Cninese new PDH plants face up to Asian propylene glut

MOSCOW (MRC) -- The startup of two more propane dehydrogenation plants in China by mid-2015, coming on the heels of the four facilities that have begun operations over the past year, will exacerbate Asia's propylene glut and likely force the newcomers to curb output to defend their margins, reported Apic-online with reference to industry sources.

Some of the new plants may also be forced to continue reselling their contracted propane cargoes, in the hope of capitalizing on steady prices for offloading unwanted the feedstock during the winter (November through February), sources said.

In total, the six new PDH plants will be able to produce 3.51 million mt/year of propylene.

Yantai Wanhua Polyurethanes is set to start up China's single-biggest PDH plant, located in Shandong province, next January or February, according to a source familiar with the matter. The new plant will be able to produce up to 750,000 mt/year of propylene and will consume up to 900,000 mt of propane and 600,000 mt of butane annually. The company had scheduled to commission the plant in December, though the source said the early-2015 startup is still in line with its original plan.

Oriental Energy now aims to start its 660,000 mt/year PDH plant in Jiangsu province around end-2014 or early-2015, according to another source familiar with that project, though others said the plant may not start until mid-2015. It had previously planned to launch phase one of the facility in the second half of 2014, a company source said in April.

The most recent startup, the 450,000 mt/year Shaoxing Sanyuan Petrochemical plant owned by China's top propylene importer, has been producing chemical-grade propylene since September 12. It is unclear if the plant is producing polymer-grade propylene yet, although a company source had said it was due to start last week.

We remind that, as MRC wrote previously, Saudi Arabia’s Advanced Petrochemical Co. plans to invest in a project worth around USD1 billion to produce propylene in South Korea. The PDH project, a joint venture with South Korea’s SK Gas, is due to start up in H1-2016. The project, with annual production capacity of 600,000 tons, will be financed 40% equity and 60% debt. Advanced will hold a 35% stake in the project.
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Scientex investing in PE, BOPP film capacity

MOSCOW (MRC) -- Flexible packaging manufacturer Scientex Bhd, based in Malaysia, is planning investment of 300 million Malaysia ringgits (USD91.4 million) over three years to expand its polyethylene and biaxially oriented polypropylene film production capacity, as well as enter the cast PP film market with new production lines, said Plasticsnews.

Scientex announced Sept. 24 it will construct a BOPP film manufacturing plant in Pulau Indah, Port Klang, Malaysia, in collaboration with Japan’s largest BOPP film producer Futamura Chemical Co. Ltd. In 2013, Scientex bought Malaysian BOPP film producer Seacera Polyfilms, and its new plant will expand group production capacity tenfold from the current 6,000 metric tons per year to 60,000 when it is completed in 2016.

Scientex’s wholly-owned subsidiary Scientex Great Wall will oversee the project and issue 10 million new shares to finance the project. The agreement with Futamura will see Scientex and Futamura inject capital of 40 million ringgits (USD12.1 million) each to acquire five million shares representing 5 percent equity stake in SGW. Futamura is also entitled to purchase up to 20% of the issued shares of SGW over the next five years.

The Japanese market is a key one for the Port Klang plant, and Futamura would be involved to oversee quality management to Japanese BOPP quality standards. Scientex said that Futamura plans to import 18,000 metric tons per year of BOPP films from SGW, which would account for more than 35 percent of Japan’s annual import market of 48,000 metric tons.

The project also involves Scientex starting cast PP film production in 2015 with annual capacity of 12,000 tonnes. Scientex’s also will boost its PE film production in Rawang to 48,000 metric tons per year from the current 24,000 by the end of 2014.

Scientex’s plans are supported by investments in new extrusion lines supplied by Japan Steel Works (JSW), Reifenhauser Group and Windmoeller & Holscher (W&H).

JSW will provide the machinery to SGW for the production of BOPP film, which is expected to achieve higher-performance BOPP film at a wider and higher speed than JSW’s previous model.

Reifenhauser said it is building two 5-layer cast PP film lines from its Midex series for the production of lamination film and metallizable film for SGW. Advanced components such as the Reicofeed 2.1 feedblock will be installed in the lines.

As MRC wrote before, Scientex Bhd reached an agreement to buy GW Plastics Holdings Bhd for 283.2 million Malaysian ringgit (USD92.63 million) in cash and guaranteeing current debts. Scientex subsidiary Scientex Packaging Film Sdn Bhd will take over Great Wall Plastic Industries Bhd and GW Packaging Sdn Bhd, GW Plastics said in a filing.

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Pemex signs cooperation agreement with Exxon Mobil

MOSCOW (MRC) -- Mexico's state oil company Pemex and Exxon Mobil Corp signed a non-commercial agreement on Thursday to jointly explore potential upstream and downstream business opportunities, said Reuters.

The agreement comes against the backdrop of the landmark constitutional reform, signed into law under Mexican President Enrique Pena Nieto last year, that ended Pemex's 75-year-old oil and gas monopoly.

Next year, the company is expected to seek joint venture partners for the development of a range of oil and gas fields, thanks to the legislation.

The memorandum of understanding signed with Exxon Mobil aims to "establish the bases for dialogue and analysis of business opportunities in upstream and downstream areas," the statement said.

Upstream projects include exploration and production of crude oil or natural gas, while downstream ventures could include refining, storage or oil and gas transportation projects.

As MRC wrote before, Pemex signed a noncommercial agreement with Exxon Mobil to share technical and scientific information of mutual interest in April, 2013.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world"s second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).

Exxon Mobil is the world's largest publicly traded international oil and gas company, and produces in nonconventional areas like the deep waters of the Gulf of Mexico on the U.S. side. Pemex is just starting exploration in the deep waters of the Mexican side of the Gulf.

MRC

Solvay completes acquisition of Flux GmbH

MOSCOW (MRC) -- Solvay has finalized the acquisition of Flux Schweib- und Lotstoffe GmbH (Flux), complementing its aluminum brazing capabilities and products with fast-growing formulations for automotive heat exchangers and stationary heat, ventilation and air conditioning units, as per companie's press release.

Flux, headquartered in Garbsen and with sales of EUR21 million in 2013, will become part of Solvay’s Global Business Unit (GBU) Special Chemicals whose Nocolok aluminum brazing products are recognized as the industry standard.

Combining Solvay’s fluorinated chemical research and innovative capabilities with Flux’s outstanding know-how in formulations and applications will form a strong global platform for growth, bringing innovative and tailor-made solutions to customers.

As MRC wrote before, Solvay SA and Ineos Group AG have given a name to their chlorovinyls joint venture, Inovyn, as the two firms prepare the launch the company by the end of 2014. The new company will officially open following divestments by both companies required by the European Commission. Until completion, Solvay and Ineos will continue to run their businesses separately.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers – fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.

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Recycled polypropylene gets food contact approval from US FDA for 100%

MOSCOW (MRC) -- Alabama based KW Plastics' recycled PP has been approved by the US Food and Drug Administration for food contact at levels of up to 100%, said Plastemart.

The letter expands FDA’s non-objections to produce a post-consumer resin suitable for use in the fabrication of disposable food service items, under Conditions of Use C-G. In addition to the reusable food contact crates and pallets, appropriate applications for KWR621 FDA now include disposable cutlery, soup containers, and hot and cold drink cups, such as stadium cups.

"We are excited about the FDA’s decision to expand the conditions and the expanded opportunities this will bring our customers," Scott Saunders, General Manager for KW Plastics Recycling Division, said. "The demand for food grade PCR is growing each day. What may have seemed impossible a few years ago is a reality today. Achieving our second FDA NOL within 12 months is a testament to the investment and research KW Plastics commits to growing our industry."

As MRC wrote before, the polyethylene film recycling working group within the American Chemistry Council expects to see growth in thin film recovery and recycling. Chevron Phillips Chemical Co., KW Plastics Recycling, Mil-tek and Verdeco Plastics Inc. have joined the ACC's Flexible Film Recycling Group (FFRG), which already included major chemical and recycling names such as Dow Chemical Co., ExxonMobil Chemical Co., S.C. Johnson and wood-alternative decking company Trex Co. Inc.

Alabama-based KW Plastics is a major recycler and a supplier of plastic one gallon, quart, pint and half-pint containers for the paint and coatings industry.
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