Chevron Phillips Chemical enters into a new licensing agreement with Sinopec to construct a 350,000 MT/year HDPE plant

Chevron Phillips Chemical Company announced that it has licensed its slurry loop technology to China Petrochemical International Company Ltd. (Sinopec) for the construction of a new 350,000 metric tons per year high-density polyethylene plant.

The new loop reactor facility will be located at Sinopec’s Maoming Petrochemical complex in Guangdong Province, China.

Comments: Chevron Phillips’ slurry loop process accounts for roughly 35% of the global HDPE capacity. In the past five years, production increases have amounted to 1.7 million tons with over 86 commercial reactors in operation in 15 countries.

This new license by Sinopec will be one of the largest slurry loop plant designs enabling China to lessen the domestic demand-supply gap. This is one of the first Chevron Phillips slurry loop licenses in China. Chevron Phillips was considering an olefins and derivatives joint venture with PetroChina subsidiary Lanzhou Petrochemical at Lanzhou but dropped out due to the timing of the project. Chevron Phillips has a joint venture with Shanghai Petrochemical in Shanghai that produces 100,000-m.t./year of high-density polyethylene, and a wholly owned 100,000-m.t./year polystyrene plant at Zhangjiagang, Jiangsu.

Chevron Phillips continues to upgrade the slurry loop technology internally and via its licensees. In May 2002, Chevron Phillips and ExxonMobil entered into an agreement to exchange proprietary technology using loop slurry technology. The cross-licensing agreement establishes CPChem as the exclusive licensor to third parties of CPChem’s and ExxonMobil’s loop slurry process technology.

ExxonMobil Chemical introduces new grades of Achieve™ metallocene polypropylenes

ExxonMobil Chemical Company is introducing a new wave of Achieve™ metallocene polypropylenes that will benefit many markets, beginning with nonwovens. These new products extend the reach of Exxpol™technology that in 1995 produced the first metallocene-catalyzed polypropylenes.

The new grade introduced is Achieve 6936G1, which is the first metallocene polypropylene designed for melt-blown applications. The company claims that this product offers spun melt producers new opportunities to enhance fabric properties and improve overall productivity. The several advantages include a high melt flow rate and narrow molecular weight distribution needed to reach the next level of performance in meltblown processes. Following are the benefits available to spun melt producers: (1) outstanding spun melt process uniformity and reliability, (2) easy processing with free-flowing granules, (3) excellent results using existing extrusion equipment, (4) excellent melt-flow stability, and (5) increased product cleanliness.

Additional products to be available soon in this major extension of ExxonMobil Chemical’s Achieve metallocene polypropylene portfolio will benefit other applications such as film and specialty injection molded products.

Comments: Polypropylene nonwoven fabrics can be classified into three broad categories namely: (1) spunbond fabrics, (2) melt-blown fabrics, and (3) staples.

The melt-blown process was pioneered by ExxonMobil with the University of Tennessee, Knoxville. Meltblown fabrics are considered a specialty within the nonwoven category. Polypropylene is the material of choice for melt-blown fabrics which finds applications in baby/adult diapers, feminine hygiene composite fabrics (spun-bonded/meltblown/spun-bonded, spun-bonded/meltblown/meltblown/spun-bonded, spun-bonded/melt blown/spun bonded/meltblown/spunbond, etc), industrial applications (Filtration, sorbents, wipes) and Medical (face masks.).

Metallocene polypropylene offers benefits in terms of processability, fiber tenacity, and barrier properties. Meltblown resins are often characterized by an MFR of 1200 to 1500. The major advantages of metallocene polypropylene fibers over conventional polypropylene fibers include (1) finer denier fibers, (2) better tenacity, (3) compatibility on high-speed lines, and (4) softness.

The major end-users of m-PP nonwovens include (1) Kimberly Clark, (2) BBA Nonwovens, (3) PGI, (4) John Mansville, and others.

Borealis prepares for new Borstar® polyethylene plant and new products

Borealis broke ground for its new 350,000 MT/year polyethylene plant at its petrochemical site at Schwechat, Austria. Scheduled to come on stream towards the end of 2005, the new plant, to be built by Tecnimont, will utilize Borealis’ proprietary Borstar technology. It will replace two old LDPE lines and an HDPE line and will focus on LLDPE

Comments: The Borstar polyethylene process, comprising 2 independently controlled reactors, can produce unimodal and bimodal polyethylenes having densities from homopolymer down to 0.918 g/cm3. Product properties are determined by (1) the ratio of the components produced in the first and second stages, (2) the Mws of the components produced in each stage, and (3) the amount of comonomer incorporated in each stage. The diluent in the slurry loop is supercritical propane, in contrast to other slurry polyethylene processes that utilize heavier diluents: isobutane, hexane, or cyclohexane being the most frequently used materials. The use of supercritical propane as the diluent has several advantages. Supercritical propane is a very poor solvent for polyethylene, so the reactor can make very low molecular weight fractions without fear of fouling due to the dissolution of the low-molecular-weight components. The density of supercritical propane is significantly lower than that of, for instance, isobutane, making recovery of the polymer in the reactor’s settling legs more efficient. Borealis discovered serendipitously that a large amount of hydrogen used to control the molecular weight of the polymer produced in the loop does not form bubbles in supercritical propane, bubbles that cause cavitation in pumps.

Borealis plans to introduce new enhanced, differentiated Borstar LLDPE film products for flexible consumer packaging and industrial applications. Over the last six months, Borealis has invested in another 630,000 tons of Borstar capacity, taking the total worldwide Borstar capability up to two million tons per year.

As part of the EUR 200 million expansion project at Schwechat, announced in July 2003, the existing Borstar polypropylene plant will be debottlenecked Another Unique Service from 210,000 to 300,000 MT/year. Additionally, Borealis will debottleneck its Borstar polyethylene plant in Finland, from 180,000 to 240,000 MT/year by the end of 2004, and the Borouge joint venture Borstar polyethylene plant in Abu Dhabi from 450,000 to 580,000 MT/year by mid-2005.

The Borstar family comprises two more polyethylene plants: a 225,000 MT/year plant at Borealis in Sweden, and a 250,000 MT/year plant at Shanghai Petrochemical Co. Ltd. in China, a licensee of Borealis’ Borstar technology.

Dow announces new organization and leaders for businesses and functions

The Dow Chemical Company has announced a new streamlined organization that will accelerate the company’s drive for higher profitability by reducing structural costs and enabling the company to operate more efficiently.

The organizational change consolidates several businesses and functions and leverages strengths and expertise across the company in alignment with the new business portfolio structure, announced in December 2003.

According to the company, the streamlined organization will not only reduce structure but will increase leveraging on value-creating activities. In addition, it will position the company to adjust to major changes occurring in the chemical industry, including higher feedstock costs and shifting patterns of geographic growth.

There were several changes made including (1) the chemicals and plastics “Portfolio Team” named, (2) global business leadership roles defined, (3) a new geographic model unveiled for Greater China, (4) the leadership in shared services changed, and (5) new senior manufacturing leaders named for businesses.

Comments: With the recent turnaround in the profitability of Dow Chemical Company and the change of top leadership the new management at the middle level reflects Dow’s continued commitment to cost-cutting and efficiency. The major observation is that the organizational structure mirrors closely the organizational structure when Dow had excellent success during the early 90s. More announcements are forthcoming in the mid and individual divisional levels.

Japanese polyolefin producers Japan Polypropylene & Japan Polyethylene to reduce costs by more than ¥10 billion.

Cost savings of more than ¥10 billion are being targeted by Japan Polypropylene and Japan Polyethylene in a new business plan to be completed by mid-2004.

In early 2006, Japan PP plans to bring a 300,000 MT/year facility on stream as part of scrap and build a program for which it is currently conducting a feasibility study. A decision on the new plant’s location is due to be made in the next few months. The choices at present are Kashima, Chiba, and Kawasaki. The company will cut costs by reducing staff levels and will seek savings in procurement and logistics. An optimized production network for LDPE, LLDPE, and HDPE is to be introduced by Japan PE among its 20 production trains in Japan with a significant reduction in the number of grades produced. In Oct 2004, it will close an LDPE unit at Yokkaichi. Both companies also plan to restructure their mechanism for setting prices. From Apr 2004, the price of resin will change dependent on the price of naphtha.

Comments: apan Polyethylene was formed in September 2003, as the result of the integration of the polyethylene business of Japan Polychem (the wholly owned company of Mitsubishi Chemical) and Japan Polyolefins (65:35 joint venture between Showa Denko and Nippon Petrochemical). The shareholders in the company include: (1) Japan Polychem (50%), (2) Japan Polyolefins (42%), and (3) Mitsubishi Shoji Plastics Corporation (8%). Japan Polyethylene has a total manufacturing capacity of 417.4 KT LDPE, 375 KT LLDPE, and 475 KT HDPE in Japan.

Japan Polypropylene was formed in October 2003, as the result of the integration of the polypropylene business of Japan Polychem (65 percent) and Chisso Corporation (35 percent).

Shanghai Leader Catalyst Co. increases presence in China and abroad

Tianjin Petrochemical Co has successfully implemented an SLC-G gaseous-phase polyethylene (PE) catalyst developed by Shanghai Leader Catalyst Co Ltd at its ethylene plant in China. The catalyst has also been used by Jilin Chemical Industrial Co Ltd. Both companies have been able to achieve around 300% of design capacity.

Comments: Located in the Jinshan Economic Development Zone southwest of Shanghai, Shanghai Leader Catalyst Co was jointly funded and established by the China Petrochemical Corporation (SINOPEC), Shanghai Research Institute of Chemical Industry, and Maoming Petrochemical Corporation. The company’s PE catalyst portfolio includes the SCG and SLC series catalysts. The production capacity of this company is 80-100 t/a of six catalysts of the SCG series and two of the SLC series, used for the production of various grades of polyethylene products, with MWD from narrow to broad molecular weight distribution and density from high to low.

The SCG-1 (I-III) catalysts are designed to run in the Unipol process producing a full range of PE densities. SCG-1 (I) allows for the production of low and medium-density products under normal reactor conditions. SCG-1(II) allows for the production of low and medium-density and partial high-density products under normal and condensed mode conditions. SCG-1(III) is recommended for all high-density products. Activities for SCG-1 (I, II & III) catalysts range from 4000-6000 kg/kg, 6000-9000 kg/kg, and 4000-7000 kg/kg, respectively.

The SCG-2 catalysts are designed to assimilate the performance of M-1 type catalysts and are divided into two types: SCG-2 (I) for low and medium-density resin; SCG-2 (II) for high-density resin. Typical activity ranges from 4000 to 7000 kg/kg.

The SCG-3/4 catalysts are chrome-based, with medium molecular weight distribution, used in the production of HDPE and LLDPE. This catalyst series competes directly with B-300/400(F-3/F-4) catalysts The SCG-5 catalyst is used for the production of broad molecular weight distribution HDPE, and compete with G-300 (S-2) catalysts. The SCG-5 catalyst is also used for the production of broad molecular weight distribution HDPE and is designed to compete with G-300 (S-2) catalysts. The SCG-6 is recommended for use during the transition from Ziegler to Chrome.

The SLC series includes the S and G-type catalysts. SLC-S is a slurry catalyst with 25-30% solids in the special mineral oil. It is a non-silica-supported Mg/Ti catalyst and is designed to replace traditional powder catalysts. SLC-S is used for producing narrow LLDPE, MDPE, and HDPE in a gas-phase fluidized-bed polyethylene process. The SLC-G catalyst is a high-activity Ziegler-Natta catalyst based on SiO2, with activity greater than 10,000 kg/kg.

The company has had successful trials in Indonesia, Malaysia, and Taiwan, and is starting to export to these regions. They are also working actively to enter the market in Japan, the Middle East, and Europe.

Gundle/SLT Environmental, Inc and Code Hennessy & Simmons announce cash merger agreement

Gundle/SLT Environmental, Inc. (GSE), a leading global provider of geosynthetic lining solutions, products, and services signed a merger agreement with Code Hennessy & Simmons LLC (CHS).

Under the agreement, all publicly traded shares of GSE’s common stock will be converted into cash at the rate of $18.50 per share. Upon completion of the merger, GSE will be wholly owned by CHS.

Under the merger agreement, certain GSE executives will enter into new employment contracts with GSE upon completion of the merger. A portion of their outstanding options to acquire shares of GSE’s common stock will be converted into options to purchase shares of GEO Holdings Corp. estimated to represent approximately 8% of GSE’s post-merger fully diluted shares. All other outstanding options to purchase GSE common stock will be converted in the merger into cash in an amount equal to the per share “in the money” value of each option.

Gundle/SLT Environmental, Inc. headquartered in Houston, is a global manufacturer and marketer of geosynthetic lining solutions, products, and services used in the containment and management of solids, liquids, and gases for organizations engaged in waste management, mining, water, and wastewater treatment, and aquaculture.

Founded in 1988, Code Hennessy & Simmons LLC is a private equity firm that manages approximately $1.5 billion in capital in four funds. CHS focuses on building shareholder value in middle-market manufacturing, distribution, and service companies through strong relationships with management teams and sound investment strategies.

Comments: Complications have already surfaced in the merger proceedings. Shortly after the announcement of the merger, GSE and its directors were named in a putative class action alleging that the GSE board breached its fiduciary duty by authorizing the merger of GSE with an indirect wholly owned subsidiary of Code Hennessy & Simmons LLC. The complaint seeks to enjoin the merger, to rescind it if approved by stockholders and consummated, and to obtain unspecified damages from the defendants.

Gundle/SLT Environmental is a global manufacturer of geomembranes used in the containment of solids, liquids, and gases for the mining, water, wastewater, agriculture, and aquaculture industries. The company’s principal products are polyethylene-based geomembranes (primarily HDPE), geonets, geocomposites, geotextiles, geosynthetic clay liners, concrete protection liners, and vertical barriers. GSE has manufacturing facilities in the United States, Canada, the United Kingdom, Germany, Thailand, and Egypt and has an annual liner manufacturing capacity of over 300 million pounds. Gundle SLT is famous for the first large-scale polyolefin sheet extrusion for pool and pond liner applications. The Gundle Systems essentially proved that polyolefins can compete with PVC for pool and pond liner applications.

DSM Engineering Plastics expands Arnitel® co-polyester capacity & develops a new grade of Arnitel

DSM Engineering Plastics has announced its plans to expand the capacity for Arnitel® TPE-E (thermoplastic elastomer ether ester block copolymer) at its facility in Emmen, Netherlands. The expansion will add 25% capacity by mid-2004 and is the second such increase in Arnitel® production in the last five years.

The Arnitel® TPE-E family grades include E and P types, traditional polyether-ester formulations; and U grades, based on unique polyester-ester technology that extends the temperature range of the formulation.

DSM Engineering Plastics has developed a new grade Arnitel PB582-H for automotive applications that has several advantages including: (1) excellent temperature resistance, and (2) strength and flexibility for automotive engine air duct needs. The new material enables designers either to specify thinner walls for material and/or space savings or to retain the as-designed wall thickness and increase performance.

Arnitel PB582-H is a heat-stabilized, compounded black material with a high level of crystallization. This crystallization provides extra performance at high temperatures; the new compound exhibits a 50- 60% greater lifetime at any given temperature compared to materials currently in use. Mechanical testing at 150°C indicates that weight savings can run to 40% of the original part. The material has been used in Mercedes Benz C-Class automobiles since early 2003 for clean-air (post-filter) ducts. This part’s oval cross-section, dictated by tight under-bonnet space constraints, demands the extraordinary negative-pressure performance shown by Arnitel PB582-H. Side-by-side comparison in the lab shows also that the sound emission properties of the material – when the parts are in use and therefore hot – is up to 10dB lower.

Arnitel® is formulated for durability, fatigue resistance, flexibility, elasticity, permeability to water vapor, chemical and oil resistance, and thermal stability. It exhibits low-temperature ductility and high-temperature strength, combined with an excellent molded surface finish.

Arnitel® is engineered for a wide range of demanding applications, from automotive airbag covers and constant-velocity axle joint boots, to energy absorption assemblies and low-noise gears in consumer goods, to films and wraps for medical and textile needs. Superior performance and lower system cost in comparison to traditional elastomers have resulted in the adoption of Arnitel® for a continuously growing list of components.

Comments: Thermoplastic elastomers (TPEs) are broadly classified into (1) styrenics (SBS, SIS, SEBS), (2) olefinic (TPO, TPV), and (3) specialty (copolyester elastomers (COPE), polyamide elastomers, and TPUs). Thermoplastic elastomer ether ester block copolymer is often referred to as COPEs.

In the early 1950s, DuPont Company initiated research on high-strength elastomeric materials to replace reinforced rubber in various automotive applications. DuPont first commercialized copolyesters in North America in 1972 and was then introduced in Europe.

The European suppliers of specialty elastomers include (1) Enichem, (2) DuPont, and (3) DSM. The total operating capacity of DSM in Emmen, Netherlands before expansion is about 3,000 metric tons. The total demand for these products is about 25 million pounds with automotive being the largest application, followed by wire & cable, and medical applications. These products have excellent properties including (1) high resilience, (2) tensile strength, (3) tear resistance, (4) chemical & solvent resistance, (5) abrasion resistance, (6) compression set, and (7) high-temperature properties among others.

Atofina sells its stake in PVC producer Mexichem to Grupo Industrial Camera

Atofina announced that it sold its 43% stake in Mexichem, a producer of chloralkali and polyvinyl chloride, to Mexican producer Grupo Industrial Camesa SA (GICSA), the majority shareholder in the joint venture.

At the same time, Atofina plans to become the sole shareholder of Atofina Peroxidos by buying out GICSA’s 49% stake in the company. Mexichem has sales of $185 million and employs 1,000 at nine sites in Mexico.

Comments: Atofina plans to focus its chloralkali and vinyl business on assets in Europe and Qatar. Mexichem was formed in 1998 as a joint venture between Elf Atochem and Mexican private investors including Quimica Pennwalt SA de CV and Polimeros de Mexico SA de CV. Mexichem has a PVC capacity of 100,000 MT/year at Coatzacoalcos, Veracruz.

Solvay and Kobelco eco-solutions create a joint venture to introduce Vinyloop® in Japan

Solvay and Kobelco Eco-Solutions signed a joint venture agreement to set up an industrial unit of Solvay’s Vinyloop® Polyvinyl Chloride (PVC) recycling process in Japan, under the name Kobelco Vinyloop® East Co., Ltd. Kobelco Eco-Solutions is to own 66% of the joint company, while Nippon Solvay will hold the remaining 34% stake. The agreement proceeds from extensive feasibility, market, and technical studies. Pending government approval, both companies are planning to launch Asia’s first Vinyloop® industrial unit at the end of 2005. As a first step, production should be built up to 12,000 tons of recycled PVC per year.

Current plans pertain to setting up the Vinyloop® unit in the Prefecture of Chiba, South-East of Tokyo, for the recycling of PVC material from used cables and agricultural foils from greenhouses. The new facility will also operate as a pilot plant for the recycling of automotive parts. The joint venture intends to diversify into the recovery of other PVC waste, such as wallpaper, which would be treated in this plant.

One of the advantages of PVC is that it is soluble in certain solvents. Using this characteristic, the Vinyloop® technology developed by Solvay Research & Technology allows the complete separation of PVC material from other components, which are combined with PVC in many applications. The biodegradable solvents are used in a closed circuit and regenerate PVC of a quality equivalent to the original product. This efficient and competitive technology provides the answer to one of the obstacles generally faced in recycling composite materials: separating various intimately linked materials.

Comments: Vinyloop is the PVC recycling technology developed by Solvay. Vinyloop separates PVC from its additives using a combination of chemical solvents and centrifugation. The additives and the solvent itself also can be recycled.

In 2002, Vinyloop Ferrara SpA opened in Ferrara, Italy, using the technology of separating the PVC for recycling from 22 million pounds of cables annually. A second Vinyloop operation is set to launch this year in Bernburg, Germany, able to separate the PVC from 79 million pounds of vinyl floors, roof systems, and cables. Automaker Volkswagen AG is considering sending plastics recovered from auto shredder residue to the site as well.

In Japan, Solvay and Kobe Steel, a metals and engineering company, are jointly involved in the polyvinyl chloride (PVC) recycling business in Japan.

Tekni-Plex produces medical tubing without phthalates

Tekni-Plex Inc. has started manufacturing a phthalate-free line of medical tubing for drug delivery and other unstable solutions.

The company is seeing increasing interest in alternatives to phthalates in PVC tubing, in part because California recently decided to list di (2-ethylhexyl) phthalate as a reproductive toxin under its Proposition 65 labeling legislation.

The trilayer tubing uses a thermoplastic elastomer to replace an outer layer of PVC. The inner layer is polyethylene, and the middle layer is a proprietary adhesive. According to the company, the tubing can withstand the same solvent or adhesive bonding as PVC.

Comments: The use of phthalates as plasticizers in PVC is being under environmental pressure for a long time now. According to some environmental groups, the use of phthalates in PVC toys can be harmful to human reproduction. In Europe, there has been a ban since 1999 on the use of six phthalates as PVC plasticizers in soft toys. The six phthalates that are banned by the EU include: (1) di-isononyl phthalate (DINP), (2) di-2-ethyl hexyl phthalate (DEHP), (3) di-n-octyl phthalate (DNOP), (4) diisodecyl phthalate (DIDP), (5) butyl benzyl phthalate (BBP) and (6) di-butyl phthalate (DBP).

In the United States, California’s Office of Environmental Health Hazard Assessment has listed the plasticizer di (2ethylhexyl) phthalate (DEHP) as a “reproductive toxicant” under its Proposition 65 law. Hence, companies are trying to find alternatives to using phthalates in different applications.

Phthalate plasticizers are the most commonly used plasticizers. They account for about 80% of the global plasticizer demand. The other types of plasticizers include: (1) aliphatic plasticizers (adipates, maleates, azelates, and sebacates), (2) trimellitate plasticizers, (3) epoxy plasticizers, (4) phosphate plasticizers, and others.

Indian BOPP film manufacturer Cosmo Films to expand its capacity

Bi-axially oriented polypropylene (BOPP) films manufacturer Cosmo Films announced its plans to expand its capacity from 46,000 MT/year to 60,000 MT/year by March 2004.

The company posted a 37% decline in post-tax profit at Rs. 70 M on a 4% lower turnover at Rs. 765 M for the 4Q ended Dec 2003. The decline in profit is attributed to the increase in raw material costs. The consumption of BOPP films in India is estimated at 46,000 tons and growing at 15 %/y. Cosmo Films has a 75% share in India’s BOPP films. The export market for BOPP films is estimated at 2.78 M tons. The company recorded export sales of Rs. 756 M for 4Q ended Dec 2003. The company’s BOPP films are used for packaging food products and drugs.

Comments: Cosmo Films is the largest producer of BOPP films in India. It was incorporated in 1980 to manufacture BOPP films in India. It was commissioned a year later and started supplying BOPP films in India the same year. Cosmo Films has four production lines with one located in Chikalthana and the remaining three in Waluj. Its current capacity is 36,000 metric tons per annum. Cosmo Films could manufacture 23,000 metric tons of BOPP film per annum, however, its total capacity increased to 36,000 metric tons after the acquisition of Gujarat Polypack. It further expanded its capacity to 46,000 metric tons last year. It supplies all kinds of films including coextruded heat sealable, plain, white opaque, and metalized.

Other suppliers of BOPP films in India include Flex, Biax, Supreme, and Max India. Cosmo Films is by far the largest supplier of BOPP films in India. Most of the products from the new capacity will be sold to existing customers.

Temporary tariffs imposed on Asian polyethylene bag makers

The U.S. government announced on Jan. 20 that it will impose temporary punitive tariffs of up to 122% on plastic bags imported from China, Malaysia, and Thailand.

The Department of Commerce is imposing the trade sanctions because it said bags from those three countries have been sold in the United States at less than fair market value.

The imposed tariffs vary from company to company, ranging from less than 1 percent for one Chinese firm to 122.88 percent for several firms from Thailand.

The U.S. International Trade Commission has to determine if the U.S. industry has been materially harmed by the imports. If so, final tariffs will be imposed, probably in August. If not, the case ends.

The Commerce Department order lists 26 separate firms from China, six from Malaysia, and five from Thailand. The tariffs for Thai firms varied from 2.84 percent to 122.88 percent, while five of the six Malaysian firms face punitive tariffs of 101.74 percent. The rates for Chinese firms varied widely, with most of them facing tariffs of 12.71 percent. The order also includes rates for firms not specifically listed: 80.52 percent for firms in China, 84.81 percent for Malaysian firms, and 11.54 percent for those in Thailand.

Comments: Polyethylene Retail Carrier Bag Committee formed by US producers had filed an anti-dumping petition against imports of PE retail carrier bags from China, Malaysia, and Thailand in July 2003. The petition claimed that plastic bags are being sold in the United States at dumping margins up to 122% for China, 117% for Thailand, and 78% for Malaysia. This resulted in an increase in imports from the three countries, causing a decline in U.S. market share, employment, and profits.

After 6 months of investigation, the U.S. government has imposed temporary tariffs to support the domestic industry. However, such tariffs will only provide temporary relief to domestic suppliers. The competitiveness of the Asian suppliers comes from cost advantages in equipment, raw materials, and labor. Many US-based producers have shifted production overseas to cost-advantaged locations. As the industry competes on a global basis the shift in material flow will become increasingly evident.

Santoprene TPV reduces lowers cost of all-terrain vehicle air-intake system

An air-induction tube developed for Polaris Industries Inc. for use in all-terrain vehicles (ATVs) uses thermoplastic vulcanizate (TPV), from Santoprene™.

According to AES, the elasticity of Santoprene TPV is critical to fit the ends of the tube onto the air box and the Predator’s high-performance, liquid-cooled 500 cc engine.; as well as It’s this elasticity enabling that enables these system components to move independently of each other during demanding ATV operation.

Santoprene TPV also exhibits excellent sealability, which helps prevent dirt, sand, and other debris from entering the air-intake system at the connection points – critical for optimal engine performance. The rigid PP helps the tube withstand high pressures caused by intense airflow. Santoprene TPVs are manufactured by Advanced Elastomer Systems (AES), an ExxonMobil Chemical affiliate.

Comments: Advanced Elastomer Systems (AES) is the largest producer of TPVs in North America. AES manufactures TPV under the trade name Santoprene®. Majority of the TPV usage in North America is concentrated in Automotive under-the-hood applications and molded goods. This is attributed to TPV’s ability to withstand higher temperatures because of the highly crosslinked elastomeric phase. TPVs provide a good balance between rigidity and flexibility thereby making them the ideal material for applications like automotive air ducts. Santoprene provides Polaris with significant cost reduction through part consolidation.

Zotefoams and AtoFina Chemicals are in agreement to develop closed-cell PVDF foams

Zotefoams plc, the foam technologists, and AtoFina Chemicals, Inc. have signed a mutually exclusive agreement to share market and technical information toward the development of closed-cell PVDF-based foams that will meet market needs.

This agreement sets Zotefoams and ATOFINA Chemicals as exclusive partners in the development and sales of PVDF-based closed-cell foams based on AtoFina Chemicals’ KYNAR® fluoropolymers.

The several advantages of PVDF include (1) wide temperature tolerance, (2) excellent UV and aging resistance, (3) good fire retardation, (4) outstanding resistance to a wide range of solvents and aggressive chemicals, and (5) high dielectric strength.

The new PVDF foams can be used for both low and high-closure-force seals for the petrochemical industry. Their “closed cell” nature enables lifelong buoyancy for tough applications like “unsinkable” floats and level sensors in chemical tanks.

PVDF foams are inherently fire retardant, low smoke, and low heat release materials. Many other fire retardant foams are “open cell” in structure and have to be skinned/sealed with a suitable barrier material or require incorporation into complex composite structures to avoid fluid/moisture absorption during use. These new “closed cell” foams require no such treatment and should be easier and more economical to fabricate and use.

Zotefoams will be marketing the KYNAR PVDF foam under the brand name ZOTEK® F 30.

Comments: ATOFINA Chemicals, Inc. announced the technology for the manufacture of flexible or rigid fluoropolymer foams back in July 2001. The technology is based on KYNAR® polyvinylidene fluoride resins. These foams exhibit excellent chemical resistance, stability at high temperatures, extremely low smoke and flame characteristics, water repellency, good UV resistance and weather ability, excellent mechanical properties, and radiation resistance.

ATOFINA Chemicals, Inc. currently has ongoing relations with Zotefoams for applications involving closed-cell foams and another relation with Acton Technologies for open-celled foams.

Potential applications are many, including flame retardant insulation, chemically resistant filters, high-purity polishing materials for electronics applications, moisture-resistant, breathable foams for sporting equipment, UV-resistant outdoor decorations, temperature- and chemical-resistant gaskets, sound barriers, and encapsulated fabrics. Current North American usage for PVDF foams is negligible and the above-mentioned applications are considered a specialty.

PolyOne acquires the North American distribution business of ResinDirect

PolyOne Corporation, a leading global polymer services company, announced the acquisition of the North American distribution business of ResinDirect LLC, a wholly owned subsidiary of Louis Dreyfus Energy Services L.P.

ResinDirect is a worldwide procurement, distribution, and marketing company dealing in purchasing and selling prime commodity plastic resins. In North America, ResinDirect distributes approximately 60 million pounds of commodity plastic resins annually. ResinDirect’s North American distribution business will be integrated into PolyOne’s Distribution business. PolyOne Distribution has six customer service centers; more than 30 stocking locations, including 10 repackaging plants; and a state-of-the-art Design Center in Suwanee, Georgia. In 2003 PolyOne Distribution had sales that exceeded $500 million.

Comments: ResinDirect, formerly Louis Dreyfus Polymers, recently increased its resin distribution volume by 25% in 2002. The company handles procurement of resins from BP Amoco plc, Nova Chemicals Corp., Formosa Plastics Corp. USA, Equistar Chemicals LP, ChevronPhillips Chemical Co., Huntsman Polymers Corp., and Denka Inc.

Kuraray develops next-generation Poval HP, polyvinyl alcohol-based polymer

Kuraray Co., Ltd. announced that using its original technology, it has developed and is marketing a next-generation Poval® HP polymer that offers higher performance and superior operating characteristics.

Poval (polyvinyl alcohol) is a functional resin first commercialized by Kuraray and is a raw material for vinylon fiber.

The different advantages of this polymer include: (1) suitable for film formation, (2) good adhesive and emulsification properties, (3) resistance to oils and chemicals, and others. This next-generation Poval HP polymer offers new possibilities in general merchandise, and, as more users are introduced to its useful characteristics, applications may emerge in many fields.

Comments: Kuraray is the largest producer of polyvinyl alcohol-based polymers in the world. The company has about 30% of the global market share of these polymers. The other producers of this product include (1) DuPont, (2) Nippon Ghosei, and others.

The most important characteristic of Poval is its water solubility. The main application of polymers is their use as a raw material in the production of vinylon fiber and film. Other applications include its use as a stabilizer for emulsion polymerization, a paper sizing, an adhesive, and a stabilizer for polyvinyl chloride polymerization.

ExxonMobil proposes an LNG terminal along the Gulf Coast

An Exxon Mobil Corporation affiliate, Vista del Sol LNG Terminal LP, announced plans to develop a $600 million Liquefied Natural Gas (LNG) receiving terminal along the Gulf Coast of Texas.

The proposed project will be located in San Patricio County about two miles west of Ingleside, Texas. The terminal, which will process imported LNG for distribution throughout Texas and the United States, should take about three years to build and involve employment for some 600 workers during peak construction. The facility is expected to be operational in the 2008/09 timeframe, with a processing capacity of 1 billion cubic feet per day (bcfd) of LNG.

Comments: In an earlier edition of CMR’s PO&E, we pointed out that there were 22 proposed (now  24) LNG projects with a combined capacity approaching (theoretically) 12 BCF/d of natural gas. Now, the US market is about on average 25 BCF/d so obviously, there are too many projects.

ExxonMobil makes sense because they have the source pinned down (Qatar), the transportation means under control (new orders for 450,000 M3 Ships), and a hungry market. LNG will be the incremental supply of up to 15% of US natural gas demand. The recent announcement of the Australian-US alliance in this regard by the Energy Secretary only reinforces this direction. LNG to the US is more cost-effective than many far north projects and very deep water offshore if not co-produced with large crude oil fields. This generation of new big ships halves transport costs to the US.

Sources aside from ExxonMobil control, there is an expected overhang in the World LNG supply market. Older plants have been de-bottlenecked and newer ones always have 15%+ capacity in their capability so, even without, Qatar, ExxonMobil could fill this terminal easily. Evidence of this overhang was also shown through another recent world event in LNG, the Algerian plant explosion. Initially, it was thought 3 units, or almost 50% of their capacity was affected. Now, sources in the industry tell PO&E that only one of the oldest units was badly damaged, another has only moderate damage and a third is restartable shortly. The bottom line is that Algeria’s announcement that they can meet all contracts is probably true, there is an overhang available for emergency and the merchant sector.

The location of the ExxonMobil project is good too. It is essentially right at the junction point of the big trunk systems that go North East, North, and West. There is another issue to watch. Supposedly, most LNG is delivered “hot” including ethane. What could this mean to the feedstock futures market?

PKN Orlen & ConocoPhillips submit a joint bid for Unipetrol

PKN Orlen and ConocoPhillips announced that they have submitted a joint preliminary bid to acquire the Czech government’s 63% stake in Unipetrol (Prague). The government recently reopened bidding for the stake after an earlier attempt to privatize Unipetrol failed. The deadline for preliminary bids was January 12.

Comments: The government of the Czech Republic has put Unipetrol for sale in an attempt to privatize the company. The government has received bids from MOL, TNK-BP, Agip, a unit of Italian energy giant Eni, ConocoPhillips, and Shell.

Agip, ConocoPhillips, and Shell already hold a stake in Unipetrol’s refinery arm Ceska Rafinerska. Unipetrol subsidiary, Chemopetrol is a producer of polyolefins in the Czech Republic.

 Ipiranga to divest its stake in Chilean petrochemical group Petroquim

Ipiranga Petroquimica (IPQ), the petrochemical branch of Empresas Petroleo Ipiranga, plans to sell its 33.4% share in petrochemical company Petroquim, for $19.250 million. Petroquim, a joint venture with Chilean companies, is sited at Talcahuano, Chile, and produces 100,000 MT/year of polypropylene Its sale would help to reduce IPQ’s $450 million debt.

Comments: Ipiranga Petroquímica was formed in 1976 and was first called Polisul Petroquímica. The initial shareholders of Polisul were Hoechst (Germany), PetroChina (a state-owned company), and Empresas Petróleo Ipiranga.

In 1992 Petroquisa sold its shares to Hoechst, and Petróleo Ipiranga, and in 1997, Hoechst sold its shares to Petróleo Ipiranga, and the company was wholly owned by Petróleo Ipiranga. The name Polisul Petroquímica was changed to Ipiranga Petroquímica.

Ipiranga Petroquimica is one of the largest polyolefin producers in Brazil. The company has a total capacity of 400 KT HDPE, 150 KT HDPE/LLDPE swing plant and 150 KT PP (operated through the joint venture Petroquim) operating at five units.

By selling its 33.4% stake in Petroquim, the company will be able to reduce some of its debt. Petroquim is a joint venture of six partners, the larger ones being Ipiranga Petroquimica SA, (33.4% stake), and Petroquimica San Julio SA of Santiago (33.4% stake). The PP plant in Chile has a total capacity of 100 KT and uses Basell’s Spheripol technology.

 

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