Chairman of International eChem advised chemical companies to check stock levels

(ICIS) -- The volatility in chemical and oil markets indicates that the global economy is going through a structural change and entering the New Normal' of lower growth in mature markets, according to a leading consultant.


Speaking before Monday's launch of a free eBook on the New Normal, co-author Paul Hodges, chairman of UK-based consultancy International eChem, said the volatility is being caused by central banks trying too hard to stimulate economies that should naturally be entering a sustained period of lower growth.


According to Hodges, the post-war baby-boom generation is ageing, and therefore spending less money on big-ticket items such as new cars and bigger homes. The oldest baby boomers are 65 this year and their average age is 53. But central banks have missed this demographic change and are trying too hard to stimulate economic growth despite the structural fall in demand.


The growth in demand for chemicals and other commodities seen in the first quarter of 2011 may not be based on real demand, but speculative buying based on the fear of continued rising oil prices, Hodges said.


Hodges said conditions are not yet the same as the crash of late 2008 because the oil price has not collapsed.


He advises chemical companies to check stock levels and check with downstream customers, not just with convertors but with retail customers.


In the long run, innovative chemical companies can emerge as winners from the New Normal if they are properly prepared, said Hodges. They can create products suitable for the ageing baby-boomer population in the West, and meet the needs of people moving into the first stages of consumption.


MRC

HPCL is in talks for its petrochemical project

(Plastemart) -- Hindustan Petroleum Corporation Ltd (HPCL) is in talks with potential partners including Total of France for its Rs 45.000 crore petrochemical project at the proposed PCPIR near Visakhapatnam. State-owned HPCL expects to ground the project by the end of the fiscal. About 10 companies have so far evinced interest in the PCPIR in Andhra Pradesh.


HPCL is the anchor client in the project. HPCL would be keen on a partner willing to supply about 50-60% of the feedstock for the project. HPCL has already been allotted about 1.500 acres in the PCPIR by the Andhra Pradesh government. The company is now seeking allotment of another 1.000 crore for expanding the scope of the project.


The petroleum major's plan includes setting up a 350 mw captive power plant in its proposed complex, apart from the 15 mln tpa petrochemical facilities. The company already has an 8.5 mln tpa petroleum refinery in the vicinity of the proposed project. The refinery capacity too is expected to go up to 15.000 mw, entailing an investment of about Rs 10.000 crore.


MRC

Earthquake should give a boost to injection machine investment in Japan

(Plastics Today) -- The Great East Japan Earthquake should give a boost to injection machine investment in Japan but this will take time to manifest itself given persisting supply chain disruptions, noted Koichi Kasamatsu, global sales manager at injection molding machine manufacturer Sumitomo Heavy Industries (Tokyo, Japan). "Many plastics processors are ready to invest and restart operations but their customers in the auto industry are not, so they are holding off."


Kasamatsu says the Japanese automotive industry is unlikely to start ramping up production until October, and full production levels are expected to return only in December. However, some observers are also of the view that some export-oriented car production might eventually be permanently relocated overseas to countries such as the U.S. and Thailand, throwing further uncertainty over domestic processors' machine investment.


Kasamatsu also noted that while the Chinese economy remains strong, there has been a dip in imports there of Japanese machinery. "We are seeing increasing numbers of Chinese all-electric machines in the market and eventually we will have to compete with them," he explained during the Chinaplas show (May 17-20 in Guangzhou).


Sumitomo is looking at introducing lower cost all-electrics that do not compromise on performance, according to Kasamatsu. "Value engineering and value analysis will play a key part in this development effort to lower costs."


MRC

Ma'aden and Sahara Petrochemicals awarded Daelim EPC for caustic soda and EDC plant

(Arabian Oil and Gas) -- Saudi Arabian Mining Company ⌠Ma'aden and Sahara Petrochemicals have awarded South Korean contractor Daelim the engineering, procurement and construction contract (EPC) for the construction of a caustic soda and ethylene dichloride (EDC) plant, within the Sahara complex in Jubail Industrial City, the company said in a statement published on Tadawul. The project execution will take 34 months. Work commenced on the initial engineering and construction works in March 2010.


The USD 750m project will produce 250 KTa of caustic soda and 300 KTa of ethylene dichloride. The project will be owned on 50/50 basis between the two partners.


MRC

Petronas plans to build a USD 20 bln oil refinery and petrochemical complex

(C&EN) -- Malaysian state-owned oil refiner Petronas plans to build a USD 20 billion oil refinery and petrochemical complex in the state of Johor. And Saudi Basic Industries Corp. (SABIC) is going ahead with a polycarbonate investment in China and a large rubber project on its home base in Saudi Arabia.


Petronas says its refinery will have a processing capacity of 300.000 barrels per day. Its petrochemical complex will crack naphtha to annually produce 3 million metric tons of ethylene, propylene, and other olefins. A Petronas spokesman tells C&EN that the project, to be commissioned in 2016, is still in the early stages and that more details will come later.


MRC