My Turn – Commentary on Global Polyolefins and Elastomers –The Shift of Basic R&D to India and China – Dr. Balaji B. Singh

Chemical Market Resources Inc. just completed the FlexPO2006 conference in Singapore. The conference was a roaring success. After the last four years of languishing in depressing North American polyolefins prospects, no innovations, all technical innovators under the surgical knife, and constant excuses from the polyolefin industry players that they have no money to attend the conferences and learn…

It was a breath of fresh air … to hold the conference in Singapore, the beautiful gateway to Asia… full of optimism, growth, innovation, and energy…

No wonder there are headlines every week like “Rohm & Haas builds a new R&D Center with 500 professionals in China: Closing facilities in Europe and cutting 300 jobs…” “ Degussa to form chemicals JV in China; Cut jobs in Europe and North America” “ Dow announces a major R&D/TS&D center in Shanghai; cuts everywhere “ ExxonMobil, GE to expand the R&D function in China; cuts in North America…”

It’s good to hear the news… After all, the organizations are still very innovative, albeit at the right places…

The opinions expressed are those of Dr. Balaji B. Singh and do not necessarily reflect those of CMR Inc, its employees, and/or management.

Chemical Market Resources completes its conference and licensing fair, FlexPO 2006

March 15-17 marked the 11th annual FlexPO 2006 conference hosted by Chemical Market Resources and co-sponsored by the Singapore Economic Development Board, Chemicals Cluster. FlexPO 2006 was held in Singapore at the Marriott Hotel. The conference covered a variety of topics ranging from new regional trends in the polyolefin end-use markets to various polyolefin technologies and licensing issues. All in all, the conference provided a solid picture of the polyolefins landscape for the year ahead.

The key technologies highlighted included a session on metallocene polypropylene technology. Four different companies presented papers on metallocene polypropylene catalysts’ role in the future development of polypropylene catalysts. Basell, ABB Lummus, and Dow highlighted the innovations in the metallocene polypropylene technology and provided an in-depth comparison between the traditional catalyst such as Ziegler-Natta, and the new metallocene-based polypropylene catalyst. The presentation was followed by an overview of single-site catalyst development for the Borstar process – a commercial catalyst developed by Borealis Polymers Oy, Finland. Dr. Malcolm Kaus, Intellectual Property Process and Global Polymers Licensing Manager of ExxonMobil delivered a paper that focused on ExxonMobil LDPE and PP technology. The catalyst discussion was concluded by CID, where their director, Dr. Walter Ramirez, explored new materials development and catalyst evaluations using high throughput experimentation vs. conventional methods.

The changing global polyolefin end-use markets and catalyst technologies were emphasized throughout the conference. Singapore Economic Development Board illustrated the role of Singapore as bridging the east-west opportunities for the global players. Chemical Market Resources, Inc. explored the role of China and India in shaping the polyolefin market. Dow delivered its perspective on flexible polyolefin opportunities in the overall Asian markets. The discussions were brought into sharp focus through a specific look at polyolefins’ future in China and India. Mr. Jianjun Yi of PetroChina highlighted polyolefins development and opportunities in PetroChina.

Dr. Bryan Chapman of ExxonMobil presented the concept, opportunities, and future impact of plasticized polyolefins mainly highlighting the introduction of, ExxonMobil’s ElevastTM line of polymer modifiers. Dr. Deen Chundury, Technical Director of Ferro Corporation and Mr. John Mathew, Customer Projects Manager Catalloy Products of Basell presented the compounder perspectives and use of raw materials in compounding, taking polyolefins to the next level. All of these issues were then again summarized and expanded on by Chemical Market Resources, Inc during a comprehensive panel discussion.

Chemical Market Resources, Inc. extends its sincere gratitude to all of you who made this year’s FlexPO such a success.

Basell announces licensing of Metocene PP technology

Basell announced that it will start licensing on a worldwide basis, its Metocene PP technology, which is used in the production of polyolefins based on single-site catalyst systems.

According to the company, Metocene PP technology can be adapted to virtually any polypropylene process and is a highly versatile technology that extends the product range of conventional PP.

Metocene PP license packages are customized to address the needs of individual licensees and can include intellectual property rights, process upgrades, technical and product information as well as customized single-site catalyst systems.

The company also says that product advantages that Basell customers are seeing with Metocene PP technology include lower levels of extractable and xylene solubles, improved transparency, and peroxide-free reactor grades. Higher processing speeds at reduced melt viscosities can also be achieved.

Comments: Concurrent with Dr. Evertz’s announcement, Basell discussed the licensing of its Metocene PP technology during Chemical Market Resources’ FlexPO2006 conference in Singapore on March 16. During the technical session of the conference, Dr. Brekner of Basell highlighted the technical and commercial advantages of Basell’s metallocene PP catalyst. The Metocene PP technology will enable licensees to further broaden and differentiate their PP product portfolio. He stated that the technology has been proven on a commercial scale and is regularly run on Basell’s assets in Italy and USA.

Basell’s licensing of its metocene PP technology will increase its awareness in the industry. The demand for metallocene and single-site polymers is forecast to grow more than 15 percent over the next 5 years. The primary advantages metallocene and single-site catalyst technology hold over conventional Ziegler/Natta processes in polyolefins production are versatility and control. The growth is driven by increased processing and performance advantages the materials bring over conventional thermoplastics and elastomers. These processing and property advantages include (1) low extractable and xylene solubles (2) improved transparency (3) improved mechanical properties such as tensile strength.

Metallocene and single-site catalyzed resins have found increasing use in non-woven applications such as hygiene, baby and adult diapers, and filtration applications. The other major application is in film and sheet. These include applications, such as packaging film, stretch film, shrink film, overwrap, trash bags, heavy-duty bags, and films for meat and dairy products, fruits and vegetables, and frozen foods.

Chemical Market Resources, inc. will soon publish a multiclient study on metallocene and single-site catalyzed-based polyolefin products. For more information, please contact us at 281-557-3320.

Borealis finalizes its decision to close the HDPE plant in Norway

Borealis announced its plans to close its HDPE plant in Bamble, Norway. Over the past few years, the plant has been losing money and it has been considered the least profitable plant in the Borealis group. The plant had an annual capacity of 110 KT per year and the closure will affect about 100 employees.

According to the company, its focus will be improving the competitiveness of its LDPE and PE plants using the cost-competitive feedstock opportunities in the region.

Comments: Borealis is one of the largest producers of polyethylene in Europe where all its production sites are located.

Packaging accounts for close to 75 % of HDPE consumption and 15% goes to building and construction, the other major consumer of HDPE. The Bamble plant catered to blow molding and roto molding markets for applications such as bottles and leisure boats.

Recently, the company announced that it was evaluating the future of the HDPE site in Norway and that closure was one possible option. Prior to this closure, Borealis’ global HDPE capacity is about 1,247 KT and accounts for about 4% of the global HDPE capacity. Norway plant accounts for only about 9% of the total HDPE capacity and hence should not have a significant impact on the company’s market share and HDPE position.

Reliance Industries to finance Jamnagar refinery through IPO

Reliance Industries’ newly created Reliance Petroleum subsidiary will sell 1.8 billion new shares, equivalent to 40% of the business’s enlarged equity, half of which will be bought by Reliance Industries. The share issue will take the form of an initial public offering (IPO) and is expected to raise $1.3 billion. The newly floated company also plans to raise Rs. 90 billion ($2 billion) through syndicated loans from leading international and domestic banks

Reliance Petroleum Limited (RPL) will set up the first export-oriented refinery-cum-petrochemicals plant here in Gujarat at an investment of Rs 27,000 crore by December 2008 to cash in on the growing global demand.

The plant will have a crude distillation capacity of 580 Kilo barrels per stream day and a polypropylene plant of 0.9 million metric tons per annum. The new plant will come up adjacent to RIL’s existing 6.6 lakh barrels per day refinery and petrochemicals complex with assets of over Rs 80,600 crore. RPL has already entered into a preliminary term sheet with certain banks and financial institutions to provide for a syndicated term loan facility for approximately Rs 6,750 crore and intends to seek additional financing through export credit agencies for approximately Rs 4,500 crore to Rs 6,750 crore.

The current global demand is 81.8 million barrels per day and it is expected to rise to 105 million barrels per day by 2020. However, there is a shortage of refinery capacity since no new refinery capacity has been added in US and Europe in the last few years, making it an opportunity for RPL to cash.

Comments: Reliance is one of the largest publicly traded petrochemical companies in India. The company has been undergoing significant expansions and injecting capital to support the growing Indian economy. Capital is being injected into various businesses including the exploration, refining, and chemicals sectors of the company. These massive expansions will be financed through an IPO. The brokerage houses and investment firms in India like Reliance Stock and the company will not have any problems in financing the projects through an IPO.

Plans to build an export-oriented polypropylene facility are embedded in the announced expansions. Reliance is the largest supplier of polypropylene in India and this expansion will allow the company to cater to the growing Asian and Indian polypropylene markets. The company has received government approval for setting up a special economic zone that will be spread over 450 acres in Jamnagar.

Rumor Mill – Singapore FlexPO2006 – Mr. Mukesh Ambani, Chairman of Reliance Industries to visit Midland, MI to meet Dow’s top management

It is rumored by reliable non-Reliance sources that Mr. Mukesh Ambani is planning on visiting Dow Corporate offices in Midland MI – not to see the famous “Tridge” on the Saginaw River, but to explore future opportunities.

Now, why would Reliance be interested in Dow?: (1) polyethylene metallocene and other advanced technologies, (2) expanding market and technology base, (3) have resources and plans..,

Why would Dow be interested in Reliance: (1) Gateway to India – starting at the top, (2) Government support – When Reliance Talks, The Indian Government Listens. (3) People have trust in Reliance as a Reliable organization that has enhanced the stockholder value year after year, (4) Only Reliance can convince the public that it is a good deal to the post-Union Carbide public.

Another cracker project planned at Yanbu

Jeddah-based Alujain Corp., part of Xenel Industries announced that it is studying plans to build a world-scale cracker project at Yanbu.

According to Marwan N. Nusair, president and COO of Alujain, the company will formulate its plans during this year. The complex will be based on either ethane or ethane/propane and will be designed to produce 1.3-1.5 million MT/year of ethylene. The final decision will depend on which feedstocks Alujain can obtain from Saudi Aramco.

Downstream plants will include polyethylene, ethylene glycol, and propylene derivatives, he adds. Total investment costs will be about $4 billion-5 billion.

Alujain is well advanced on another project, which will be built at Al Jubail, to produce more than 1 million MT/year of iso-octane, a gasoline-blending component used as a replacement for methyl tert-butyl ether. It will cost about $500 million to build. Nobel Americas will have a 25% stake in the venture and will offtake the entire output from the plant when it comes online at the end of 2008. NatPet (Yanbu), Alujain’s sister company, is currently building a 400,000 MT/year propane dehydrogenation unit and a Spheripol process polypropylene (PP) plant, licensed from Basell, at Yanbu. The start-up of that complex is due at the end of 2007. Sabic will offtake 50% of the PP and Nobel Resources (Hong Kong) will sell the balance.

Comments: The key word here is that Alujain Corp. is “studying” plans to build a world-scale cracker and derivative units.

New feedstock deals from Aramco are reported to be costing more than earlier feedstocks as the field becomes more and more crowded with ethylene projects. According to one major analyst, excluding Iran, there are at least a dozen ethylene projects underway or planned in the region, and this spells for an excess of ethylene and derivatives. Before this ethylene project, the biggest project undertaken by Alujain is the 900,000 mt/year MTBE switched to 1,000 KT/year of iso-octane output to avoid the global MTBE situation that could result when the US phases out of MTBE shortly. Iso-octane will have a ready-made market because of global octane strains and gasoline volume losses from the removal of MTBE. This project is reported to be in the range of $500mm which is roughly 1/10th the size of the ethylene project being considered. The ethylene project is therefore a big step up in project execution and unless a well-established partner in ethylene and derivatives can be snared, it is questionable that the region needs another merchant ethylene plant at this time.

There are rumors of several European and US companies searching for project positions so it may be possible for Alujain to pull this “study” into a real project category. There are also other ethylene cracker projects under study considerations so there is more competition for Aramco’s feedstocks. The future of this project depends on the partners arranged and Aramco’s commitment.

Shell & ExxonMobil consider individual expansions of their crackers in Singapore

Shell Eastern Petroleum (Singapore), a Shell subsidiary, will make a final decision in the second quarter on whether to proceed with a previously announced steam cracker at Bukom Island, Singapore. Shell is conducting “detailed engineering” work on the project and expects to bring the cracker on-stream in the second half of 2009 if it goes ahead. The company is still in discussions with the Singapore Economic Development Board (EDB) on the size of the stake that EDB will hold in the project. Shell recently awarded basic design and engineering contracts to a consortium of ABB Lummus Global and Toyo Engineering.

Petrochemical Corp. of Singapore, a joint venture between Shell and a Japanese consortium led by Sumitomo Chemical, will start up a metathesis unit to make propylene at Jurong Island, Singapore later this year. It will have a capacity of 200,000 MT/year. The projects are part of Shell’s strategy to increase its production in Asia/Pacific and the Mideast from 25% of its total in 2000 to 35% by 2010.

ExxonMobil Chemical has progressed to an “advanced study stage” on a second naphtha cracker and derivatives project in Singapore. ExxonMobil recently awarded a contract for project coordination and services to Foster Wheeler and WorleyParsons and appointed a project executive for the study.

The company is raising the ethylene capacity at its existing cracker in Singapore by 9% by the end of the year. The $2-billion plant started up in 2000 and is ExxonMobil’s biggest integrated petrochemicals production site in Asia. ExxonMobil is also scheduled to bring onstream in 2009 an 800,000-m.t./year cracker at Qangang, China, a joint venture with Sinopec affiliate Fujian Petrochemical, and Saudi Aramco.

Comments: Both Shell and Exxon cracker projects have been announced before and now have progressed to the advanced project study stage.

The question both projects must face is whether they can compete in the face of multiple expansions in China whereas the Singapore projects will serve China and a broader market in South East Asia.

Ethylene and derivatives growth in the region are holding up well and this bodes for both Singapore projects to move ahead. With the infrastructure in Singapore in place, these projects can be built for much less than 50% of the cost of grassroots facilities in China. With overall product growth exceeding 6%/year for the region for the period 2010 – 2015, it is almost a sure thing that Singapore’s derivatives will be taken up by the marketplace.

We would conclude that both projects will proceed ahead, especially since they are in such an advanced state of planning and early coordination. Feedstock costs in Singapore from existing refineries will surely be at an advantage also to those from other projects requiring essential construction of new refining facilities in addition to the ethylene assets.

Dow introduces new polyethylene product portfolio for rotational molding

Dow has introduced two new Dowlex range polyethylene resins, available in powder and granules for rotomolding applications. These resins have recently been introduced to the market and are already providing results for rotational molders. These resins when compared to existing Dow resins, exhibit a wider processing window and a shorter molding cycle, while maintaining excellent environmental stress crack resistance and impact balance.

The new resins – DOWLEX 2629 UE and DOWLEX 2631 UE in granules, and DOWLEX 2629.10 UE and DOWLEX 2631.10 UE in powder will replace the earlier grades DOWLEX NG 2429 UE and DOWLEX NG 2431 UE in granules, and DOWLEX NG 2429.10 UE and DOWLEX 2431.10 UE in powder.

Comments: The roto-molding market in North America is growing at close to 5% and is expected to continue for the next 5 years. The major applications for roto molding include industrial commercial and agricultural storage tanks ranging in size from 5 to 22 gallons. Other products include under-the-hood automotive parts, leisure, and toy applications.

Rotomolding is also used to make large-part products such as kayaks and recreation vehicles. Due to high technical requirements, as well as the form in which the resin is supplied, roto molding markets tend to return a higher value for polyolefin producers. Besides Ziegler-based polyethylenes, suppliers have started to introduce metallocene-based products into this market segment.

Argentina PVC maker Solvay Indupa buys Brazilian HDPE producer

Argentina’s leading PVC producer Solvay Indupa announced its plans to buy Brazilian HDPE producer Solvay Polietileno for $ 17 mil to secure more ethylene and free up vinyl chloride monomer (VCM) for producing PVC in Argentina and Brazil. Indupa, a unit of Belgium’s Solvay Group, is financing the purchase of Santo Andre-based Solvay Polietileno out of its resources.

The company is buying the company from its Brazilian subsidiary Solvay Indupa do Brasil. Indupa will reduce Solvay Polietileno’s HDPE output at its 60,000 MT/year plant in Santo Andre to 20,000-30,000 MT/year, making it possible to use more of the ethylene for making PVC at Solvay Indupa do Brasil’s 236,000 MT/year PVC facility, also in Santo Andre.

Solvay Polietileno consumes 60,000 MT/year of ethylene which it buys from Brazil’s Petroquimica Uniao under a 120,000 MT/year contract. The rest of the ethylene goes to Solvay Indupa do Brasil’s PVC facility. Increased ethylene supply to the PVC site will enable Indupa to eliminate VCM exports to the Santo Andre plant as a PVC feedstock from its complex in Bahia Blanca.

The move will cut logistics costs and allow the company to use the VCM instead for increasing PVC production in Argentina. In February, Indupa completed a $7.3-mil investment to expand PVC production capacity by 15% at the Bahia Blanca plant to meet the growing demand for the product in Argentina and neighboring countries.

Comments: The demand for PVC in South & Central America is expected to grow at about 3.9% per annum for the next five years.

Solvay Indupa is the second largest PVC producer in South & Central America with a total capacity of about 470 KT per annum. The company has two PVC manufacturing sites located in (1) Bahai Blanca, Argentina, and (2) Santo Andre, Brazil. By this acquisition of Solvay Polietileno, the company will achieve increased ethylene supply and gain logistical advantages.

Qatar Plastics Products Company (QPPC), to increase the output of polyethylene films

Qatar Plastics Products Company (QPPC), a joint venture promoted by Qatar Petrochemicals Company, Qatar Industrial Manufacturing Company, and Italian firm Febo, will install a second production line this year to boost its output of polyethylene films to 30,000 tons a year by 2008. The company is set to install a second production line at its plant in Mesaieed. The company saw an 18% increase in production in 2005 compared with 2004. In 2005 the company produced polyethylene packaging films in excess of 10,000 tons.

The Mesaieed-based firm is Qatar’s largest unit that transforms polymer into packaging materials such as form, fills, and seal (FFS) films and shrinks film. QPPC also produces construction foil, blue sleeves, general-purpose foil, greenhouse foil, top open bags, and heavy-duty bags for the construction and industrial sectors.

The company is on a major expansion drive brought about by Qatar’s burgeoning need for polyethylene packaging films. QPPC’s major consumers are Qapco and Q-Chem. With Qatofin going onstream in 2008, QPPC will have to meet the polyethylene packaging needs of that joint venture as well.

The company currently cannot meet the local demand for polyethylene packaging films as various government departments and institutions have approved and cleared QPPC’s polyethylene packaging films for purchase, there is a huge local demand for our products.

QPPC’s goal is to become the Gulf’s largest converter of polymers into packaging material by the decade-end. One of the company’s priorities is to lessen its dependence on imported raw materials. Currently, 80% of the raw material is obtained locally from Qapco and QChem.

Comments: The strong growth of polyolefins production capacity in the Middle East has started to prompt the development of downstream converting operations, especially ones intimately related to the export of resins. The main reason for this is that most of the resins produced in the Middle East are shipped to regions/markets where bags are more popular than bulk shipping systems, thus requiring packaging film and other materials. Another example of this is Oman announced plans for the construction of the world’s largest pallet operation. Up to now, the Middle East has primarily been the polyolefins production hub. Going forward, we expect more converting operations to be set up in the Middle East; initially to support the shipping/export industry, but eventually to capture a larger portion of the polyolefins value chain.

Pak-Wing “Steve” Chum from Dow Chemical Company was elected to the Plastics Hall of Fame

Pak-Wing “Steve” Chum, Ph.D., chief scientist, and Dow fellow in the Performance Plastics & Chemicals portfolio for The Dow Chemical Company, will be inducted into the Plastics Hall of Fame on June 19, 2006, at the Chicago Hilton and Towers during the National Plastics Exposition in Chicago, Ill.

Chum is being recognized for his lifetime contributions to the development of polymer materials science and the use of materials science to guide and speed up the development and innovation of new plastic products and applications. He is a world-recognized expert in semi-crystalline polymer materials science, including structure/property models, crystallization of semi-crystalline polyolefins, rheology models, and fabrication technology for polyolefins.

Chum joins 145 distinguished inductees in the Plastics Hall of Fame, which is administered by The Plastics Academy Inc. The Plastics Hall of Fame was established in 1972 to honor individuals who have made significant contributions to the advancement and growth of the plastics industry in the United States and is the highest honor awarded in the plastics industry. The awards were expanded to include non-U.S. contributions in 2004. New inductees are elected every three years by majority vote.

Chum joined Dow in 1980 as a senior research chemist in functional polymer R&D and has held various leadership roles in R&D for functional polymers, foams, and polyolefin products. Early in his career at Dow, Chum made significant contributions to plastic foam technology.

Later, collaborating with Kurt Swogger and others, Chum was one of the key inventors of INSITE™Technology, an innovative metallocene-based polymer technology. His developments enabled Dow to commercialize several new families of and applications for polyolefins, including ELITE™Enhanced Polyethylenes, AFFINITY™ Polyolefin Plastomers, INSPIRE™ Performance Polypropylenes, ENGAGE™ Polyolefin Elastomers, NORDEL-IP™EPDM, and XLA™ Elastic Fiber. INSITE™Technology is one of the Dow technologies that received the 2002 U.S. National Medal of Technology from President George W. Bush.

Recently, he co-led another new product development effort and the successful launch of a new polypropylene-based product, VERSIFY™Plastomers, and Elastomers.

Chum grew up in Macau and received his bachelor’s degree in chemistry from Hong Kong Baptist College. He completed graduate studies in Chemistry at Northern Michigan University, earned a Ph.D. in Chemistry from Oregon State University, and completed post-doctoral Research at Kent State University.

Comments: It has been an honor to work with him over the last 15 years. Congratulations Steve…

Ciba Specialty Chemicals introduces a new high-performance nucleator for polypropylene

Ciba Specialty Chemicals have introduced a new high-performance nucleator for polypropylene. Ciba® IRGASTAB® NA 287 is a highly efficient nucleator that provides a converter with material savings through good mechanical properties; increased choices in coloration as well as reduced scrap formation through better management of warpage issues; and reduction in cycle time for increased output.

Using IRGASTAB NA 287 high-performance nucleator improves several physical and mechanical properties of polypropylene such as stiffness, impact properties, hardness, and heat distortion temperature. This improvement of mechanical properties generally enables down gauging and weight reduction of the finished parts. The other advantage is that the higher crystallization speed of polypropylene in the presence of IRGASTAB NA 287 and high-performance nucleator can lead to a reduction of the cycle time in molding processes and generally can result in increased output as well.

IRGASTAB NA 287 reduces the crystallite size and improves haze control so when it is used in polypropylene thermoforming, it can enhance the “see-through” characteristics of the final product.

IRGASTAB NA 287 can be used in general-purpose blow molding, Injection molding for applications such as thin-walled packaging, Caps & Closures, automotive, furniture, appliances, crates, Boxes & Containers. The thermoforming application includes trays, cups, and tubs.

Comments: The major advantages of nucleators include: (1) faster cycle times, (2) good results in injection molding and thermoforming, and (3) increased stiffness (which permits thinner walls). Some nucleating agents also help in the reduction of haze. The North American market for clear plastics is very competitive and crucial for many applications such as blister packaging, disposable cups, and other film applications. Snack food applications such as candy wrappers, cookies, and baked goods are all major end users for clear polypropylene. In recent years there has been a lot of development done to improve the clarity of polypropylene that would compete against resins such as f-PVC, polystyrene, and others.

Nucleating agents are based on organophosphate esters and carboxylic acid-based salts. Ciba has been involved in the manufacture of organophosphate-based nucleators.

Dow signs HPPO joint venture Agreement with BASF for propylene oxide manufacture

Dow Chemical and BASF have announced their plans to build a low-cost alternative process for making propylene oxide. This product is the principal component to produce polyols. The two companies have formalized the partnership with the signing of a joint venture agreement. A plant to make 300,000 tons/year of PO using technology based on hydrogen peroxide will come on stream in 2008 at BASF’s Antwerp, Belgium site.

Two joint ventures are being set up, one to build and operate the plant giving both partners equal take-off rights, and another to further develop the HPPO (hydrogen peroxide route to propylene oxide) technology.

Comments: Dow Chemical is one of the leading producers of propylene oxide with a 4 billion pound capacity at its PO facilities in Freeport, Texas; Plaquemine, Louisiana; Stade, Germany; and Aratu, Brazil. The major products using propylene oxide include polyether polyols (polyglycerol ethers) propylene glycols and propylene glycol ethers. Dow is also the world’s largest producer of polyether polyols, propylene glycol, and P-series glycol ethers.

Dow Chemical and BASF are both major producers of polyurethane in North America and Europe. The partnership will allow both BASF and Dow to utilize polyols, a major raw material for PU. Polyol constitutes 60 to 70% of the total PU composition.

The direct oxidation route to propylene oxide manufacture is considered the Holy Grail for propylene oxide producers. The debate rages about whether the new hydrogen peroxide route will claim the cost leadership position from the propylene oxide-styrene monomer co-producers. In any given market, the two processes are probably tied for economics but the supposed advantage of the hydrogen peroxide route is that it only produces propylene oxide and there is not a co-product like styrene monomer (or MTBE or HCl) to worry about. The PO-only route makes it easier to balance production and thus this is the real cost advantage. The ultimate in economics is direct propylene to propylene oxide and Lyondell-Equistar has said that they have such a process in advanced development. 

 

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