In Asia liquid epoxy resins prices to decline further in July

(ICIS) -- Asia's liquid epoxy resin (LER) prices are expected to continue falling in line with the region's weak downstream demand and declining feedstock epichlorohydrin (ECH) and bisphenol A (BPA) prices, industry sources said on Wednesday.

LER prices fell by USD 200/tonne (EUR 140/tonne) over the last four weeks to settle at USD 3.250-3.550/tonne FOB (free on board) northeast (NE) Asia (iso-tank) on 28 June, according to ICIS.

The Chinese government has imposed two interest rate hikes and raised the reserve requirement ratio six times this year, causing the poor performance in the country's downstream markets, several Chinese producers said.

The weak downstream demand in China is causing regional LER prices to decline, as end-users are finding difficulty in raising capital for their purchases, Chinese producers said. LER prices are likely to soften further if downstream demand in China continues to weaken.

MRC

(ICIS) -- Spot prices of linear low density polyethylene (LLDPE) film in the Middle East continued to plunge, taking the cue from the key China market, market players said on Wednesday.
Offers for July LLDPE film cargoes were at USD1.280-1.290/tonne (EUR 896-903/tonne) DEL (delivered) Saudi Arabia and USD 1.320-1.350/tonne DEL Dubai, down USD 100-120/tonne week on week, they said. The GCC offers for July cargoes were about USD 130-150/tonne lower than the prices for June shipments.

Prices have fallen by 13% from the year's peak in of USD 1.520-1.560/tonne DEL Dubai in early April, tracking the slide in Chinese prices, according to ICIS data.

Meanwhile, mounting LLDPE inventory of Middle Eastern producers lead them to substantially lower offers to entice buyers, market sources said, adding that procurement by converters is very limited.

Regional converters do not welcome the price slump in LLDPE as it as creates difficulty in cost management. They said they prefer a gradual price decline.

MRC

(ICIS) -- Synthetic rubber producers in Asia are mulling cutting output or shutting plants for maintenance in July and August, as costs of feedstock butadiene (BD) continued to spike, wiping out margins, industry sources said on Wednesday.

Losses will likely be incurred with BD prices hitting an all-time high of USD 4.000/tonne (EUR 2.800/tonne) CFR (cost and freight) Asia on 24 June. BD prices have shot up by USD 1.200/tonne from 1 April, according to ICIS data.

Korea Kumho Petrochemical Co (KKPC), Asia's largest synthetic rubber producer, plans to halve production at its 410 KTa butadiene rubber (BR) plant next month, said a company source.
⌠Our BR margins are now negative and we have no choice but to cut our BR production output by 50% in July, and may shut down our BR plant in August if the BD price continues to rise, the source said.

MRC

(ICIS) -- US cellulosic ethanol production will sharply fall short of targets mandated under the Renewable Fuels Standard (RFS), an industry executive predicted on Tuesday. Cellulosic ethanol is identical to regular ethanol, except that the product is made from biomass that does not include edible feedstocks, such as corn.

Under the RFS, the US would have to use 10.5bn gal of cellulosic ethanol by 2020, but global production of that type of biofuel will likely only total 500m gal that year, said Phil Madson, president of KATZEN International.

Cellulosic ethanol production is still at the lab stage and there will not be enough of it to meet those targets, he said on the sidelines of the International Fuel Ethanol Workshop (FEW) in Indianapolis.
Madson pointed to a recent move by the Environmental Protection Agency (EPA), which last week proposed reducing the mandate for US cellulosic ethanol consumption for 2012 to 3.45m-12.90m gal, from a previous 500m gal target.

MRC

(Plastemart) -- Gevo Inc. has successfully produced fully renewable and recyclable polyethylene terephthalate (PET) with its potential customer, Toray Industries, Inc. Toray is one of the world's leading producers of fibers, plastics and chemicals, while Gevo is a leading renewable chemicals and advanced biofuels company. In April 2010, the two companies signed a non-binding letter of interest for the future supply of renewable paraxylene derived from Gevo's isobutanol sometime in 2012 or thereafter.

Working directly with this important potential customer, Gevo employed prototypes of commercial operations from the petrochemical and refining industries to make paraxylene from isobutanol. This renewable paraxylene was sent to Toray for conversion into biobased PET articles. Toray employed its existing technology and new technology jointly developed with Gevo and used Gevo's paraxylene and commercially available renewable mono ethylene glycol (MEG) to produce fully renewable PET (all of the carbon in this PET is renewable). The next step in this collaboration between Gevo and Toray is to move from lab-scale "proof of concept" to establishing commercial-scale operations. Gevo is currently working with partners to optimize the process technology needed to produce para-xylene from isobutanol at commercial-scale and competitive economics.

MRC