A MARKET UPDATE for May 2011

TCC News:

TCC would like to Welcome Craig Ultsch to our sales team! Craig is the son of one of our veteran Sales Managers Tom Ultsch so he has big shoes to fill! Craig will be the Mid- Atlantic Sales Manager based out of Richmond, VA. Contact information for Craig is cultsch@thechemco.com Welcome!! TCC would also like to welcome Bianca Scartabello to our Customer Service Expert staff. A recent University of Rhode Island graduate Bianca will be training with our CSE team for the next 6-8 weeks before taking on her own responsibilities. Welcome!!

Be sure to follow us on our new facebook page


Habla Español??? The TCC website is now in Spanish!

Myriant Technologies reports that they continue to make significant progress at the Lake Providence, LA site. Construction is in full swing and the excitement is building. Myriant is staying on track to meet the full scale production goal of Q1- Q2 2012 for their bio- based succinic acid. Demand for Bio based alternatives is growing as consumers look to place a percentage of their purchases with companies producing from bio based, renewable feedstocks.

Biobased Succinic Acid

Upcoming Events:

TCC Annual Sales Meeting
June 2-3, 2011
SPI’s Flexible Vinyl Products 22nd Annual Conference
July 10-13, 2011
EPCA Berlin
Germany
October 1-5, 2011

Downloadable Brochure

click here to download/view

New Products In Stock

Citric Acid 25 Kg. Bags, 2,000 lb. Sacks and 50% Solution
(In Stock and Available Now!)

Melamine Crystal 25 Kg. Bags (In stock and available now!)

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

90% Phenol Drums ( In Stock and Available Now! )

Maleic Anhydride Briquettes (In Stock and Available Now!)

Acetyl TriButyl Citrate (Out NatureFlexx 509 is in Stock and Available Now!)

Adipic Acid 25 Kg., 500 Kg. and 1,000 Kg. Bags (In Stock and Available Now!)

Products In Transit/ Available Soon

Boric Acid 25 Kg. Bags

Antimony Trioxide (High Tint, Supersacks)

New/ Updated Technical Information (hyperlinked):

Epoxidized Soybean Oil

Diisononyl Phthalate

Adipic Acid

DiOctyl Adipate

ChemFlexx 206

Antimony Trioxide

Malic Acid

Tartaric Acid

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

Melamine Crystal Crystal is an organic compound that is often combined with formaldehyde to produce melamine resin, a synthetic polymer which is fire resistant and heat tolerant. Melamine resin is a very versatile material with a highly stable structure. Uses for melamine include whiteboards, floor tiles, kitchenware, fire retardant fabrics, and commercial filters. Melamine can be easily molded while warm, but will set into a fixed form. This property makes it ideally suited to certain industrial applications.
Spec: Melamine Crystal

Succinic Acid Succinic Acid is a dicarboxylic acid comprised of four carbon atoms. The chemical is produced as a colorless crystalline solid and is used in the drug, agriculture, food products, and other industries.
Spec: Succinic Acid

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 subtle 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

**Please note that all products are now in Alphabetical Order and many products are hyperlinked to their own information page.**

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

Benzene
US May Benzene contract settled up $.35/ gallon to $4.23/ gallon (April $3.88/ gallon). Spot prices are currently in the$4.00- $4.10/ gallon range. +

Natural Gas
Natural Gas pricing has moved lower through May as warmer weather fills in to the lower 48. Refill of storage inventories following last winter has proceeded slower than in recent years. Spot prices reported ~$4.10- $4.20/MMBtu. /

Oil
Crude oil prices seesawed in recent market activity, dropping as much as 10% in one day. US crude broke below $100/barrel for the first time since March and is now trading in the $98 range. Brent futures for June settled down $10.39 at ~$110/bbl. It was reported that OPEC was considering raising formal output limits when it meets in June in order to convince oil markets it wants to bring prices down. President Obama called on major producers such as Saudi Arabia to increase supplies in order to stabilize prices. /

Orthoxylene
May contracts settled at $.67/lb, an increase of $.03 from April. This is a record high. +

Propylene
April contracts shocked most, with a US$.15/ lb. increase putting pricing at $.86/lb for chemical grade and $.875/lb. for polymer grade. Prices rose once again in May for a partial settlement of $.955/ lb. for chemical grade and $.97/ lb. for for polymer grade a US$.095/ lb. increase. Current spot market is in the low $.90’s. ++

Chemicals Markets

Adipic Acid:
There continues to be price pressure from Benzene and Ammonia as well as availability issues due to scheduled maintenance outages in Europe. Overall availability has improved in most regions except Europe. Demand has been steady. /

Ammonia:
May business for Tampa moved up US$10/ metric ton to US$565/ metric ton delivered. Gas curtailments in Trinidad have ended and production there is returning to normal. Sellers are predicting a further increase for June. /+

Ammonium Nitrate:
Raw material costs for AN are pressuring producers but there are no new price increase announcements for May. Seasonal demand has begun and agricultural demand for AN and it’s raw materials are reaching their peak. /

Antimony Trioxide:
Antimony prices have stabilized as consumers remain cautious to commit to excess inventory. Some consumers have found success in alternative chemistries and are abandoning ATO use to the highest level possible. Prices of US$15,000.00 per metric ton are keeping ATO pricing in record territory. /

Dicyandiamide:
Pricing has moved higher due to increased freight costs and calcium carbide pricing. Calcium Carbide is a major raw material to Dicyandiamide production and vast amounts of energy are needed to produce it thus it is being strictly controlled by the Chinese Government. ++

Epoxidized Soybean Oil:
Better availability of soy beans (From S. America), a large anticipated crop in the U.S. and less demand from China has stabilized bean price. ESO pricing has stabilized as well. /

Fumaric Acid:
FA Pricing has moved up on higher butane values and maleic anhydride availability issues. /+

Glycol (Mono, Di and Tri):
MEG – April rolled over but may will see some reductions in price($.03/ lb.). Export demand is very good to Europe and Asia but this will likely ease. U.S. demand is still good. Benchmarks are set at $.64- $.68/ lb. for May. Inventories are good. -/

DEG- Weak demand is noted which is good considering the number of current turnarounds. A decrease of 3 cts/ lb. was made by one major for May. Benchmarks for May $.67- $.76/ lb

TEG- With the end of the cold weather comes the end of the seasonal TEG demand. Spot offers are around US$.90/ lb.

Isophthalic Acid:
Raw material costs have pushed Isophthalic pricing up. Availability has become more limited and prices are on the rise some $.05/ lb. for domestic and $.10/ lb. on import. +

Maleic Anhydride:
A US$.04/ lb. increase was announced for May on molten maleic anhydride. Availability issues and rising feedstocks (Butane) are the reason behind the higher prices. Briquettes pricing is up $.10/ lb+ over the last couple of months also due to higher feedstocks and availability. +

Malic Acid:
Butane and Maleic Anhydride values are moving up and Malic Acid has felt the pressure to follow. Demand is good and longer lead times are reported for order delivery. +

Melamine:
Melamine demand and supply are balanced. Urea prices had plateaued but has some renewed price momentum may cause price pressure in the near future. No new price announcements are noted for melamine. /

Methanol:
The Methanex Non-Discounted Reference Price for May has once again rolled over at US$1.28/ gallon. U.S. Spot pricing has been steady in the $1.00- $1.10/ gal. range. /

Notes:

  • The Methanex “Medicine Hat” (Canada) plant is near full operating rates.
  • Global Supply and Demand are considered stable at this time.
  • Natural gas curtailments in Trinidad and Tobago have ended. This has not been a major factor yet and has not affected supply or pricing.
  • China continues to be the key to global balance.
  • Venezuela’s Metor I is in start up and expected to be at full rates this week. Metor II will be taking a one month planned maintenance once Metor I is up and tested.

Nitric Acid:
Nitric Acid pricing is under pressure due to increased ammonia cost. No new price increase announcements at this time, demand is good. /

Phenolic Resins:
Pricing and supply are under pressure due to limited availability and underlying feedstock costs, especially Phenol. Demand has improved along with the economy. Pricing will likely continue to increase throughout Q2, 2011. +

Phthalic Anhydride:
Orthoxylene contract pricing has increase for May by US$.03/ lb (April was also up $.05/ lb.). PA pricing is expected to follow for June. +

Plasticizers and Plasticizer Alcohols:

Plasticizer and plasticizer alcohol demand has been good throughout 2011. Pricing remains under pressure from underlying feedstock costs. (i.e. propylene, orthoxylene, ethylene, phthalic anhydride). An increase has been announced for branched for June following the May increase.

Branched and Linear alcohols supply has improved but remain tight, especially 2-EH and Isononyl Alcohol. +

Note: Many plasticizers have limited availability. Please contact TCC for further details.

TCC Plasticizers available:

 

Phthalate:

Styrene monomer:
Styrene pricing moved up in May along with benzene. Most feel Benzene will settle lower for June forcing SM pricing lower. /

Urea:
The wet weather throughout much of the United states has pushed Urea pricing back up. Prices have climbed from the $330/ ton range to $400/ ton as farmers switch away from ammonia and to urea for better fertilization in damp conditions. +

Notes:

  • NOLA inventories are low especially on prill. Urea and UAN are the choice fertilizers in wet conditions.
  • Urea demand for Diesel Exhaust Fluid is expected to significantly increase over the next two years.

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 American Chemistry Council (ACC) reported a chemical production increase of 0.5% in March, following a revised gain of 0.8% in February. Gains were reported in all regions.

In 2010 the European chemical industry experienced an annual growth of 10%, attributed to increased exports and growing demand from the domestic manufacturing sector.

A jury in Mississippi on May 5 awarded the largest plaintiffs’ asbestos verdict in US history of $322 million to a former oil field worker. Chevron Phillips Chemical and Union Carbide Corporation were determined to be liable.

A review of the EPA study of formaldehyde toxicity issued by a National Academy of Sciences panel was critical of the findings and suggested substantial revisions. The NAS said that the EPA assessment of formaldehyde as a human carcinogen fails to support its conclusion that the chemical causes respiratory cancers, leukemia, and other health problems.

On April 14, Sen. Frank Lautenberg, D-NJ, introduced the Safe Chemicals Act of 2011. This was an updated version of a bill introduced last year to modernize TSCA. It mandates that companies confirm safety before chemicals reach the market. The American Council on Science and Health stated that such an approach is problematic.

New Hampshire, Maine, and New Jersey are considering withdrawing from the Regional Greenhouse Gas Initiative, a program seeking a reduction of 10% in GHG emissions by 2018. Some state lawmakers view the RGGI as a carbon tax that burdens power consumers.

A comprehensive study by the German Society of Toxicology that took into account thousands of studies on bisphenol A (BPA) found that exposure to the chemical represents no noteworthy risk to humans, including newborns and babies. The ACC has continued to assert that its use in food containers is safe. However, the Maine legislature recently passed a bill banning its use in reusable food and beverage containers so the debate continues.

A report issued by the EPA on April 18 stated that in 2009 the US emitted the lowest volume of GHG since 1995. The level of emissions in 2009 went down by 6.1% compared with 2008.

Members of the House of Representatives wrote to EPA Administrator Lisa Jackson asking her to complete the agency’s dioxin assessment. An ACC spokesman stated that the reassessment should be completed when the EPA gets the science right, addressing the scientific concerns, or it risks causing panic about dioxin levels in the US food supply.

Styrenics producer Styron is changing its name to Trinseo, and will use it in all countries in 2011. “Styron” will continue to be used as a brand name for the company’s polystyrene products.

Dow Chemical’s propylene plant expansion will be built at its Freeport, TX complex. Completion of construction is expected in 2015, with the startup of an additional unit by 2018. Combined new capacity is estimated at 900,000 MT/year.

General Chemical Industrial Products, producer of natural soda ash in Green River, WY will now be known as Tata Chemicals North America. The company is a unit of India’s Tata Chemicals.

At the April meeting of the World Bank and International Monetary Fund (IMF) Robert Zoellick, World Bank President, warned that the world is “one shock away from a full-blown crisis”. He cited rising food prices as the main threat to poor and emerging nations.

The IMF has determined that China’s economy will surpass that of the US in real terms in 2016. The Chinese middle class is growing rapidly and wages are expected to double by 2015. China has become the US’s fastest growing market for exports and is second in volume only to Canada and Mexico.

China showed a $1.02 billion trade deficit in the first quarter, the first quarterly deficit in seven years.

The US may add 1.2 million MT of ethylene capacity by 2015 due to the growth of feed stock ethane supplies from shale gas deposits. Chevron Phillips Chemical has announced plans for an ethylene cracker, which is seen as the first move in a wave of new investments.

The EPA is expected clarify the rules for natural gas companies that inject diesel fuel into the ground as part of their hydraulic fracturing (fracking) operations. A congressional investigation concluded earlier this year that companies have not secured EPA permits before starting fracking operations. States have historically regulated the process. Although Congress had exempted most hydraulic fracturing activities from the EPA’s jurisdiction the exemption does not include diesel fuel.

The head of the American Gas Association recently stated that diesel fuel should not be used as a fracking fluid.

The International Maritime Bureau announced that ocean piracy hit an all-time high in the first three months of 2011, with 142 acts reported worldwide.

In April, Department of Transportation Secretary Ray LaHood issued a detailed report on US Marine Highways. It was requested by Congress in order to demonstrate how water-based transportation can ease highway congestion as well as wear and tear.

Year-over-year, UPS reported first quarter revenue was up 7.3% to $12.58 billion. Quarterly operating profit was up 21% at $1.43 billion, and net income of $885 million was up 66%.

March intermodal and carload volumes showed continuing growth. Rail carloads were up 3.4% compared to a year earlier. Intermodal car loadings showed an 8.5% annual gain. However, railroad volumes still trail 2008 on a volume basis.

China Shipping has completed a major terminal expansion at the Port of Los Angeles allowing for greater berthing space and higher cargo throughputs.

On May 6 silver futures fell, finishing the biggest weekly drop since 1975, closing at $35.27/ounce. On April 25, the price was $49.84, a 31 year high. Gold futures for June delivery were quoted at $1491.60/ounce, reaching a record high of $1577.40 on May 2.

The Economy

The US government deficit for the first six months of fiscal 2011 was $830 billion, $113 billion more than the same period last year. Outlays and revenues were reported as higher than they were last year by 11% and 7% respectively. Forecasts indicate that the federal government will end fiscal 2011 with a deficit of nearly $1.5 trillion, up from the $1.3 trillion in 2010.

The Wall Street Journal reported that the US government plans to sell most of its remaining stock in General Motors in the coming months and will lose $11 billion in the process. The government had rescued GM for $50 billion in 2009 and now owns 26.5% of the company, down from 61%.

The Department of Agriculture said that prices for meat, poultry and fish will jump five to six percent, led by beef and pork. In the first quarter, meat and fish prices rose 3.2 percent.

The Bureau of Economic Analysis reported that first quarter 2011 Gross Domestic Product increased at a rate of 1.8%. In the fourth quarter of last year real GDP increased by 3.1%. GDP growth was 2.6% in the third quarter. Current-dollar GDP, the market value of the nation’s output of goods and services increased 3.7% or $135.0 billion in the first quarter to a level of $15,006.4 billion. Fourth quarter increase was reported as 3.5% or $126.3 billion.

The Conference Board’s Leading Economic Index increased 0.4% in March to 114.1 (2004=100) following a 1.0% increase in February and a 0.2% increase in January.

The Conference Board Consumer Confidence Index which had decreased in March showed improvement in April. It stands at 65.4 (1985=100) up from 63.8 in March.

The Institute for Supply Management’s Manufacturing Index registered at 60.4% in April, a decrease of 0.8% from March. A reading above 50% indicates that the manufacturing economy is generally expanding. The Non-Manufacturing Report for the same period was 52.8, less than March’s 57.3 but a reading above 50 represents continuing growth.

In March, retail and food services sales adjusted for seasonal variations increased 0.4% from February and were 7.1% above a year earlier. Total sales for the January 2011 – March 2011 period were up 8.1% from the same period a year ago.

Privately owned housing starts in March of 549.000 were 7.2% above the revised February estimate of 512,000 and 13.4% below the March 2010 rate of 634,000. Single family housing starts in March were at a rate of 422,000 or 7.7% above the revised February figure of 392,000.

On May 6 Fannie Mae asked the government for an additional $8.5 billion in aid after declining home prices caused more defaults on loans guaranteed by the company. It reported a loss of $8.7 billion in the first quarter. The total cost of rescuing the government-controlled mortgage buyer is nearing $100 billion and was reported as the most expensive bailout of a single company. Combined with the bailout of Freddie Mac, total bailout cost is estimated at $259 billion. The funds are intended to cover their losses on soured loans made during the housing bubble.

Sales of bank-owned properties hit 34.5% of the market, sending quarterly home prices down 5% compared to March 2010. Home prices declined an average 1.8% during the first quarter.

New orders for manufactured durable goods in March increased $5.0 billion or 2.5% to $208.4 billion. This followed a February 0.7% increase. This was the third consecutive monthly increase.

March unfilled orders for manufactured durable goods, up eleven of the last twelve months, increased $6.6 billion or 0.8% to $843.4 billion and followed a 0.7% February increase.

Consumer Price Index increased 0.5% in March after rising 0.5% in February. In the last twelve months, the index for all items increased 2.7% before seasonal adjustments. Over the past 12 months the energy index has increased 15.5% with gasoline index up 27.5%. The food index rose 2.9% during the same period.

The Producer Price Index increased 0.7% in March, following a 1.6% increase in February, and a gain of 0.8% gain in January.

Interest rate: Prime at 3.25%, unchanged since 12/16/08.

Inflation: Annual inflation rate was 2.7% for March.

Unemployment: April 9%, after March 8.8%, the first increase since November. Payrolls increased by 244,000 workers, the biggest gain since May, 2010.

Trade Deficit: For February 2011 the goods and services deficit decreased to $45.8 billion from an adjusted $47.0 billion in January as imports decreased more than exports.

Crude Oil: On May 5, the House passed a GOP plan to expedite offshore oil and gas drilling leases. Two more pro-drilling bills are expected soon.

Natural Gas According to T. Boone Pickens, increased production of US shale natural gas will lessen foreign oil dependency, reduce greenhouse gas emissions and create jobs. At the same time, there is increasing legislative action regarding regulation of the fracking chemicals used to extract the gas.

Industrial production increased 0.8% in March after an increase of 0.1% in February. Total industrial production in March was 5.9% above its level of a year earlier and was 93.6% of its 2007 average. Capacity utilization rate for total industry increased 0.5% to 77.4 %, and was 3.0 % below 1972 – 2010 average.

The US dollar trading at 80.57 Japanese yen. $1.48 = euro. The British pound sterling = $1.65.

Leave a Reply

Your email address will not be published. Required fields are marked *