Petrochemical glut
Propylene price falls on weak demand, excessive output in China
TOKYO -- The Asian price of a key petrochemical material, propylene, has slipped amid tepid demand and overproduction in China.
The East Asian spot price of the main feedstock for polypropylene stood at around $880 a ton, down 16% from a recent high in May.
Propylene output in China was up about 9% in the January-May period compared with the same period a year earlier. Due to cost reasons, more facilities turned to propane, instead of naphtha, as a feedstock.
The price of propylene has slid below that of ethylene, another key material. The price difference with their feedstock naphtha remained at around $600 a ton for ethylene but was only about $400 for propylene.
Propylene production capacity is expected to keep growing in China, reaching 36.9 million tons a year in 2019, up about 90% from 2013, according to an estimate by Japan's Economy, Trade and Industry Ministry.
(Nikkei)
The Ministry of Commerce issued the No.29 Announcement, publishing the preliminary decision of the anti-dumping investigation of the imported Methyl Methacrylate originating in Singapore, Thailand and Japan on July 24, 2015.
The Ministry of Commerce affirmed that dumping was found in Methyl Methacrylate imported from Singapore, Thailand and Japan, causing the Chinese domestic industry the substantive and severe damage. MOFCOM decided to implement the temporary anti-dumping measures by the means of cash deposit guarantee. According to the preliminary decision, the importers should provide relevant cash deposit to the Chinese customs according to the dumping margin (6.8%-34.6%) of all companies defined in the preliminary decision when importing the products from the above sources.
This product is listed in the Customs Tariff of Import & Export Commodities of PRC: 29161400. Products other than Methyl Methacrylate under this HS code are beyond the scope of this investigation.
Source: MOFCOM China July 28 2015
Victrex Announcement :
Acquisition of Kleiss Gears
Victrex is pleased to announce the acquisition of Kleiss Gears, a US based polymer gears' manufacturer, for approximately $6m (£3.8m) in cash.
Kleiss has over 20 years' experience of unique design and precision moulding capability in gears, and will benefit from Victrex's materials know-how, existing customer relationships and global commercial reach. Kleiss has early stage commercialisation of PEEK gear programmes, alongside the rest of its mainly industrial focused gears business.
The acquisition is in line with Victrex's strategy of moving further downstream and investing in growth acceleration opportunities for its pipeline projects. It offers the opportunity to accelerate Victrex's PEEK gear proposition to the automotive industry, in line with our aim to double the amount of PEEK volume in cars over the medium term.
For its 2014 financial year, Kleiss had revenues of approximately $4m and employed 26 people.
Outlook
For the year as a whole, whilst challenges continue in the Oil & Gas market and in improving Invibio's performance, our overall momentum remains positive and we still expect to fully overcome the impact of foreign currency. Consequently, and reflecting our balanced portfolio, Victrex remains well positioned to deliver profit progress over the full year.
Cash generation remains healthy and there have been no significant changes to the Group's financial position since our interim results announcement.
Additionnal comments:
Current global PEEK market is about 5500 Tons/year of which roughly 3000 tons are supplied by Victrex.
Peek demand grows +7% CAGR and is driven by Metal and Polymer substitution.
In its May2015 Capital Day presentation to investors, Victrex mentioned that the potential adressable market for PEEK was of ~ 80 000 tons.
Victrex has in its innovation pipeline:
2 major R&D programs with sales potential 20-50 Mi £ within 2 to 5 years (=> 550 Tons PEEK for each)
6 mega R&D programs with sales potential >50 Mi £ within 2 to 5 years (=> 775 Tons PEEK for each)
1 mega R&D program with sales potential >50 Mi £ with a time frame > 5 years (=> 775 Tons PEEK for each)
==> Gears for Auto is one of the 2 short term "Major Programs" of Victrex for which Victrex decided to go downstream with Kleiss acquisition
Successful start of production: Evonik expands leading market positions in C4 products
Essen/Antwerp. Evonik Industries has strengthened its leading position in C4-based products and has successfully, and on time, put into operation new production plants in Antwerp (Belgium). Also in the Marl Chemical Park (Germany), the C4 capacities are being increased. For this, the company has invested a total amount in the three-digit million range (Euro) in the two sites.
The new plants result in an expansion of capacities for butadiene in Antwerp, for the plasticizer alcohol Isononanol (Marl) as well as for the antiknock agent MTBE (Marl and Antwerp). According to market analyses, the global demand for these products increases by two to five percent per year.
"By expanding our C4 capacities and the necessary and important investments into the supply of raw materials at our sites, we are sustainably strengthening our market positions. At the same time we are supporting our customers’ growth plans in Europe and worldwide," said Klaus Engel, Chairman of the Executive Board of Evonik.
With long-term supply contracts, Evonik has sustainably ensured the raw material supply for the operation of the new plants. As a technology leader, Evonik has also for the first time made FCC- C4 material flows from refineries usable. This demonstrates Evonik’s technological excellence on C4 and is an important contribution to a sustainable production.
Evonik has been a globally leading provider of C4 - based products such as butadiene, MTBE, isobutene, 1-butene, INA (Isononanol) as well as 2-PH (2-propylheptanol) and DINP (diisononylphthalat) for a long time. For this, Evonik operates integrated large-scale plants for the processing of C4 raw materials. The group offers its customers long-term logistics competence and an excellent global service network.
With the expanded production networks in Antwerp and Marl, Evonik wants to further develop and strengthen its market positions in C4 chemistry for the long-term.
Butadiene is mainly used in synthetic rubbers, for example for the manufacturing of tires. Furthermore, there is a wide range of application for elastomer and plastics.
The anti-knock agent MTBE (Methyl -tert.-butylether) increases the octane number of fuels in petrol engines and results in an improved combustion of fuels in the engines. This way, MTBE contributes to a better air quality.
Isononanol (INA) is mainly used as an alcohol component in the manufacturing of PVC plasticizers. Plasticizers based on INA are characterized by excellent properties, both in the plastisol and thermoplastic processing.
Source: Evonik website
Please find enclosed the Arkema Coating Division Presentation from the Capital Day 2015,June 29 related to Arkema Acrylic Value Chain
I would like to highlight some key messages about Arkema strategy in Acrylics 2004-2014 and from 2015
2004-2014:
A FULL GLOBAL AND INTEGRATED ACRYLIC VALUE CHAIN BUILT OVER THE PAST 10 YEARS
- Competitive world-scale units in Europe, North America and Asia
- A downstream integration in coating materials built from scratch in 6 years Coatex (2007) Emulsions (2010) Cray Valley / Sartomer (2011)
Ambition from 2015 on
- being a global and more resilient leading integrated player
key pillars
==> Very competitive monomer base through Technology leadership, Operational excellence, Successful integration of Sunke’s assets
==> Reinforce acrylic monomers downstream through Partnerships, Geographic expansions, Innovation, Bolt-on acquisitions
Acryic Monomer Demand CAGR: Global 4-5%, NA 2-3%, EMEA: 1-2%, Asia 6-7%
Arkema expect Acrylics situation to move from current "low cycle" to "mid cycle" by 2017
Source: Arkema website