BASF to Close Polyamide 6 Plant at Rudolstadt

LONDON (ICIS news)--BASF is to discontinue production of polyamide 6 (PA6) at its Rudolstadt site in east Germany at the end of 2010, the chemical company said on Tuesday.

It also plans to reduce PA6 capacity at its Ludwigshafen plant and will eliminate a total of 77 jobs from the two facilities, the company said in a statement.

A BASF spokeswoman said that by taking these steps the company would be reducing its PA6 capacity in Europe by 40,000 tonnes/year. It currently has a capacity of 410,000 tonnes/year in Europe.

The decision to restructure was prompted by BASF wanting to remain competitive in the polyamide market. The company was therefore focusing on its backward integrated plants, she added.

BASF’s Performance Polymers division head, Harald Lauke, said in a statement: “By focusing on the large, backward-integrated Verbund sites, we are improving our cost basis and safeguarding our competitiveness in the European polyamide 6 market.”

BASF will continue to operate a compounding plant for the production of engineering plastics in Rudolstadt.

A major PA6 buyer said the reduction in capacity would not be felt because of the number of players in the market.

“Taking 40,000 tonnes out of the market is not going to have much impact,” he added.

A European producer said that the timeframe set for the closure meant it would not shift the market dramatically.

PA6 producers have suffered from severely reduced margins this year as they failed to pass on higher feedstock costs to customers earlier in the year.

Since the beginning of 2009 contract prices for PA6 feedstock caprolactam have risen by €507-522/tonne as a result of benzene price increases. During the same period, prices for PA6 increased by just €100-150/tonne.

quoted from: ICIS.com

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Current Accident-Reporting Rules Sufficient - US Chem Industry

WASHINGTON (ICIS news)--US chemical industry officials on Tuesday urged a federal safety agency to make use of existing national accident reporting requirements instead of imposing a new and duplicative layer of regulations covering serious plant site accidents.

The Chemical Safety and Hazard Investigation Board (CSB) provided stakeholder comments regarding its plans to issue formal regulations to ensure that the board is notified quickly of any serious chemicals-related explosion or other accident that may warrant an investigation by the CSB.

The board issued a formal notice of proposed rulemaking on 25 June and invited comment from industry and the general public.

CSB has been under pressure from Congress and the Department of Homeland Security (DHS) to implement an accident reporting requirement as stipulated by the Clean Air Act amendments of 1990.

The board is charged by Congress to investigate chemical sector accident resulting in any fatalities, serious injury or substantial property damage.

CSB has long maintained that it does not need a formal reporting process, saying that it receives adequate and timely notice of significant chemical accidents through the news media and other federal agencies.

However, in issuing its 25 June rulemaking proposal, the board acknowledged that it has a statutory obligation to implement a formal reporting procedure that would require notice to the CSB by companies or site operators as soon as a serious accident occurred.

The American Chemistry Council (ACC) said that the board can fulfil its legal requirement by establishing formal reporting relationships with other federal agencies that already receive real-time accident notifications from the industry.

The council in particular cited the longstanding federal requirement for industry reports of accidents, spills or other releases of hazardous substances to the National Response Center (NRC), a 24-hour, nation-wide reporting operation that has been maintained by the US Coast Guard since 1974.

The NRC collects real-time reports from chemical firms and other companies required under a variety of federal environmental laws and regulations.

According to its website, the centre currently collects and relays accident information for and to numerous federal agencies - including the Environmental Protection Agency (EPA), the Nuclear Regulatory Commission, the Department of Energy (DOE), the Federal Bureau of Investigation (FBI), the Department of Defense (DOD) and the Federal Railroad Administration (FRA).

However, there apparently is no formal relationship between the NRC and the CSB by which the centre can collect accident information on behalf of the board and relay that real-time data to the CSB.

The council cautioned that if the CSB were to develop and implement a separate reporting structure and requirement, it could cause confusion and perhaps undermine existing industry and government programmes “to provide timely emergency management and response”.

The National Petrochemical & Refiners Association (NPRA) echoed that recommendation, saying in its comments to the board that “reporting beyond what is currently done would not necessarily improve the current process”.

Instead, the NPRA said, a new CSB reporting mandate “could in fact create confusion and diversion during a critical emergency response”.

The board is expected to issue a proposed reporting rule by the end of this year and, following another period of public comment, implement a final reporting mechanism in early 2010.

quoted from: ICIS.com

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Christmas Season Brings Little Cheer for Asian Petchems

SINGAPORE (ICIS news)--Economic numbers tell of a global recovery story, but rising unemployment and shrinking purchasing power have kept consumers on the sidelines, making it difficult for petrochemicals demand to significantly pick up ahead of the Christmas season, analysts said on Tuesday.

The degree of uncertainty on the pace of economic turnaround remains high about a year after the unprecedented collapse in demand in late 2008, analysts said.

“We’re not seeing that spending power return yet in terms of day to day. That for me will determine whether this recession has come to an end,” said Paul Hulme, president of the global textile effects division at US producer Huntsman.

While petrochemical prices managed to scale back up this year, they are still a long way off from hitting pre-crisis levels given soft demand.

“I think it is very hard to say how strong demand will be in the fourth quarter. It is unlikely to be as bad as last year. But the market surprises,” said Andrew Wong, a petrochemical industry analyst at global credit ratings firm Standard and Poor’s.

Thanks to huge government spending, most countries in Asia have exhibited signs of recovery.

Japan, Asia’s biggest and the world’s second biggest economy, emerged from a deep recession in the three months to June to mirror the positive developments in its western counterparts. It was the third economy in the G7 list to post positive quarter-on-quarter GDP numbers.

China muddled through the crisis and managed to keep its head above waters because of the sheer size of its domestic economy, even though the major pillar of its rapid expansion - exports - gave way.

Manufacturing activities peak in the months of July to September in China every year in preparation for the deluge of export orders in the fourth quarter, when the global Christmas shopping spree phenomenon occurs.

The current weak state of the global economy suggested that strong rebound in demand for exports was unlikely this year as consumers continued to tighten their belts, economists said.

It may be that it is in the fourth quarter than in any time of this year that exports weakness would hurt Asia the most.

Demand for polystyrene (PS), acrylonitrile- butadiene-styrene (ABS) and expanded polystyrene (EPS) remained slow this month despite September being the tail-end of the peak of China’s production.

Traders said that Chinese exports to the US and Europe remained in doldrums, especially for toys. Consumer electronics fared better but business was still below the levels achieved in the previous years.

Some factories reported orders at 50-70% of previous years while smaller ones saw business shrink more than 50%, said a trader in Hong Kong.

“Why are the orders not coming in at the moment? I would think that buyers are still holding on to their money, waiting for a further fall in prices,” said Im Jee Soo, a Seoul-based analyst at Good Morning Shinshan Securities.

China’s demand, boosted by its massive fiscal stimulus, drove up product prices since the start of the year, but this was mostly due to restocking, analysts said.

In some sectors like polyester that used to be buoyant, weakness recently set in and pulled down prices of fibre intermediates such as purified terephthalic acid (PTA), paraxylene (PX) and monoethylene glycol (MEG).

Huntsman’s Hulme and S&P’s Wong warned against another sharp decline in global economic output once the effects of the global stimulus packages wear off if consumer confidence failed to return.

“Demand for these [petrochemical] products is closely linked to GDP growth. A return of GDP growth in the region and the pace of that is still quite uncertain,” Wong said.

Petrochemical trading activities in China were muted when the central bank started to rein in on lending in the second half of the year, affording companies and traders only limited spending power, said Im from Good Morning Shinshan.

A clearer picture on demand would emerge in the middle of the month, she said.

It did not help that more capacities would come on stream towards the end of the year when demand was very soft, hence the expectations of further price depression, analysts said.

“Certainly volumes will take a while to come back. There is an acknowledgement that this year is going to be a tough year,” said S&P’s Wong.

“Next year will be soft and perhaps in 2011, it will be more of a stronger operating environment,” he added.

Given all that transpired since the fourth quarter of last year and the very gradual upturn, it looks like this is not going to be a very merry Christmas for all.

quoted from: ICIS.com

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