China trade row helped BASF land USD10B Guangdong chemicals coup

MOSCOW (MRC) -- Germany's BASF managed to wrap up a preliminary deal to build China's first wholly foreign-owned chemicals complex quite quickly, aided in part by trade tensions between Beijing and Washington, sources with knowledge of the matter said, reported Hydrocarbonprocessing.

The proposed complex, worth some USD10 billion in investment to 2030, will be located in Guangdong, China's most populous province which had been worried about the impact of a U.S. decision to heavily penalize telecom firm ZTE Corp, also based there.

Fears that a U.S.-China trade war would hurt investment prospects for the business-friendly province made local government officials that much more receptive to overtures by BASF, a global giant with state-of-the-art technology, separate people briefed on the matter also said.

BASF's announcement, part of USD23 billion worth of bilateral deals unveiled as German Chancellor Angela Merkel met Chinese Premier Li Keqiang in Berlin this week is conspicuous for its timing, trade and chemical industry experts said.

In reaching out to Europe, China is showing it is open for business as the trade row with Washington deepens.

BASF's coup, while still a rare example of a foreign player prising open the Chinese government's tight control over its energy and chemical industries, also follows measures by Beijing to lift some caps on foreign ownership in the auto and banking sectors.

"Now that we have this trade war that was kicked off last week, Beijing is telling Washington that it is still doing business and that there are capable companies around the world to do business with," said John Driscoll, director of consultancy JTD Energy in Singapore.

BASF's search for a potential site for its second major project in the world's largest chemical market had been in the works for a while, an industry insider with knowledge of the deal said. Like other sources, the industry insider declined to be identified due to the sensitivity of the matter.

The German firm had decided to go it alone rather than working with a state-owned partner as it had done previously and chose Guangdong as recently as three months ago, the person said, adding BASF had spied a "window of opportunity", banking on the province's desire for cutting-edge technology.

The person also said local governments had become more aware that they "cannot own everything" and foreign investment could help them build what they wanted.

BASF's overtures coincided with a crisis for ZTE, slapped with a ban barring U.S. suppliers from selling it components after the firm broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea. ZTE has had to curtail operations and is working to lift the ban.

"The ZTE case helped," the person said on Tuesday, without elaborating further.

BASF's media relations department said the company chose Guangdong for its first major investment in South China to tap the region's fast economic growth and declined to comment on whether ZTE's travails had helped speed up the decision-making.

Amid China's increased openness to foreign investment, BASF's knowledge of doing business in China meant it could "seize the right opportunity at the right time", a Beijing-based energy industry executive said.

Under the agreement, BASF will explore building an integrated chemicals complex with petrochemicals plants and a steam cracker producing 1 million tonnes per year of ethylene.

It is a chance to greatly expand in a Chinese chemicals market worth an estimated USD1.5 trillion a year, feeding plastics, coatings and adhesives to the southern province's fast-growing consumer electronics and automotive sectors.

BASF plans to do a pre-feasibility study of its site by the end of the year, followed by a thorough analysis by end-2019 with construction estimated to start in 2023. The company aims to complete the first plants by 2026.

BASF's first major foray in China, nearly two decades ago, was a joint venture with state oil major Sinopec to build a USD5.2 billion petrochemical complex in Nanjing, Jiangsu province.
MRC

Clariant supports Chinese auto industry in critical weight reduction & safety, high performance under the hood

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, has presented its innovative, no-VOC masterbatches to support the Chinese automotive industry’s response to progressive new fuel-economy standards and reducing vehicle emissions, as per the company's press release.

As the Greater China market reaches 30 million cars in 2018, automakers and Tier One suppliers are moving towards increasing use of plastics for large complex parts, in harsh environments under the hood, and in interior applications. This is influenced by government initiatives such as the "Replace Steel with New Materials" initiative, as well as the growing demand for lighter weight vehicles and specially-tailored components for China’s significant focus on electro-mobility.

Clariant is seeing rising regional interest in its smart masterbatches, Hydrocerol chemical foaming agents (CFAs) and Renol concentrates and compounds, for car interior and under-the-hood applications from both local and multinational automakers within the country. Over the past five years, it has experienced annual double-digit growth in its sales of Hydrocerol to the automotive sector, for example. As no-VOC, efficient high-performance solutions, the masterbatch ranges support the country’s shift towards greater sustainability and safety in terms of production processes and health and the environment.

Lower weight, eye-catching interior parts. Easy-to-use new Hydrocerol CFAs help automakers to cut the weight of many plastic interior parts without adversely affecting appearance or performance. They create a finer, more durable cell structure that allows manufacturers to achieve surface quality and mass reduction of between 5-20%, demonstrated in components molded from Thermoplastic olefins (TPOs), Polypropylene (PP) and nylon.

One global automotive OEM has even successfully achieved a 25% reduction in the overall weight of a dashboard carrier with the use of Hydrocerol in its special foaming system.

In addition Hydrocerol masterbatches are endothermic foaming agents. The chemical reaction that creates the foam absorbs heat so that less heat needs to be removed from the polymer after molding and processing cycles are shorter. Shorter cycle times mean machine and labor productivity can be increased by as much as 20%. Hydrocerol at lower addition rates can be used to reduce sink marks and eliminate final part quality issues due to shrinkage and warpage.

Excellent performance & color for high temperature applications under the hood. Easy processing Renol and Renol TC heavy metal-free compounds and masterbatches for engineering polymers and high temperature resins provide heat and light stability, and flame retardancy. Importantly, they offer protection while maintaining critical flow properties in parts like connectors used in SMT applications and electric vehicle charging systems. They are available as small lots which enables customers to purchase only what they require and contribute to a reduction in their carbon footprint.

In the production phase RENOL masterbatches offer excellent processability for virtually all non-olefins - PA 6, and 66, PET, PBT, POM, PC and high temperature polymers like PPA, LCP, PPS, PPSU, PESU, PES, PEI and even PEEK.

Ying Xu, Head of Marketing BU Masterbatches in Greater China, comments: "Hydrocerol chemical foaming agents let automakers bring plastics out into the open, with great looking, lighterweight high performance interior parts so critical for contributing towards reduced vehicle emissions. And under-the-hood, through Renol we are proud to deliver better mechanical and/or thermal properties to engineering thermoplastics and high temperature resins, allowing parts vital for today’s in-demand electric vehicle systems to have the safe, high performance they require."

As MRC reported earlier, in May 2018, Clariant announced that it was awarded a contract by Jinneng Science & Technology Company, to design the world’s largest singletrain propane dehydrogenation unit in collaboration with CB&I. The plant will be located in Qingdao, Shandong Province, China and have the capacity to produce 900,000 metric tons per annum (MTA) of propylene when completed.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.
MRC

PE imports to Belarus dropped by 1% in Jan-May 2018

MOSCOW (MRC) -- Overall imports of polyethylene (PE) into Belarus dropped by 1% year on year in the first five months of 2018, exceeding 49,600 tonnes. At the same time, local companies reduced purchasing of exclusively linear polyethylene (LLDPE), according to MRC's DataScope report.


According to the National Bureau of Statistics of Belarus, May 2018 PE imports to Belarus grew to 9,600 tonnes from 8,800 tonnes a month earlier. Local companies increased their purchasing of low density polyethylene (LDPE) and high density polyethylene (HDPE). Overall HDPE imports exceeded 49,600 tonnes in the first five months of the year, compared to 50,100 tonnes a year earlier. Demand for HDPE and LDPE increased, whereas the need in LLDPE subsided significantly.

The structure of PE imports to Belarus by grades looked the following way over the stated period.


May LDPE imports to Belarus rose to 3,900 tonnes from 3,000 tonnes a month earlier. Local companies increased their PE purchasing in Russia during the shutdown for maintenance at the local producer - Polymir. Overall imports of this PE grade into Belarus totalled about 15,000 tonnes in January-May 2018, compared to 14,100 tonnes a year earlier.

May LLDPE imports were 1,200 tonnes versus 1,500 tonnes a month earlier, local companies reduced significantly their purchasing of Middle Eastern butene grade PE. Thus, overall LLDPE imports reached 9,700 tonnes over the stated period, whereas this figure was 17,400 tonnes a year earlier.

May HDPE imports grew to 4,500 tonnes from 4,200 tonnes a month earlier. Local companies increased their purchasing of PE from Russian producers. Thus, overall HDPE imports totalled about 24,000 tonnes in the first five months of 2018, up by 29% year on year.

MRC

Situation in the market of pipe HDPE in Russia stabilised in July

MOSCOW (Market Report) - Supply of polyethylene (PE) increased significantly this month in Russia after the shortage of natural high density polyethylene (HDPE) in June. But this factor did not help to avoid a significant rise in prices in the market, according to the ICIS-MRC Price Report.

A significant shortage of natural pipe HDPE in June was a surprise for Russian consumers, since the beginning of the year market was oversupplied. Taking this into account prices of pipe PE began to grow dynamically, and some Russian producers had to seriously adjust their production plans for July. The situation in pipe PE market has stabilised by mid-July, but a serious rise in price of raw materials still could not be avoided.

A key supplier of natural pipe HDPE in the Russian market - Gazprom neftekhim Salavat (GnS) - shut its capacity for a turnaround in early July, but the shutdown was not long. The offer of Salavat polyethylene has grown significantly by the middle of July, Customers of the plant said only pipe PE from GnS will be produced until September.

Stavrolen also increased production of pipe PE in the beginning of the month, although some of the volumes were supplied to export markets. Partly the need for raw materials producers of pipes satisfied with natural HDPE grade 273-83; Russian pipe producers sold the July quotas of this PE in the first decade of the month.

The rush in the market of natural pipe HDPE has subsided by mid-July. The supply of material has grown significantly, although there is still no excess. And, most likely, this status quo will continue in August.

Prices for natural pipe HDPE began rising in mid-June from the level of Rb94,000/tonne CPT Moscow, including VAT, and by the end of the month in some cases it reached Rb100,000/tonne CPT Moscow, including VAT. Some suppliers slightly increased PE prices for their customers in July further, but on average the prices were settled slightly above Rb100,000/tonne CPT Moscow, including VAT.
MRC

PP imports to Belarus rose by 8% in January-May 2018

MOSCOW (MRC) -- Overall imports of polypropylene (PP) to Belarus grew in the first five months of 2018 by 8% year on year, totalling slightly over 41,100 tonnes. Demand for all grades of propylene polymers increased, according to MRC's DataScope report.

May PP imports into Belarus were about 9,000 tonnes, compared to 9,200 tonnes a month earlier, local companies reduced their purchasing of propylene copolymers. Overall imports of propylene polymers reached 41,100 tonnes in January-May 2018, compared to 38,000 tonnes a year earlier. The need in all grades of propylene polymers increased, with propylene copolymers accounting for the greatest increase in demand.

The supply structure by PP grades looked the following way over the stated period.


May 2018 imports of propylene homopolymers (homopolymer PP) to the Belarusian market exceeded 6,000 tonnes versus 5,700 tonnes a month earlier, local companies increased their purchasing of injection moulding PP in Russia. Thus, overall homopolymer PP imports reached 27,500 tonnes in the first five months of 2018, up by 7.2% year on year. Russian producers with the share of about 89% of the total shipments were the key suppliers.

June imports of propylene copolymers to Belarus were 2,900 tonnes, compared to 3,500 tonnes a month earlier, local companies reduced their procurement of injection moulding statistical copolymers (PP random copolymers) in Russia and the Middle East. Thus, overall imports of propylene copolymers reached 13,600 tonnes in January-May 2018, whereas this figure was 12,400 tonnes a year earlier.

MRC