Demand for chemicals, petrochemicals in India to grow 9% per annum

MOSCOW (MRC) -- India’s Chemicals and Fertilisers Minister D V Sadananda Gowda on Tuesday said the demand for chemicals and petrochemicals is expected to rise 9% annually, and the size of the industry is likely to grow to USD300 billion by 2025, according to Kemicalinfo.

Addressing a conference organised by industry body Assocham, the minister said the Indian chemical industry, over the last one-and-a-half decade, has transformed from manufacturing principal chemicals in a highly regulated market to being a mature industry in a liberalised economy.

Majority of the chemicals produced in India comprise either upstream products or intermediates, which go into a variety of manufacturing applications including fertilisers, pharmaceuticals, textiles and plastics, agrochemicals, paints and dyes, he said, adding that end-use industries like automotives, electronics, packaged food and textiles are driving Indian specialty chemicals industry.

‘Strong domestic demand, coupled with huge investments by domestic and foreign players, is making the industry scale new heights,’ Gowda said.

The minister said rising disposable income, median age of population, urbanization and growing penetration, and demand from rural markets are the factors contributing to growth of chemical and petrochemical sector.

‘As production and consumption shift towards Asian and Southeast Asian countries, the demand for chemicals and petrochemicals is expected to grow at 9 per cent per annum, much faster than the expected GDP growth rate, to reach USD300 billion by 2025,’ Gowda said.

Gowda said the size of the industry was USD163 billion in 2018, contributing 13.4% of manufacturing GVA (gross value added) and 2.4% of national GVA. The sector employs 2 million people.

He said Indian chemical and petrochemical industry plays an important role in all sectors of the economy.

Stating that successive governments have taken various initiatives to promote this sector, the minister highlighted that licensing requirements, except for hazardous chemicals and a few special drugs, have been removed.

Entrepreneurs are allowed to set up chemical industries following the Industrial Entrepreneurs’ Memorandum (IEM) route and under the automatic route, 100% FDI is allowed for all chemicals, except hazardous ones, he said.

Gowda said the peak rate of customs duty on most chemicals has been brought down to 7.5%, while the Petroleum Chemical Petrochemical Investment Regions (PCPIR) policy has been introduced to boost the development of chemicals and petrochemicals investment regions.

‘I certainly believe that the Indian chemical and petrochemical sector holds a potential to emerge as global manufacturing hub. We are aware of the need to support the cluster based development of the sector through provision of world class infrastructure and logistics. The department is working on it,’ he said.

Speaking at the event, Niranjan Hiranandani, President ASSOCHAM, said, “The Indian chemical industry presents excellent potential and is expected to register a growth of 8-9% in the next decade and is expected to double its share in the global chemical industry to about 6% by 2021. The Indian chemical industry has a significant potential for growth, provided some of the key drivers are focused upon like Securing Feedstock, Right Product Mix and M&A opportunities.”

“The Government could continue to work toward the ease of doing business in India by streamlining regulations and processes and by issuing clear directives on future regulatory requirements. I am sure the insightful views from the experts would further contribute to the initiatives of the Government on making India a global manufacturing hub,” he added.

Jai Shroff, Global CEO, UPL Group, said, “India has ample manufacturing potential for chemicals sector which needs to be leveraged to substitute imports and promote exports. For India, to emerge as a dominant leader in the sector, research and development and creation of centres of excellence need to be promoted and encouraged.

Speaking at the session, Janardhanan Ramanujalu, Vice President & Regional Head- South Asia & Australia, SABIC, said, “All of Industrial Revolution 4.0 ingredients like precision manufacturing, digital capability, talent availability and supportive policies makes India best suited to be the global manufacturing hub”.

Adnan Ahmad, Region Head – India, Clariant Chemicals (India) Limited, said, “India’s position as a global manufacturing hub contender was always a given. The only question was when we would take across the tipping point. Now we are seeing opportunities for the Specialty Chemicals Industry like never before, with the local demand expected to grow exponentially and global industries looking to de-risk their Supply Chain dependency on China. It is now time for us to act and move into a role that was destined to be ours, as a Global Manufacturing Hub for chemicals.”

As MRC reported earlier, Clariant Chemicals Limited., an Indian subsidiary of specialty chemicals giant Clariant AG, has announced its results for the second quarter ended September 30, 2020. The company reported a net profit of Rs 191.8 crores for the period ended September 30, 2020 as against net profit of Rs 2.7 crores for the previous quarter. Net sales grew 40% to Rs 180.8 crores during the period ended September 30, 2020 as compared to Rs 129.0 crores during the previous quarter. The company reported a net profit of Rs 191.8 crores for the period ended September 30, 2020 as against net profit of Rs 9.2 crores for the prior-year quarter.

We remind that in October 2020, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

Propylene is the main feedstocks for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- BASF has completed the first phase of its methylene di-para-phenylene diisocyanate (MDI) expansion project in Geismar, Louisiana, starting up a new synthesis unit and shutting down an older unit, said Chemweek.

The immediate increase in MDI production capacity will be “limited,” the company notes. The second phase of the project, scheduled for completion in the second half of 2021, will expand several upstream units, allowing the Geismar complex to increase its overall MDI output by about one-third, says BASF. A potential final phase, which BASF aims to complete in the mid-2020s, would bring MDI capacity at Geismar to roughly 600,000 metric tons/year, the company says.

MDI is a polyurethane feedstock. Major producers in North America are BASF, at Geismar; Covestro, at Baytown, Texas; Dow, at Freeport, Texas; and Huntsman, at Geismar.

We remind that BASF restarted its No. 1 steam cracker following a maintenance turnaround 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 polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

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.

MRC

MOSCOW (MRC) -- During the summer of 2020, monthly exports of liquefied natural gas (LNG) from the United States were the lowest in 26 months but have since increased, and in November, estimated LNG exports surpassed the previous record set in January 2020, said Hydrocarbonprocessing.

In the December 2020 Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) estimated that November U.S. LNG exports reached 9.4 billion cubic feet per day (Bcf/d), which was 93% of peak LNG export capacity utilization.

Several factors contributed to the increase in U.S. LNG exports in recent months. International natural gas and LNG prices increased in Asia and Europe because global natural gas demand increased after COVID-19 restrictions were eased and global LNG supply fell due to unplanned outages at LNG export facilities in Australia, Malaysia, Qatar, Norway, Nigeria, and Trinidad and Tobago. In addition, 2.7 Bcf/d of new U.S. LNG export capacity was added in 2020, and several U.S. LNG terminals affected by hurricanes and annual maintenance have resumed LNG shipments.

As MRC informed earlier, Venture Global LNG announces that KBR has been awarded the EPC contract as lead contractor for Phase 1 of the Plaquemines LNG export project currently under development in Plaquemines Parish, Louisiana. KBR will integrate highly modularized, owner-furnished equipment for the 10 MMtpy nameplate facility, identical to the systems being successfully delivered and installed at Venture Global LNG’s Calcasieu Pass project.

As MRC informed earlier, KBR and Johnson Matthey (JM), announced that they have signed an alliance agreement to license a groundbreaking ammonia-methanol co-production process that combines their market-leading ammonia and methanol technologies.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

MOSCOW (MRC) -- Borealis and Bionerga announce the joint commissioning of Biostoom, a new waste-to-energy plant constructed and operated by Bionerga in Beringen, Belgium, said the company.

The long-term agreement between Borealis and Bionerga, a Belgium-based specialist in recovering energy from waste, has enabled Borealis to move closer to its goal of sourcing 50% of its total electricity consumption from renewable sources for operations in its major business areas by the year 2030. The new Biostoom Beringen facility is allowing Borealis to reduce the amount of natural gas used in operations by supplying steam and electricity recovered from processing of non-recyclable waste collected from nearby communities. The first electricity delivery took place in August, and the first steam was delivered in October 2020.

The new waste-to-energy plant processes non-recyclable wastes to generate steam and electricity, allowing Borealis to reduce the amount of natural gas used in operations at Beringen. "The Biostoom Beringen project is the perfect example of re-inventing for more sustainable living: if materials are not recyclable, recovering energy is the best alternative for waste that would otherwise be landfilled," said Martijn van Koten, Borealis executive vice president, Base Chemicals & Operations in a statement on Tuesday. “The fact that this project is sourcing non-recyclable waste from adjacent communities further strengthens the sustainability aspect," he added.

Details about project costs or capacities were not disclosed.

As MRC informed earlier, the light-feed 625,000-metric tons/year Borealis steam cracker at Stenungsund, Sweden, is remained shut as of early December after a fire broke out at the plant in May. And there are no update on this cracker's restart. The cracker has been under force majeure for over half a year after the blaze at the plant on 10 May, which was subsequently brought under control the following day.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- LyondellBasell, the world’s leading licensor of polyolefin technologies, announced that the Amur Gas Chemical Complex project, being implemented by SIBUR Holding PJSC, the largest integrated petrochemicals company in Russia, has selected LyondellBasell’s Spheripol technology for a new facility, said the company.

The process technology will be used for a 400 KTA polypropylene unit to be built in Svobodny, Amur region, Russia. “We are honored that SIBUR has again opted to utilize the Spheripol technology for its Amur GCC project in the Russian Far East,” said Jim Seward, senior vice president of research and development, technology and sustainability at LyondellBasell. Seward added: “The process robustness and CAPEX effectiveness of the Spheripol process allows SIBUR to create benchmark polymers on a sustainable basis."

"LyondellBasell's technology will help to achieve the highest level of diversification at Amur GCC and expand SIBUR's mostly homopolymer-oriented portfolio with a few PP random copolymers by adding a wide array of other copolymers, e.g. high-impact polypropylene-ethylene copolymers, and thermoplastic grades", said Pavel Lyakhovich, Management Board Member and Managing Director of Basic Polymers Division at SIBUR. Total design capacity of AGCC is 2,700,000 KTA of PE and PP products.

Spheripol is the benchmark PP process technology with more than 30 million tons of licensed capacity. The latest fifth generation Spheripol technology includes process improvements that further maximize operational efficiency. The plant will commence operations using Avant ZN catalyst.

New licensees can take advantage of LyondellBasell’s in-house expertise of continuous production improvement, sustainable product development and catalyst knowhow, by optionally joining our Technical Service program.

According to MRC's DataScope report, Russian companies increased external purchases of polypropylene in November, imports reached 20,400 tonnes against 17,900 tonnes a month earlier. Thus, overall PP imports into Russia reached 202,000 tonnes in January-November 2020, compared to 167,400 tonnes a year earlier. Purchasing of all grades of propylene polymers in foreign markets increased, with homopolymer PP imports accounting for the most noticeable rise.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe. LyondellBasell sells products into more than 100 countries and is the world's largest producer of polymer compounds and the largest licensor of polyolefin technologies.
MRC