Brazilian authorities tell Braskem geological damage from salt mine more widespread

MOSCOW (MRC) -- Brazilian petrochemical giant Braskem has received a letter from state and federal Brazilian authorities noting a wider area than previously identified that has incurred geological damage linked to the company's former salt mining operation, reported S&P Global with reference to Braskem's statement.

The expanded area that state and federal prosecutors and public defenders say require more properties to be vacated with residents relocated will cost an additional Real 850 million (USD158 million) in possible payments to those residents, the company said.

Braskem also said it expects an additional Real 750 million in expenses to "definitively" shut down the salt mining operation. Braskem announced in November that the company would permanently cease salt mining at the site.

The issue emerged in March 2018 when neighborhoods in Maceio, the capital city of the Brazilian state of Alagoas, experienced a mild earthquake. The Brazil Geological Survey investigated that as well as fissures and other geological damage that had appeared, and in May 2019 released a report that said Braskem's salt mining operation in Maceio was responsible.

Braskem shut the salt mine, as well as a chlor-alkali facility and a downstream ethylene dichloride plant. Salt is a key chlor-alkali feedstock, and subsequent chlorine production feeds EDC, a precursor to construction staple polyvinyl chloride.

In January, Braskem reached a deal with state and federal prosecutors and public defenders on permanent closure of the salt mine and relocations of about 17,000 people. In exchange, the prosecutors and public defenders agreed to release about Real 3.7 billion to implement a compensation and relocation support program, and another Real 1 billion for costs to close certain wells associated with the salt mining operation.

The costs noted in the July 9 announcement are on top of those previous costs.

Braskem said further July 9 that the company is negotiating with those authorities "to define possible measures to be adopted by mutual agreement, although it is not automatically obligated to assist in the vacation of these new areas" pursuant to the January agreement.

Braskem is working toward restarting the shut plants. The chlor-alkali facility has a capacity of 400,000 mt/year of chlorine, and 460,000 mt/year of caustic soda, a byproduct of chlorine production. The EDC plant has capacity of 520,000 mt/year.

The closures left Braskem dependent on imports of caustic soda to supply customers and EDC to maintain downstream PVC production.

Braskem in February received its first 35,000 mt shipment of salt from Chile, and once the plants have been running for up to four months, the company will replace 50% of its Chilean salt imports with salt from Brazil's Rio Grande do Norte state, north of Alagoas.

The company had aimed to restart the plants in May. But Braskem had to slow work to replace a chlorine pipeline and associated racks as well as install a permanent substation to provide power to the chlor-alkali facility to implement safety protocols to prevent coronavirus pandemic spread and meet additional inspection standards.

A new timeline for restart has not been announced.

Brazil is the top export market for US caustic soda. US caustic soda exports in the first five months of 2020 fell 3.6% to 2.3 million mt compared with the same span in 2019, the latest US International Trade Commission data showed. Shipments to Brazil rose 55% to 1.18 million mt in the January-May period, or half of all outflows, year on year.

Brazil became the top market for US EDC exports upon Braskem's shutdown of its sole EDC plant. US ITC data show Brazil was the top recipient of US EDC in 2019 with 299,567 mt, nearly 21% of 1.4 million mt shipped out, supplanting China as the top export market in 2018.

In the first five months of 2020, Brazil received 183,635 mt of US EDC, up from 53,543 mt in the same span in 2019 when the EDC plant was operating for four months, the data showed.

As MRC reported before, Braskem USA is planning to startup its new polypropylene (PP) plant in the third quarter this year. Based in La Porte, Texas, United States, the plant has a production capacity of 450,000 tons/year.

According to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 13,800 tonnes in the first half of 2020, up by 5% year on year, whereas exports grew by 7% year on year.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- China's Jiangsu Sailboat Petrochemical, also known as Jiangsu Shenghong, is only able to restart its around two acrylonitrile (ACN0 plants on July 31, followed an unplanned shutdown of these production units on July 16, reported S&P Global.

Thus, the company shut down both their two 260,000 mt/yr ACN plants along with its methanol-to-olefin unit at the same time.

As MRC informed before, in March 2018, Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. had accepted a new methanol-to-olefins (MTO) unit provided by Honeywell UOP, and that the plant was operating and had met all guarantees. With a production capacity of 833,000 metric tons per year, the unit is the largest single-train MTO unit in the world. Honeywell UOP, which pioneered MTO technology, started its first MTO unit for China's Wison Clean Energy in 2013.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, Russia's ABS output was 780 tonnes in May 2020. Production of Russian ABS plastics totalled 4,240 tonnes in January-May 2020, down by 17% year on year.

Jiangsu Sailboat Petrochemical, part of the Shenghong Holding Group, is a major petrochemical manufacturer in China, including polyethylene (PE) and ethylene-vinyl-acetate (EVA). The company's production facilities are located in the new Xuwei Industrial Park in Lianyungang City, Jiangsu Province.
MRC

1. Dow swings to loss, announces 6% workforce cut

MOSCOW (MRC) -- Dow reports a second-quarter net loss of USD217 million, down from income of USD90 million in the year-ago period, reported Chemweek. Sales totaled USD8.354 billion, down 24% year-over-year (YOY) from USD11.014 billion. COVID-19 lockdowns cut into demand and low energy values weighed on prices, says the company. Citing the prospect of a gradual and irregular recovery, Dow says it will soon begin a restructuring program aimed at USD300 million in annualized EBITDA benefit by the end of 2021. Measures include a 6% reduction in the company’s global workforce and plans to exit uncompetitive assets.





MRC

MOSCOW (MRC) -- NOVA Chemicals Corp. (Calgary, Alberta, Canada) and Enerkem Inc. (Montreal, Quebec, Canada) have recently entered into a joint development agreement to explore turning non-recyclable and non-compostable municipal waste into ethylene, a basic building block of plastics, reported Chemical Engineering.

Working together, the companies will research advanced recycling technology to transform hard-to-recycle municipal waste, including items such as plastics, household waste, and construction materials, into ethylene at full commercial scale. Ethylene, produced from waste, would advance a plastics circular economy and help meet consumer brand goals for recycled content in packaging.

Advanced recycling technologies are a necessary component of moving to zero plastic waste by creating valuable new feedstocks from post-use plastics that cannot be easily mechanically recycled. The quality of polymers produced with advanced recycling products is indistinguishable from those made from 100 percent virgin, fossil-based feedstocks.

“We are excited to work with Enerkem to create innovative, sustainable solutions for a plastics circular economy,” said Todd Karran, president and CEO, NOVA Chemicals. “Our R&D teams will collaborate to develop game changing technology to push the boundaries for recycling waste to create new feedstocks and bring value to the environment, economy and society.”

Enerkem is the first company in the world to produce renewable methanol and ethanol from non-recyclable, non-compostable municipal solid waste at full commercial scale. Its current technologies replace the use of fossil sources like petroleum and natural gas to produce sustainable transportation fuels and chemicals that are used in a broad range of everyday products.

“We are delighted to team up with NOVA Chemicals to collaborate on new technology for waste-to-ethylene feedstock to solve one of the world’s most pressing environmental issues,” said Dominique Boies, CEO and CFO, Enerkem. “This strategic partnership will allow us to explore the development of new products and expand our offering in pursuit of the circular economy.”

Peter Nieuwenhuizen, Enerkem’s Vice President of Technology Strategy & Deployment, added “With over 20 years of technology development, we have built a robust gasification platform to turn waste and biomass into fuels and chemicals with high carbon efficiency. Enerkem’s technology has the scale and versatility to supply raw materials for the circular and decarbonized chemical industry that is being created now. Not just for plastics but also for many other chemical ingredients that are vital for everyday life.”

NOVA Chemicals is committed to enabling 100 percent of plastics packaging is recyclable or recoverable by 2030; and 100 percent of plastics packaging is re-used, recycled or recovered by 2040. “This research is one of the ways NOVA Chemicals is innovating to recapture the value of plastic products and create a world free of plastic waste,” said Karran. “Working together, we can shape a world that is better tomorrow than it is today,” he added.

As MRC wrote earlier, Nova Chemicals declared force majeure on supplies from its Joffre C4 (butene) linear low density polyethylene facility near Red Deer in Alberta, Canada, a company spokeswoman said in an email July 14 to S&P Global. The declaration will cover all C4 LLDPE resins produced at the facility effective July 13, the company also said in a letter to customers.

We remind that NOVA Chemicals has expanded ethylene production capacity by 20% at its cracker in Corunna, Ontario from the previous capacity of about 839,000 tpy. The expansion occurred between 2014 and 2018 and was part of a wave of expansions and upgrades to NOVA's existing facilities near Sarnia, Ontario. Other upgrades in the plan included a debottlenecking of the Moore low-density polyethylene (LDPE) line and a retrofit of the Moore high-density polyethylene (HDPE) line.

Ethylene is the main feedstock for the producion of polyethylene (PE).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is wholly-owned ultimately by Mubadala Investment Company of the Emirate of Abu Dhabi, United Arab Emirates.
MRC

MOSCOW (MRC) -- German thermoplastics distributor ALBIS has split off its compounding operations as a separate business, named MOCOM, said Sustainableplastics.

Ian Mills, former chief sales officer at ALBIS, is heading the compounding business, which has 700 employees and locations in Germany, the US, and China.

Horst Klink, former ALBIS vice president, heads the distribution business, which will continue to operate as ALBIS, with a staff of 450 people and 24 locations worldwide.

ALBIS and MOCOM are part of Hamburg-based Otto-Krahn Group, which also includes specialty chemicals distributor KRAHN Chemie and plastics recycler WIPAG.

Prior to the split, Albis Plastic posted sales of 1 billion euros in 2019. Otto Krahn Group was founded in 1909 by its namesake as a trading company dealing in rubber materials and products and related goods.

As MRC infomed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.
MRC