BASF concentrates European production of paper coating dispersions in Ludwigshafen and Hamina

MOSCOW (MRC) -- BASF will concentrate the production of paper coating dispersions in Europe at two sites, the Ludwigshafen Verbund site and the Hamina site in Finland, said the producer on its site.

The goal is to strengthen BASF’s ability to compete in the challenging market environment of paper coating dispersions in the long term.

As a result of this decision, BASF SE has signed a contract with Synthomer Austria GmbH, a subsidiary of the British specialty chemicals manufacturer Synthomer plc, for the sale of the BASF production site for styrene butadiene dispersions for paper coating in Pischelsdorf, Austria, for a purchase price of EUR30 million. The buyer will take over 42 employees at the site. The transaction requires authorization by the relevant merger control authorities and is expected to be completed by late January 2018.

In future, BASF will supply customers for styrene butadiene dispersions in Europe from existing production capacities at the sites in Ludwigshafen and Hamina. Furthermore, paper dispersion production will continue without changes in the other BASF production sites for paper coating dispersions in the EMEA region, i.e. Gebze, Turkey and Durban, South Africa.

The styrene acrylic dispersions that are currently produced in Pischelsdorf are not included in the sale. The respective production will also be concentrated in Ludwigshafen.

"This decision helps us improve our competitiveness and creates the conditions necessary to offer products and services to our customers at attractive terms in the future. We will continue to supply our Austrian paper customers with the usual range of styrene butadiene and styrene acrylic dispersions combined with technical on-site services and optimized logistics," says Professor Thomas Schiele, Vice President Paper Coating Chemicals Europe at BASF. "At the same time, we are pleased that Synthomer, an experienced producer of dispersions, wants to further develop the site."

Paper dispersions are applied to paper together with other additives and pigments to improve such properties as the print quality of graphic paper as well as packaging paper and cardboard.

As a leading supplier of paper chemicals BASF offers, besides styrene butadiene and styrene acrylic dispersions for paper coating, a broad portfolio of customer-focused solutions and chemicals for the paper and packaging industry. These product lines for the production and coating of paper and cardboard are not affected by the decision.

As MRC wrote previously, within the next five years, BASF plans to invest globally more than EUR200 million in its plastic additives business, approximately half of which in Asia, focusing on capacity expansions and operational excellence, said the producer in November 2016. Plastic additives improve product properties such as scratch resistance or light stability, and optimize plastics manufacturing processes. As the leading global supplier of plastic additives with manufacturing assets in all regions, BASF is a major partner to the plastics industry.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of about EUR58 billion in 2016.
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Oil rallies on Chinese import boost and Mideast tensions

MOSCOW (MRC) — Oil prices firmed on Friday as bullish news from strong Chinese oil imports to turmoil in the Middle East put Brent on track for a more than 3% weekly gain, said Reuters.

The developments added to other signs that the market was finally rebalancing after years of excess. Brent was at USD57.42 at 1139 GMT, up USD1.17. US West Texas Intermediate (WTI) crude was at USD51.59 per barrel, up 99 cents from its last settlement.

The contracts were on track for weekly gains of more than 3% and 4%, respectively. Chinese oil imports hit 9 MMbpd in September, data showed on Friday. Imports averaged 8.5 MMbpd between January and September, solidifying China's position as the world's biggest oil importer.

"We woke up with the strong data from China. That's on the supportive side," said Olivier Jakob, managing director of PetroMatrix. China's huge imports have been strongly driven by purchases for its strategic petroleum reserves (SPR).

The nation has spent around USD24 B on building its crude reserves since 2015 and now holds around 850 MMbbl of oil in inventory, according to the International Energy Agency (IEA). Unrest in Iraq, and possible US action on the Iran nuclear deal, also underpinned prices.

On Friday, local television reported that tens of thousands of Kurdish fighters had deployed in the Kirkuk oil region to confront possible "threats" from Iraqi forces. Tensions between the two, which traders fear could cut off oil exports from the region, have been building since Iraq's Kurds overwhelmingly backed independence in a Sept. 25 vote.

Later on Friday, US President Donald Trump is expected to announce that he will not certify the 2015 Iran nuclear deal. The deal has to be re-certified every 90 days and is due for renewal on Sunday. The step would give the US Congress 60 days to decide whether to impose sanctions, but Iran's parliament speaker told the TASS news agency that decertification would "be the end" of the deal and cause "global chaos."

"US sanctions could cut off a lot of Iranian oil trade finance," FGE President Jeff Brown told Reuters this week. Despite the bullish signals, Bernstein Research said that the Organization of the Petroleum Exporting Countries needed to extend its agreement to reduce oil output beyond its current March 2018 expiry date in order to clear stocks.

OPEC, with other producers including Russia, have agreed to production cuts of 1.8 MMbpd. "OPEC will not achieve normalized inventory levels before cuts expire at the end of March," Bernstein analysts said, adding: "We believe an extension of cuts through 2018 should allow inventories to reach normalized levels before the end of 2018."
MRC

Asia oil buyers turn to US in hunt for cheap supply

MOSCOW (MRC) — Asia is set to ramp up crude oil imports from the United States in late 2017 and early next year, with buyers searching out cheap supplies after hurricanes hit US demand for the commodity at a time of rising production in the country, said Reuters.

As many as 11 tankers, partly or fully laden with US crude, are due to arrive in Asia in November, with another 12 to load oil in the United States later in October and November before sailing for Asia, according to shipping sources and data on Thomson Reuters Eikon.

US West Texas Intermediate crude benchmark stands at its largest discount in years against the Atlantic Basin's Brent, with local appetite curbed as US refineries are still pushing to get back on track in the wake of hurricanes such as Harvey.

"Between November and January, there is a very big volume of US crude heading to Asia," said a Chinese trader who has bought 4 MMbbl of medium-sour US oil to arrive in December. He declined to be identified as he was not authorized to speak with media.

The price-spread between the two crudes had already pushed US crude exports to a record 1.98 MMbpd by late September, according to the Energy Information Administration in the United States.

Exports in the next two to three weeks could hit 2.2 MMbpd, Marco Dunand, chief executive of trading house Mercuria, said last week. That has also been driven as some Asian governments look to diversify supply sources and reduce trade surpluses with the world's top economy. India joined China, Japan and South Korea when it imported its first US crude in October.

And high premiums for Middle Eastern grades of crude are also stoking Asian appetite for US supplies. "US medium sour grades can replace most Middle East grades and the light sweets may replace some African crude," said the Chinese trader.
MRC

Turkey arrests four people over explosion at Tupras refinery

MOSCOW (MRC) — Turkish authorities arrested four people over Wednesday's explosion in a storage tank at a Tupras refinery which killed four people, the state-run Anadolu news agency said, as per Reuters.

The explosion occurred following maintenance work at the refinery in the western Turkish province of Izmir, wounding two other workers, but had no impact on production.

On Thursday, authorities had detained seven people over the blast, of which four have been formally arrested and three have been released on probation.

The report gave no details of what charges the four may face.
MRC

Hengyi opens Singapore trade office for Brunei oil-petchem project

MOSCOW (MRC) — Privately-run Chinese company Hengyi Group has started a trading office in Singapore to buy crude and trade oil products from its USD3.4 B Brunei project, company officials said on Monday, as per Hydrocarbonprocessing.

The office will also handle third-party trading and use derivatives to hedge risks, said Michael Zhang, managing director of the trading arm Hengyi Industries International Pte Ltd. The refinery-petrochemical project will be mechanically completed by the end of 2018 and start operations in the Q1 2019, Zhang said.

The project, at Brunei's Pulau Muara Besar island, includes a 175,000-bpd refinery that will produce gasoline, diesel and jet fuel. The complex also houses an aromatics plant to produce 1.5 MMtpy of paraxylene (PX) and 400,000 tpy of benzene.

Hengyi also signed in September a memorandum of understanding (MoU) with Brunei's Economic Development Board to expand the project in a second phase.

The expansion includes a 14 MMtpy (281,150 bpd) refinery and units to produce 1.5 MMtpy of ethylene and 2 MMtpy of PX, the company said last month.

The second phase is estimated to cost USD12 B, Qiu Jianlin, chairman of Zhejiang Hengyi Group, told the industry at the Singapore office's opening ceremony on Monday.
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