A MARKET UPDATE for April 2010

Special Message:

Flooding in the Southern United States has crippled truck and rail movements in the region. Rail and trucking capapcities were already stressed due to increased demand but the recent flooding and demand from Gulf Coast Clean up efforts has further exacerbated the situation. The result is a 2-3 week delay for trucks and an even worse 4-6 week delay on many rail lines. This logistical nightmare is causing companies in the region to look elsewhere for available trucks or rail and this is a costly alternative and in many cases simply doesn’t work.

TCC News:

TCC would like to welcome our newest team members!

Ms. Robyn McGrady based out of Atlanta, GA. Robyn has decades of chemical sales experience but you would never believe it if you met her since she looks so young! Robyn will be focusing on sales throughout the country with an emphasis on the Southeast. Robyn can be contacted at robynmcgrady@thechemco.com or (770) 712-1329. Welcome Robyn!!

Mr. Javier Fernandez will be based out of our Corporate offices in Jamestown, RI. Javier will focus on sales throughout Latin and South America and also provide support to our sales team domestically and abroad. Javier is the third bi-lingual (Javier is actually tri-lingual including Spanish, Portugese, and English) member of the TCC team. Javier can be reached at Javier@thechemco.com Welcome Javier!

Speaking of Bi- lingual have you noticed that the TCC web-site is also Bi- lingual. For a Spanish version of the website simply click on the “Lengua Espanola” or the Flag of Spain.

Check out the new TCC web site intro. at thechemco.com The ad is alternating with our old Ad so if it is the old Ad pops up simply refresh until the new TCC ad appears!

Events:

October 2-6, 2010 EPCA Budapest, Hungary
October 27-29, 2010 IFAI EXPO Americas
October 27 – Nov. 3 K Show Düsseldorf, Germany

Downloadable Brochure

click here to download/view

Products In Transit/ Available Soon

2- Hydroxyethyl Methacrylate Drums

Succinic Acid Small Bags

Fumaric Acid Big Bags

Maleic Anhydride Briquettes (In Stock and Available Now!)

Malic Acid Small Bags (In Stock and Available Now!)

Citric Acid (In Stock and Available Now!)

Acetyl TriButyl Citrate (In Stock and Available Now!)

New/ Updated Technical Information:

NatureFlexx 509 Phthalate Free Plasticizer
https://thechemco.com/chemicals/ATBC-Nature-Flexx-509

Malic Acid
https://thechemco.com/chemicals/Malic-Acid

ChemFlexx DiOctyl Adipate
https://thechemco.com/chemicals/Chemflexx-DOA

Methanol
https://thechemco.com/chemicals/Methanol

ChemFlexx 206 Linear Phthalate Plasticizer
https://thechemco.com/chemicals/Chemflexx-206

New Products:

NP500 Non- Phthalate Plasticizer Non-phthalate plasticizer to replace general purpose phthalate plasticizers like DOP, DOTP and DINP. Drums, Totes and Bulk Available.
Spec: ChemFlexx NP500

NP600 Non- Phthalate Plasticizer Non-phthalate plasticizer to replace the general purpose phthalate plasticizers DIDP. Drums, Totes and Bulk Available.
Spec: ChemFlexx NP600

NatureFlexx 509 100% Phthalate Free General Purpose Plasticizer! This high molecular weight plasticizer is an excellent, phthalate free replacement for general purpose phthalate plasticizers like DINP, DOP, DOTP, Etc. Drums, Totes and Bulk Available.
Spec: NatureFlexx 509

Malic Acid A suttle and persistent sour in food applications as well as an excellent acidulant. New technical applications are being discovered as well. Food and Technical Grade material is in stock and immediately available. Packaging is 25 Kg. Bags, 2,000 lb. Supersacks and a 50% solution.
Spec: DL Malic Acid

Please contact Robb Roach at robb@thechemco.com or Tel: (401) 423- 3100 for more information.

We appreciate your taking the time to review this newsletter. We welcome your comments as well as contributions regarding our readers’ company/industry activities. Please send them to Bob Beavins at chemcobob@comcast.net

Critical Raw Materials Markets

At the end of each paragraph you will notice a symbol and the meaning of these symbols are as follows:

+ Denotes upward pricing momentum
\ Denotes stable pricing momentum
– Denotes downward pricing momentum

Oil: Current spot prices in the $75- $78/ bbl range; futures at $85 – 87/bbl.

Crude Oil continues to be released from the damaged BP oil site in the Gulf of Mexico. It is likely that this disaster will go down as the worst environmental disaster in U.S. history.

Natural Gas: Current spot pricing ~ $3.96/MMBtu. May contract increased to $4.27/MMBtu. Inventories are 18.8% above the five year average. /

Benzene: US May Benzene contract increased by US$.04/ gallon to US$3.52/ Gallon. Spot prices are currently at $3.44- $3.46/ gallon for May and $3.43- $3.46 for June. +

Propylene: It appears May contracts will settle down US$.12/ lb. This would bring them to $.62 for Chemical Grade and $.635/ lb. for polymer grade. April US contract prices were $.74/lb for chemical grade and $.755/lb polymer grade. – –

Orthoxylene: May contracts settled at $.49/lb, an increase of $.01/lb. from March. +

Chemicals Markets

Methanol:The Methanex Non-Discounted Reference Price for April will decrease by US$.10/ gallon to US$1.00/ gallon. Spot barge offers are currently in the $.76- $.765/ gallon range and firm on producer buying.

Notes:

  • The Atlas Trinidad plant had an unexpected outage last week and is expected to be down for about a week. This is the second unexpected outage in recent months. The Atlas plant was down in mid to late March for about 15 days.
  • The M5000 plant in Trinidad will be brought down for about 30- 40 days in June.
  • The new Metor 2 plant in Venezuela is expected to start production in late May with material available starting in June.
  • All geographies world-wide are seeing good demand.
  • Methanex’s President and CEO noted last week that methanol demand is back to pre-recession levels.
  • New production globally is expected to affect the methanol market by the end of the second quarter. Spot prices should continue push contract lower.

Urea:Urea prices are in the US$280- $285/ ton range and steady. – /

Notes:

  • Urea prices continue to be under pressure but sellers are doing their best to hold the floor.
  • Global prices have softened.
  • Seasonal demand is in full swing.
  • Urea demand for Diesel Exhaust Fluid is expcted to significantly increase over the next two years.

Adipic Acid: Adipic Acid has most likely surpassed historic high pricing due to planned and unplanned outages. Availability remains a critical issue in all geographies with the vast majority of global production down. Asia has been the highest priced market due to the domestic producers inability to operate consistently. Now an explosion at the Fangming 150 K. Ton plant has made a bad situation worse. We expect availability issues to remain and possibly get worse over the coming months. +++

Melamine: Melamine pricing has leveled on better availability from China and moderating urea prices. / +

Phenolic Resins: Prices have leveled in line with underlying values. A limited number of players has resulted in few options for consumers and many have opted to seek toll manufacturing opportunities. /

Ammonium Nitrate: Low density AN prices are currently stable. Demand on both low and high density has softened due to a lack of mining and cheaper alternatives for fertilization. /

Ammonia: May pricing ranges between US$405 and US$435/ton /

Nitric Acid: Nitric Acid pricing is stable at the moment. Demand is flat. Pricing is expected to remain stable through Q2, 2010. /

Plasticizers and Plasticizer Alcohols:

Plasticizer pricing has moved higher each month for the last several months. At times increases have been levied twice per month. Feedstock costs have been escalating but the most recent issues are supply and demand of the alcohols and acids.

Linear alcohol and plasticizers are tight with limited availability of linear alcohols due to a recent FM announcement by one major.

Limited availability and extreme pricing on Trimellitic Acid and Adipic Acid has further aggravated the availability and cost of adipates and trimellitates. ++

TCC Plasticizers available:

Non- Phthalate:

  • “ChemFlexx NP 500” Non- Phthalate Replacement for General Purpose Plasticizers
  • “ChemFlexx NP 600” Non- Phthalate Replacement for DIDP
  • “NatureFlexx 509” Phthalate Free General Purpose
  • Epoxidized Soybean Oil
  • TOTM (TriOtcyl Trimellitate)
  • DOA (DiOctyl Adipate)
  • 8 10 Trimellitate

Phthalate:

  • DINP (DiIsononyl Phthalate)
  • “ChemFlexx 206” Linear Phthalate Plasticizer
  • “ChemFlexx 208” Low Temp Linear Phthalate Plasticizer
  • DOP (DiOctyl Phthalate)
  • DUP (DiUndecyl Phthalate)
  • DMP (DiMethyl Phthalate)
  • Brominated DOP
  • 9 11 Phthalate

Epoxidized Soybean Oil: Despite recent downward trend on soy bean pricing, overall pricing has not yet reached levels seen at the beginning of the year. Pricing is stable and demand is good. /

Antimony Trioxide: Prices are moving higher and in/ near record territory. Demand and availability are the driver to this latest round of increases. ++

Dicyandiamide: Prices are flat and availability is good. Demand is good as the NA economy struggles to recover. /

Fumaric Acid: Fumaric Acid has become relatively snug and prices are moving up. Global values have also increased as demand improves and supply being limited. Normal butane, had gone from the mid-$1.40s/gal range in March to the low-$1.60s/gal as of late. It averaged in the mid US$1.50’s/gal for April. +

Malic Acid: Global values have improved with demand and increased raw material cost. Non- food/Technical applications are being re-looked at as other acid values remain inflated (eg. Citric). Normal butane, had gone from the mid-$1.40s/gal range in March to the low-$1.60s/gal as of late. It averaged in the mid US$1.50’s/gal for April. / +

Isophthalic Acid: Prices have increased into May in line with underlying raw material costs. Demand has also improved in most major markets. Availability has become more limited as of late. +

Maleic Anhydride: Demand has improved slightly (although NA supply and demand remains completely imbalanced) and normal butane values have moved up to levels not seen since January. Some producers have announced a US$.04/ lb. increase for June. The briquette market has surged as European rationalization and limited availability has created a supply and demand imbalance. Normal butane, had gone from the mid-$1.40s/gal range in March to the low-$1.60s/gal as of late. It averaged in the mid US$1.50’s/gal for April. +

Styrene monomer: Benzene values have moved slightly higher pushing SM pricing in the same direction. Pricing has increased approx $.01/ lb. in May. +

Phthalic Anhydride: Orthoxylene pricing will push prices up again in June. Prices increased approximately US$.02/ lb. for May and demand has been improving. We expect a penny increase for June in line with orthoxylene. +

Mono Ethylene Glycol: MEG pricing has rolled into May but availability remains limited. Benchmarks remain at $.55- $.58/ lb. fob Gulf. /

Diethylene Glycol/ Triethylene Glycol: DEG inventories remain very low with producers being the major buyers. US producers announce a US$.02- $.03/ lb. increase for April. Benchmarks are US$.61- $.65/ lb. fob Gulf. Triethylene Glycol producers announce a US$.02- $.03/ lb. Increase for March. Benchmarks are at $.86- $.87/ lb. fob Gulf and demand has seasonally slowed. +

For more information on these or any of the products and services provided by TCC please contact Robb Roach directly at Robb@thechemco.com or go to our web site at thechemco.com

Chemical Industry News

The April, 2010 issue was the final issue of Purchasing Magazine, a business publication with a long history. Other associated brands were shut down by Reed Elsevier, the parent company.

In March, DINP was successfully registered under REACH.

The first steps toward reforming Toxic Substances Control Act (TSCA) have been made with the introduction of bills in both the House and Senate. Both bills would essentially require industry to show that chemicals are safe, rather than the current approach by which the EPA is required to show that chemicals would cause “unreasonable risk.” Industry and professional groups have expressed concern about implementation.

DuPont reported an increased first quarter net income of $1.14 billion compared to its $489 million for the same period a year ago.

Cereplast said that it is prepared to produce plastic made from algae-based biomass and polypropylene at its plant in Seymour, IN.

Clariant reported $9.2 million first quarter net profit, but it was short of expectations. Company management anticipates that a slow recovery and higher raw material costs will restrict future earnings.

BASF first quarter profit increased to €1.03 billion from €375 million which topped earlier estimates. The company plans to cut costs by at least €1 billion by 2012. It’s expected that the merger with CIBA Specialty Chemicals will result in significant savings as well as the elimination of nearly 4,000 jobs.

Dow Chemical reported an increased first quarter net income of $551 million compared to $24 million a year ago. During 2009 Dow eliminated 10,000 workers, cut dividends and sold more than $3 billion of assets in order to help repay a $9.5 billion loan to acquire Rohm and Haas.

Eastman Chemical reported first quarter earnings improvement of $101 million compared with $2 million in 2009.

Cytec Industries reported increased revenues and earnings of $24.8 million for the first quarter.

DuPont plans to add production lines to its nylon manufacturing facility in China. The implementation of the project was moved forward based on encouraging economic data.

AkzoNobel has received EU approval to acquire Dow Chemical’s power coating business. The operation was gained when Dow acquired Rohm and Haas.

With court approval on April 23, LyondellBasell emerged from bankruptcy on April 30 with greatly reduced debt and new ownership. The company will now be known as LyondellBasell Industries NV. Its headquarters will continue to be based in Rotterdam, the Netherlands, with North American offices in Houston. Based on sales volumes, LyondellBasell is the world’s largest independent chemical company.

ExxonMobil is urging its drilling contractors to disclose the chemicals used to release natural gas through hydraulic fracturing, or “fracking,” a method of extracting natural gas from shale rock formations.

An amendment to a proposed new Senate FDA regulatory bill that would ban BPA from food and beverage containers has drawn opposition from the Grocery Manufacturers Association. The FDA said in January that it had some concern about possible health concerns linked to BPA, but didn’t have enough reason to restrict its use and would study the question over 18 to 24 months. A GCMA spokesman said that they trusted the FDA to complete a safety assessment for BPA and didn’t think that the Senate should short circuit the process.

On April 13, a statement from the UK-based Medical Research Council’s Centre for Reproductive Biology in effect said that the millions of dollars spent on BPA research looks like a zero ROI.

US ethanol production rose in January by 30% year on year, the fourth consecutive increase in monthly output. A bill has been proposed in the Senate that would extend government support for ethanol. It would extend through 2015 both a $.45/gallon credit given to fuel blenders for mixing ethanol into gasoline and a $.54/gallon tariff imposed on imported product.

Valero has agreed to sell its Delaware City, DE refinery for $220 million to subsidiaries of PBF Energy. The ~180,000 bbl/day refinery has been idled since November, 2009.

UK-based Shell and Virent Energy Systems have started up the world’s first biogasoline production plant in Madison, WI. The demonstration facility will convert plant sugars, rather than ethanol, into gasoline and blend components. No commercialization date has been announced.

Russia’s Gazprom, the world’s largest gas producer, reported an increase in earnings to $11.3 from $10.5 a year earlier. This included an asset swap with Germany’s E.on Ruhrgas AG. Gazprom increased its reserves by 2.2% during the same period.

Total industrial output in the EU increased 3.5% in February compared to a year earlier. The production of chemicals was up by 3% from January.

China’s first quarter GDP increased 11.9% from the same period a year earlier. Chinese CPI rose 2.4% for the first quarter 2010. Economists have urged China to raise interest rates in order to curb potential inflation problems and to consider currency re-evaluation.

The US Treasury Department recently reported that China remains the biggest holder of US government debt, with an investment of $894.8 billion in US securities.

As the economy continues to improve, overall demand for freight services has increased. Intermodal traffic in North America year to date is up 8.4% from 2009. Stronger demand for intermodal business has been forecasted and one carrier has ordered 2,000 new containers.

To the relief of the trucking industry, the federal government’s proposed Comprehensive Safety Analysis which rates trucking companies and drivers, is being delayed. Industry representatives had pointed out a number of flaws in the system, and it is now to be implemented in phases, starting on November 1. Motor carrier volumes increased 4.5% in March.

The US Department of Transportation announced in April the establishment of “America’s Marine Highway” program, which is an effort to switch freight to waterways from congested highway systems. The DOT’s Maritime Administration will help to identify rivers and coastal routes that could carry cargo efficiently.

The Economy

The US government deficit increased in March by $65.4. However, a second monthly revenue increase indicated that a US economic recovery may be under way.

The Conference Board’s index of Leading Economic Indicators increased 1.4% in March following a 0.4% gain in February and 0.6% in January. The Conference Board noted that the LEI has risen steadily indicating improving economic conditions. The Conference Board Consumer Confidence Index, which had rebounded in March after a sharp decline in February, increased further in April from 52.3 to 57.9.

The Institute for Supply Management’s Non-Manufacturing Index (NMI) rose again in March.

In March, retail and food services sales adjusted for seasonal variations increased 1.6% from February and were 7.6% above a year earlier. Total sales for the January – March 2010 period were up 5.5% from a year earlier. Gasoline station sales were up 26.4% from March 2009. The National Retail Federation expects 2010 retail sales, excluding automobiles, gas stations, and restaurants to increase by 2.5% over 2009.

Privately owned housing starts in March of 626.000 were 1.6% above the revised February estimate of 616,000 but 20.2% above the March 2009 rate of 521,000. Single family housing starts in March were at a rate of 531,000 or 0.9% below the revised February figure of 536,000.

New orders for manufactured durable goods in March decreased $2.2 billion or 1.3% to $176.7 billion. This followed three consecutive monthly increases. March unfilled orders for manufactured durable goods decreased $2.3 billion or .3% to $719.8 billion and followed a February increase of 0.4%.

Consumer Price Index increased 0.1% in March. The index has increased 2.3% over the last 12 months, not including seasonal adjustments.

Interest rate: Prime at 3.25% as of 12/16/08 and expected to remain the same well into 2010.

Inflation: Annual inflation rate 2.3% for March.

Unemployment: March 9.7% and expected to average 9.8% this year after peaking under 10%.

Trade Deficit: For February 2010 the goods and services deficit increased to $39.7 billion from an adjusted $37.0 billion in January as imports increased more than exports.

Crude Oil: Currently trading at ~$85/bbl, with moderate increase in short term price forecasts. The spill in the Gulf of Mexico and its increasing impact is expected to result in a moratorium on new offshore drilling until investigation is completed.

Natural Gas Inventories are higher than historical averages.

Industrial production increased 0.1 % in March after a 0.1% February increase. Capacity utilization rate for total industry in March was 73.2%, up from 73.0% in February, a level 7.4% below the 1972 – 2009 average but 3.7% above the rate from a year earlier.

Advance estimates issued by the Bureau of Economic Analysis show a Gross Domestic Product gain of 3.2% in the first quarter of 2010. This compares to an increase of 5.6% in the fourth quarter of 2009. The Bureau also reported that real personal income for Americans, excluding government sources, such as Social Security, has fallen 3.2% since January 2009.

The US dollar trading at 94.1 yen. $1.32 = euro. The British pound sterling = $1.53.

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