September – Critical Raw Materials Update

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“It’s hard to argue against cynics: They always sound smarter than optimists because they have so much evidence on their side.”

– Molly Ivins, Wonkette.com

Product News

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

Ammonium Bromide: 25 Kg. Bags in Stock and Immediately Available

Bio- Succinic Acid: 2,000 lb. supersacks and 25 Kg. Bags Available Now!

Dicyandiamide: 25 Kg. Bags and 2,000 lb. supersacks available now!

Epoxidized Soy Bean Oil: TCC offers bulk trucks, drums and totes to North America.

GPO DiOctyl Terephthalate (DOTP): TCC offers bulk trucks of GPO DOTP to North America. Product is in stock and available now.

Malic Acid: 25 Kg. Bags in Stock and Available Now!

Maleic Anhydride: 25 Kg. bags of USA produced briquettes available now.

NatureFlexx 509: Phthalate Free General Purpose Plasticizer. Available in Bulk, Totes (2200 lbs.) and Drums. (Totes in stock and immediately avail.)

Plasticizers: Branched plasticizers DINP, DOTP, DOP, DOA, TOTM, and linear DUP, 911P, L9P, 810 trimelliate. In stock and immediately available.

Tetrabromo Phthalic Anhydride (TBPA): 1,000 Kg bags in stock and available now!

Vestinol 9 DINP: TCC offers bulk trucks and split loads (w/ eso or dop) of DINP to North America.

Urea: Technical Prilled, Feed Grade and DEF grade in bulk rail and pneumatic, 2,000 lb. sacks and 25 Kg. bags.

Critical Raw Materials Markets

Check the real-time commodities tracker at thechemco.com for up to the minute info.Raw Material Trends Legend

Benzene: U.S. benzene contracts for September settled down to US$4.69/ gallon from US$5.06/ gallon in August. June 2014 had the highest U.S. contract price of $5.28/ gallon but pricing has steadily declined. –

n-Butane: Normal Butane prices are trading in the mid US$1.20’s per gallon. \

Ethylene: U.S. Contract Price for July settled up $.0175 to $.495/ lb. Spot ethylene is trading in the low $.70’s/ lb. June settled at US$.4775/ lb. up $.0075/ lb. from May. +

Natural Gas: Natural gas pricing trended lower from Mid June and through July, stabilizing through August and into Septemer. October NYMEX gas settled at $3.823/ mmbtu on September 11th. This was a marginal increase from the week before. Current NYMEX pricing is trading near US$4.058/ mmbtu. \ GasChart9-14

Oil: WTI crude continues its slow downward trend with a slight, recent rebound. Beginning in late June WTI has steadily moved lower. Current pricing is trending near $93/ bbl.

OilChart9-14

Orthoxylene: September contract pricing shed $.04/ lb. to US$.56/ lb. –

Propylene: September contract pricing settled flat. Pricing will roll over from August. Chemical grade will remain at $.71/ lb. and Polymer grade at $.725/ lb. \

Shale Oil & Gas

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Oil Prices Likely to Keep Falling as US Output Booms

A Bloomberg News article posted in Newsmax and several other industry publications reported that new U.S. pipelines and a revival in Libyan supply are increasing the likelihood that oil prices will slump through year-end after climbing in the first six months.

Wall Street analysts tracked by Bloomberg predict West Texas Intermediate oil, the U.S. benchmark, will average $100 a barrel in the fourth quarter, down 5.1 percent from June 30, while Brent drops 4.8 percent to $107. Violence in Iraq sent Brent to $115.71 in June, its highest level since September, on concern supplies would be disrupted.
FULL ARTICLE

Obama Opens Eastern Seaboard to Oil Exploration

Jason Dearen posted on ABC News announced that the Obama administration is reopening the Eastern Seaboard to offshore oil and gas exploration, approving seismic surveys using sonic cannons that can pinpoint energy deposits deep beneath the ocean floor.

Friday’s announcement is the first real step toward what could be a transformation in coastal states, creating thousands of jobs to support a new energy infrastructure. But it dismayed environmentalists and people who owe their livelihoods to fisheries and tourism.

The cannons create noise pollution in waters shared by whales, dolphins and turtles, sending sound waves many times louder than a jet engine reverberating through the deep every ten seconds for weeks at a time. Arguing that endangered species could be harmed was the environmental groups’ best hope for extending a decades-old ban against drilling off the U.S. Atlantic coast.
FULL ARTICLE

Europe Risks Losing 30 Million Jobs to U.S. Shale Boom

According to a Bloomberg News article by Priyanka Sharma and Lananh Nguyen,the U.S. shale-gas boom is placing 30 million jobs at risk in Eurooe as companies with greater reliance on energy contend with higher fuel prices than their American counterparts, the International Energy Agency said.

Manufacturers of petrochemicals, aluminum, fertilizers and plastics are leaving Europe to take advantage of booming U.S. production of natural gas from shale rock formations, Fatih Birol, chief economist for the International Energy Agency, a Paris-based adviser to 29 nations, said at a conference in London today.

“Many petrochemicals companies in central Europe are moving out,” Birol said. “Thirty million jobs are in danger.”

The U.S. has become the world’s largest producer of oil and gas as hydraulic fracturing and horizontal drilling help producers extract resources from shale rock. The country’s refineries processed a record volume of crude last week as plants took advantage of cheaper domestic crudes. Chemical makers from Germany’s BASF SE to Brazil’s Braskem SA plan to invest as much as $72 billion in U.S. plants to take advantage of low-cost natural gas feedstock.
FULL ARTICLE

Shale gas brings U.S. manufacturing resurgence

An ACC Smartbrief report said that U.S. manufacturing is strengthening, in large part because of cheap shale gas, which manufacturers are increasingly turning to as a primary energy source. As evidence of the manufacturing comeback, the American Chemistry Council estimates there are 125 pending chemical projects that will expand U.S. capacity and add $84 billion to the economy.
FULL ARTICLE

E.IA: Marcellus gas output to surpass 15 Bct/d in July, Aug

The Energy Information Administration reported on Monday that natural gas production in the Marcellus Shale will reach an average of 15.235 billion cubic feet per day this month, an increase of 28% from the previous year, and further rise to 15.482 billion cubic feet per day in August. Gas output from the region makes up approximately 16% of total domestic gas production.
FULL ARTICLE

Horizontal drilling is real driver of U.S. Shale revolution

A Reuters Newswire article said that while hydraulic fracturing is touted as the driver of the U.S. shale revolution, the more significant innovation is horizontal drilling, writes John Kemp, senior market analyst at Reuters. He notes that the process was first used for water more than 2,000 years ago and was more recently combined with fracking after a decade of experimentation. Kemp argues that technologies that will transform future oil and natural gas production might already be present, “waiting to be improved and discovered more widely.”
FULL ARTICLE

Chile’s ENAP to import U.S. shale gas fro BG Group in 2016

Reuter’s Newswire reported that Chile’s state-run oil firm ENAP said in a statement Tuesday that it reached a deal to purchase U.S. shale natural gas from British oil and gas company BG Group in the first half of 2016. BG Group “will be in conditions to supply the fuel once the Sabine Pass terminal starts operating at the end of 2015 or beginning of 2016,” the company said.
FULL ARTICLE

Shell discovers oil in Gulf of Mexico’s deepwater Norphlet play

The Times-Picayune reported that Royal Dutch Shell announced Tuesday that it found oil for the third time in the Norphlet play in the Gulf of Mexico. The exploration well, drilled 75 miles offshore, is expected to hold 100 million barrels of oil equivalent. Test results of the well are still being finalized, the company said.
FULL ARTICLE

Chemical Industry News July 2014

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DuPont cuts outlook on weak agriculture results

DuPont also revised its second-quarter and full-year earnings outlook, citing a lower-than-expected quarterly performance from its agriculture segment and, to a lesser extent, its performance chemicals unit. The company expects second-quarter earnings to fall “moderately below” the $1.28/share recorded in the year-ago quarter, and lowered its 2014 earnings forecast to $4–4.10/share, down from the $4.20–$4.45/share.

Asia predicted to be main demand region for polyolefins

In a Chemical Week article, Ajay Shah, senior executive v.p./chemicals at Reliance Industries announced that Asia will remain the main demand region for polyolefins, and its share of worldwide polyolefin consumption will exceed 50% by 2020, with China representing well over half of this share. India’s polyolefin demand, although far behind that of China, is expected to be about 10 million m.t./year by 2020, representing 10% of total Asian demand. Shah made the announcements at the IHS Chemical’s annual Polyethylene Polypropylene Chain Global Business Forum (PEPP) that took place in Zurich this week.

monsanto

Monsanto third-quarter income down

According to Reuters NY, Monsanto Chemical Company reported that its fiscal third-quarter net income was down 5.6% year-on-year (YOY), to $858 million, on sales that were roughly flat YOY, at $4.25 billion. Earnings totaled $1.62/share, down 2.4% but ahead of analysts’ consensus estimate of $1.56/share.

SABIC takes first steps into renewable polyolefins

ICIS reports Saudi Arabia’s SABIC plans to manufacture and market a full range of renewable polyethylene (PE) and polypropylene (PP) by feeding “second generation” waste animal and vegetable oil feedstocks into its crackers in Europe. The project objectives are to help customers meet consumer demand for sustainable, renewable products, particularly in the packaging sector.

ChemicalSafetyf7

Senators draft bill to extend life of chemical security program

In a Global Security Newswire article, Douglas P. Guarino wrote that senators are working on a bill that could extend the life of a controversial chemical security program, but details still remain under wraps. The Senate Homeland Security Committee was to mark up what it is calling the “Protecting American Chemical Facilities from Attack Act of 2014” on June 25, but consideration of the measure was ultimately deleted, without explanation, from the agenda of a committee business meeting that day.A spokeswoman for the panel, which is chaired by Senator Tom Carper (D-Del.), declined to provide details regarding the legislation and how soon it might be unveiled.

 

Braskem adding UHMWPE capacity in Texas

According to an article by Frank Esposito, Brazilian plastics giant Braskem SA will spend $34 million to build a plant making ultra-high molecular weight polyethylene (UHMWPE) at its site in La Porte, Texas. Construction on the plant will begin in the third quarter of 2014, with completion expected in the first half of 2016. São Paulo-based Braskem currently only makes UHMWPE in Brazil. The firm sells the material under the UTEC brand name.

Researchers Test Low-Carbon Cement

A Forbes magazine article reported that Researchers at Switzerland’s Ecole Polytechnique Federal de Lausanne are testing a low-carbon cement that could reduce the carbon footprint of construction sites by 40 percent.

The cement is made from calcined clay and ground limestone that creates a cement that is less porous and stronger than traditional cement when added in large amounts to concrete mixtures. This could make the new material, called LC3 (Limestone Calcined Clay Cement), a greener alternative to Portland cement, the cheapest, most commonly used cement but also the most energy-intensive to produce and the most caustic.

PPG industries acquire Mexico’s Comex for $2.3 billion

In an article by Robert Wetervelt, PPG Industries announced that the company has reached a definitive agreement to acquire Consorcio Comex (Mexico City), a leading Mexican producer of architectural and industrial coatings, for $2.3 billion. The deal follows two months after Sherwin-Williams (SW) cancelled plans to acquire the Mexican operations of Comex for $2.3 billion after Mexico’s federal competition commission blocked the deal.

The privately held Comex has approximately 3,900 employees, eight manufacturing facilities, and six distribution centers, and had sales of approximately $1 billion in 2013. Comex sells coatings and related products in Mexico and Central America through approximately 3,600 stores that are independently owned and operated by more than 700 concessionaires. The deal is subject to regulatory approvals and other customary reviews. PPG expects the regulatory review to take four to six months. PPG says the deal is its largest since the 2008 acquisition of SigmaKalon for €2.2 billion (US$3.2 billion).

Domestic Shale Oil & Gas Production Take the Spotlight in Stabilizing U.S. Economy

The View from Jamestown - ShaleOil

Shale gas output growth just beginning

Matt Smith, commodity analyst at Schneider Electric says that the shale-driven growth in U.S. natural gas production is still likely “in the first half” of the game. He went on to say, “As natural gas prices gradually increase, we should see more production coming online because it’s incentivized by these higher prices. And so the unconventional gas story in the U.S. has a log way to run yet.” Although some countries can experience surging production from shale, they will not be able to replicate the U.S. boom, he added.

North Dakota tops 1M barrels per day

North Dakota oil production rose from 977,000 barrels per day in March to more than 1 million barrels per day in April, data from the state Department of Mineral Resources shows. Most of the output came from the Bakken Shale play and the Three Forks formations.

Domestic petrochemical exports expanding because of increased U.S. shale production

ExxonMobil Chemical President Steve Pryor said that the U.S. is joining the Middle East as a major petrochemical exporter because of the shale boom. Eventually, U.S. shale gas will find its way to Asia and Latin America in the form of resin pellets, according to the article. The American Chemistry Council estimates a total of $71.7 billion in new shale-related petrochemical investments.

Iraq’s impact on oil prices mitigated by U.S. shale boom

Nansen Saleri, CEO at Quantum Reservoir and former head of reservoir management at Saudi Arabian Oil said that the U.S. shale boom, which has driven growth in crude oil production, has prevented oil prices from increasing at a higher rate amid the crisis in Iraq. “Were it not for the increase in U.S. production that’s gained close to 2 million barrels a day, we would see a $20 to $30 rise in prices,” he said.

Even non-producing states benefit from U.S. gas boom say industry experts

In a Fuel Fix article, IHS Vice Chairman Daniel Yergin told Congress’ Joint Economic Committee that the surge in domestic natural gas production is contributing to the economic growth of U.S. states, even in states that don’t drill. Yergin said that approximately one-fourth of the 2.1 million jobs related to unconventional production can be found in those nonproducing states. Business leaders also noted that other industries are gaining from the boom.

Study reveals that oil and gas capital spending declined in 2013

According to an Oil & Gas Journal article, Deborah Byers, oil and gas leader at Ernst & Young said that capital expenditures by U.S. oil and natural gas firms in 2013 decreased by 7% from 2012, leading to a 9% gain in oil and gas reserves and strong energy prices. The decrease “is due in part to the advancement in technologies and processes that are making exploration and production less expensive and more efficient,” she said.

ExxonMobil shale gas exploration with Turkey almost certain

Turkish energy ministry official Salami Incedalci said that ExxonMobil and state-controlled Turkish Petroleum Corp. could team up on shale natural gas exploration in parts of Turkey.

The Reuters Newswire confirmed the claim in a report that quoted a Turkish energy official as saying that U.S. oil firm ExxonMobil is in talks with state-run Turkish Petroleum Corporation over a venture to explore for shale gas in the country’s southeast and northwest regions.

According to the report, Exxon held talks with TPAO in 2012 to cover a partnership in shale, but the negotiations were inconclusive. Turkish officials say talks have since advanced and are likely to result in an agreement.

The partnership could take the sting out of the possible loss in revenues suffered in the Iraq conflict if the crisis is not resolved in the near future.

Economy Shrinks for the First Time in Three Years

 

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GDP contracts 1 percent

For the first time in three years, the economy contracted in the first quarter due to a harsh winter according to a Reuter newswire report. However, economists say that it is rebounding and shows promise of 4 percent growth in the April-June quarter.

Last Thursday the Commerce Department slashed its estimate of gross domestic product to show that the economy shrank at an annual rate of 1.0 percent.

According to the report this was the worst performance since the first quarter of 2011. It reflected a far slower pace of inventory accumulation and a larger trade deficit than previously estimated.

Weather-related factors are expected to fade and inventories are expected to swing higher, which will boost the output in the current quarter.

Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York said: “The race isn’t over yet for the economy. Things are better than you think. We are still expecting a strong finish to the year.”

The initial GDP estimates predicted a 0.1 percent growth rate. However, it is not unusual to see dramatic revision to GDP numbers from the government, as it does not have comprehensive data when it makes its initial estimates.

Reports from economists estimate that the severe weather could have been responsible for chopping off as much as 1.5 percentage points from GDP growth. The economy grew at a 2.6 percent pace in the fourth quarter of last year.

As investors focused on the brighter second-quarter growth prospects, U.S. stocks traded higher. Prices for U.S. Treasury debt rose, but the dollar fell against most competing currencies.