HEADLINE NEWS

US BD producer nominates up 2 cts for Sep, others see flat

noreply@blogger.com (Pak Eko) — Sat, 21 Aug 2010 08:29:00 +0000

20 August 2010 21:16 [Source: ICIS news]

HOUSTON (ICIS)--A US butadiene (BD) producer on Friday nominated an increase of 2.00 cents/lb ($44/tonne, €34/tonne) for September, but sources this week predicted contracts were likely to roll over or drop amid looser supply in other regions.

US BD contracts in August settled at 94.00 cents/lb, unchanged from July.

“We are expecting a drop in BD prices since Asian prices are very low at this point in comparison to the US price. Worst case scenario will be to have a rollover,” astyrene butadiene rubber (SBR) producer said.

BD prices in Asia, a key supplier of BD to the US, have dropped by around 10% in the past four weeks, pressured by weak buying interest and ample supply.

BD in northeast Asia was assessed this week at $1,600-1,620/tonne CFR NE Asia (cost and freight Northeast Asia), down from an average of $1,800/tonne around mid-July.

One market participant also pointed to a softening in Europe, where BD prices have dropped by 7% in recent weeks amid weaker export demand and improved supply.

“Not a lot of factors supporting an increase so rollover may be best case,” the source said, referring to the US contract.

Spot prices in Europe were assessed this week at $1,870-1,940/tonne FOB Rdam (free on board Rotterdam), down from $2,000-2,100/tonne in the week ended 23 July.

Market participants have also pointed to spot prices in the US, saying a parity between spot and contract material was indicative of steady pricing moving forward.

BD spot prices in the US were assessed this week at 92-96 cents/lb, unchanged from a week earlier, but down from 95.00-97.00 cents/lb four weeks ago.

The outcome of the September BD settlement in the US will depend on nominations from three other suppliers, which are expected to step out with their initiatives in the coming days.

US BD usually settles at the lowest price nominated by the four main US producers.

Two of those producers are on allocation at 85% but buyers said supply from other sources, mostly imports, was filling the gap in the market.

BD contracts in the US rose by 49% in the first half of 2010 until a flat settlement in July capped the uptrend. The increase was due to tight supply and firm demand for the product.

US BD producers include ExxonMobil, INEOS, LyondellBasell, Shell and TPC Group. Buyers include Invista, International Specialty Products (ISP), Lanxess, Michelin and Negromex.

uploaded from: http://www.icis.com/Articles/2010/08/20/9387169/us-bd-producer-nominates-up-2-cts-for-sep-others-see-flat.html

The Drawn-Out Downtrend phase of the Crisis begins

noreply@blogger.com (Pak Eko) — Sat, 21 Aug 2010 08:24:00 +0000

"Humankind cannot bear very much reality" TS Eliot, 4 Quartets, 1936

Who now remembers the stock market rally that followed 1929's initial collapse? By November 1929, the US Dow Jones Index had fallen to 195 from its September high of 386. But by April it had rallied 52% to 297.

At the time, this seemed as sensational as the Dow's recent rally, which took it up 74% from March 2009's low of 6469, to peak a year later at 11258. And it occurred without any co-ordinated G-20 stimulus packages around the world. It just happened.

But when the famous English poet (and former bank clerk) TS Eliot published in 1936 the first part of his major work 'The Four Quartets', quoted above, his tone reflects the weariness of the subsequent Downtrend, not the euphoria felt during the Rebound.

The chart above captures the textbook path of a major financial crisis, as first described by Merrill Lynch's guru, Bob Farrell. There is an initial Sharp Decline, as seen this time from September 2008. Then there is a Rebound. And finally, the Drawn-out Downtrend.

The chart also adds the 'Paradigm of Loss' model developed by famous psychologist Elizabeth Kübler-Ross. As first noted by the Financial Timeslast year, her model is potentially an excellent guide to the stages through which the current Crisis will likely pass.

The FT suggested that the world was slowly moving from Denial into Anger. Clearly some policy makers, and many bankers, still remain in the Denial phase. But the rise of the Tea Party protest movement in the USA, as well as the riots in Greece and elsewhere, supports the FT's argument.

This emphasises that after 2 years, we are still towards the beginning of the Crisis. Only a relatively few consumers or companies have moved towards the Bargaining phase, to focus on saving rather than borrowing. Most are convinced any cutbacks will impact others, and not themselves.

Equally, we are nowhere near the Depression and Acceptance stages, which would indicate that the world was getting ready to move on to accept the world in its post-Crisis form.

The blog hopes that its analysis is wrong, and that in a year's time it will be able to eat humble pie and admit it was too pessimistic. But if it was still running a major chemical business, it would by now have ensured that a detailed contingency plan was ready, in case its fears come true.

Posted by Paul Hodges on August 16, 2010 6:49 AM

source; http://www.icis.com/blogs/chemicals-and-the-economy/2010/08/the-drawn-out-downtrend-phase.html

Baby-Boomers cut spending, start saving

noreply@blogger.com (Pak Eko) — Sat, 21 Aug 2010 08:21:00 +0000

Consumer spending is 70% of US GDP. And because US GDP is so large, this means the US consumer is 17% of global GDP. This is the same as the combined GDP of China and Japan, who rank 2 and 3 after the USA.

So a change in US consumer spending matters. And it particularly matters to the chemical industry, as our products are focused on consumer needs. Thus the blog is taking very seriously indeed comments from major US consumer companies, who suggest we can no longer rely on the "shop-till-you-drop American consumer" to support global demand. For example:

• Wal-Mart, the world's leading retailer, has seen its US same store sales drop for the last 5 quarters. This has not happened before. Wal-Mart also warned they expect consumers to "remain cautious about spending".
• Target, the leading discount store, confirmed the blog's view thatMarch was the peak of the cycle, with CEO Gregg Steinhafel saying "its clear Q2 marked a change in trend. GDP growth softened considerably, and our sales trends levelled off as well".
• Procter & Gamble, the world's largest consumer products company, gave the same message. "Consumers day-to-day spending reflects an entrenched frugality that often means leaving P&G's relatively inexpensive products on the shelf."

This is serious stuff. And it links with major demographic changes taking place in the USA. The boom in chemical demand over the past 40 years is closely tied to demand from the 'baby boomer" generation (born between 1946 - 1964). They now own 80% of all US personal financial assets and are responsible for over 50% of discretionary spending power.

But they are getting closer to retirement, with a median age of 54 years. And so their need for 'new things' is reducing, as is their ability to afford them. Equally, as the above chart from thechartstore.com shows, their savings rate is starting to shoot up. They were let down by the stock market after the dot-com boom; then the housing market disappointed.

So now we seem to be seeing the start of a generational switch from spending to saving in the world's most important market. From close to zero, the savings rate has already jumped to 6%, as baby-boomers worry about how to afford their retirement, especially as they can expect to live longer than any generation in history.

Of course, if stock market and housing prices began to recover, then this trend might reverse again. But there is clearly a danger of a vicious circle developing, where fear replaces greed as the prime driver in financial markets, and drives a growing demand for yield.

The back-to-school season, now underway in the USA, is the second most important shopping period of the year. It will therefore be even more critical than usual for those wishing to forecast chemical demand.

If Wal-Mart, Target and P&G are right, then the US economy could easily see US GDP growth of below 2% in Q4.

This would not be good news for everyone in the chemical industry, dependent on the US consumer to drive future demand.

Posted by Paul Hodges on August 21, 2010 8:20 AM

sumber. http://www.icis.com/blogs/chemicals-and-the-economy/

SAGIA EYES USD 100 BILLION TRANSPORT SPEND BY 2020

noreply@blogger.com (Pak Eko) — Fri, 20 Aug 2010 03:21:00 +0000

Saudi Arabia is poised to invest $100bn over the next 10 years to transform the kingdom into one of the world's leading transport and logistics hubs, a new report has said.

The Saudi Arabian General Investment Authority (SAGIA), the investment arm of the government, has identified 19 priority investment opportunities for transportation projects, it said in the report.

It added that the "strategic location and large-scale infrastructure development" will position the kingdom as one of the world's leading logistics hubs by 2020.

SAGIA said 15 of the projects would be based in the planned Economic Cities and overall, a $100 billion investment was anticipated over 10 years, Saudi Press Agency reported.

Of the projects, five would be ports, three would be aviation-related, three would be rail-based while another three would be roads-related, the report said. It added that five logistics centres were also planned for the kingdom.

"Studies indicate several opportunities for capacity expansions and operational enhancements with attractive opportunities for qualified port operators," the report said, adding that Jeddah Islamic Port alone could increase capacity by 30-50 percent.

SAGIA added that air operators would be sought to drive expansions to Saudi Arabia's air transport infrastructure, with significant upgrades already underway at Jeddah Airport and a new cargo village has been planned.

The rail infrastructure in Saudi Arabia is in need of major expansion, SAGIA said, with planned projects including the 950km Jeddah-Dammam Land Bridge and a 2,000km Mineral Line running north to south.

Arabian Business

source: http://www.sagia.gov.sa/en/SAGIA/Media-centre/News/SAGIA-eyes-USD-/

US-based RPM lifts fiscal Q4 net income by 54% on rising sales

noreply@blogger.com (Pak Eko) — Mon, 26 Jul 2010 19:47:00 +0000

26 July 2010 14:22 [Source: ICIS news]

LONDON (ICIS news)--RPM International increased its fiscal fourth-quarter net income by 54% year on year to $60.5m (€46.6m) on the back of rising sales, the US-based coatings and sealants producer said on Monday.
Net sales increased 13.3% to $971.5m from $857.3m in the same period last year, RPM said.

Operating profit was also up, by 23.7%, to $103.3m from $83.4m in the 2009 quarter, the company said in its earnings statement.

“Virtually all of our industrial and consumer businesses posted higher sales in the fourth quarter,” said CEO Frank Sullivan.

The company’s “bottom line” had benefited from a favourable product mix due to RPM’s diversified portfolio of companies, Sullivan added.

There had been better plant utilisation due to higher sales volumes, despite the negative impact of raw material pricing and availability, the CEO said.

Quoted from www.icis.com
($1 = €0.77)
To discuss issues facing the chemical industry go to ICIS connect

Less product, higher prices for Europe plasticiser buyers

noreply@blogger.com (Pak Eko) — Mon, 26 Jul 2010 19:45:00 +0000

26 July 2010 14:39 [Source: ICIS news]

By Libby George
LONDON (ICIS news)--European plasticiser buyers hoping for a summer respite to high prices and prevailing market tightness are now bracing for the opposite, market sources said on Monday.
After last week’s force majeure declaration from BASF, market supply is set to contract even further, and all varieties of plasticiser are likely to get more expensive.
“The market is so short that if one supplier is out, the other suppliers cannot replace them,” one plasticiser buyer said. “Some companies will be very much in trouble.”
Dioctyl phthalate (DOP), di-isononyl phthalate (DINP) and other plasticisers are primarily to make polyvinyl chloride (PVC) soft and flexible for end uses ranging from pipes and cables to flooring, medical devices and toys.
This year – marked by low stocks, consolidated DOP production and a series of unplanned production outages – had already been tough for buyers, nearly all of whom have been on allocation for several months.
But after the 21 July BASF force majeure, end-use PVC producers are even more concerned than they were before about getting the plasticisers they need to produce – and passing on enough of the rising costs to maintain a decent margin.
“Every month we are fighting to find material,” said another buyer. “I’ve never faced such a difficult situation in the plasticiser market.”
BASF made the declaration on DINP and three other varieties of plasticisers following an “unforeseeable technical defect” in its iso-nonanol (INA) plant in Ludwigshafen, Germany. The seller said it hoped to have the plant up and running in 14 days.
The outage could hardly come at a worse time for the market. For several months, demand has outstripped supply at such a fast clip that even sellers have expressed frustration with their inability to produce more. Meanwhile, a coming maintenance season – nearly every seller has a turnaround ranging from one to four weeks at some point in the August-October period – has forced them to hold back product from the market.
“A lot of customers could overflow us with inquiries, because in their need, they will take each and every kilo,” said one DOP seller. “I have not a single kilo for another customer.”
It has gotten so bad that some PVC compound sellers have not been able to meet their own commitments, and have sought to purchase either the end product, or feedstock plasticisers, from other sellers. Thus far, none contacted said they could spare either.
Imported material from Asia has served as a respite for some buyers, but it has come at a high price - €1,900-2,000/tonne ($2,451-2,580/tonne) for DINP, according to market sources. But traders said it is small amounts - not much more than 400 tonnes in total - and that a coming maintenance turnaround at a Taiwanese plant will further hinder imports.
Imported material “is definitely not disturbing the market and it is definitely not meeting demand”, one trader said.
While all market players had been hoping for the situation to balance out during the usually quiet summer period, the continual demands, and the BASF troubles, have dashed those hopes.
“It will be even worse than before…I’m afraid that prices will jump further,” one buyer said. “Just after the force majeure coming from BASF, [sellers] started talking about price increases.”
While prices were stable the week ended 23 July, it is likely the calm before the storm. Sellers are discussing hikes of €40-70/tonne for DOP, and potentially twice as much for DINP.
Meanwhile, prices for both products have already skyrocketed since the beginning of the year; both have climbed 66% above the average levels of January to €1,650-1,700/tonne FD (free delivered) NWE (northwest Europe) for DINP and to €1,525-1,575/tonne FD NWE for DOP, according to data from ICIS.
During the same period, PVC prices have risen roughly 15% for both spot and contract, to €810-840/tonne FD NWE for spot, with gross contract prices in the major German market at €1,040-1,070/tonne FD as of 23 July.
Plasticiser sellers, which in addition to BASF include Arkema, ExxonMobile, Oxeno, Oxea and Polynt, are quick to note that market tightness – and not speculation – has dictated increases. Additionally, every supplier has also examined postponing or rescheduling planned turnarounds, but in each case, they determined it was not possible.
“We have announced it since last year,” said one seller that said it found it “virtually impossible” to change its outage. “We cannot delay it or find another date.”
But such assurances are little comfort to buyers, who are bracing for what the prices will be – if they can even get material.
“Unfortunately for us, we are not as good at increasing prices as plasticiser producers,” one buyer said. “We lose margin every month. That’s really the problem.”

Quoted from www.ICIS.com

($1 = €0.77)
For more on DINP, DOP or PVC visit ICIS chemical intelligenceFor more on BASF, Arkema, Oxeno, Oxea and Polynt visit ICIS company intelligence
Please visit the complete ICIS plants and projects database To discuss issues facing the chemical industry go to ICIS connect

Study questions long-only strategies in oil markets

noreply@blogger.com (Pak Eko) — Sat, 24 Jul 2010 17:02:00 +0000

As the chart above from Petromatrix shows, total US stocks of crude, gasoline, distillate and jet kero this year (red line) remain very over-supplied in the short term, by comparison with previous years.
A major reason for this is the move by pension funds to adopt long-only positions in the commodity future markets, in the belief that crude markets are fundamentally tight.

However, this week the Financial Times summarises a timely new study of commodity markets, by Prof Joelle Miffre of Edhec Business School. This argues that investors need instead to understand the difference between:

o Backwardation, "when commodity producers are more prone to hedge than commodity consumers", and the future price is lower than today's
o Contango, "when commodity consumers outnumber commodity producers, leading to excess demand", and the future price is above the current value

They recommend that "to earn a positive risk premium, investors should take long positions in backwardated markets and short positions in contangoed markets".

The team's research suggests this strategy would have earned the investor a commodity risk premium of 12% a year between 1992-2008. Whereas the long-only strategies currently followed by pension funds earned only 2% a year. Edhec therefore concludes that "passive long-only strategies as advocated by traditional indexers perform less well".

Posted by Paul Hodges on July 21, 2010 6:55 AM

Quoted from: ICIS Blog

Mideast naphtha heads for US, helps alleviate Asia glut

noreply@blogger.com (Pak Eko) — Sat, 24 Jul 2010 16:59:00 +0000

23 July 2010 08:22 [Source: ICIS news]

(Adds details, traders comments)
By Felicia Loo

SINGAPORE (ICIS news)--Around 300,000-500,000 tonnes of Middle East naphtha were booked to head to the United States next month, a move that would help alleviate the glut in Asia, traders said on Friday.
Much of the fixtures were on provisional bookings, but they were likely to be confirmed in the next few days, they said.

“The arbitrage to the U.S. from the Middle East may work out, as the U.S. could give a better netback,” said a trader.
Asian naphtha prices bounced higher on such arbitrage opportunities to offload excess supply, as demand in this region remained tepid, traders said.

The price spread between first half September and October contracts narrowed to a contango of $6.50/tonne from a contango of around $8 earlier in the week, while the naphtha crack spread against Brent crude futures ended at a 12-session high of $76.70/tonne on Thursday’s close, ICIS data showed.

“The Asian market has been greatly hit by Formosa’s cracker issues. So the arbitrage flows to the U.S. will help to cushion the impact,” said a trader, referring to demand heavyweight Taiwan’s Formosa Petrochemical Corp (FPC).

The company had temporarily refrained from making spot naphtha purchases, following a cracker outage in Mailiao in early July, and it had even requested defer the deliveries of some term naphtha supply from August to December.

Formosa, whose 700,000 tonnes/year No 1 cracker would stay shut for two to three months since the blast on 7 July, was also seeking government approval to postpone the regular maintenance at the 1.03m tonne/year No 2 cracker at the same site. The No 2 cracker was originally scheduled to be taken off line from August 20-22.

The market welcomed the diversion of Middle East supply to the U.S. as Asia was awash in supply from an armada of imports from the Middle East recently, traders said.

On signs of a glut, onshore inventories of naphtha and gasoline in Singapore rose 591,000 barrels in the week ended 21 July to an eleventh-week high of 11.530 million barrels, according to Reuters quoting data from International Enterprise.

South Korea’s Honam Petrochemical bought 25,000 tonnes of open spec naphtha on Thursday at a discount of $10/tonne to Japan quotes CFR for second half of August delivery, up from $3/tonne on previous spot purchases, traders said.

But, on the other hand, shrinking petrochemical margins weighed on the market, with ethylene prices tumbling to $830-850/tonne CFR NE Asia this week, from $900-940/tonne a month ago and this squeezed the profitability, traders said.

“Fundamentally, nothing’s changed. The market is long on supply and worst, petrochemical margins are falling,” said a trader.

At naphtha prices hobbling near $660/tonne, the margins were in theory no longer feasible, as cracker operators typically require an ethylene-naphtha spread of at least $250/tonne to ensure profitability, traders said.

“At the rate things are going, cracker operators may have to consider curbing runs,” said one trader.

To discuss issues facing the chemical industry go to ICIS connect

By: Felicia Loo

< previous article(Iran’s Arya Sasol shuts down LDPE plant on technical issues)

quoted from ICIS News

US benzene exports to Europe could balance Gulf supply

noreply@blogger.com (Pak Eko) — Sat, 24 Jul 2010 16:56:00 +0000

23 July 2010 20:44 [Source: ICIS news]

By Ryan Hickman

HOUSTON (ICIS news)--Up to 20,000 tonnes of US Gulf benzene is headed to the European market in response to production issues, sources said on Friday, potentially evening out the length in the US that has suppressed prices this month.

An outage at a major European production facility opened the arbitrage opportunity in the Atlantic basin and jolted prices upward in both regions on 21 July.

"That's an easy prey for the trade," a US source said, referring to traders looking to capitalise on volatility.
A source said that 15,000-20,000 tonnes of benzene fixtures were secured for the European market.
Other US market players generally agreed with the amount of exports, although sources in Europe had estimated up to 30,000 tonnes might be coming into the market.

Meanwhile, a US Gulf aromatics trader said that 15,000-20,000 tonnes seemed like a large amount and could include some styrene.

News that Dow Chemical's benzene output at Terneuzen in the Netherlands could be shut down prompted a 4-cent jump in July spot benzene prices in the US on Wednesday.
The Dow plant, which has a capacity of 915,000 tonnes/year of benzene and 500,000 tonnes of styrene, will have its aromatics unit down for three weeks, the company confirmed.
A source said export volumes out of the US Gulf could provide "a little bit of breathing room" amid full inventories, since Asian imports came into the region last month.
However, a source said that more benzene imports were scheduled to arrive in the US Gulf for late July and early August. Four vessels were fixed with only one without a buyer, the source said.
Material was heard to be coming not only from Asia but from the Middle East and South America, according to the source.

The benzene overhang had kept spot prices mired in a range in the high-$2.60s/gal for most of the month, which is more than 10 cents under the US July contract.
More material coming would suggest further downward pressure, but a source said with the exiting exports, supply in the market could come into balance next month.
"By pulling some stuff out to go to Europe, it might make some room for everything else where there might not have been room before," a US source said.

August spot prices in the Gulf remained at a 2-4 cent/gal contango to July values, which were up and straddling $2.70/gal on energy gains and worries about Tropical Storm Bonnie.
Spot levels were talked steady on Friday at $2.68-2.72/gal FOB (free on board) July, as players remained tentative in making moves with inventory, storm and pricing uncertainty abundant.

Major US benzene producers include BP, ExxonMobil, Flint Hills Resources, LyondellBasell, Shell, Sunoco and Total.

Additional reporting by Truong Mellor
For more on Dow's Terneuzen plant, visit ICIS plants and projects
For more on benzene visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connectPaul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
quoted from ICIS news.

The Six Sigma Equation

noreply@blogger.com (Pak Eko) — Sun, 28 Feb 2010 03:30:00 +0000

Business management strategies such as Six Sigma and Lean now embrace a rich variety of industries. Alex Hawkes talks to Julian Mosquera of LCP Consulting to find out what benefits they can bring to the chemicals sector.

Six Sigma is a business management strategy that was introduced in the US by Motorola in 1981 and is now deployed across a wide range of sectors, including the chemicals industry.

Having enjoyed early success with the likes of General Electric and Honeywell, varying forms of Six Sigma were deployed on a wider scale in the late 1990s and have most recently been practised in conjunction with Lean – a production practice that focuses on eliminating all waste from the production chain.

Six Sigma projects tend to follow two main methodologies, which comprise five phases each – DMAIC, which is used for projects aimed at improving an existing business process and stands for define, measure, analyse, improve and control; and DMADV, which is aimed at created new product or process designs and stands for define, measure, analyse, design and verify.

The strategy's name derives from the notion that if one has six standard deviations between the process mean and the nearest specification limit then practically no items will fail to meet specifications. This calculation method is employed in process capability studies which are often implemented by Six Sigma consultants, such as LCP Consultants.

Alex Hawkes: What is the main ethos of Six Sigma? And how does it work in tandem with other production practices such as Lean?

Julian Mosquera: Six Sigma and Lean are both essentially a mindset and collection of techniques deployed to investigate and resolve a given problem or business issue. Six Sigma has evolved from what was originally a single technique designed to manage process variability – at the heart of this philosophy is the idea that making processes more predictable and reliable leads to increased quality, improved yield and less waste. Lean, on the other hand, has a strong process engineering background with its central focus on waste reduction in all its forms.

"Six Sigma has evolved from what was originally a single technique designed to manage process variability."

Both effectively look at the cause and effect around a problem, establishing its magnitude and means of managing or eliminating it altogether. Both have adopted each other's "techniques" – so Lean now encompasses Six Sigma, which has itself moved from being a single technique to becoming a programme and mindset.

Purists would still argue they are fundamentally quite different, but I believe that, on the ground, they are applied in very similar ways.

AH: What are some of the typical issues a Six Sigma consultant will address at a company?

JM: A great deal of Six Sigma projects are currently focused on reducing inventory and cost, particularly in large chemical factories, but this is now becoming more ambitious.

For example, in a chemicals factory there are typically a large number of processes that create huge amounts of heat and require cooling, resulting in high energy losses. There are often more effective ways of combining the two processes back to back, and this may be the subject of such a project. Alternatively, we see projects focused on finding better ways of ensuring and guaranteeing that products are fit for purpose, always with the challenge of improving the bottom line.

Projects typically use five or six analytical techniques from the Six Sigma "toolbag". Companies need to be selective about the sort of tools they use and think carefully about how the result will be reported.

One of the things we do at LCP Consulting is establish from the outset what the expectations of a project are, recognising and understanding how the holistic organisation may be affected. Often, with a strictly Six Sigma or Lean approach, the scope is quite narrow and solutions can fail to embrace the wider organisational implications.

Whatever approach is taken, it should be about getting to the heart of a problem rather than just addressing the visible symptoms. In some cases, this may only require changing the decision-making protocol or the parameters in a system. What can initially seem like a big problem can turn out to be quite easy to address and, of course, what seems small can mask a much deeper issue.

AH: What are some of the potential drawbacks of embarking on a Six Sigma or Lean programme?

JM: Six Sigma and Lean programmes can involve a heavy resource commitment; for instance requiring companies to invest in extensive staff training.

"Lean is a production practice that focuses on eliminating all waste from the production chain."

These programmes are sometimes criticised for overwhelming the business – consuming time and resources without necessarily delivering on the promise of a significant cost reduction. Six Sigma projects often run for up to nine months as part of the investigation and solution definition phases, which I believe is simply too long.

What LCP would rather do is run what we call a health check (or RapiSCAN), which gets to the nature of the issue and an action plan in the space of six to 12 weeks depending on the problem under review. As a result, we still deploy many Lean / Six Sigma techniques and thinking, but without the overheads.

AH: Six Sigma uses a set of quality management methods that create a special infrastructure of people within an organisation who are trained to different levels of expertise in these methods. What are your thoughts on this?

JM: When a business first embarks on a programme, it typically identifies a small elite group that should be capable of running such a programme (black belts) and a support group (green belts). Both need a significant period of training in the basic techniques, with black belts immersed in their application and interpretation to yield appropriate solutions for a business to implement.

Whilst there are companies for whom this heavily formalised approach is relevant, I believe the process is too long. Staff with some initial training and orientation applied directly to a business issue can learn from a consultant on the job. For us, it is therefore about constructing a programme and engaging a business as early as possible in deploying the problem solving techniques.

It is important to maintain the competence of the internal team and have sufficient projects to keep them busy over the long term to justify the initial investment.

A slightly different perspective relates to the project focus. The pool of projects to be investigated is usually created by managers, more senior than the black belts, who will not have received the same rigor of training. So the black belts' success is determined by the senior management group's capability to jointly manage a programme that delivers against the strategic needs of a business while being grounded in real issues that need to be addressed.

AH: How large should an organisation be in order to deploy an effective Six Sigma project?

JM: There is no denying that over the last two decades, larger organisations have tended to be more likely to have the resources and depth in manpower to deploy a comprehensive Six Sigma programme. A multinational or global organisation will have business processes that cover multiple countries or functions. Quite a few global businesses develop in-house Six Sigma teams, which would not be financially viable for a small to medium-sized enterprise.

Even in a sizeable company the pool of talent available to become "black belts" is limited and it takes time to build up the expertise. Where capable people exist, they often have limited experience outside the operations they find themselves in. Though training is extensive, it tends to be intensive over a short period. Some are able to absorb and apply, while many cannot, and find themselves depending on a small number of techniques. When it comes to challenging the status quo, internal resources can have a tough time persuading more senior managers to change direction. Six Sigma is a good tool, but inevitably has some limitations.

Six Sigma projects, however, can be deployed effectively in any size of company, but a different approach is needed for smaller businesses. Here it is generally a case of going to a specific factory or country operation, undertaking an investigation and implementing the solution locally. For this size of business, a combination of learning the skills and working with a consultant to develop new skills proves to be of greater value. When this approach is applied to specific projects it often leads to better results, and value is delivered much earlier to the client.

Therefore, a Six Sigma project can be deployed effectively in any size of company. The smaller the company though, the more difficult it is to group together the skills and know-how. The wider challenge is to not to just deploy a project but to deploy a rolling programme so that the approach to projects becomes one of utilising statistical techniques and good project management disciplines, which in turn becomes a business habit.

"It should be about getting to the heart of a problem rather than just addressing the visible symptoms."

Part of the ethos of Six Sigma is to recycle the black belts so that they are reintroduced to operational roles, ensuring that the background capability of the organisation is enhanced and better Six Sigma governance develops. Most organisations find that this is a difficult progression and takes considerable time. External injections of expertise can be beneficial to Six Sigma, introducing a different perspective gained from experience within other organisations. This can also provide additional resource and focus to enable a boost to getting effective change implemented.

AH: How has the global economic downturn affected general attitudes towards Six Sigma and Lean?

JM: Industries now face a different problem when it comes to risk. While improving a process to ensure it is more predictable can only be a positive move, the flipside is that if you remove all of the residual capacity from a business then, by definition, it becomes inflexible.

What we have found with the economic downturn is that those unable to respond to very short-term needs, such as customer demand, have placed their business at risk.

This issue is currently being debated in the commercial functions, where questions are being asked as to how companies can effectively manage risk or be more flexible, or how supply chains and manufacturing operations could be designed to better respond to such short-term changes in demand. Six Sigma and Lean projects are now starting to address these challenges.

Quoted from: Chemicals Technology

SINOPEC to build two MTO projects in Henan

noreply@blogger.com (Pak Eko) — Sat, 27 Feb 2010 03:30:00 +0000

In Feb. 3, 2010, SINOPEC and Henan Provincial Government signed a memorandum of outstanding, deciding to set up a 1.8Mt/a methanol to 600kt/a olefins project in Baoshan Cyclic Economy Industrial Cluster, Hebi City, Henan Province.河南省鶴壁市

The project will be jointly executed by SINOPEC and Henan Coal & Chemical Industry Group (HNCC河南煤業化工集団）. The project shall combine coal mining, methanol synthesis, MTO (methanol-to-olefins) and downstream processing into an integrated operation. Work of the project preliminary stage is divided between HNCC, in charge of the coal mining design, and SINOPEC, in charge of that of methanol, MTO and the derivative plants, while relevant governmental departments of Henan province shall provide the supporting documents necessary for the project proposal. The project application report shall be accomplished and submitted to state authorities before June 2010.

According to the earlier released information, at the end of 2009, SINOPEC approved the ethylene feedstock diversifying project proposed by Zhongyuan Petrochemical 中原石油化学in Puyang濮陽市, Henan Province. This project was reported to cost around CNY1.5bn and use a SINOPEC self-developed SMTO process. Construction scope shall cover a 600kt/a methanol to 200kt/a olefin unit. Also, it includes the expansion of existing PE unit to 260kt/a and a new PP plant of 100kt/a capacity. Zhongyuan Petrochemical is a subsidiary of SINOPEC. It is currently operating a 180kt/a ethylene cracker, a 200kt/a PE unit, a 60kt/a PP unit, a 50kt/a C4 extraction and a 100kt/a aromatic extraction plant.

Combining the news, SINOPEC is supposed to execute two MTO project in northern part of Henan Province. Firstly, the company will build a demonstration MTO unit of 200kt/a olefins in Puyang . Then a larger size MTO complex (600kt/a olefins) shall follow and to be built in Hebi.

According to the analysis of ASIACHEM, the existing naphtha crackers of under 300kt/a capacity in China will gradually lose their competitiveness with those coal-based olefin plants developed in China or ethane-based crackers boomed in Middle East. Therefore, the feedstock change project of Zhongyuan Petrochemical, once comes true, will be a good choice for SINOPEC, by the project not only the company can obtain commercial experience from the 200kt/a MTO operation and avoid the risk of one-step scale up to 600kt/a capacity, but also the existing downstream plants and distribution channels can be made full use to reduce investment cost.

SINOPEC has developed SMTO (initiated with S for SINOPEC) process as a technology reserve. In 2007, SINOPEC built a 100t/d SMTO commercial pilot unit in Yanshan Petrochemical. Then in 2008 the company developed 1.8Mt/a SMTO process package and acquired all capabilities necessary for the engineering & construction of full size MTO complex.

Sinopec announced that it has all the capabilities to scale up the SMTO project to 1.8 Mt/a (methanol feedstock).

Both Puyang and Hebi are located in northern part of Henan Province, belonging in one of the state planned 7 coal chemical industry bases, i.e. the borderland between Jiangsu, Shandong, Henan and Anhui Provinces. The abundance of local coal and water resources will provide a better foundation for SINOPEC to develop coal chemical projects.

Quoted from: New Kaznak

No more Iraqi oilfields for foreign companies: prime minister

noreply@blogger.com (Pak Eko) — Sat, 27 Feb 2010 03:28:00 +0000

Iraq has no further plans to use foreign firms to develop its oilfields beyond ones auctioned off last year, the country's prime minister said on Saturday(2/20), ahead of a national election next month.

Analysts say that foreign companies may have accepted the tough terms in oilfield development contracts awarded in two rounds last year partly to secure an initial foothold in Iraq, with a view to possible access to other untapped reserves later.

Iraq has the world's third-largest crude reserves and is the world's 11th-biggest oil producer.

Prime Minister Nuri al-Maliki said Iraq should start thinking about developing its national oil firms and warned of "staying captive in the hands of foreign oil firms."

"I told the oil minister during a cabinet meeting that we will never sign any more contracts with foreign oil companies," Maliki told supporters at a rally in the southern oil hub of Basra, weeks before a parliamentary election on March 7.

"We will depend on our national companies in developing our oilfields," Maliki said.

His nationalistic tone could discomfort oil firms such as BP Plc and Royal Dutch Shell, which are monitoring their likely reception in a country wracked by years of war and with little recent experience of working with foreign companies.

Baghdad has struck deals with international oil firms that could boost its output capacity to 12 million barrels per day (bpd) within seven years from about 2.5 million bpd now.

Oil Minister Hussain al-Shahristani said in December there were no plans for a third oil contract auction.

Maliki's coalition is not expected to repeat its triumphant performance in last year's local polls. Huge bombings have since chipped away at his claims to have improved security, and opponents have united to oust him.

Analysts expect the ten oil deals awarded in auctions last year will likely survive the change in Iraq's government after the parliamentary vote next month, seen as a crucial test for Iraq as it tries to move away from years of war and sanctions.

Foreign capital and expertise is seen as essential if Iraq is to rebuild its battered economy and infrastructure.

The country's oil installations and pipelines have suffered repeated bombings and sabotage, and many of its most qualified workers fled the country in the violent and chaotic aftermath of the 2003 U.S.-led invasion.

Quoted from: New Kaznak

LyondellBasell Preparing to Stop PP Production in Terni

noreply@blogger.com (Pak Eko) — Sat, 27 Feb 2010 03:26:00 +0000

LyondellBasell Industries today announced a project to cease the production of polypropylene (PP) at Terni, Italy. The company has started the employee consultation process regarding a project to permanently shut down the unit.

“Demand for polypropylene continues to be affected by global economic conditions and the resulting market environment has made facilities such as Terni no longer economically viable. We expect to be able to meet projected customer demand for polypropylene (including local customers in Terni) with product supplied from our other facilities in Italy,” said Anton De Vries , LyondellBasell’s senior vice president, Olefins and Polyolefins - Europe, Asia and International. LyondellBasell said that PP production activities in Italy will be focused on the company’s world-scale sites at Ferrara and Brindisi.

The Terni plant has a nameplate capacity of 255 KT per year. In conjunction with the shutdown project, LyondellBasell has started consultation with representatives of the employees to determine the appropriate path forward for the employees at the site. The plant currently has approximately 120 permanent employees.

Quoted from: New Kaznak

Toyota Announces US Sales Freeze

noreply@blogger.com (Pak Eko) — Thu, 28 Jan 2010 09:59:00 +0000

Japanese car giant Toyota has said it will suspend US sales of eight models of cars, including its top selling Camry, amid a massive safety recall.

The unprecedented move comes a week after the company announced a recall of 2.3 million cars to fix potentially faulty accelerator pedals.

The recall was Toyota's second major alert in four months in the US, its biggest market.

The halt in sales announced on Tuesday means the world's number one carmaker will also freeze production on some models at its plants in the US and Canada.

The company has said it is also considering whether it needs to announce a recall on cars sold in Europe, where the same parts are used in millions of models already sold.

The problem could lead to accelerator pedals sticking in the depressed position, causing acceleration without warning.

Toyota recall: US models affected

Camry – model for years 2007 to present

RAV4 - 2009-2010 model

Corolla – 2009-2010 model

Matrix - 2009-2010 model

Sequoia - 2008-2010 model

Tundra - 2007-2010 model

Avalon - 2005-2010 model

Highlander – 2010 model

The recall is expected to cause major dent in Toyota's earnings, as well as the company's reputation for safety and quality.

It could also undermine its recovery from plunging automotive sales around the world caused by the financial crisis.

The automaker's shares fell 4.3 per cent in Tokyo trade Wednesday following the sales suspension announcement.
Toyota has already forecast a $3.9bn operating loss for the year to March, with a return to profit not expected until well into 2011 at the earliest.

Annual combined North American sales of the eight cars involved in the sales suspension and recall amount to more than one million units.

Bob Carter, Toyota's US vice president, said the company was taking the measures needed to ensure safety and restore confidence among Toyota customers.

"This action is necessary until a remedy is finalised," he said in a statement.

"We're making every effort to address this situation for our customers as quickly as possible."

Quoted from: Aljazeera.net

Gold Slips Below $1,090/oz as Dollar Firms

noreply@blogger.com (Pak Eko) — Wed, 27 Jan 2010 09:58:00 +0000

26 January 2010

LONDON - Gold prices slipped below $1,090 an ounce in Europe on Tuesday as China’s implementation of a clampdown on lending lifted the dollar versus the euro, undermining bullion’s appeal as an alternative asset.

Higher-yielding and commodity-related currencies are sensitive to any hints that China may be putting the brakes on its economy.

Spot gold was bid at $1,089.15 an ounce at 1210 GMT, against $1,097.95 late in New York on Monday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange fell $6.50 to $1,089.20 an ounce.

“It looks as though gold has found some support here, but I wouldn’t be surprised to see more weakness,” said Standard Chartered analyst Daniel Smith.

“A lot will be determined by the outlook for the dollar, so clearly the U.S. GDP number on Friday will be very important for that,” he added. “If it is stronger than expected, the dollar will strengthen and gold will suffer.”

The outcome of the Federal Reserve’s meeting on interest rates, due to conclude on Thursday, will also be key for the U.S. currency, he said. The Fed is not expected to indicate a benchmark rate hike is imminent.

Gold prices fell along with the euro on Tuesday as risk aversion increased, while equities also slipped. China’s central bank told banks that need to raise reserve ratios to implement the change on Tuesday, banking sources said.

In addition, Standard & Poor’s cut its rating outlook on Japan, hitting investor confidence about global economic recovery. European shares fell for a fifth day, while stock futures pointed to a lower opening on Wall Street.

Commodities pressured

Gold might typically be expected to benefit at times of rising risk aversion as investors buy the metal as a haven, as happened a year ago while the financial crisis raged.

However, if risk aversion is rising but still manageable, the benefits to the dollar — strength in which weighs on gold — generally puts gold prices under pressure.

“(Gold’s) risk-averse qualities were hardly noticeable during the latest sell-off in equities, with bullion trading against the dollar as anything else in your average commodity basket,” said VTB Capital analyst Andrey Kryuchenkov in a note.

Among other commodities, oil fell more than 1 percent, and industrial metals like copper and aluminium also fell. The asset class is suffering from fears tighter Chinese monetary policy may curb investment flows into commodities.

On the supply side, the chief executive of Harmony Gold Mining, the world’s fifth-largest gold producer, sees spot gold prices flat for the next 12 months.

He added the company was reviewing further operations based on the gold price versus costs after closing four shafts, and the company’s electricity bill could triple in four years if power utility Eskom’s tariff request is granted.

Silver fell to a 2010 low of $16.74, tracking losses in gold, and was later at $16.78 an ounce versus $17.12. Platinum was at $1,517 an ounce versus $1,546.50, and palladium at $426.50 an ounce versus $441.

Buyers cashed in on gains in palladium, the best performer of the precious metals so far this year, analysts said. However, “investors may view the correction as a further dip buying opportunity”, said TheBullionDesk.com analyst James Moore.

Quoted from: Khaleejtimes.com

Yen Gains as China Implements Reserve Ratio Hike

noreply@blogger.com (Pak Eko) — Wed, 27 Jan 2010 09:56:00 +0000

26 January 2010

LONDON - The yen rose sharply on Tuesday after China’s implementation of rises in some banks’ reserve ratios cut risk appetite and underlined concerns that monetary tightening may slow the country’s economic growth.

The dollar fell against the yen but rose against most other currencies after the China news raised the prospect of further tightening.

Sterling tumbled against the dollar after data showed Britain only just emerged from recession at the end of 2009, suggesting any UK monetary tightening was still a lomg way off.

China’s move sparked selling in positions funded by the low-yielding yen, which hit a nine-month high against the euro, even as ratings agency Standard and Poor’s cut its outlook on Japanese sovereign debt to negative from stable.

China’s central bank ordered banks that need to raise their reserve ratios to implement the change on Tuesday, banking sources said, prompting falls in equities..

Analysts said the change, flagged by Chinese officials last week, underlined the market’s low tolerance for risk.

“Risk aversion is in vogue right now. The market is still quite skittish about equities, which is coming through and helping the yen,” said HSBC director of currency strategy Paul Mackel.

By 1220 GMT, the euro was down more than 1 percent against the Japanese currency at 126.14, yen off an earlier nine-month low of 125.96 yen after Japanese deputy finance minister Yoshihiko Noda pledged fiscal discipline following the S&P announcement.

Finance Minister Naoto Kan echoed those comments, saying Japan must show it has a roadmap to restore fiscal health.

The yen initially trimmed gains after the S&P announcement, which came in early European trade, but quickly recovered as analysts shrugged off the news on the view that only a small proportion of Japanese government bonds are held offshore.

“It would be a very different story if a lot of foreigners held JGBs. It is another reminder that the fiscal side of the story continues to rot in many of the developed economies and I think that’s at the forefront of investors’ minds right now.” Mackel said.

The dollar was trading at 89.62 yen, down 0.7 percent, after falling to a one-month low at 89.39 after Noda’s remarks, having earlier traded as high as 90.55 yen.

The euro was down 0.5 percent versus the dollar at $1.4075, despite a German survey showing a bigger-than-expected rise, with the Ifo business climate at 95.8 in January, up from 94.7 in December.

Quoted from: Khaleejtimes.com

Oil Drops Towards $74 on China Banks; Eyes Inventories

noreply@blogger.com (Pak Eko) — Wed, 27 Jan 2010 09:55:00 +0000

26 January 2010

LONDON - Oil fell towards $74 a barrel on Tuesday after China implemented a clampdown on lending, rekindling concern that tightening moves by the world’s second-largest oil user may limit demand.

Crude approached a one-month low after the Chinese move, which analysts said was a setback for the bullish view in oil markets that puts the prospect of rising Asian demand ahead of the market’s weak current fundamentals.

“The fundamental link to current prices is weak — hence oil prices need at least some general optimism that boom times are around the corner,” said Olivier Jakob, analyst at Petromatrix.

“That general optimism depends a lot on China’s consumption, saving the rest of the world and that will be somewhat challenged by the Chinese government trying to regulate the formation of bubbles.”

U.S. oil was down 76 cents at $74.50 by 1206 GMT, having traded as low as $74.14. On Friday, it touched a one-month intraday low of $74.01. Brent crude fell 65 cents to $73.04.

Crude oil futures have fallen by more than 6 percent in January, set for their first monthly decline since July 2009.

China implemented its planned increase in required reserves for some banks on Tuesday, sources told Reuters. Asian stocks fell, copper slipped and the dollar gained. European shares lost ground.

“The Chinese tightening is making people concerned that it is going to damp down demand, but it won’t damp demand by very much,” said Christopher Bellew, a broker at Bache Commodities.

“The market may be forming a base around these numbers, I think.”

Recovery jitters

Highlighting fears that a global recovery may be sputtering, South Korea reported weaker-than-expected growth in the fourth quarter.

Britain came out of recession in the fourth quarter, but with a lower growth rate than expected. Standard & Poor’s cut its rating outlook on Japan.

Economic reports this week have also raised doubts over the strength of the U.S. recovery. The Federal Reserve is not expected to indicate that it will raise its benchmark rate any time soon when it meets this week.

The Federal Open Market Committee (FOMC), the Fed’s policy-setting group, begins a two-day policy meeting on Tuesday.

Oil inventories in the United States, the top oil consumer, are expected to rise further in reports due this week. Crude stocks probably rose by 1.7 million barrels, a Reuters poll of analysts showed on Monday.

The survey also forecasts gasoline stockpiles probably climbed 1.4 million barrels and distillates, which include heating oil and diesel, were predicted to have fallen 1.4 million barrels.

Industry group American Petroleum Institute issues its weekly inventory report on Tuesday at 2130 GMT. The government’s Energy Information Administration (EIA) follows on Wednesday.

Quoted from: Khaleejtimes.com

Oil Rises Above $71 on Brighter Demand Outlook

noreply@blogger.com (Pak Eko) — Mon, 14 Dec 2009 06:00:00 +0000

(Reuters)11 December 2009

LONDON - Oil rose on Friday as forecasts for higher demand growth next year and strong Chinese industrial output boosted sentiment, ending a seven-day losing streak which saw prices dip below $70 a barrel for the first time in two months.

U.S. crude for January delivery edged up 52 cents to $71.06 a barrel by 1107 GMT, after touching a session low of $69.81 a barrel on Thursday. Over the past seven trading days, front month crude has sunk almost $7 or 10 percent.

Brent crude futures rose 55 cents to $72.41 a barrel.

World oil demand will rise by almost 1.5 million barrels per day (bpd) in 2010 to 86.3 million bpd and the rate of demand growth will also accelerate, the International Energy Agency (IEA), which advises 28 industrialised nations, said on Friday.

“Oil demand looks a bit stronger,” said David Fyfe, head of the oil industry and markets division of the IEA. “Looking at 2010, it is an adjustment in a bullish direction.”

The report came after the U.S. Energy Information Administration revised its own world oil demand for 2009 lower on Tuesday

Strong industrial growth figures out of China also helped to reverse this week’s price slump.

China’s November industrial output surged to its strongest since June 2007, underscoring the economy’s robust recovery from the global downturn, and analysts expected the trend to continue in coming months.

Refining rates in the world’s second largest oil user also posted a record high in November, up 21 percent from a year earlier to 8.12 million bpd, signalling recovering demand.

“The IEA shows demand is slightly up and the Chinese data has been positive. Prices are likely to stabilise around these levels,” said Olivier Jakob of Petromatrix, adding $70 a barrel was set to be a key technical support level moving forward.
Oversupply

Analysts however cautioned the supply concerns that drove prices lower this week were likely to hold sway over the market and could temper any future rallies.

Earlier this week, the EIA reported stocks at the U.S. delivery hub of Cushing in Oklahoma rose 2.5 million barrels to 33.4 million barrels.

This inventory overhang has depressed front month U.S. crude prices relative to oil futures, resulting this week in the widest WTI crude market contango since August of more than $2 a barrel.

“There is a strong message in the oil market and that is weakness. The contango is widening significantly and this points to physical oversupply,” said analyst David Wech at JBC Energy, referring to both inventories on land and in floating storage.

The volume of refined oil products stored on ships floating in the sea increased to 98 million barrels at the end of November, the IEA said on Friday.

Data out of the United States later is likely to provide further direction as traders look for clues about the pace of demand recovery in the world’s largest oil consumer.

U.S. retail sales for November are due at 1330 GMT and preliminary December consumer confidence figures at 1455 GMT.

These data will also be important drivers for the U.S. dollar and this could in turn steer oil, analysts said.

Weakness in the U.S. dollar has been a factor behind this year’s oil price rally from below $40 a barrel last December.

A cheap dollar tends to drive oil higher as it makes it more attractive for buyers using other currencies.

quoted from: Khaleej Times

Solvay Launces Tender Offer on Shares Vinythai

noreply@blogger.com (Pak Eko) — Mon, 14 Dec 2009 05:59:00 +0000

Offer will allow Solvay to support development of Vinythai’s businesses

Solvay today announces that in line with its strategy of growing in emerging markets, its Dutch subsidiary Solvay Chemicals and Plastics Holding B.V. is launching a tender offer on the shares of Vinythai, the Thai Vinyl and Chlor-alkali producer. Solvay’s participation in Vinythai recently has crossed the threshold of 50% of the shares of its Thai subsidiary. The tender offer price is 6.15 Thai Baht per share, and the offer period will run from December 16th 2009 to January 21st 2010. Solvay has no intention to increase the price or to extend the term of the Tender Offer.
The offer will allow Solvay to support the development of Vinythai’s businesses, including the Epicerol (R) project recently transferred to Vinythai. Epicerol is an innovative and environment friendly production process for epichlorohydrin, protected by 38 patent applications, some of them already granted in different parts of the World. It is based on the transformation of natural glycerine mainly obtained as by-product from the production of biofuels.
Epichlorohydrin is an essential feedstock for the production of epoxy resins, increasingly used in applications such as corrosion protection coatings as well in the electronics, automotive or aerospace industry. Demand for epichlorohydrin to produce wind turbine blades of windmills is also soaring.

VINYTHAI is a Vinyl and Chlor-alkali producer listed on the Stock Exchange of Thailand. Its major shareholders are the Solvay Group (50%), PTT Chemical Public Company (24.98%), and the Charoen Pokphand Group (11.87%).
In 2008 Vinythai recorded total revenues of 13,312 MTHB (EUR 275 million) and booked a net profit of 1,035 MTHB (EUR 21 million). Vinythai employs 390 people.

A year ago Vinythai increased its PVC capacity at Map Ta Phut in Thailand by 70,000 tonnes to 280,000 tonnes, and has a plan to raise capacity in stages to 400,000 tonnes.
The site is also home to the 100,000 tonnes glycerine-to-epichlorohydrin Epicerol process plant being built by Solvay, and due to be operational about now. The Epicerol process makes epichlorohydrin from the glycerine by-product of biodiesel production. Epichlorohydrin is a feedstock for the production of epoxy resins and Solvay says demand for it has significantly outpaced the growth of the world economy in recent years.

quoted from: New Kaznak

Dubai Stock Market Registers Biggest Two-day Gain

noreply@blogger.com (Pak Eko) — Mon, 14 Dec 2009 05:57:00 +0000

14 December 2009
DUBAI — The Dubai stock market continued to rally on Sunday, building on a 7 per cent surge it made before the weekend on Thursday, to post the biggest two-day gain in more than a year.

Abu Dhabi’s index also gained the most since March on hopes that Dubai World would make a last-minute move to avoid a default on its property unit Nakheel.

Investors see the $3.5 billion Nakheel bond maturing today, but with a two-week grace period ending on December 28, as a key test for Dubai’s ability to meet its financial obligations.

The DFM General Index, which nose-dived 19 per cent since Dubai World’s debt standstill announcement on November 25, rose 3.3 per cent to 1,695.35, bringing its two-day gain to 11 per cent, the most since October 2008. Abu Dhabi’s index added 4.5 per cent, the biggest one-day jump since March 24.

Property developer Emaar Properties jumped 6.8 per cent, while National Bank of Abu Dhabi, the UAE’s second biggest lender by assets, rose the most in 10 months.

Emaar shares, which triggered the market rally on Thursday with a 14.84 per cent surge in the wake of a decision to abandon a merger with three real-estate units of Dubai Holding LLC, were trading more than 8.0 per cent up on Sunday. Emaar rose to Dh3.14, the highest close in almost a week. The stock has soared 23 per cent since it said on December 9 it abandoned the merger move.

“Now with the overhang cleared, we believe investors should direct their focus back to Emaar’s fundamental value as a standalone entity,” EFG-Hermes investment bank said in a report on Sunday.

Nasdaq Dubai-listed DP World, majority owned by Dubai World, last traded 8.6 per cent higher at $0.38.

National Bank of Abu Dhabi rose 9.7 per cent to Dh11.85 and Aldar Properties added 8.7 per cent to Dh4.53.

Construction major Arabtec’s shares also went up by 7 per cent, while the stocks of budget airline Air Arabia were up just over one per cent.

Dubai Islamic Bank shares appeared to shrug off a rate downgrading by Moody’s as they surged by nearly 10 percent. Emirates NBD bank, also downgraded, seemed to react negatively, dropping by over four per cent.

“The market has come to a critical level and many investors believe the recent selloff was not justified,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC in Abu Dhabi. “We already know that there were meetings with the banks and there is a buzz that there might be agreements with the bondholders, so the market is remaining really hopeful.”

If there’s no news about the Nakheel bond tomorrow the markets could see another selloff, but not with the same momentum of the past few weeks, he said.

Issac John (With inputs from agencies)

issacjohn@khaleejtimes.com

Quoted from: Khaleejtimes.com

The Immediate Dubai Impact

noreply@blogger.com (Pak Eko) — Thu, 03 Dec 2009 14:20:00 +0000

On A Very Sticky Wicket

www.theage.com.au

By John Richardson

As one my colleagues said - it's a good job the US stock markets were closed for Thanksgiving.

Lots of efforts are being made to talk the Dubai World crisis and down - and despite drops in Middle East market equities - Asian markets rallied today.

But the next few days could still be important with a lot depending on how neighbouring governments respond.

Oil markets have been pretty much out-of-sync with real demand since 2003.

But with the rise in the US dollar carry trade and Western growth so fragile, the risk of another sharp correction is higher now than when the world economy was in good shape. Such a collapse would be a mini version of what happened in Q4 last year.

I did a very unscientific survey of 30 traders, producers, buyers and logistics people at the APPEC oil and gas conference in Singapore a few weeks ago.

Twenty three said oil prices, based on fundamentals, should be $40-50 a barrel (three of those who disagreed and thought should be where they are now were financial analysts!).

So perhaps the biggest immediate risk from Dubai is a big strengthening of the dollar and a connected drop in equities and crude.

As I mentioned in my previoust post, I was in Shanghai last week. The local linear-low density polyethylene (LLDPE) polyvinyl chloride (PVC) and purified terephthalic acid (PTA) futures contracts all dipped sharply when the Dubai news broke.

My colleagues at CBI China said that because of the dip in these contracts, very few buyers were willing to acquire physical cargoes on Thursday and Friday.

This could continue as long as the markets worry that this might be another Lehman Bros (fortunately, this seems very unlikely at the moment).

quoted from: ICIS/Asian Chemical Blog

LAS Prices Resilient Despite Low Demand

noreply@blogger.com (Pak Eko) — Thu, 03 Dec 2009 06:34:00 +0000

Gordon Graff -- Purchasing, 12/2/2009 1:58:26 PM

Despite a decline in demand, prices for surfactant linear alkylbenzene sulfonate have remained stubbornly higher than other chemicals, steadily increasing off a cyclical bottom in April. Prices did dip in November, however.

Overall business conditions in the surfactants market were "chronically depressed" during the first half of 2009, says Neil Burns, managing partner at Neil A. Burns a private equity firm that invests in specialty chemical companies. While activity began to recover in the second half of the year, he notes, total demand for surfactants in 2009 will be "significantly below that of 2008 in volumes, revenues and profitability."

Considering how much demand retreated, prices of surfactants have been fairly resilient. For example, according to Purchasingdata.com, tags for LAS hit a high point of $1.03/lb. in July 2008, slid to a low of 89¢/lb in April, and had bounced back to 97¢/lb by September.

quoted from: Purchasing.com

Copper Prices Continue to Rise

noreply@blogger.com (Pak Eko) — Thu, 03 Dec 2009 06:29:00 +0000

Paul Teague -- Purchasing, 12/2/2009 2:01:33 PM

Buyers tell Purchasing that they paid more than twice as much for copper cathode in November as they paid in December 2008. The average transaction price last month, they said, was $3.06/lb versus $1.49 last December.

The transaction price has climbed steadily all year. Strong demand in China is among the reasons for the price increases. But another factor, especially lately, has been fears of supply shortages due to labor strife at two South American mines.

Another factor could be production slowdowns at Kazakhsatn-based copper miner Kazakhmys PLC, one of the world's ten largest producers. Reuters reported that the miner produced 13.5% less copper cathode from its own concentrate in the third quarter. The cutback, Reuters said, was part of the miner's efforts to cut its overall costs.

But a new source of copper is coming on line. The Chinese company Golden Dragon has opened a mine in northern Mexico expected to have a capacity of 120,000 tons, according to the Chinese news agency Xinhua.

Meanwhile, copper on the COMEX exchange was priced at $3.22 earlier today. The price on the London Metal Exchange was $3.17 yesterday.

quoted from: Purchasing.com

China Mine Blast Toll Tops 100

noreply@blogger.com (HAEDAR SALMAN) — Mon, 23 Nov 2009 04:11:00 +0000

The number of workers killed by a gas explosion at a mine in northeastern China has risen to more than 100.

The official Xinhua news agency said at the time of the pre-dawn blast at the Xinxing mine in Heilongjiang province on Saturday, there were 528 workers in the colliery, and 420 of them had been rescued by Sunday night.

The authorities said 104 were dead and four more were still missing or unaccounted for, believed to be trapped about 500 metres underground.

Some 300 rescue workers were working round-the-clock in search of the missing men but Chinese media said dense gas and collapsed tunnels made the effort slow-going.

There were reports quoting an unnamed employee as saying that the mine's director, deputy director and chief engineer had been fired after the incident.

But Zhang Jinguang, a spokesman for the mining company, told reporters it was an act of nature, and not caused by human error.

"There was no sign that this accident might happen. If there had been, we could have controlled it. On top of that, as I just said, it was a huge and sudden coal and gas explosion like a bomb," he said.

"Development is important, but the growth of GDP shouldn't be achieved at the price of miners' blood"

Li Zhanshu, Heilongjiang provincial governor

Still, Saturday's incident at the nearly 100-year-old mine near the Russian border once again highlighted how heavy demand for power-generating coal in the world's third-largest economy has sometimes come at a high human cost.

Li Zhanshu, the provincial governor, urged officials to better manage coal mines.

"Development is important, but the growth of GDP shouldn't be achieved at the price of miners' blood," he said.

The deadliest accident in China's mining industry in two years was a blow to the central government's efforts to improve safety in the world's deadliest mine industry.

Hundreds of smaller, private mines have been shut down or absorbed into state-owned operations.

Compared to other manual jobs, Chinese coal miners can earn relatively high wages, tempting workers and farmers into rickety and poorly-ventilated shafts.

In the first half of the year, 1,175 people died in officially recorded coal mine accidents across China, a fall of 18.4 per cent compared to the same time last year, according to the State Administration of Coal Mine Safety.

Quoted from: Al-Jazeera.net

Industrial News

noreply@blogger.com (HAEDAR SALMAN) — Mon, 23 Nov 2009 04:08:00 +0000

Clariant to Close Plants and Cut Jobs

Swiss speciality chemicals company Clariant said it will close plants at several sites as part of its restructuring programme to cut costs and address overcapacities.

Clariant has nominated its sites in France, the UK, Mexico and parts of two plants in Germany as part of its 'Global Asset Network Optimization' (GANO) project.

The restructuring will cost an estimated $147m (CHF150m), and the proposed closures are expected to affect 570 jobs worldwide, Clariant said.

The initial GANO proposal, including transferring production to other Clariant sites, is expected to be completed between 2011 and 2013.

Shaw to Provide Purification Technology to Yanchang's Olefins Unit

China's Yanchang Petroleum Group has selected The Shaw Group to provide purification technology and design services for its deep catalytic cracking (DCC) unit in Shaanxi province, China.

Shaw will license its proprietary refinery offgas (ROG) purification and recovery technology and supply process design services for Yanchang's 1,500kt/y DCC unit.

The unit, owned by Yanchang's subsidiary Yulin Energy and Chemical, produces ethylene and propylene from heavy oil feedstock.

The ROG technology will enable the unit to produce an additional 270,000t/y of ethylene and 320,000t/y of propylene.

Shaw will also provide the technology for two ultra selective conversion furnaces and other proprietary equipment, as well as technical support during basic and detailed design, commissioning and startup of the DCC unit.

Quoted from: Chemicals Technology