growing demand in the Asia-Pacific region and to strengthen its own position as a market leader in this field. The films are mainly used in the automotive, telecommunications, medical technology and ID document sectors. The project is the first step in a global expansion of Covestro's plastic film production. The total investment of more than 100 million euros also includes an expansion of the associated infrastructure and logistics to shorten delivery times. More than 100 new jobs will be created worldwide.

“With this additional production line using state-of-the-art technology, we are investing in future growth in the Asia-Pacific markets, which are very important to us," says Sucheta Govil, Chief Commercial Officer (CCO) at Covestro. "At the same time, we are responding to the rapidly growing demand for specialty films in this region and are supporting the expansion of promising technologies and industries.”

Dr. Thorsten Dreier, Global Head of Specialty Films, sees advantages in customer service: "The new production line is important to us because it enables faster market launches and at the same time expands our market access in Asia-Pacific. Our most important goal is to intensify our cooperation with customers in the region and to increase our efficiency. We intend to drive growth in the plastic film business with innovations and a stronger customer focus.”

Covestro has been operating a production facility for specialty films in Thailand since 2007. The range comprises polycarbonate films from the Makrofol® range and Bayfol® products made from polycarbonate blends. The new line is equipped with the latest technology and operates very efficiently.

As a further measure in the investment program to expand film production, Covestro has already converted a coextrusion film plant in Guangzhou, China, for the future. At the South Deerfield site in the USA, the efficiency and quality of film production was also improved. The next milestone will be the expansion of films production in Dormagen, where the company is currently building up new coextrusion capacities. This project is scheduled for completion by the end of 2020.

As MRC reported earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market reached 58,000 tonnes in January-July 2020, up by 22% year on year (47,500 tonnes).

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2019 sales of EUR12.4 billion, Covestro has 30 production sites worldwide and employs approximately 17,200 people (calculated as full-time equivalents) at the end of 2019.

Opportunities and risks for the chemical industry in a post-pandemic world

MOSCOW (MRC) -- IHS Markit held an executive briefing on Tuesday in a virtual format on the occasion of the European Petrochemical Association (EPCA) annual meeting. The webinar examined opportunities and risks for the chemical industry in the post-pandemic world, said Chemweek.

Mark Eramo, global vice president/oil markets, midstream, downstream, chemicals at IHS Markit, set the scene describing COVID-19 as “one of the most impactful events in modern history” that had caused a “head-on collision between the personal and business world.” Planning a path forward “has never been more difficult, given the unprecedented level of complexity,” Eramo said.

Dan Evans, vice president and global head of refining and marketing at IHS Markit, highlighted the pandemic’s dramatic impact on the upstream oil and downstream refining sectors, including a worsening oversupply of petroleum products. He said that demand for refined products in 2025 will be at least 4 million b/d (MMb/d) lower than pre-COVID expectations, but that a lot of new refining capacity is due to come onstream in the intervening period.

Refining margins in 2022-23 will still be as weak if not worse than this year, according to Evans. As a result, at least 3 MMb/d of refining capacity will likely be closed worldwide in the next 3-5 years, more than half this figure in Europe, he said. “We have entered a new era of overcapacity in the refining industry,” Evans said.

Refining companies will seek greater integration with petrochemical production to address oversupply, Evans said. But this strategy has risks as well as opportunities. “The risk is that too many refiners do it, which could lead to overcapacity in the petrochemical space,” he said. IHS Markit forecasts that petrochemical yields from refineries could increase from 25-40% to 40-80% as integration increases.

Duncan Clark, vice president/aromatics and fibers at IHS Markit, provided an analysis of base chemical scenarios, covering six key products: ethylene, propylene, methanol, chlorine, benzene, and para-xylene. Clark cited an IHS Markit estimate that worldwide demand for base chemicals will be lower by 8 million metric tons (MMt) in 2020 than pre-pandemic forecasts. “We’re losing one and a half years of demand growth as a result of this pandemic,” Clark said.

Base chemicals were already headed for overcapacity before COVID-19 due to numerous capacity additions, according to IHS Markit. The pandemic “couldn’t have come at a worse time because these products were already facing overcapacity,” Clark said. “These markets will be under pressure for the next five years." IHS Markit is expecting “a poorer base chemicals performance in Western Europe than in the rest of the world” this year, largely linked to an anticipated slump in regional GDP, which has caused a significant downturn in demand for durables, with the automotive sector particularly hard it, Clark said.

IHS Markit estimates that worldwide ethylene demand will increase 0.9% in 2020 but decline 4.4% in Western Europe. It expects worldwide methanol demand to decline 4.4% this year but drop 15.0% in Western Europe. And it predicts benzene demand will decrease 4.7% worldwide in 2020 but fall 10.2% in Western Europe. These figures contrast with average annual growth of 4% for base chemicals worldwide in the last 10 years.

Adam Bland, executive director/solvents and surfactants at IHS Markit, highlighted one product that has clearly benefited from the pandemic, isopropyl alcohol (IPA), which is used to make cleaning and disinfectant products including hand sanitizer and as a processing solvent in the production of pharmaceuticals. “IPA is at the forefront of the battle with COVID-19,” said Bland. IHS Markit forecasts a 12% worldwide increase in IPA demand in 2020. As a result, about 250,000 metric tons of additional IPA will be used in medical markets this year.

Bland expects “a significant pullback in IPA demand in 2021,” assuming a recovery from the pandemic next year. However, he anticipates that widespread use of hand sanitizers will continue. As a result, there will be high demand for IPA “for many years to come,” Bland said. The overall economy will be the main indicator of the specialty chemical industry’s recovery from the crisis, according to Bland. IHS Markit forecasts that consumption of specialties will increase at a compound annual growth rate (CAGR) of 3.3% in 2022-25 with the Chinese specialties market achieving a CAGR of 5% but Western Europe expanding at a CAGR of just 1-2%.

Specialties, with their many applications and strong innovation, can also help the recovery of the world economy, Bland says. “The ‘new normal’ will present opportunities for growth,” he said. “Specialty chemicals will allow us to achieve more for less and, with foresight and innovation, we can enter a golden age of specialty chemicals."

Mukta Sharma, managing director/chemical consulting at IHS Markit, noted that worldwide chemical demand is forecast to decline in 2020 for the first time since 2008. Growth will average just more than 3%/year in the coming years, she said.

Sharma also highlighted the impending overcapacity in base chemicals. More than 140 MMt of annual capacity is set to be added in the next five years, from projects that had been sanctioned before the pandemic, she said. However, demand growth is forecast to be much lower than the capacity growth, at less than 100 MMt over the same period, according to IHS Markit. “This adds up to a rather prolonged period of lower earnings overall for the chemical industry,” Sharma said.

The situation during this challenging period will be complicated by the need to deal with likely price volatility and manage the energy transition and shift to greater circularity, she said. Circularity remains “high on the industry agenda,” Sharma said. The development of new plastics recycling technologies, particularly chemical recycling, is essential to establish a circular economy. “There are obstacles to overcome in terms of commercialization and scale, but chemical recycling would provide an elegant solution,” Sharma said.

As MRC informed earlier, European petrochemical industry faces short-term and longer-term challenges caused by or exacerbated by the COVID-19 pandemic. Speakers on Monday at the European Petrochemical Association’s (EPCA) 54th annual meeting, being held in a virtual format, said the crisis had been a learning experience for the industry.

According to MRC's DataScope report, Russian companies significantly raised their purchasing of PP in foreign markets in August partially because of a major increase in demand, imports were 21,200 tonnes versus 17,200 tonnes a month earlier. Thus, overall PP imports into Russia reached 143,200 tonnes in January-August 2020, compared to 120,100 tonnes a year earlier.


Port of Antwerp launches search for investors in circular economy hub focused on chemicals sector

MOSCOW (MRC) -- A potential circular economy hub aimed specifically at the chemical and manufacturing industries is being studied by Port of Antwerp, Belgium, reported Chemweek.

The proposed site, named NextGen District, covers 88 hectares. Port of Antwerp says it is launching a consultation phase to find investors “within the circular processing and manufacturing industry who intend to further develop the site in order to contribute to the transition to a climate-neutral society.”

The port says the consultation “specifically concerns candidates with core activities within the circular processing industry (primarily chemical processes) and the manufacturing industry.”

The area was formerly used by General Motors, with the port authority describing it as one of the last remaining available large sites in the port close to Europe’s largest chemical cluster. The industrial site is planned to be where end-of-life products will be reused, circular carbon solutions researched, and experiments conducted with renewable energy, it says. Room will also be allocated for relevant startups and “free-standing plots of various sizes aimed at chemical and industrial players.”

Efforts will be made to reduce carbon dioxide emissions and transition to alternative energy sources through projects such as generating renewable energy, using residual heat, and importing, storing, and converting hydrogen into building blocks for the chemical sector, it says.

“Port of Antwerp is home to the largest integrated cluster in Europe. We intend to strengthen, anchor, and support this cluster in the transition to a carbon-neutral and circular economy,” says Jacques Vandermeiren, the port’s CEO. “The energy transition and the circular economy were at the top of the agenda before the pandemic, and still are today,” he says.

As MRC informed before, Russia's output of products from polymers grew in August 2020 by 4.1% year on year. However, this figure increased by 1.9% year on year in the first eight months of 2020, reported MRC analysts. According to the Russian Federal State Statistics Service, August production of unreinforced and non-combined films rose to 126,300 tonnes from 118,200 tonnes a month earlier. Output of films products grew in January-August 2020 by 8.3% year on year to 863,200 tonnes.