September – Critical Raw Materials Update

SupplyChainLock
 

“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. \

The Future of Shale Oil & Gas—Opinions Differ

Shale Plays in the Lower 48
[Click Map to Enlarge]

Ohio shale and gas production shifts south

A Columbus Dispatch article by Dan Gearino said that the Ohio Department of Natural Resources report on second-quarter results show the center of Ohio shale development shifting south to Noble County and Antero Resources Corp.

The top two natural-gas wells are located in Monroe County; both are owned by Hall Drilling.

Carroll County presently has the most oil and gas wells and the largest production. However, it lags in new development and in production per well.

FULL ARTICLE

 

Arguments for and against shale oil & gas developments may surprise you

An oilprice.com article by Euan Mearns questions whether we understand the concept of the controversial so-called energy debate. Whereas many think it is about the pros and cons of renewable energy and the environmental sensibilities of shale developments, the crisis may not be about those issues at all.

The crises for many countries could be abut the legal imperative to reduce their carbon dioxide (CO2) emissions relative to the value of 1990. The second order of importance is economic.

FULL ARTICLE

 

Why the shale oil and gas revolution won’t end any time soon

The Bangkok Post’s writer John Kemp questions the sustainability of the North American oil and gas boom. He says that doubts center on rapidly declining output from many shale wells after they are initially drilled. Although that may be true, supporters have every reason to believe that is not an issue. Kemp convincingly presents both sides of the issue in his comprehensive report.

FULL ARTICLE

 

Are drillers producing more debt than oil as they pursue fortunes in shale?

Asjylyn Loder seems to think so in a Bloomberg News article addressing that question.

Floyd Wilson, chairman and CEO of Halcon Resources Corp. wrote off $1.2 billion last year after disappointing results in two key prospects. Since Wilson took over the company, Halcon’s shares have dropped by about half, trading at $5.67 on Sept. 5.

Apparently this does not discourage Wilson, who claims that politicians and investors are buying into the vision of a domestic energy renaissance.

FULL ARTICLE

 

The long supply chain, not Big Oil that keeps the industry pumping

That’s what Jennifer A. Dlouhy reports in a fuelfix.com article on Sept. 9.

The American Petroleum Institute released a report documenting the nearly 30,000 businesses across the country that supply the oil and gas industry with products, equipment, and services, Dlouhy said.

Does that offset the losses suffered by investors in the oil fields where production is dwindling?

READ THE FULL ARTICLE AND SEE IF YOU AGREE

Critical Raw Materials Update

 TheViewIMG_Aug2014

Prop 65: Forest Goodman Executive VP Tells us how he really feels

Prop 65, the 1986 California initiative to limit exposure to certain chemicals was a major topic of conversation at this year’s Vinyl Formulators Conference, for good reason.  For strictly emotional reaction and without proper scientific evaluation, certain ortho-phthalate plasticizers have been placed on the list including DINP, which was supposedly not going to be listed.  But it was.  Much to the consternation of Nina Hallmark, the PHD Toxicologist with Exxon, who described the painful process used by the proponents of Prop 65 to get what they wanted.  Prop 65 has become a lawyer’s dream mechanism to extort money from companies all up and down the supply chain.  A lawyer who spoke at the conference who fights these law firms kept calling them bounty hunters, but that is unfair to bounty hunters.  Because of this law there are a handful of California law firms who are raking in hundreds of millions of dollars at the expense of American Industry.

A quote from one of our handouts: “Since 1988, over 17,000 NOVs (Notice of Violation) have been issued by bounty hunters affecting over 34,000 separate businesses and almost 3,500 Prop 65 lawsuits have been filed.”

The most disturbing discussion was when several compounders gave their examples being hit with a lawsuit and the subsequent financial damages.  One was very far removed from the consumer.  Say you make a compound, someone buys it, modifies it, sells it to a third person.  They make a partially finished part that goes elsewhere, winds up part of an assembly which goes to a manufacturer who completes a product and off it goes to a big box store and eventually gets to California.  That is what one of these cases was like.  And the truly sad fact was that the compound did not even contain what the predator lawyers claimed.  But the problem is, with Prop 65, you are guilty until proven innocent.  To fight one of these lawsuits will likely cost about $250,000 minimum.  So everyone is settling for whatever will make the predators go away, usually about $50,000.

And these predators work the food chain.  In one case they brought a lawsuit against a consumer products company who settled and then by way of discovery through the process of that lawsuit identified their non-California suppliers and went after them and extorted money from them also.  They are working further and further up the chain.

Another tool of these law firms is the MSDS’s companies post online.  They are using that data to build a base for further lawsuits in the future.  They are also looking to see if the Prop 65 warning is posted on them if there is a chance the product will wind up in California. They are gunning for everyone involved in the flexible vinyl industry.

One proposed solution to limit the damages being caused by this was to establish a Pollution Liability Insurance Coverage with a $500,000 limit and a $5000 deductible.  I think the figure thrown out was about a $5000

cost per annum.  So the year the bounty hunters come for you, it will cost 10 grand but only 5 grand for every other year after that. What a deal.

The positive note about all this is that the SPI and particularly the Vinyl Group are concerned and trying to marshal resources to come up with strategies to combat this egregious assault on our industry.

 

“How inapropriate to call this planet Earth when it is quite clearly Ocean.”

– Science Fiction Writer Arthur C. Clarke quoted in the Wall Street Journal

 

SPI Event review by Thomas Guadagno

Producers, suppliers and compounders joined together July 13th – 15th in Williamsburg, VA to discuss the current status and future of the flexible vinyl industry.  The large focus of the meeting was the discussion of the listing of Di-Isononyl-Phthalate (DINP) under California’s Prop 65, and the ramifications for vinyl.  The American Chemistry Council ACC recently filed suit against California regarding the listing of DINP as “known to cause cancer”.  Multiple presentations were made in support of DINP, including a presentation by a toxicologist explaining why the listing is erroneous and lacking any scientific support. The listing of DINP under Prop 65 has left the industry scrambling to reformulate using other primary plasticizers, mainly Di-(2-ethylhexyl)-Terephthalate (DOTP).

In additional to the domestic regulation, the harmonization of global standards was discussed in hopes of trying to avoid as much of the inevitable growing pains that are to be expected during implementation. It was noted in multiple presentations that the trends of regulations first start in Europe and move westward to the Americas.  DINP has been deemed suitable for children toys and food packaging in the much more stringent regulations of European.  The vinyl industry often looks to Europe in hopes of gaining insight into which direction American regulation is heading, although they have been left perplexed in regards to the Prop 65 listing of DINP.

America’s position on light feed stocks due to shale-gas was also highlighted at the conference.  The industry is looking forward to the additional domestic capacities coming on line now and continuing into the coming years. T he plastics industry as a whole is starting to reach pre-recession levels and job growth in the industry is already in place and expected to continue for over a decade, mainly due to the economical advantaged of shale gas.

 

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

Citric Acid:            Food Grade 25 Kg. bags and 1,000 Kg. sacks in stock and available now.

DiEthylene Glycol (DEG):             New terminal for DEG in New Jersey!  Bulk, split, and partial loads available for immediate pick up or delivery.

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

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

DiOctyl Terephthalate (DOTP):             TCC offers bulk trucks of DOTP to North and South America.

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

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

MonoEthylene Glycol (MEG):            New terminal for MEG in New Jersey!  Bulk, split, and partial loads available for immediate pick up or delivery.

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

Phthalic Anhydride:            25 Kg. Bags and 1,000 Kg. sacks in stock and available now.

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:             Prilled and Feed Grade in 25 Kg. and 1,000 Kg. bags in stock and available now.

 

  

CRITICAL RAW MATERIALS MARKETS

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

Raw Material Trends LegendBenzene: U.S. benzene contracts for July settled up significantly from $4.48/ gallon in June to US$5.28/ gallon.  August contracts settled at $5.06/ gallon down $.22/ gallon from July.  US pricing for benzene remains highest in the world.  

n-Butane:  Normal Butane prices are currently trading in the low US$1.20’s/ gallon.  Pricing has trended slightly lower recently. 

Ethylene:   U.S. Contract Price for May settled up US$.0025 to $.47/ lb.  June settled up $.0075/ lb. to $$.4775/ lb.  July has not yet settled.  Spot ethylene hit an all time high in mid- July at US$.78/ lb. and inventories got critically low due to planned and unplanned outages.  +

 

Natural Gas: August NYMEX Henry Hub settled at $3.808/ mmbtu.  Pricing has seen erosion through July.  End of July settled at $3.847/ mmbtu.  Current NYMEX pricing is US$3.922/ mmbtu.  

NatGasGraph_Aug2014

Oil: WTI crude pricing has been trending lower since reaching its recent high in late June of $106/ barrel.  The first parcels of US crude have been exported. 

CrudeOilGraph_Aug2014

Orthoxylene: July contract pricing increased $.0875/ lb. to US$.645/ lb.  This is the largest one month increase ever for orthoxylene.  August is in discussion but all indications are we will see a decrease of US$.04- $.05/ lb.  Strong mixed xylene pricing has pushed orthoxylene pricing to these high levels.  +

Propylene: July contract pricing settled flat at $.675/ lb. for Polymer Grade and $.66/ lb. for Chemical Grade.    

Chemical Industry News – June

viewjune14

A Message from CEO Nick Roach

The Chemical Company regularly imports chemicals from around the world.  When doing so there are numerous regulations that must be adhered to in each country.   So prior to any import we have to do the research to assure that we are in compliance with all regulations.  In the USA there are chemicals where it is quite simple to confirm which regulations apply and we can complete importation rather promptly.  There are other chemicals that are banned substances that cannot be imported.  Finally there are chemicals that require very special procedures in order to import.

In all there are as many as ten federal departments that could be involved when importing products into the US.  The fines can run into astronomical numbers if you are in violation.  One federal department has fines of $37,000 dollars per day for violations and a minimum fine of $2,600.00 if you don’t check the correct box on the import form.  It is extremely important that experts handle documentation when importing any quantity of chemicals or chemical blends

The Chemical Company has bolstered our regulatory department with the addition of Dr. Dennis Migneault a PhD chemist.  Dr. Migneault is on staff to review and qualify imports world-wide.  Dennis works with all levels of our company at making sure that we conform to all regulations when shipping a product in the US or internationally.  This not only protects our company, it also protects our customers and suppliers.

The Chemical Company provides additional protection to companies dealing with us so we won’t make a mistake that could cost you millions of dollars.  So when customers request information on us for an import your patience is appreciated.   This is part of our effort to protect our company, your company, and our suppliers from the consequences of improper chemical handling.

Welcome Dennis Migneault
V.P. International Compliance

The Chemical Company Enhances Regulatory Support

The Chemical Company has taken two steps to enhance support of Regulatory Compliance in company activities.  Dennis Migneault has been brought on board in a regulatory compliance support position of  VP International Compliance.  Dennis formerly worked in a Quality Control/Quality Assurance positions at Pfizer Inc. for 23 years.  Dennis’s responsibilities will include reviewing supply decisions for compliance with TSCA and FIFRA as well as developing product specifications, MSDS’s, and COA’s for TCC products.

Pat King and Dennis Migneault attended a two day TSCA program in Washington D.C.  The program was offered by McKenna, Long and Aldrich, a firm which served as consultants during the recent EPA audit of TCC.  Topics covered included EPA Enforcement actions, the TSCA existing substances list, and reporting requirements.  Weekly TCC staff meetings will start with a brief Compliance/Safety presentation.

Welcome David Xue
V.P. of Asia Operations

The Chemical Company bolsters it’s Asia Operations

The Chemical company has added David Xue as V.P of Asia Operations to enhance our established relationships and grow new relationships with dignity and respect for the cultures of Asia.  David will help manage Growth in our Asian Product portfolio and greater demand from our customer base to service their chemical requirements with safety and competitive pricing.  David is a native of China but has lived in the United States since College.  He has worked for some of the largest chemical companies in the world during his career but courted The Chemical Company for a long term position focused on growth with the countries of Asia.  David is a China expert but has relationships beyond main land China.  Welcome David! 

lennon

  

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!

Citric Acid:                                                        Food Grade 25 Kg. bags and 1,000 Kg. sacks in stock and available now.

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

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

DiOctyl Terephthalate (DOTP):                              TCC offers bulk trucks of DOTP to North and South America.

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

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

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

Phthalic Anhydride:                                              25 Kg. Bags and 1,000 Kg. sacks in stock and available now.

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:                                                                 Prilled and Feed Grade in 25 Kg. and 1,000 Kg. bags in stock and available now.

 

CRITICAL RAW MATERIALS MARKETSRaw Materials Legend - The Chemical Company

Benzene: U.S. benzene contracts for June settled down $.09/ gallon to US$4.48/ gallon from US$4.57/ gallon in May.  Despite the decreased pricing U.S. pricing remains the highest in the world.  Less avail. due to lighter feeds.  

n-Butane:  Normal Butane prices are currently trading in the low US$1.20’s/ gallon.  Pricing has trended slightly lower recently.  

Ethylene:   U.S. Contract Price for May settled up $.0025 to $.47/ lb.  UP

Natural Gas: June NYMEX Henry Hub settled at $4.619/ mmbtu.  Pricing has seen strength over May’s $4.359/ mmbtu.  Current NYMEX pricing is US$4.736/ mmbtu.  UP

 

graph1

Oil: WTI crude pricing is strong and trending higher.  Current pricing is trading above $105/ barrel.  Will the US begin to export crude?   UP

graph2

Orthoxylene: June contract pricing rolled at US$.575/ lb.  

Propylene: May contract pricing settled down $.005/ lb. to $.705/ lb. for Polymer Grade and $.69/ lb. for Chemical Grade.    

Economy Shrinks for the First Time in Three Years

 

WordTypo

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.

Federal lawsuit challenges safety of railroad transport of toxic chemicals

The Chemical Company - The View from JamestownTwo train accidents, one resulting in 47 deaths, and both causing massive, fiery explosions, has put the railroad transportation of toxic chemicals under scrutiny.

Now, a lawsuit has been filed in Minnesota by several chemical groups that include The Chlorine Institue and the American Chemistry Council (ACC) against the Canadian Pacific Railroad for their abrupt changes in policy and implementation of stringent regulations that the chemical groups consider unreasonable.

The new regulations require all rail cars hauling certain toxic chemicals on Canadian Pacific lines to comply with stricter safety standards effective immediately.

The chemical groups involved in the suit called the move “arbitrary, unilateral, and illegal,” and said in a statement that such chemicals “are essential to the economy and national health, and rail movement of these materials is extremely safe.”

“CP’s decision blindsides the chemical industry and has ramifications for America’s public health, agriculture, pharmaceutical, construction, defense, and manufacturing sectors,” said Tom Schick, ACC’s Senior Director of Regulatory and Technical Affairs.

Canadian Pacific responded with a statement saying: ” . . . CP opposes the motion by the American Chemistry Council based on our railroad’s continual concern over safety in our communities. CP believes there is a shared responsibility to haul these commodities throughout North America in the safest possible manner and our railroad is asking shippers of these toxic chemicals to take steps to further protect our employees and the public.”

Statistics reveal that as many as 78,000 cars could be involved. Meeting the new standards would take several years and lots of money.

The chemical groups filing the suit claim that their rail cars meet all existing Department of Transportation (DOT) safety requirements.

The railroad feels that they have the right to protect themselves from lawsuits in the event of any accidents and they do not want to be responsible for the liability.

All parties agree that safety should always be the first consideration, but who is going to pay for it is an issue that needs to be resolved.

Liquefied Petroleum Gas (LPG)—U.S. Supplies China

Liquefied petroleum gas tanks

If the pump jacks and wells seen operating in an oil field near McKittrick, California are any indication, the Monterey Shale formation is on the verge of a boom using hydraulic fracturing, or fracking to extract gas and oil.

Sinopec & Pillips Deal

Huge finds of shale oil and gas in the U.S. resulted in a deal between China’s most productive refiner Sinopec and Phillips that could make the U.S. one of the top suppliers of liquefied petroleum gas (LPG) to the world’s biggest user and second-biggest economy.

Although Washington restricts crude oil exports and limits liquefied natural gas (LNG) shipments, sales of liquefied petroleum gas have no constraints.

However, like the U.S. and Europe, China has ambitions to wean itself from energy imports and reduce its overwhelming dependence on coal that has made China the world’s largest contributor to global warming.

Unfortunately for China, the path to energy independence is fraught with obstacles and pitfalls. In China, companies must drill two to three times as deep as in the U.S., making the process significantly more expensive and dangerous. China’s energy companies operate in strict secrecy and accidents allegedly claim a high death toll.

 Jiaoshizhen Valley Rig Explosion

Villagers reported that eight people died when a rig exploded in the middle of the night in the Jiaoshizhen valley, an area so remote that residents speak a dialect that is different from anywhere else in China. Village leaders and Sinopec officials ordered them not to discuss the event.

Until China can overcome these hurdles or find more favorable oil and gas fields, the trade deal between Sinopec and Phillips to supply liquefied petroleum gas could be its best hope of reducing its carbon footprint and dependence on coal.