ADI Chemical Market Resources Newsletter
May 12, 2008

 

LyondellBasell to stop PP production at its Morris, Illinois plant

LyondellBasell Industries announced that it will stop producing polypropylene at its Morris, Ill. plant in the fourth quarter of 2008. Production will be shifted to other sites. Polyethylene production at the site will not be affected.

LyondellBasell currently operates three polypropylene lines in Pasadena, Texas, and two polypropylene lines in Lake Charles, La. All of these units use Spheripol process technology. LyondellBasell’s joint venture Indelpro, located in Mexico, operates a Spheripol process line and is building a new 350 KT Spherizone polypropylene plant at Altamira which is scheduled to start up later this year.

Comments: This is the only remaining PP plant for Equistar based on Novolen technology. Equistar has sold all of its other PP assets to Sunoco. It did not make much sense for Equistar to operate this plant except that it had a relationship with Novolen and may have been used as a demonstration plant in North America. After the acquisition by Basell, it was speculated that this plant will be idled. LyondellBasell has been rationalizing its capacity to use its existing plants and technology. The plant in Morris. IL had a total capacity of 135 KT and this capacity can be shifted to other plants in the US or the upcoming new Spherizone plant in Mexico.

DuPont to invest $150 million in ethylene copolymers

DuPont announced that it is investing approximately $150 million to expand and upgrade manufacturing facilities in Europe, the United States, and Asia to meet strong demand for its specialty ethylene copolymers in photovoltaics, packaging, and automotive markets, as well as for new infrastructure in emerging economies.

According to the company, this investment will result in over 200 million pounds of additional capacity, enhanced capability of its current facilities, and reduced energy consumption of its operations.

DuPont added capacity at Dordrecht, the Netherlands, to expand the Fusabond® modifiers and Bynel® adhesive resins. The new capacity is expected to be online in 2009. Enhanced capabilities for DuPont™ Surlyn® ionomer resin and Vamac® ethylene acrylic elastomers from DuPont Performance Elastomers and upgrades to improve energy efficiency at DuPont’s Sabine operation in Orange, Tex. These will be operational in 2008 and 2009. Production efficiency investments at the Victoria, TX, facility for DuPont™ Elvax® ethylene vinyl acetate copolymer (EVA) products. These will be operational in 2008 and 2009.

As previously announced, DuPont will construct an EVA facility near Beijing, China, with its joint venture partner, Sinopec. The facility, the first EVA manufacturing operation for DuPont in China, will supply a broad range of EVA products, thus strengthening DuPont’s position in the world’s fastest-growing EVA market. The facility will begin operations in 2009.

Comments: Ethylene copolymer markets have seen steady growth in recent years and the pricing for these materials has also been very stable. EVA markets have seen significant price increases due to increasing demand and limited supply of vinyl acetate monomer. Specialty products offer stable earnings during the time of economic slow-down and in times like today when the commodity markets will face more competition from cost-advantaged products from the Middle East. DuPont is one of the leaders in these markets supplying acid copolymers, ionomers, and EVA copolymers. ExxonMobil is also a leader in this market participating in all three segments.

Pertamina plans to construct a polypropylene plant

Indonesian state oil firm Pertamina plans to build a polypropylene plant near its 125,000 barrels-per-day Balongan refinery complex in West Java.

Pertamina will expand its propylene output for feedstock for the planned polypropylene plant. Another Pertamina official said the polypropylene plant will cost around $200 million with a production capacity of around 200,000 tons a year. Indonesia currently has a production capacity of around 600,000 tons per year of polypropylene.

Comments: Pertamina is an Indonesian government-owned corporation that extracts and refines the country’s oil and gas reserves. It was created in 1968 by the merger of Pertamina and Permian. Currently, Pertamina owns 7 oil refineries which have a capacity of 1,041.2 thousand barrels, and 2 gas reserves with a capacity of 31 tons per year in addition to its petrochemical business which is a very small portion of its overall portfolio. Indonesia is Asia Pacific’s only member of OPEC, but aging fields and lack of investment have made the country a net crude oil importer in recent years. The current announcement by the state-owned oil firm is to leverage its feedstock position to improve its position in commodity plastics such as PP to satisfy the growing domestic demand.

Solutia to increase PVB resin capacity in Europe

Saflex®, a unit of Solutia Inc., announced that it will expand its PVB resin manufacturing facilities in Antwerp, Belgium, adding 15,000 metric tons of annual capacity, which is planned to come on-stream in 2010. PVB resin is the key raw material used in making PVB sheets, which the company markets under the Saflex brand name. This investment will feed the company’s new Saflex PVB sheet extrusion line in Ghent, Belgium, which will start up later in 2008 and will create 40 million square meters of new capacity once it ramps up to full production.

In addition, Saflex is currently expanding its PVB resin capacity at its plant in Springfield, Mass., which will add 12,000 metric tons of products to the site in early 2009.

Solutia has been investing continuously to meet growth in demand for its PVB resin and sheet. It has constructed a new Saflex PVB sheet production facility in Suzhou, China; added capability at its Saflex PVB sheet production facility in Santo Toribio, Mexico; increased the output of its Indian Orchard PVB sheet production facility in Springfield, Mass. by 50%; and, as noted above, is close to completing a major new Saflex PVB sheet production line at its facility in Ghent, Belgium.

Comments: PVB is used as an interlayer in the manufacture of safety glass for automotive and architectural applications. The demand for safety glass is increasing significantly in architectural applications as compared to automotive applications. DuPont and Solutia are the two largest producers of PVB globally.

Solutia’s decision to invest in PVB business will improve its profitability and overall portfolio of commodities vs. specialties. This announcement is consistent with the trend in developed regions to focus more on specialties as compared to commodities.

For more information on PVB, please refer to our multiclient report on Vinyl Acetate Derivatives– 2006-2011-2025.

NOVA Chemicals and Reliance Industries to form a building and construction joint venture in India

NOVA Chemicals announced its plans to form a building and construction joint venture with Reliance Industries Limited. The proposed new joint venture plans to leverage NOVA Chemicals’ green building and construction technology to design, engineer, and build a range of high-efficiency structures for the Indian sub-continent.

According to Nova, this new venture will enable the company to work with Reliance to build a large, profitable business based on proprietary Performance Styrenics building and construction systems. The potential for energy-efficient buildings in India is very exciting and these systems are an excellent fit for Reliance Retail’s strategy.

These unique building and construction systems and parts, based on expandable polystyrene, minimize resource consumption while decreasing ongoing energy demand by as much as a third. The components of the system include structural and non-structural roofs, decking, and wall panels.

The new venture is expected to be operational by the third quarter of 2008 following the finalization of formal agreements. Initial steps necessary to manufacture components in India are underway. The first activity of the venture will be the construction of buildings for Reliance Retail in India.

Comments: Nova Chemical has had success in forming joint ventures in the styrenics business. The company posted a positive EBIT in the business after a long time. This JV with Reliance should further help Nova improve its performance styrenics business and gain the advantage of a faster-growing economy. This JV with Reliance should also strengthen their relationship for any future ties.

BASF to strengthen its automotive business in India

BASF announced its plans to expand its offerings for the automotive industry in India with investments in plants and technology. The company will build a new engineering plastics compounding plant at its existing site in Thane, which is expected to come on stream by the second half of 2009. As well as being used in the automotive industry, engineering plastics are also employed in the electrical and electronics industries, for example. BASF has also set up a computer-aided engineering (CAE) lab in Thane where its engineers design and optimize new engineering plastic parts in close cooperation with customers.

Comments: BASF’s move to establish a compounding plant for the automotive industry goes in line with the current situation with the industry in India today. The Indian automotive industry is growing rapidly with the increase in disposable incomes and standards of living that middle-class Indian families, estimated to be four million are experiencing. The growth in the automotive sector is close to 18% and these trends have encouraged many multinational automakers from Japan, U. S. A., and Europe to enter the Indian market mainly through joint ventures with Indian firms.

PetroLogistics subsidiary to construct propane dehyro plant in the US

PL Propylene, a subsidiary of PetroLogistics, announced a project to construct a 1.2 billion pounds per year propane dehydrogenation plant to produce propylene. The facility will be located in the vicinity of the Houston Ship Channel at the site of the former Houston olefins plant recently acquired by PL Propylene from ExxonMobil.

The infrastructure, logistics, and certain processing units of the former ExxonMobil plant will be used as the platform for the project, which will utilize the “CATOFIN” technology licensed by Lummus Technology, a CB&I company. When completed in mid-2010, the plant would produce both chemical-grade and polymer-grade propylene and would have extensive pipeline connectivity to propylene consumers. The plant would also produce commercial quantities of hydrogen and other co-products.

Comments: Over the last few years, propylene has grown at a faster rate as compared to ethylene. With more ethane-based crackers built recently, there has been an overall shortage of propylene. There are different methods of manufacturing propylene on purpose such as (1) Propane Dehydrogenation, (2) Metathesis, (3) Olefins Cracking, and (4) Methanol to Olefins. Propane dehydrogenation is a catalytic dehydrogenation process using propane feed and producing a single propylene product with around 84% selectivity. UOP and ABB Lummus are the main licensors of this technology.

The construction of this facility will allow the easing of the propylene shortage.

Sabic plans to construct a petrochemical complex in Iraq

Saudi Basic Industries (SABIC) is in talks with Iraq’s government “to build a new factory to produce polyethylene and polyvinyl chloride. Sabic joins companies like Royal Dutch Shell PLC (RDSA), Dow Chemical Co., and Total S.A. as the latest to flirt with a major investment in Iraq amid ongoing political uncertainty and violence in the country.

Iraq plans to lure companies like SABIC with access to each vast and cheap natural resources in return for investment as it struggles to rebuild its shattered economy.

Other plans to rebuild Iraq’s dilapidated hydrocarbons sector involve the rehabilitation of an existing phosphate plant by a consortium of companies from the U.A.E., India, Singapore, and Syria in the west of the country.

Comments: With the availability of lower-cost feedstock, there will be tremendous interest in investing in Iraq. SABIC has the required experience in participation in the Middle East and will largely benefit from the complex.

Teknor Apex introduces TPEs based on new olefin block copolymers – Telcar® OBC Compounds

Teknor Apex introduced a new family of thermoplastic olefin (TPO) elastomers that have the performance and softness limitations of conventional TPOs and exhibit processing and physical property advantages over a wide range of other thermoplastics elastomers (TPEs).

Trade named Telcar® OBC, the new TPO compounds are blends of a rigid polyolefin and INFUSE olefin block copolymers (OBC) from Dow, which Teknor Apex uses under a newly established agreement with Dow. Conventional TPOs have rubber phases consisting of EPDM rubber or random ethylene copolymers.

Conventional TPOs. Telcar OBC compounds provide far more rubber-like elasticity (as measured by compression set at 70 deg. C.), greater tensile strength, tear strength, and elongation, and improved processability, as compared with TPOs with rubber phases of EPDM or random ethylene copolymer. In addition, they will be available in a much broader range of Shore A hardnesses, from the single digits to 90 and above. By comparison, standard TPOs are generally not available below 70.

According to Teknor Apex, in comparison with many grades at equivalent hardness, Telcar OBC compounds exhibit superior compression set, heat aging performance, chemical resistance, and processability, as well as equivalent or greater tear and tensile strength.

Teknor Apex recommends new compounds for opaque and translucent applications such as food and beverage packaging, office products, medical devices, consumer goods, and industrial products like hoses, tubes, gaskets, seals, weatherstripping, and wire and cable. Telcar OBC compounds meet FDA requirements for regulated uses.

Teknor Apex currently supplies Telcar OBC compounds for injection molding and extrusion. The compounds range from 30 to 75 Shore A in hardness and are available in unfilled and filled formulations, including three unfilled grades that are oil- and plasticizer-free. In development are super-soft, gel-like compounds and formulations for blow molding.

Comments: This is a win-win situation for both parties. For Teknor Apex, this is a great opportunity to build a new TPE product line based on Dow’s unique OBC technology and as well name recognition. For Dow, this will speed up its efforts in developing new market opportunities for its new Olefin Block Copolymer (OBC) product INFUSETMgrades. Dow seems to be committed to finding suitable “ready-to-drop-in” commercial applications for the INFUSETM grades. As we reported before, Dow has already started similar efforts – I INFUSETM -based TPE products developed in collaboration with GLS Corporation, which is recently acquired by Poly One Corporation. We suggested (see FlexPO 2007 Conference proceedings for further details) such an approach as an immediate viable opportunity for Dow’s INFUSETMgrades in polymer modification and blends to achieve new product attributes that are not available by conventional TPOs and TPEs. Finally, we are pleased to see our prediction becoming reality. By collaborating with TPE industry leaders – both Teknor Apex and GLS (Poly One) Corporation, Dow is doing the right thing – plucking the “low-hanging fruits” of commercial opportunities. In the long run, we expect Dow to exploit its unique OBC technology – further expand INFUSE grade slates by incorporating high modulus (i-PP, 4-Methylpentene) and styrenic “hard phases” and complementary “soft phases” in the OBC backbones that have higher potential in various high-performance end-use applications, especially requiring high heat environment such as automotive under-the-hood parts.

 

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