Shares of petrochemical companies in Asia tumbled on Friday

(ICIS) -- Shares of petrochemical companies in Asia tumbled on Friday in line with sharp falls across regional bourses on concerns over a possible demand slump, with fears of a double-dip recession hounding the global markets. The Asian markets took the cue from the 4.31% plunge in US equities overnight, which was accompanied by a slump in US crude prices.

Recent data from the US and the debt crisis in the eurozone do not inspire confidence about the strength of the recovery of the global economy from the 2009 recession. In the US, consumer spending fell for the first time in nearly two years, logging in a 0.2% decline, while its manufacturing sector grew at its lowest rate in two years in July.

There are concerns that the troubles in the western economies may drag down Asian economies, which managed to recover faster from the global recession, but are currently dealing with high inflation.

MRC

(Plastemart) -- The Saudi International Petrochemical Company (Sipchem) announced that it has spent over SR150 mln to construct its corporate Research and Product & Application Center - at the Dhahran Techno Valley (DTV) of King Fahd University of Petroleum and Minerals (KFUPM).

Sipchem has previously signed a memorandum of understanding with the Ministry of Petroleum and Minerals and King Fahd University of Petroleum and Minerals for the establishment of the center on a 15000 square meters area at DTV. Based on this memorandum Sipchem shall construct, manage and operate this center.

Sipchem has already started the construction of the center at the site. The center has been designed on the most modern building designs that contain state-of-the-art laboratories and equipment with the objective of developing the usage of polymer products and the downstream industries in the Kingdom which currently include more than 860 plants. The company targets to start operation of the center in the middle of 2012.

MRC

(Reuters) -- Asia's naphtha price stayed at a two-week low on Thursday, while cracks edged higher and South Korean spot prices flipped to premiums for the first time in about two months, supported by recovering ethylene and plastics prices.

LG Chem bought two open-spec cargoes totalling around 50 KT for second-half September arrival at Daesan and Yosu.

Prices were estimated to be in the range of 50 cents to USD 1 a tonne premium to Japan spot quotes on a cost-and-freight (C&F) basis.

This is the first time spot prices were in premiums since May 26. The prolonged shutdown of Formosa's 700 KTa No. 1 cracker and an upcoming maintenance at its 1.2 million tpy No. 3 cracker are creating a tighter ethylene market.

MRC

(Gevo) -- Gevo, a leading renewable chemicals and advanced biofuels company, announced it plans to work with South Hampton Resources, a subsidiary of Arabian American Development Co, to build a hydrocarbon processing demonstration plant at their facility just outside of Houston in Silsbee, Texas. This demonstration plant is expected to process up to 10.000 gallons of Gevo's isobutanol per month into a variety of renewable hydrocarbon materials including jet fuel for engine testing, isooctane for gasoline, isooctene and paraxylene for polyethylene terephthalate (PET) and will supply other potential customers with material for product qualification and evaluation. The demonstration plant is slated for completion before the end of 2011. The contract between the companies is for two years with one-year extensions thereafter.

MRC

(Reuters) -- Japan's JX Nippon Oil & Energy Corp will join forces in petrochemicals and lubricating oils with SK Innovation Co of South Korea, the Nikkei business daily reported.

Faced with flagging demand for gasoline and other petroleum products in their respective home markets, the two giants will invest around 120 billion yen (USD 1.52 billion) in a pair of new production ventures in South Korea, the paper said.

A formal agreement on the business partnership is expected as early as Friday. The new petrochemicals and lubricants factories will be built on the grounds of the South Korean group's refinery complex in the southeastern city of Ulsan. JX Energy will invest more than 50 billion yen in the two ventures, the Nikkei said.

In petrochemicals, the JX Holdings Inc unit will form a 50-50 venture with SK Global Chemical Co, a unit of SK Innovation. Production of paraxylene, an oil-based raw material for synthetic fibers and plastics, is expected to begin around 2014, the business daily said.

At an investment of some 90 billion yen, the new facility will have an annual output capacity of about 1 million tons, making it one of the biggest in the world, the daily reported.

This will bring JX Energy's total paraxylene capacity, now at 2.62 million tons a year, to about 3.1 million tons and raise its share of the Asian market to around 15 percent, cementing its position as the top producer in the region, the paper reported.

MRC