China's styrene market to remain subdued for several weeks

(ICIS) -- China's styrene monomer (SM) market is expected to remain subdued for several weeks because of weak downstream demand ahead of the Lunar New Year holiday, industry sources said on Wednesday. Trade in the normally active SM market in east China has slowed as traders have lowered their purchasing volumes in December to maintain their margins, a major trader in east China said. In addition, there were few concluded deals because of weak demand from end-users as the year-end is the traditional off-peak season, the trader added.

The Lunar New Year in 2012 is earlier [than usual], so we do not have to buy SM for production because our expandable polystyrene (EPS) unit will be shut during the holiday, a domestic EPS producer said.
The domestic spot prices of SM fell to yuan (CNY) 9,700-9,750/tonne (USD1,523-1,530/tonne) ex-tank Zhangjiagang on 13 December, from 9,950-10,000/tonne ex-tank Zhangjiagang at the beginning of November, with a few deals heard done, according to data from Chemease, an ICIS service in China.

Most traders and end-users will be unable to conclude deals in the second half of December because of China's tight monetary policies and the traditional lull period in the market, a second east China-based trader said. ⌠I may not buy any large-volume cargoes during the second half of December, the second trader said. ⌠If I were to buy, I will have to apply for special approval from my [management], so it is better for me to wait until next year, the trader added.

The domestic prices of SM in east China are expected to hover at the current levels during the second half of December, the industry sources said.

MRC

(ICIS) -- Access to technology will be the main issue for Middle East petrochemical producers as they shift strategy to push downstream into value-added chemicals, Paul Harnick, chief operating officer of KPMG's chemicals and performance technologies practice, said on Tuesday.
The Arabian Gulf region "can sort out most things", he said, "such as infrastructure, logistics and raw materials, but it needs to acquire the technology".

KPMG, a global management consultancy, is launching a special report at this year's Annual GPCA Forum, entitled "The GCC in 2020: Downstream expansion of the Middle East chemical industry". The report, which forms the latest issue of KPMG's Reaction chemical magazine, has been developed with the Gulf Petrochemicals & Chemical Association (GPCA) and is co-branded as a KPMG/GPCA publication.

Said Harnick: "The report is very timely as the move downstream is getting much more important for Gulf producers. This is being driven by two things: regional demographics that are seeing growing populations and an increasing need to create jobs, and the desire to add yet more value to the region's oil and gas production."

Looking at the four main petrochemical producing regions, Harnick said that the Middle East continues to have an advantage with feedstock provision, while Asia has rapidly growing markets, and Europe and North America have an advantage in technology. This presents a win-win' situation for Western technology holders willing and able to create joint ventures with Middle East partners.



Harnick pointed to the Saudi Aramco/Dow Chemical mega-complex being planned for Al-Jubail in Saudi Arabia as a case in point. "They have agreed things so both partners are going to win, with a trade off between technology advantage and feedstock access."
But equally, added Harnick, Middle East players have a cash advantage that will allow them simply to buy-in technology in some cases, under licence or through acquisition. However, there is a risk here that political issues may prevent transactions if governments decide technology ownership is sensitive.

MRC

(ICIS) -- The outcome of the Durban climate change conference in South Africa has fallen short of the expectations of Germany's chemical industry, a trade group said on Sunday.

Participants at the the UN climate conference at Durban on Sunday agreed to extend the life of the Kyoto treaty and to put in place a new binding climate change accord by 2015 which will take effect on 2020.

"That deal is not enough for Germany's chemical industry," said Utz Tillmann, general manager of Frankfurt-based Verband der Chemischen Industrie (VCI), in a statement.
In particular, it remained unclear exactly ⌠how binding the yet-to-be agreed new deal will be, he added.


"What Germany's chemical producers need is a fair deal that sets down the same framework of conditions for all major greenhouse gas-emitting countries," Tillmann said.
The negotiations at Durban showed that the world is not yet capable of reconciling both economic growth and climate protection, he said.

However, VCI is relieved that the Durban climate talks did not fail completely, Tillmann said.
Especially important is that large greenhouse gas emitters such as China no longer seek to block a roadmap for a new global climate change accord, he said.

MRC

(ICIS) -- A US judge approved on Monday BASF's proposal to pay $51m (┬38m) to settle allegations that it fixed isocyanates prices, leaving Dow Chemical as the last producer fighting the class-action lawsuit.

In settling the case, BASF denied that it fixed prices. Instead, BASF settled the case to avoid the cost, inconvenience and distractions that would come with prolonging the litigation.
The settlement was approved by the US District Court, district of Kansas.

The BASF settlement leaves Dow Chemical as the last producer fighting the price-fixing lawsuit.
The lawsuit was filed in 2004, and it accused Huntsman, Bayer, BASF, Dow and LyondellBasell of fixing prices. The complaint covered propylene oxide (PO)-based polyether polyols; methyl di-p-phenylene isocyanate (MDI); and toluene di-isocyanate (TDI) that were purchased from 1 January 1999 through 31 December 2004.
Earlier this year, Huntsman agreed to pay $33m to settle the lawsuit. The court approved the settlement in September.

Netherlands-based LyondellBasell has also settled the lawsuit. However, it paid nothing.
In 2006, Bayer agreed to pay $55.3m to settle the allegations.

In all, the isocyanates customers have reached $139.3m in settlements with the producers.
Meanwhile, a separate price-fixing lawsuit has been filed against many of the isocyanates customers. These customers used the isocyanates as feedstock to produce polyurethane foam.
The buyers of polyurethane foam accused the producers of fixing prices. That lawsuit is still pending in US District Court, northern Ohio district.

MRC

(ICIS) -- Germany's Sud-Chemie and South Korea's LG Chem announced on Tuesday that they have signed a memorandum of understanding (MoU) to jointly build a lithium iron phosphate plant.
The plant, which will have a 2,500 tonne/year capacity, is slated for completion by end-2014, LG Chem said in a separate statement.

"The new plant specific location is still not finalised, but it will be in South Korea," said LG Chem spokesperson Louie Chung.
The new plant will incorporate the South Korean firm's processing technology and Sud-Chemie's manufacturing technology, the chemicals companies said in a joint statement.
Financial details of the investment were not disclosed.


The joint venture will also involve development of other advance olivine structure materials such as lithium manganese iron phosphate in the later stage, LG Chem said.
Lithium iron phosphate is a cathode material used in rechargeable lithium-ion batteries.

"With LG as a partner, LFP lithium iron phosphate will establish itself as a storage material for large high-performance batteries," said Sud-Chemie chairman Gunter von Au in the joint statement.
In the same statement, LG Chem vice chairman and CEO Peter Bahnsuk Kim said: "It [joint venture] enables us to have strong competitiveness in the field of rapidly growing high capacity lithium-ion battery for Energy Storage System (ESS) and in vehicle applications."

MRC