US shale gas to support chemical industry despite unfavourable economic situation

(hydrocarbonprocessing) -- Favorable oil-to-gas price ratios driven by the production of natural gas from shale will drive a renewed US competitiveness that will boost exports and fuel greater domestic investment and economic growth within the business of chemistry, according to the Year End 2012 Situation and Outlook, published by the American Chemistry Council (ACC) trade group.

After three years recovering from the recent recession, the global economy stumbled in 2012. The euro area entered a recession again, and a pronounced slowdown in China helped spread economic uncertainty around the world, the ACC said. In the US, although GDP surpassed its pre-recession peak, growth is slow and a typical business cycle expansion has yet to emerge. Despite this, the business of American chemistry remains a bright spot. The business of chemistry is a USD760 billion enterprise and one of America’s most significant manufacturing industries, with more than 96% of all manufactured goods touched by products of chemistry.

Though rising uncertainty over the fiscal cliff, debt ceiling negotiations and tax reform have hindered business confidence, the most important domestic energy development in the last 50 years is poised to reshape American manufacturing. Access to vast, new supplies of natural gas from shale deposits creates a competitive advantage for US petrochemical manufacturers, as MRC informed earlier. Ethane, a natural gas liquid derived from shale gas, is used as a feedstock by American chemical companies, giving them an advantage over foreign competitors that rely on a more expensive oil-based feedstock.

"Aided by a favorable oil-to-gas ratio, chemical exports grew 1.8% to USD191 billion in 2012, helping to turn a trade deficit into a modest surplus," said Kevin Swift, ACC’s chief economist and lead author of the report. "We’ll see exports continue to grow 4.7% in 2013 and another 6.2% to USD209 billion in 2014."

While overall shipments in the business of chemistry slipped 1.5% in 2012, they are expected to increase nearly 9% over the next two years, to USD794 billion in 2013 and USD833 billion in 2014.
MRC

(Daily Finance) -- Georgia Gulf Corporation has recently announced that a favorable private letter ruling has been received by PPG Industries from the U.S.

Internal Revenue Service with respect to the previously announced separation of PPG's commodity chemicals business and subsequent merger of a newly formed company with a subsidiary of Georgia Gulf Corporation. The receipt of the ruling is a closing condition and an important milestone in moving towards completion of the transaction.

As previously disclosed, the Georgia Gulf Board of Directors has called a special meeting to be held on January 10, 2013, for shareholders to approve the issuance of Georgia Gulf shares in the proposed merger with PPG's commodity chemicals business. If approved by Georgia Gulf's shareholders at the special meeting, the merger is expected to close in late January 2013.

The Georgia Gulf Corporation has historically been a major manufacturer and marketer of chlorovinyls (caustic soda, chlorine, VCM, EDC, PVC resins, PVC rigid and flexible compounds) and aromatics (acetone, cumene, phenol). With the acquisition of Royal Group Technologies the company is now also a major producer of building materials ranging from piping and siding to window profiles, decking, and fencing.

PPG Industries Inc. is an Americain international company that produces paints, chemicals, optical components, specialty materials, glass and fiber glass. The company consists of more than 150 production units and offices in more than 60 countries. PPG industries is in the list of the top 500 U.S. corporations in terms of sales of. As MRC reported previously, PPG Industries plans to open its first factory in Russia near Tver. As of today, PPG Industries has no production facilities in Russia.
MRC

(Qatar News Agency) -- The Chairman of Qatar Chemical and Petrochemical Marketing and Distribution Company (MUNTAJAT) said that the State of Qatar has a future plan to increase its chemical and petrochemical production from about 10 million tonnes currently, to about 23 million tonnes by 2020.

HE Dr. Al-Sada said that the company has a vision to position the State of Qatar as the world s pre-eminent chemical and petrochemical hub, pointing that Qatar has strengthened its presences as a producer and a major source of chemicals, polymers and fertilisers and still aims for more concrete large-scale expansions.

With growing global demand for chemicals, polymers and fertilisers, Qatar s increasing production is supplying and supporting the growth of a wide number of industries around the world. The country is investing around USD 25 billion in its petrochemical sector up until 2020 as part of its economic diversification strategy and its mission to increase its global market share in the chemicals and petrochemicals industries, he said.

He stressed that the launch of the new company comes in preparation for Qatar's targeted huge production levels, where it occupies the second place in petrochemical production in the Gulf, and plans to double its current production in 2020, stressing that Launching the company is to address a problem, it is rather planning for a future which Qatar is keen to benefit from its opportunities.

Asked whether there was a relationship between the launch of the new company and Climate Conference, which was held recently in Doha targeting emission reduction, HE Dr. Al-Sada stressed that Qatar is making considerable efforts in this area, including the areas of research and solar energy projects.

The Qatar Petrochemical Company produces ethylene, low density polyethylene, and sulfur. Its facilities consist of an ethylene plant producing 525,000 tonnes per annum (tpa), two low density polyethylene (LDPE) plants with 360,000 tpa and a sulphur plant with 70,000 tpa.

MRC

(yourindustrynews) -- 27.4 million tons of petrochemical products were produced in Iran during the first 8 months of current Iranian calendar year, began 20 March 2012.

Production manager at National Petrochemical Company (NPC), Ali Bossaqzadeh made the remarks adding that currently 18 petrochemical plants are active in Mahshahr region, south of Iran, 10 plants in Assaluyeh (onshore installation of South Pars gas field) and 13 others in other parts of the country.

Bandar Imam, Pars, Nori, Maroun and Pardis petrochemical plants were the main producers of petrochemicals during the aforementioned period while Zagros, Jam, Shiraz, Razi and Bo Ali plants followed them.

‘During the mentioned period, Shiraz, Shazand, Kermanshah, Khorasan, Mehr and Oromiyeh petrochemical plants produced 1.3 million tons, one million tons, 720 thousand tons, 534 thousand tons , 199 thousand tons and 15 thousand tons of petrochemicals respectively implying they have succeeded to produce equal to 90 percent of their nameplate capacities’, NPC official said.

Earlier Bossaqzadeh had said that petrochemical products output would hit a new record in current year by providing on time feedstock to petrochemical plants.

Meanwhile Petrochemical Commercial Company (PCC) released figures that showed during the first nine months of current Iranian calendar year the company had exported 3.476 million tons of petrochemical products worth 3.245 billion dollars, mainly gas liquids (propane and butane).

As MRC wrote earlier, Iran has launched the world's longest ethylene pipeline, which carries the chemical compound from the southern Persian Gulf port of Assaluyeh to petrochemical complexes in the western provinces of Iran.

MRC

(apic-online) -- Turkey is set to face an upward revision in customs duties on HDPE and homo PP imports out of developing countries from 4.8% to 6.5% as of January 1, 2013. This is the second phase of the customs duty revision as they were first raised to 4.8% from 3% on September 6. Customs duties on LDPE imports from developing countries were immediately increased from 3% to 6.5% on the same date.

Players in Turkey have already started to calculate the costs of their import cargoes for homo PP and HDPE mainly from the Middle East and Iran taking the revised 6.5% duty into account. This is because anything offered on import basis will be subject to the new regulation if delivered after January 1.

This situation hampers the advantage of the main homo PP and HDPE suppliers to Turkey which had lower import duties, namely the Middle East and Iran, although these two regions still maintain their advantage for low feedstock costs and short distance to Turkey.

Accordingly, Far East Asia, from where imports are already subject to 6.5% duty, is the first region that may gain a chance to compete against the regular sources in Turkey. South Korea is likely to be the prominent origin to find its way from Far East Asia to Turkey considering the country’s large PP and PE capacities. South Korea hosts a total PP capacity of more than 2,800,000 tons/year and a total HDPE capacity of more than 1,800,000 tons/year with several major producers.

Under the agreement, customs duties on LLDPE, HDPE, EVA, PP copolymer, EPS, PET and PS imports will be eliminated between the two countries as of the date on which the agreement takes effect. Customs duties on other polymers including LDPE, homo PP and PVC will be cut by a ratio of one to six from the current 6.5% duty and will continue to be lowered by the same amount on January 1 of the following six years. Accordingly, LDPE, homo PP and PVC imports from South Korea to Turkey are expected to have an initial customs duty of around 5.5% when the free trade agreement is put into practice in the first year. These are expected to be completely lifted on the sixth year after the implementation of the agreement.

MRC