Chemical Industry Summary
The anticipated secular recovery of the global crude oil market appears to be faltering under the pressure of strong production output and sustained high inventory levels. In July, Saudi oil output rose 123,000 barrels per day to hit a level of 10.67 million bpd. Russian crude exports are up nearly 5% to a level of 5.5 million barrels per day following strengthening domestic output. Iran is now at 3.6 million barrels per day, approaching pre-sanction levels. US oil production is down about 1 million bpd, but cannot balance global output even with relatively firm Chinese demand. The brief rally in crude oil prices seen in June has faded. As oil prices have fallen, the oil-to-gas price ratio that tracks North American olefins cost advantage has slipped back to a 15:1 ratio, still advantaged but well off of peak.
Macroeconomics and Geopolitics
Americas
The US Bureau of Economic Analysis has published an advanced estimate of US GDP growth in Q2 of only 1.2%. This follows a revised estimate of Q1 growth of 0.8%, down from the prior estimate of 1.1% growth.
For the second month, the US jobs report gave a surprising result of 255,000 jobs added in July. This follows a 292,000 job addition in the June US jobs report, and a slightly upwardly revised May number. For the last three months, job additions have averaged 190,000 jobs per month. This is good news for the economy that showed a slump in job growth in April and May.
In July, the US manufacturing PMI index moved up sharply to a level of 52.9, indicating an improved business climate. This result was the highest level in four months. Together with the improved jobs outlook, these could signal a mild inflection point in the US economy. In July, US auto sales of light cars and trucks recovered from a weak showing in June and were 17.77 million vehicles on a seasonally-adjusted annual basis. This number was up 7% from June and up 1.8% from last year.
The US housing market continues to do well both in terms of new construction and existing home sales. In June, US housing starts totaled 1.189 million on a seasonally-adjusted annual basis, up 4.8% from last year’s result. Single-family housing starts of 778,000 was up 4.4% from 2015. In its August forecast, the NAR (National Association of Realtors) forecasted housing starts at an annual rate of 1.214 million for 2016, up 9.2% and at 1.304 in 2017,up 7.7%. Average prices for existing home sales in July was US $247,700, up about 4% both month-over-month and from last year. Mexico’s PMI in July of 50.6 represents a 33-month low. Canada’s PMI of 51.9 represented the fourth consecutive month of improvement.
For July, Brazil’s manufacturing sector has recorded a modest bounce in its PMI with a 46.0 reading, a four-month high. The PMI remains in modest contraction territory, with the July result at an 18-month high. In its April forecast, the IMF expects Brazil’s GPD to fall about 4% in 2016. The economy reflects the current political crisis in with President Dilma Rousseff facing impeachment in the immediate future.
Europe
Global stock markets seem to have quickly recovered from the surprise Brexit vote on June 23. The British pound had briefly dipped to an historic low exchange level of below US $1.30 per £1 pound sterling, but has recovered to slightly above this benchmark. According to Eurostat, the flash estimate for European GDP growth in Q2 has been published at 1.6%, very similar to the results seen in the previous four quarters. Germany is the largest European economy. Its GDP grew at a seasonally-adjusted rate of only 0.7% in Q1, and the consensus estimate for Q2 is 0.2%. In Q1, fixed capital formation and construction spending were relatively strong.
The reported July PMI index for the Eurozone was reported at 52.0, up from 52.8 in June. Germany is finally showing signs of improvement with registering a PMI of 53.8, down slightly from the June result of 54.5, a 28-month high. The Netherlands, Italy and Spain were in positive territory. France (the second largest economy) showed modest improvement with a PMI of 48.6.
Manufacturing activity in Eastern Europe turned slightly negative in July. After one month in positive territory, Russia’s PMI moved down in July to a level of 49.5, in mild contraction territory. The Czech Republic’s growth has continued to cool, with the July PMI of 39.3 reported in negative territory for the first time in 38 months. Poland’s PMI also cooled in July, recording a result of 50.3, the lowest level in 22 months.
Asia
After six months in negative territory, China’s manufacturing sector edged into expansion territory in July recording a PMI index of 50.6. Order backlogs improved and new orders and purchasing activity accelerated. China’s auto production in June was near 2 million vehicles, close to the 2015 monthly average and in-line with recent trends. Production on anYTD basis is up 6.5% from a year ago.
Asian polymer prices have been sted with East Asian HDPE blow modeling in the range of US$1,180 to US$1,200/metric ton (MT)this summer. Ethylene prices in NEA began the summer near US $1,050/MT and peaked near US$1,130/MT in mid-July. However, they have tracked crude oil price back down and are now near US$1,065/MT.
Feedstock – Crude Oil
During August, the global oil prices have continued their march downward. As of August 10th, WTI spot prices were US $41.71 per barrel. Macroeconomic concerns and high inventories have cooled this rally that some observers had seen as moving ahead of industry fundamentals. For the week ending August 5, US crude inventories not in the SPR(Strategic Petroleum Reserve) totaled 523.6 million barrels, up 15% from last year, nearly flat from a month ago.US crude production for this same week as estimated by the DOE at8.44million barrels per day, down 10% from2015and down 12% from the peak production of9.6 million barrels per day.
For the week ending August 5, Baker Hughes reported oil-directed rigs increased 30 from last month to 381.Including gas-directed rigs, the total rig count of 464is up incrementally from the May 2016 low of 404, a number that represented the lowest count since this indicator was started in 1991. The percentage of oil-directed rigs in early August was 82.1%, the highest level since 2014.
Feedstock – Natural Gas & NGLs
As of mid-August, US natural gas prices have flattened in a range of US $2.75 to US$3.00 per million BTU. This is approximately double the pricing seen at the beginning of the summer. On July29, US underground natural gas volumes of 3,288 billion SCF were 2% above the prior 5-year maximum average for this time of year. The weather in the US has been very hot, which has led to strong usage and peak electrical demands. For the week of July 29, there was a net withdrawal from underground storage of 6 BSCF. The total amount of stored gas is 2% over the 5-year average maximum value for this time of year and is 78.3% of capacity. Depending on weather patterns, early approach to the fall season or a delayed winter withdrawal season could still put storage near full and put severe pressure on natural gas prices in the late fall season.
Enterprise’s new ethane export terminal is in start-up phase and the first scheduled shipment is reported to have been delayed. This Houston based facility will ship approximately 200,000 Bpd of ethane at full capacity. Although these quantities are well below the currently rejected ethane volumes of 500-600,000 Bpd, but cumulatively should put upwards pricing pressure on this cracker feedstock.
For the week ending July 29, the EIA reports that US propane/propylene inventories were 89.9million barrels, up 9.5% from last month, butdown1%froma year ago. Inventories are down 15%fromthe all-time record of 106 million barrels set last November due to increased industry export capacity. Spot prices are currently near US $0.42/gallon are down US $0.08 per gallon from last month. Propane tends to follow crude oil pricing that has eased in recent weeks.
US Olefins & Polyolefins
US contract ethylene prices for July settled flat with the net transaction price remaining at26.75cents/lb. This is up 5.5cents/lb. from the January price of 21.25cents/lb. that was at a 13-year low. In August, spot ethylene prices have pushed upwards, recently topping US $0.30/lb. Ethane prices have held steady in the US$0.17-0.18 per gallon area, reflecting flat natural gas and good availability. The cracker turnaround season is nearly complete with the exception of the Westlake Petro #1 and the LyondellBasell Corpus Christi ethylene crackers that are undergoing expansions.
US propylene prices settled down up one cent per pound in July with contract pricing at US$0.305 per pound for chem grade and US $0.32/lb. for polymer grade. Polypropylene prices also settled down one cent per pound so margins were flat from May. Traditionally, propylene and polypropylene prices tended to move together, but this relationship was not observed early in the year when PP prices moved ahead of propylene prices and margins expanded. However, in recent months, a surge of imports has returned the market to balance and softened polypropylene prices. This deflated PP margins to more typical values. June PP import volumes of 30,000 MT were down 25% from May levels.
In August, US contract butadiene prices have settled up 0.5cents/lb. at US $0.36/lb.
PE market prices have settled flat again in July. The4cents/lb. increase that was first announced in April had yet to get market traction. Producers are now targeting for a September5cents/lb. increase. The brief crude price rally that saw WTI prices approach US $50/Bbl. in early July has fizzled out, and the US $40/Bb l. prices seen in early August were not supportive of an industry-wide price increase. With several US crackers returning to service, a softening feedstock pricing environment will make further increases more difficult to achieve.
US exports of PE in June were down 10% from a year ago to 424,000 MT as a result of April/May cracker outages that averaged 10% of US capacity. Still, on a year-to-date basis through June, US PE exports of 2.8 million MT are 40% ahead of last year’s total. At an average of 466,000MT/month, exports are equivalent to 26% of US capacity. Import volumes for all PE grades are down 3% on average from 2015.Looking at YTD numbers, net exports are up 60% fromboth2015 and2014.+
July PVC prices rolled over with contract pipe grade at US $0.74/lb. Key raw materials ethylene and chlorine had flat pricing, not providing any momentum to improve prices.
July also saw flat US polystyrene prices flat again with contract benchmark near US $0.90/lb. Prices for US contract benzene for August are up US $0.15/gallon to US $2.29/gallon following a similar increase in July.
European Olefins & Polyolefins
For August, despite a softer market for feedstock prices, European the contract ethylene price dropped by €10/MTto a level of €925/MT. Spot ethylene prices are generally flat at near €885/MT. Contract European propylene prices were flat in August, at a level of €670/MT, with spot prices €30/MT above this level. Similarly, European contact butadiene pricing was flat at €665/MT. European benzene contract prices increased €67/MT to a level of €652/MT, and contract toluene settled in August at €480/MT, down €80/MT.
Polyethylene prices in Europe have flattened. HDPE blow molding grade in NWE is currently €1,200/MT on a spot basis. German benchmark contract pricing of HDPE-BM is €1,400/MT and steady. LLDPE (butane) contract pricing in Germany is €1,415/MT and spot is €1,165/MT. Both prices are flat. Domestic demand is somewhat soft and customers are holding off purchase decisions and utilizing inventories as they see prices fall. Spot prices are near 18-month lows.
Global Chlor-alkali
The Chlorine Institute reported that effective operating rates for US chlor-alkali in June averaged 84%, nearly flat with the 85% in May. June production was limited due to outages, notably Westlake Chemicals’ Calvert City, KY outage that began in early June and took the better part of two months with re-start the last week in July. Olin reported that about half of the US $20 per short ton (ST) for caustic was achieved in Q2 and expects most of the remaining increase to be seen in Q3. The company reported that the industry’s chlorine price benchmark was up US $5/ST in July. In late July, Olin decreased its 2016 EBITDA guidance by 8.4% to a range of US $840-900MM in part due to lower than expected caustic prices, as sales shifted towards the lower priced export market.
In the first and second quarters of 2016, Olin recorded a restructuring charge of US $100 million primarily associated with closure of 477,000 MT per year of chlorine capacity. With OxyChem’s closure of 150,000 ST in June, this will shutter about 4% of US capacity.
European chlor-alkali operating rates in June were 78.8% of industry capacity, and improvement of 3.4% from June due to incrementally improved seasonal demand. In order to meet the end of 2017 mercury cell mandate, European producers have announced closures of 8% of European capacity and this number may growth to as much as 20% pending additional closure announcements.
AMERICAS
SABIC, ExxonMobil jointly study potential development of gas-fed complex on US Gulf Coast
SABIC and ExxonMobil are mulling a gas-fed petrochemical complex to be built on the U.S. Gulf Coast. The final investment decision will likely be made by the 2nd quarter of 2017. If the project moves forward, the project would be located in Texas or Louisiana with easy access to natural gas and include a world-class scale cracker and derivative units.
Comments: SABIC is looking for ways to diversify feedstock after eight successive quarters of declining earnings. In addition to the U.S. cracker, the company is considering an oil-based petrochemical complex with Saudi Aramco and a coal-to-olefins project with Shenhua Group in China. Low crude oil prices have put a damper on new cracker announcements on the U.S. Gulf Coast, as the advantage of cracking light vs. heavy feedstock has decreased. As the first wave of eight crackers nears start-up times in 2017-2019, only Axiall/Lotte and Shell of the second wave have advanced past the FID stage. Although demand growth for ethylene derivatives is expected to be robust, the slowing down of midstream infrastructure additions in the U.S. pose uncertainties for feedstock pricing. Massive capacity additions for LPG and ethane exports will also compete with crackers for light feedstock, making a positive FID decision from SABIC in 2017 highly unlikely.
Williams Partners sells its Canadian natural gas assets to Inter Pipeline
Midstream company Williams Partners has agreed to sell Canadian assets to Inter Pipeline Ltd. for US$1.35 bill on. Under the acquisition agreement, Inter Pipeline Ltd. will take over two natural gas liquids plants, one gas processing plant, a 420 km pipeline network connected to these plants, as well as a proposed propane dehydrogenation (PDH) unit in Alberta. The acquisition is expected to close by 3rd quarter of this year.
Comments: Inter Pipeline also crude oil pipeline and liquid storage terminals in West Canada. However, slower production growth from oil sand has concerned its investors regarding insufficient volumes on its pipeline and storage network. The acquisition of Williams’ natural gas assets is supplementary and benefit coal to Inter Pipeline’s business while helping to ease investors’ concerns. Inter Pipeline Ltd. will assume the responsibility of planned PDH unit with the FID to be made by the end of this year. If it moves forward, the PDH unit will produce 525KTA of propylene. The proposed PDH project in Alberta is one of a dozen candidates reviewed by local government for petrochemical incentives. The incentive program aims to support two to three new projects with financial support ranging from CAD3-5 billion (US$2.3-3.8 billion).
Braskem postpones start-up of UHMWPE plant in Texas
Braskem has rescheduled start-up of its polyethylene facility in La Porte, Texas to 2nd Half of 2016. The new plant will produce ultra-high molecular weight polyethylene (UHMWPE) under the tradename UTEC. The new capacity will complement Braskem’ s existing production lines of UHMWPE at Camacari petrochemical complex in Brazil. The company did not provide reasons for delayed start-up and details on capacity of the new unit in Texas.
Comments: UHMWPE is a specialty material with a combination of excellent mechanical properties due to a much higher molecular weight over standard commodity PE . These properties include superior impact strength, outstanding abrasive resistance, a wide range of service temperature, high chemical resistance, and non-sticking & self-lubricating properties. Sheet & profile is the major application for UHMWPE, where Braskem is mainly active; while UHMWPE fiber and medical applications are niche markets for certain producers, such as Celanese and DSM. Braskem is the sole local supplier of UHMWPE in Latin America, with export to North America and Europe. With the new capacity in North America, Braskem can produce cost-advantaged UHMWPE to target emerging markets which drive up the demand for UHMWPE, such as China and India. Meanwhile, Braskem has a UHMWPE pilot plant at its Innovation and Technology Center in Pittsburgh, Pennsylvania. This pilot facility will enhance Braskem’s ability to improve products, broaden product portfolio, and best serve its customers’ needs.
CP Chem launches PE pilot facility in Oklahoma
Chevron Phillips Chemical Co. has completed its PE pilot plant at its research and technology center in Bartlesville, Oklahoma. The pilot plant, which utilizes CP Chem’s premier MarTECH® PE technology, allows development of new catalysts and polymers on pilot scale, prior to implementation into commercial scale operations.
Comments: As many other North American PE producers, Chevron Philips Chemical (CP Chem) is involved in major PE expansion wave that leverages low-cost NGLs advantage. The massive PE expansion wave is expected to gradually come into service over the next five years. CP Chem is scheduled to launch its two 500KTA PE facilities in Old Ocean, Texas in mid-2017. CP Chem’s PE pilot plant at its research and technology site will allow CP Chem to enhance research capability on development of new catalysts and new polymers prior to being adopted on commercial production scale as well as better serve customers’ needs. The upcoming Old Ocean PE facilities will be one of the first several production sites getting technical assistance from the PE pilot plant.
LyondellBasell suspends ethylene expansion in Channelview, Texas
LyondellBasell has decided to put its cracker expansion at Channelview site on hold, as the company is shifting its focus to ethylene derivatives and the propylene oxide (PO)/ tertiary butyl alcohol (TBA). The Channelview expansion, which initially targeted for completion in 2017, would likely restart early in next decade. Meanwhile, Corpus Christi ethylene debottlenecking project is scheduled to be completed in 3Q 2016.
Comments: In 2014, LyondellBasell initially announced the potential 250KTAethylene capacity addition to be added in Channelview, while three other ethylene debottlenecking projects in LaPorte, Channelview and Corpus Christi were already under construction. LyondellBasell’s strategy was to cost-effectively expand cracker capacity using cheap gas resources in North America during this timeframe. However, plummeting oil prices over the last 18 months has meant lower naphtha costs and made gas-fed cracker less attractive. With the given market situation, LyondellBasell made adjustments to its corporate strategy to focus C2 derivatives and downstream production in near-term. For long-term, LyondellBasell will monitor the market conditions. The Channelview debottlenecking project could be resurrected once the project becomes economically-feasible.
LyondellBasell to set up HDPE facility on US Gulf Coast
LyondellBasell has announced its final investment decision to build a high-density polyethylene (HDPE) plant on U.S. Gulf Coast region with a scheduled start-up in 2019. The facility will use its newly developed proprietary Hyperzone PE technology and have production capacity of 500KTA.
Comments: The planned HDPE facility will be the first plant that utilizes “Hyperzone” technology. The technology is a cascade gas phase process based on the proprietary multizone circulating reactor developed by its European R&D Center. The technology is claimed to have the ability to produce a wide-range of high-performance multi-modal HDPEs and to allow converters to lower polymers input per unit produced. LyondellBasell plans to licensethe “Hyperzone” technology in the future. The PE project is part of ethylene integration strategy to extra value out of ethylene value chain. The feedstock for this HDPE unit will source from recently-completed ethylene capacity additions in La Porte and Channelview. The company expects to see a good return on the combination of latest PE technology and cost-effective ethylene debottlenecking project.
EUROPE
ExxonMobil to boost specialty elastomer capacity in UK
ExxonMobil is considering capacity expansion at its specialty elastomers facility in Wales, UK, with expected completion in late 2017. The expansion project will enable ExxonMobil to increase global capacity of manufacturing SantopreneTM thermoplastic vulcanisate (TPV) by 25%. The company did not provide any details on investment expenditure or exact capacity numbers.
Comments: ExxonMobil’s SantopreneTM TPV is a vulcanized EPDM rubber in polypropylene matrix, mainly used in automotive, industrial and consumer applications. SantopreneTM TPV offers rubber-like performance properties as well as provides plastic-like processability and manufacturing flexibility due to PP content.The capacity expansion is in response to increasing global demand for high performance elastomer, especially from automotive industry.
MIDDLE EAST & AFRICA
Iran’s NPC launches 2ndphase of Kavian petrochemical project
NPC’s Kavian Petrochemical Co. (KPC) has begun commercial operation on phase II of ethylene production. With the phase II being complete, KPC’s ethylene capacity has increased by 50% to 2,000KTA.
Comments: Iran initiated a very comprehensive national program in 2002 to integrate the vast amounts of crude oil and natural gas resources. The plan including West Ethylene Pipeline and numerous petrochemical plants along the pipeline with a target set to increase petrochemical capacity to 100,000KTA by 2015 from 9,000KTA in 2001. However, economic sanctions imposed on Iran in 2006 had limited Iran’s access to both technologies and financing. Even so, Iran still increased its petrochemical capacity to approximately 60,000KTA in 2015. Kavian Petrochemical Co. is one of the many petrochemical plants constructed along West Ethylene Pipeline and provides a majority of ethylene for C2 derivatives plant along the pipeline. With the lifting of sanction, Iran is making great strides in boosting its total petrochemical output by 61,000KTA with scheduled completion of 67 developmental projects by 2018.
ASIA PACIFIC
Asahi Kasei targets 2018 for S-SBR capacity expansion
Japan-headquartered Asahi Kasei has announced its plan to boost production capacity of solution-polymerized styrene butadiene rubber (S-SBR) by 30KTA at its Singapore facility. The new capacity is scheduled to come on-line in 2nd half of 2018.
Comments: Japanese based Asahi Kasei Chemicals, is planning to expand on its solution-polymerized styrene-butadiene rubber (S-SBR) production plant in Jurong Island, Singapore. The plan is an extension to the manufacturing location which was built in two phases starting in 2011 and completed in 2015. S-SBR is a synthetic copolymer of butadiene and styrene. It is used for the production of high performance and fuel efficient vehicle tires. The proprietary technology will produce rubber with high productivity and quality, under the brand name TUFDENETM.
Sumitomo, Zeon look into S-SBR business consolidation
Sumitomo Chemical and Zeon Corporation plan to jointly study the possible consolidation of their solution-polymerized styrene butadiene rubbers (S-SBR) operation. Likely forming a JV for the S-SBR business. The two companies have an MoU (memorandum of understanding) in place which is a non-legally binding agreement. The two entities plan to complete due diligence by September 2016, sign a definitive agreement by December 2016, and form a joint venture by April 2017.
Comments: The tire industry is the main consumer of S-SBR, which accounts for more than 50% of total global consumption. S-SBR has experienced demand growth due to increasingly stringentspecifications on high performance tires and the need to develop fuel efficient tires. Many Japanese companies on the supply side, such as Sumitomo Chemical, Zeon Corporation, JSR and Asahi Kasei, are very active in S-SBR market. All have laid out plans to cater to growing S-SBR market. JSR has a S-SBR JV facility in Hungary currently under construction with scheduled completion in 2017. Asahi Kasei commits to remodel its Singapore S-SBR facility and boost production capacity by 30KTA by late 2018. The potential partnership between Sumitomo and Zeon, if realized, will strengthen R&D capacity for new product, improve cost structure, and secure a stable supply.
LG Chemical to boost elastomer production capacity by 2018
LG Chemical plans to build a 200KTA elastomer facility in Daesan, South Korea with budgeted investment of US$347.8 million. The plant is slated to come on-stream by 2018 and will be the nation’s largest elastomer plant when completed.
Comments: LG Chemical is the largest Korean chemical company, which is headquartered in Seoul, South Korea. LG Chemical markets its elastomer brand of products under the tradename LUCENETM. The product is useful in applications such as automotive, electric cables and in films. With the intended expansion of the elastomer plant, LG Chemical will be one of the largest manufacturers of elastomers in the world with an installed capacity of 290KT. This expansion will place LG Chemical in more direct competition with industry leaders such as DOW Chemical and ExxonMobil Chemical. LG Chemical planning to expand its production site in Daesan, South Korea; the company will be logistically better suited to serve growing markets in regions such as China and South East Asia.
BP puts its stake of Chinese petrochemical JV up for sale
British Petroleum (BP) is a seeking buyer for its 50% stake of Shanghai SECCO for an estimated US$2-3 bill ion. Thepetrochemical JV is equally-owned with Sinopec, which will maintain a right of first refusal.
Comments: Shanghai SECCO produces 3,200KTA of petrochemical products, including ethylene, propylene, butadiene, SM, PE, PP, PS, ACN and SAR. The company formed in 2001 with total investment of US$2.7 bill ion and is the BP’s the largest investment in China. BP’s decision for selling off its stocks of SECCO comes at the period of low crude oil prices, coupled with three straight quarterly loss and ongoing payoff plan for 2010 Gulf of Mexico oil spoil. Since 2010, BP has sold more than US$50 bill ion worth of assets. The company, stated in its 2nd quarterly report, plans to offload US$3-5 bill ion of assets, of which US$1.9 bill ion has been approved.
Lotte Chemical to complete five petrochemical projects by 2018
According Q2 quarterly earnings report, Lotte Chemical plans to mechanically complete five petrochemical projects between now and end-2018. These projects include Korea C5 project in 2H 2016, Korea condensate splitter in 2H 2016, Korea specialty rubbers project in 1H 2017, Malaysia olefin and aromatic complex in 2H 2017 and US cracker and MEG complex in 2H 2018.
Comments: In recent years, Korea’s Lotte Chemical has strategically expanded its presence both in Korea and oversea via mergers and acquisitions (M&A) and partnership with foreign entities for regional demand growth. In Uzbekistan, Lotte Chemical as part of Korean consortium built a gas-based petrochemical complex which came into service in early this year. In June 2016, Lotte Chemical completed the acquisition of Samsung’s chemical affiliates, including Samsung SDI and Samsung Fine Chemicals, which entered into general chemical market. With these five petrochemical projects both in upstream and downstream scheduled for completion over the next three years, Lotte Chemical is expected to enhance its petrochemical business and strengthen global competitiveness through diversifying raw material sources (both gas and naphtha) and broadening product portfolios.
Mitsui Chemicals to expand production capacity for elastomer
Mitsui Chemicals, Inc. is planning a capacity expansion at its wholly-owned subsidiary, Sun Alloys Co Ltd. Milastomer™ vulcanized thermoplastic elastomer (TPV) expansion project will boost production capacity by 5KTA with commercial operation scheduled for October 2017.
Comments: Milastomer™ is vulcanized thermoplastic elastomer (TPV) used mainly in automotive exterior and interior applications due to its low density and moldability. Mitsui Group is focused on strengthening and expanding its olefinic thermoplastic elastomers business particularly in Asia where growth of automotive markets is high. This can be seen from Sun Alloys’ expansion that comes after start-up of Mitsui Chemicals Functional Composites (Shanghai) Company Limited in China in 2015 for manufacture and sale of Milastomer™ (and Admer™) in the Asian region.
COAL-TO-CHEMICAL
China’s Connell Chemical awards its 1st phase of MTO project to Wilson Engineering
China’s Wilson Engineering has been awarded an EPC contract from Connell Chemical for a 300KTA methanol-to-olefin (MTO) unit, which is the phase I of Connell Chemical’s 600KTA MTO facility. The MTO project will use an integrated solution that combines UOP’s MTO+OCP (Olefin Cracking Process) technology and Wilson’s high recovery olefin separation technology. The first phase of this project is scheduled to be completed in October, 2017.
Comments:China’s Connell Chemical, located in Jilin province, is a major aniline supplier in China and also produces nitrobenzene, ammonia, and nitric acid. The city of Jilin is the second largest fine chemical production hub in Northeastern China, which mainly relies on ethylene and propylene as feedstock for production. Currently, the current ethylene capacity in Jilin is 700KTA and still far from being sufficient. Connell’s methanol-to-olefins unit is aiming to supplement local olefin supply and complete the local chemical production chain. Meanwhile, Connell Chemical plans to build two 3,600KTA methanol facilities in Texas City, Texas that take advantage of cost-competitive NGL and then export back to China. Connell’s Texas methanol plants are scheduled to be completed by 2020.