Global ethylene demand to grow 3.3% annually - Wood Mackenzie

MOSCOW (MRC) -- Ethylene production from export-oriented steam crackers associated with advantaged gas-based feedstocks is set to alter the global ethylene markets, according to analysis from energy research firm Wood Mackenzie's new Chemical Markets Service, reported Commodity Online.

"The key competitive differentiator for ethylene producers is access to low cost feedstocks or proximity to local demand. Through 2030, advantaged cracker investments will continue in the Middle East, sharply increase in North America, and then later develop in Russia and The Caspian," says Stephen Zinger, Head of Americas Chemical Research at Wood Mackenzie.

Ethylene producing assets that have access to low cost gas feedstocks, such as the ones in North America, will lead the competition with total ethylene and derivative investment set to reach USD40-50 billion in the next decade. Over the same time period, global ethylene demand will grow by 3.3% per year, on average, according to Wood Mackenzie. The Dow Chemical Company, LyondellBasell Industries N.V. and Exxon Mobil Corporation are among the leading companies engaged in the ethylene industry in North America.

In turn, China will continue to have the fastest demand growth for ethylene and ethylene derivatives and will satisfy this demand through increases both in domestic production capacity (coal-to-olefins and naphtha cracking) and imports from producers around the world with advantaged feedstocks.

In the next 10 years, Wood Mackenzie estimates total investment in ethylene and derivatives is expected to reach a record D40-50 billion in North America. In addition, ethane feedstocks to make ethylene have increased from under half of total feedstock for ethylene in 2005 to about 65% of total feedstock in 2013, and are expected to continue to rise to over 80% of total feedstock consumption.

"The development of shale gas resources in North America has triggered an ethylene investment renaissance, with the abundance of competitively priced natural gas liquid feedstocks, particularly ethane," adds Zinger.

Wood Mackenzie says domestic demand in North America for ethylene derivatives will grow more slowly than the planned ethylene capacity increases, which will lead to derivative exports more than tripling over the next 15 years.

Over the next decade, the more mature markets of Japan, South Korea and Taiwan will go through a period of consolidation, cost cutting and product value creation to increase their competitiveness, as their export market share to China is gradually replaced by low cost material from the Middle East, North America, Russia and The Caspian.

Advantaged ethane-based ethylene investments drove massive capacity growth in the Middle East throughout the 1990s and 2000s, culminating with significant new capacity additions in 2008-2010. The Middle East is again expected to almost double its existing capacity by 2030 and remain the largest ethylene derivative exporting region globally. Forced to change feedstocks by an impending shortage in ethane supplies, projects in Saudi Arabia, Qatar and eventually Oman will adjust feedstock mix to diversify and include LPGs and naphtha.

"After decades of stagnation, the Russia and The Caspian region will undergo considerable change, with plans to add nearly 10 million tons of capacity by 2030," adds Lidback. "In Russia, capacity expansions are planned in six discrete production clusters across the Western, Siberian and Far Eastern territories."

The region's emergence as a major exporter will place increasing pressure on high cost producers who do not have the benefit of advantaged feedstock. Europe, in particular, will be under considerable pressure with the addition of a neighbouring region with low cost supplies. Its ethylene industry is restructuring due to its weak demand growth, competitive disadvantages and widely available imports from low cost producers in other regions.

As MRC wrote before, the global ethylene market is expected to exhibit a 6.2% CAGR through 2017 and grow from USD 131.88 billion in 2012 to over USD 177.82 billion in 2017
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MOSCOW (MRC) -- Dow expands its composites portfolio with the VORAFORCETM TW 1100 series of polyurethane systems developed for composites fabrication by filament winding, to enhance the existing epoxy systems offering, as per the company's press release.

This innovative high-performance series allow for continuous reinforcement and manufacture of cylindrical and conical structures as found in power and transmission poles, and offers enhanced toughness and robustness while enabling easy installation and maintenance.

Specifically in infrastructure applications, filament winding composites offer significant advantages over the conventionally used concrete poles. Due to the light weight of the material, transportation is more efficient and installation becomes fast and easy. In case of severe weather events, composites offer improved reliability and maintenance thanks to their toughness. Product design and life, overall cost-effectiveness and durability are additional advantages of using composites in infrastructure applications.

Dow VORAFORCE TW 1100 series enable full 110 KV composites pole winding capabilities and thus complement the available range of polyurethane systems for smaller poles, like 10 KV. In this application, VORAFORCE polyurethane systems help improve elongation, toughness, and crack resistance as compared to conventional materials and other type of resins.

As MRC reported earlier, in September 2012, Dow Polyurethanes, a business unit of The Dow Chemical Company, in cooperation with Cannon SpA, announced that PASCAL Polyurethane Insulation Technology for household refrigerators and freezers was available to retrofit to existing production lines. The company created a new solution to enable customers to use PASCAL Technology by upgrading their production lines, but not having to build a brand new line.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. It is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
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MOSCOW (MRC) -- China Petroleum and Chemical Corporation (Sinopec), the country's largest oil refiner, announced Sunday its net profits rose 3.5% year on year in 2013, said Xinhuanet.

The net profit stood at 66.13 billion yuan (10.76 billion U.S. dollars) as calculated according to the international financial reporting standards, the company said in a statement filing to the Shanghai Stock Exchange.

By the Chinese reporting standards, Sinopec's business profit gained 9.7% to 96.45 billion yuan in 2013 while the net profit rose 5.8% to 67.19 billion yuan.

The refinery sector gained 3.2% to 131.13 billion yuan last year, which ended the losses of 11.95 billion yuan in 2012 and 37.61 billion yuan in 2011, according to the report.

In 2013, Sinopec produced 443 million barrels of crude oil, up 3.48% from a year ago. Considering the 6.6% decline of the global crude oil price last year, the company's crude oil business profit dropped 21.8% to 54.8 billion yuan.

The company also announced more input in the shale gas business development this year, targeting to expand new production capacity of 1.8 billion cubic meters per year.

Meanwhile, the company will expand business channels and attract more social and private capital in 2014, said Fu Chengyu, chairman of Sinopec Group.

As MRC wrote before, Sinopec Corp. and SIBUR, a leading Russian gas processing and petrochemicals company, entered into a joint venture developed on the site of the Krasnoyarsk Synthetic Rubber Plant (KZSK). Sinopec purchased 25% + 1 share of KZSK.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally.
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MOSCOW (MRC) -- In 2015, in volume terms, the global LLDPE production is likely climb to 29 mln tonnes, as per Merchant Research & Consulting, reported Plastemart.

In 2012, the world annual production capacity of polyethylene linear low density (LLDPE) totaled above 34.5 mln tonnes. APAC and North America dominated the market in this respect, accounting for around 57% of the world capacity. From 2008 to 2012, the global LLDPE production followed an upward trend; and in 2012, it recorded a 6.5% YoY increase and almost reached 25.9 mln tonnes. The US, Saudi Arabia, China, Brazil and Canada are the top five LLDPE manufacturers in the world.

Construction and packaging industries are the major LLDPE end-use sectors. Asia accounted for approximately 44% of the global LLDPE consumption. Chevron Phillips Chemical Co, Dow, PetroChina, ExxonMobil Chemical, Nova Chemicals and Braskem SA are the top companies operating in the worldwide LLDPE market.

The world LLDPE market is predicted to witness stable growth in the years ahead, owing to LLDPE capacity additions planned worldwide along with the constantly rising demand for the product.

As MRC wrote previously, the worldwide LLDPE production is likely to see stable growth in the upcoming years to exceed 31.4 mln tons in 2017, as per Merchant Research & Consulting.
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MOSCOW (MRC) -- Valero Energy has purchased a corn ethanol plant in Mount Vernon, Indiana, from Aventine Renewable Energy, said Hydrocarbonprocessing.

The plant has a production capacity of 110 million gal/year and uses Delta-T technology, similar to the process already in use at Valero's ethanol plant in Jefferson, Wisconsin.

The Mount Vernon plant is the 11th corn ethanol plant in Valero's system and its second in Indiana. The addition will give Valero more than 1.3 billion gal/year in ethanol production.

The Mount Vernon plant has been shut down for approximately two years, but Valero plans to begin a restart program and resume production within the next several months.

The Mount Vernon plant's logistical advantages include ready access to corn suppliers as well as strong rail, truck and barge transportation, according to Valero officials. The plant is at the Port of Indiana on a location leased from Ports of Indiana, the state port authority. That relationship will continue.

"This purchase diversifies Valero Renewables' portfolio of assets and access to markets, and it will be positive for the Mount Vernon area as well," said Gene Edwards, who has overseen Valero's ethanol plant acquisitions. "We look forward to a strong working relationship with Ports of Indiana, and as the other communities where we have ethanol plants have discovered."

Ports of Indiana CEO Rich Cooper lauded the transaction, noting that it is Valero's first facility located at a major port on the inland waterway system.

"This facility will provide Valero with a tremendous strategic advantage in the production and distribution of ethanol," Cooper said. "This project combines the resources and expertise of a world-class company like Valero with one of the world's richest grain producing regions and this port's multimodal capabilities."

As MRC wrote earlier, Foster Wheeler has signed an evergreen agreement with Valero Energy for the provision of home office engineering and project support services to Valero"s Pembroke refinery and other facilities in the UK.

Valero Energy Corporation is a Fortune 500 international manufacturer and a marketer of transportation fuels, other petrochemical products, and power. It is based in San Antonio, Texas, United States. The company owns and operates 16 refineries throughout the United States, Canada, United Kingdom, and the Caribbean with a combined throughput capacity of approximately 3 million barrels (480,000 m3) per day, 10 ethanol plants with a combined production capacity of 1.2 billion US gallons (4,500,000 m3) per year.

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