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Chemical firms exit 2016 with some bruises.
FOCUS
MARKETS AND BUSINESS Chemistry-related patents rise in Europe in 2016. The European Patent Office announced that it awarded 96,000 patents in 2016, up by 40% from 2015. Patent filings in 2016 stood at more than 296,000, up by 6.2% year on year. The three leading EU patent recipients in the drug and chemical sectors were BASF (with 653 patents), Johnson & Johnson (582 patents) and Dow Chemical (518 patents). A table shows the number of chemistry-related patents granted in Europe in 2014, 2015 and 2016. In 2016, the three leading chemistry sectors in terms of patent grants were organic fine chemistry (with 4370 patents), biotechnology (3108 patents) and pharmaceuticals (3089 patents).
Original Source: Chemical and Engineering News, 20 Mar 2017, 95 (12), 14 (Website: http://cen.acs.org/index.html) © American Chemical Society, 2017.
Prepare for the boom. According to Accenture, return on sales for petrochemicals spending (nearly 8%) now triples that of the oil and gas sector, wherein nearly $25 bn in cash funding could sustain the infrastructure boom of North America's shale gas-based chemicals and refining sectors. Borealis, NOVA Chemical and Total will co-build a 1 M tonne/y cracker for ethylene and derivatives in the US. Under a joint venture deal, Saudi Aramco and PETRONAS will co-own the latter's Refinery and Petrochemical Integrated Development (RAPID) project in Johor, Malaysia. The $7 bn deal is expected to boost the former's global capacity for chemicals (from 12 M tonnes to 34 M tonnes) and refining (from 5 M barrels/d to 8–10 M barrels/d) by 2030. Such progress could be affected by the chemical sector's low service penetration (below 10%) in terms of construction, truck transport and labour. The Associated General Contractors of America claims that problems related to craft worker recruitment affect 60% of the sector and may even worsen according to 68% of the respondents. A graph compares return on sales (%) and cash rolling ($bn) in the petrochemical sector during 2010–2016.
Original Source: ICIS Chemical Business, 7–13 Apr 2017, 291 (14), 5 (Website: http://www. icis.com) © Reed Business Information Limited 2017.
Chemical firms exit 2016 with some bruises. For the full year 2016, the 19 US-based chemical companies tracked by C&EN saw a 5.3% sales drop and an 8.7% earnings decline. The 17 players not involved in the fertilizer business witnessed a combined earnings decline of just 1.8%. For DuPont, sales marginally fell year-onyear but earnings rose by over 27% to $2.9 bn. Chemours, DuPont's previous performance chemical business, posted a 31% year-on-year growth in earnings to $187 M in full year 2016. For companies more active in the basic chemicals
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business, 2016 was not a favourable year. Westlake Chemical, LyondellBasell Industries and Huntsman Corp all recorded year-on-year decreases in earnings. Ashland's speciality business was robust in 2016 but overall earnings fell by 12%. Meanwhile, there are various deals that are occurring. In 4Q 2016, BASF acquired the surface treatment business of Albemarle. In Jan 2017, Air Products finalized the divestment of its performance material business to Evonik Industries. On 1 Feb 2017, shareholders of Chemtura decided to sell the firm to Lanxess. Later in 2017, Huntsman will spin off its TiO2 business, to be named Venator. A table presents the 2016 and 2015 financial figures of 19 chemical companies.
Original Source: Chemical and Engineering News, 13 Mar 2017, 95 (11), 26–27 (Website: http://cen.acs.org/index.html) © American Chemical Society 2017.
Canada spends on clean technology. The Province of British Columbia and the Federal Government of Canada are each investing up to $15 M to support renewable energy projects at the commercialization phase. Sustainable Development Technology Canada (SDTC) will start assessing applications in Apr 2017. It has declared two grants: $7.5 M to Automotive Fuel Cell Corp, a joint venture between Daimler and Ford Motor developing fuel cell modules; and $10 M to Cantor Pulp Products for the conversion of papermaking waste into biocrude.
Original Source: Chemical and Engineering News, 20 Mar 2017, 95 (12), 12 (Website: http://cen.acs.org/index.html) © American Chemical Society 2017.
Freeze lifted on RFS biofuel volumes. The US Renewable Fuel Standard (RFS) biofuel volume permitted for 2017 came into effect on 21 Mar 2017; following the expiry of a regulatory freeze imposed by the new administration. The regulatory freeze was imposed to review "questions of fact, law and policy'' that any previously imposed rulings would raise. This 60day delay covers policies that had been published in the Federal Register between 28 Oct 2016 and 17 Jan 2017, including Environmental Protection Agency's (EPA) final policy for renewable volume obligations (RVO) under the RFS, finalized in Nov 2016. The EPA imposed that 15.0 bn gal of total volumes in 2017 be for traditional biofuel, which is mainly ethanol based on corn feedstock. It also implemented a final regulation on RVOs for biomass-based diesel, setting the amount at 2.0 bn gal in 2017 and 2.1 bn gal in 2018. As of 21 Mar 2017, there were no further delays to the RFS regulation. A table shows the US renewable fuel volume requirements (in gal) in 2016 and 2017. The overall renewable fuel volume needed for 2017 is 19.28 bn gal, compared to 18.11 bn gal in 2016. Renewable fuel volume for cellulosic biofuel is 0.23 bn gal in 2016 and 0.311 bn gal in 2017. Biomass-based diesel volume is 1.9 bn gal in 2016 and 2 bn gal in 2017. Advanced biofuel is 3.61 bn gal in 2016 and 4.28 bn gal in 2017.
ICIS Chemical Business, 24–30 Mar 2017, 291 (12), 9 (Website: http://www.icis.com) (in English).
North American petrochemical industry fastens up "for a wild ride’’ The US economy and North America's petrochemical sector have experienced volatile conditions, uncertainties and shifts over the past years. Data from Independent Project Analysis (IPA) reveals that capital spending in refining projects and oil & gas exploration/production has considerably dropped since 2014, when oil values sharply fell. Companies cut their expenditure by 30% on average during 2014–2015. Similar reductions were observed in 2016. On a positive note, IPA perceives that capital expenditure reductions have bottomed out in the US. Over the succeeding few years, the petrochemical industry is set to witness a "wild ride,'' according to Wood Mackenzie. The sector needs to be watchful of the five vital signs and methods to acclimatize to these signs which include the crude oil market and China, the biggest producer of petrochemicals and the leading consumer of polymers, synthetic fibres and petrochemicals. Other signs are trade flows, feedstocks and technology. Meanwhile, ICIS data showed that the first spate of new cracker and polyethylene (PE) plants in the US would begin operations in 2017. Five cracker start-ups are scheduled in 2017 and will introduce 7 M tonnes/y of capacity. Indorama's cracker will supply feedstock for use in ethylene oxide (EO) production, making it an integrated US maker of polyethylene terephthalate (PET). Mexichem and Occidental Chemical will deliver the ethylene from their cracker to a nearby vinyl chloride monomer (VCM) unit. Then, the VCM will be supplied to Mexichem's polyvinyl chloride (PVC) facilities in Latin America. In the US, Mossi and Ghisolfi (M&G) is slated to commence operations at its new facility in Corpus Christi, TX, in 2017. The facility will produce 1.1 M tonnes/y of PET and 1.3 M tonnes/y of purified terephthalic acid (PTA). Enterprise is also anticipated to launch its 750,000 tonnes/y propane dehydrogenation (PDH) unit in Mont Belvieu, TX, during the year. Once new crackers begin operations, ICIS predicts ethane values to soar from the natural gas floor to the highest level of propane cracking parity. A figure shows the US' ethane consumption and net exports on a quarterly basis from 1Q 2013 to 4Q 2018.
Original Source: ICIS Chemical Business, 24–30 Mar 2017, 291 (12 (International Petrochemical Conference 2017)), 30–31 (Website: http://www.icis.com) © Copyright Reed Business Information Limited 2017.
Trump policies to change dynamics. As reported by the American Chemistry Council (ACC), the US chemical sector (minus pharmaceuticals) held $28.2 bn in surplus as of 2016, which is mostly exported to Mexico ($14.6 bn of $19.2 bn as surplus). The industry will be substantially impacted by the new Trump administration, which is expected to lay out a mixture of pro-business and protectionist policies. Key issues to be addressed include a potential border adjustment tax (BAT), corporate tax reform and regulatory rollbacks, plus infrastructure investment of $1 trillion that would cover the construction of the Dakota Access and Keystone XL pipelines. These come as the first wave of ethane crackers would be launched within 2017. Occidental Chemical and Mexichem will co-start a 544,000 tonne/y joint venture ethylene unit in in Ingelside, TX, US by late-2017, while Chevron Phillips Chemical, Dow Chemical and ExxonMobil Chemical will separately start their 1.5 M tonne/y
May 2017
MARKETS AND BUSINESS Chemistry-related patents rise in Europe in 2016. The European Patent Office announced that it awarded 96,000 patents in 2016, up by 40% from 2015. Patent filings in 2016 stood at more than 296,000, up by 6.2% year on year. The three leading EU patent recipients in the drug and chemical sectors were BASF (with 653 patents), Johnson & Johnson (582 patents) and Dow Chemical (518 patents). A table shows the number of chemistry-related patents granted in Europe in 2014, 2015 and 2016. In 2016, the three leading chemistry sectors in terms of patent grants were organic fine chemistry (with 4370 patents), biotechnology (3108 patents) and pharmaceuticals (3089 patents).
Original Source: Chemical and Engineering News, 20 Mar 2017, 95 (12), 14 (Website: http://cen.acs.org/index.html) © American Chemical Society, 2017.
Prepare for the boom. According to Accenture, return on sales for petrochemicals spending (nearly 8%) now triples that of the oil and gas sector, wherein nearly $25 bn in cash funding could sustain the infrastructure boom of North America's shale gas-based chemicals and refining sectors. Borealis, NOVA Chemical and Total will co-build a 1 M tonne/y cracker for ethylene and derivatives in the US. Under a joint venture deal, Saudi Aramco and PETRONAS will co-own the latter's Refinery and Petrochemical Integrated Development (RAPID) project in Johor, Malaysia. The $7 bn deal is expected to boost the former's global capacity for chemicals (from 12 M tonnes to 34 M tonnes) and refining (from 5 M barrels/d to 8–10 M barrels/d) by 2030. Such progress could be affected by the chemical sector's low service penetration (below 10%) in terms of construction, truck transport and labour. The Associated General Contractors of America claims that problems related to craft worker recruitment affect 60% of the sector and may even worsen according to 68% of the respondents. A graph compares return on sales (%) and cash rolling ($bn) in the petrochemical sector during 2010–2016.
Original Source: ICIS Chemical Business, 7–13 Apr 2017, 291 (14), 5 (Website: http://www. icis.com) © Reed Business Information Limited 2017.
Chemical firms exit 2016 with some bruises. For the full year 2016, the 19 US-based chemical companies tracked by C&EN saw a 5.3% sales drop and an 8.7% earnings decline. The 17 players not involved in the fertilizer business witnessed a combined earnings decline of just 1.8%. For DuPont, sales marginally fell year-onyear but earnings rose by over 27% to $2.9 bn. Chemours, DuPont's previous performance chemical business, posted a 31% year-on-year growth in earnings to $187 M in full year 2016. For companies more active in the basic chemicals
2
ON
C ATA LY S T S
business, 2016 was not a favourable year. Westlake Chemical, LyondellBasell Industries and Huntsman Corp all recorded year-on-year decreases in earnings. Ashland's speciality business was robust in 2016 but overall earnings fell by 12%. Meanwhile, there are various deals that are occurring. In 4Q 2016, BASF acquired the surface treatment business of Albemarle. In Jan 2017, Air Products finalized the divestment of its performance material business to Evonik Industries. On 1 Feb 2017, shareholders of Chemtura decided to sell the firm to Lanxess. Later in 2017, Huntsman will spin off its TiO2 business, to be named Venator. A table presents the 2016 and 2015 financial figures of 19 chemical companies.
Original Source: Chemical and Engineering News, 13 Mar 2017, 95 (11), 26–27 (Website: http://cen.acs.org/index.html) © American Chemical Society 2017.
Canada spends on clean technology. The Province of British Columbia and the Federal Government of Canada are each investing up to $15 M to support renewable energy projects at the commercialization phase. Sustainable Development Technology Canada (SDTC) will start assessing applications in Apr 2017. It has declared two grants: $7.5 M to Automotive Fuel Cell Corp, a joint venture between Daimler and Ford Motor developing fuel cell modules; and $10 M to Cantor Pulp Products for the conversion of papermaking waste into biocrude.
Original Source: Chemical and Engineering News, 20 Mar 2017, 95 (12), 12 (Website: http://cen.acs.org/index.html) © American Chemical Society 2017.
Freeze lifted on RFS biofuel volumes. The US Renewable Fuel Standard (RFS) biofuel volume permitted for 2017 came into effect on 21 Mar 2017; following the expiry of a regulatory freeze imposed by the new administration. The regulatory freeze was imposed to review "questions of fact, law and policy'' that any previously imposed rulings would raise. This 60day delay covers policies that had been published in the Federal Register between 28 Oct 2016 and 17 Jan 2017, including Environmental Protection Agency's (EPA) final policy for renewable volume obligations (RVO) under the RFS, finalized in Nov 2016. The EPA imposed that 15.0 bn gal of total volumes in 2017 be for traditional biofuel, which is mainly ethanol based on corn feedstock. It also implemented a final regulation on RVOs for biomass-based diesel, setting the amount at 2.0 bn gal in 2017 and 2.1 bn gal in 2018. As of 21 Mar 2017, there were no further delays to the RFS regulation. A table shows the US renewable fuel volume requirements (in gal) in 2016 and 2017. The overall renewable fuel volume needed for 2017 is 19.28 bn gal, compared to 18.11 bn gal in 2016. Renewable fuel volume for cellulosic biofuel is 0.23 bn gal in 2016 and 0.311 bn gal in 2017. Biomass-based diesel volume is 1.9 bn gal in 2016 and 2 bn gal in 2017. Advanced biofuel is 3.61 bn gal in 2016 and 4.28 bn gal in 2017.
ICIS Chemical Business, 24–30 Mar 2017, 291 (12), 9 (Website: http://www.icis.com) (in English).
North American petrochemical industry fastens up "for a wild ride’’ The US economy and North America's petrochemical sector have experienced volatile conditions, uncertainties and shifts over the past years. Data from Independent Project Analysis (IPA) reveals that capital spending in refining projects and oil & gas exploration/production has considerably dropped since 2014, when oil values sharply fell. Companies cut their expenditure by 30% on average during 2014–2015. Similar reductions were observed in 2016. On a positive note, IPA perceives that capital expenditure reductions have bottomed out in the US. Over the succeeding few years, the petrochemical industry is set to witness a "wild ride,'' according to Wood Mackenzie. The sector needs to be watchful of the five vital signs and methods to acclimatize to these signs which include the crude oil market and China, the biggest producer of petrochemicals and the leading consumer of polymers, synthetic fibres and petrochemicals. Other signs are trade flows, feedstocks and technology. Meanwhile, ICIS data showed that the first spate of new cracker and polyethylene (PE) plants in the US would begin operations in 2017. Five cracker start-ups are scheduled in 2017 and will introduce 7 M tonnes/y of capacity. Indorama's cracker will supply feedstock for use in ethylene oxide (EO) production, making it an integrated US maker of polyethylene terephthalate (PET). Mexichem and Occidental Chemical will deliver the ethylene from their cracker to a nearby vinyl chloride monomer (VCM) unit. Then, the VCM will be supplied to Mexichem's polyvinyl chloride (PVC) facilities in Latin America. In the US, Mossi and Ghisolfi (M&G) is slated to commence operations at its new facility in Corpus Christi, TX, in 2017. The facility will produce 1.1 M tonnes/y of PET and 1.3 M tonnes/y of purified terephthalic acid (PTA). Enterprise is also anticipated to launch its 750,000 tonnes/y propane dehydrogenation (PDH) unit in Mont Belvieu, TX, during the year. Once new crackers begin operations, ICIS predicts ethane values to soar from the natural gas floor to the highest level of propane cracking parity. A figure shows the US' ethane consumption and net exports on a quarterly basis from 1Q 2013 to 4Q 2018.
Original Source: ICIS Chemical Business, 24–30 Mar 2017, 291 (12 (International Petrochemical Conference 2017)), 30–31 (Website: http://www.icis.com) © Copyright Reed Business Information Limited 2017.
Trump policies to change dynamics. As reported by the American Chemistry Council (ACC), the US chemical sector (minus pharmaceuticals) held $28.2 bn in surplus as of 2016, which is mostly exported to Mexico ($14.6 bn of $19.2 bn as surplus). The industry will be substantially impacted by the new Trump administration, which is expected to lay out a mixture of pro-business and protectionist policies. Key issues to be addressed include a potential border adjustment tax (BAT), corporate tax reform and regulatory rollbacks, plus infrastructure investment of $1 trillion that would cover the construction of the Dakota Access and Keystone XL pipelines. These come as the first wave of ethane crackers would be launched within 2017. Occidental Chemical and Mexichem will co-start a 544,000 tonne/y joint venture ethylene unit in in Ingelside, TX, US by late-2017, while Chevron Phillips Chemical, Dow Chemical and ExxonMobil Chemical will separately start their 1.5 M tonne/y
May 2017