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Reshaping of the chemical industry in the Gulf Cooperation Council
FOCUS ON C A T A L Y S T S A MONTHLY REPORT FROM TOM DEGNAN JUNE 2017 IN THIS ISSUE MARKETS AND BUSINESS
1-3
Reshaping of the chemical industry in the GCC Chemicals future-oriented spending down in 2016 Oil price roils petrochemicals in 2Q 2017 North America: slow growth likely to spur more M&A Top 50 US chemical producers of 2016 BIOFOREVER: from wood to value-added chemicals Nanosilica market to grow to $5.1 bn by 2025 China could form new chemical giants
COMPANY NEWS
3-4
4-6
Arkema's inaugurates new speciality molecular sieve production Topsoe technology chosen for large Uzbek gas-to-liquids project Global Bioenergies successfully scales up isobutene process INEOS mulls propane dehydrogenation (PDH) unit in Europe Dongguan chooses Clariant and CB&I for Chinese project BASF expands mobile emissions catalysts capacity with new facility BASF invests in high performance silica adsorbents in Germany HPCL to use Honeywell UOP technology for clean fuels Axens increases capacity in France ExxonMobil announces $20 bn investment in US Gulf Coast Borealis aims to dodge oversupply Honeywell technology selected for China’s largest petrochemical project Honeywell UOP to provide technology for Jordanian refinery LyondellBasell to supply ACP PE technology to Chinese project Yantai Wanhua commences operation at single-train PDH facility in China
NEW TECHNOLOGY
6
PATENTS
7
UC Berkeley and BASF announce five-year collaboration extension Japanese announce new on-site ammonia production technology Technip Zimmer: cooperation with METabolic Explorer
BASF settles patent dispute Method for producing high-concentration alcohol Electrolysis system for chlorine production Separation, storage, and catalytic conversion of fluids using ITQ-55 Method for preparing caprolactam Process and catalyst for resin hydrogenation
BOOKSHELF
7
Concepts of Modern Catalysis and Kinetics Strategies for Pd-Catalyzed C-H Bond Functionalization Chemical Reaction Kinetics: Concepts, Methods and Case Studies
EVENTS
JOHN GOODENOUGH’S ENCORE BATTERY "I would rather have questions that can't be answered, than answers that can't be questioned.'' – Richard Feynman
Clariant starts 2017 with strong sales and improved absolute EBITDA Clariant catalysts contribute significantly to emission control in China Clariant highlights sustainability- and efficiency-focused gas processing Global Bioenergies secures EU funding for its new value chain CB&I inaugurates PP technology pilot plant Grace reports 1Q 2017 results: Grace Catalysts Technologies Tosoh reports on its consolidated Speciality Group results for FY 2017 Virent to commercialize BioForming technology BASF profiting from a strong oil price Honeywell delivers $1.71 earnings per share, up by 10% BioAmber: higher sales of bio-succinic acid
NEW PLANTS
AN INTERNATIONAL NEWSLETTER MONITORING TECHNICAL AND COMMERCIAL DEVELOPMENTS IN THE MANUFACTURE AND USE OF CATALYSTS ISSN 1351–4180
8
Has Professor John Goodenough done it again? Could this be the materials science discovery that fundamentally changes the way we think about lithium batteries? In January, Goodenough together with three co-workers at the University of Texas, published results describing an all-solidstate battery cell that may lead to safer, more rapidly-charging, higher charge-density, rechargeable batteries [1]. Key to the breakthrough is the replacement of the liquid electrolyte with a special form of glass. The solid glass electrolyte blocks the development of structures known as "dendrites'' that have plagued Li batteries for years. The improved design also includes a pure lithium or sodium anode. The battery cell can operate at temperatures as low as -20 degrees Celsius. In fact, this is the first all-solid-state battery cell that could operate at temperatures lower than 60 degree Celsius, which would allow it to power cars in sub-zero weather. A recently published U. S. patent application appears to disclose more details of the invention [2]. It is likely the first of several patent applications covering the invention that are assigned to the University of Texas Board of Regents. If the discovery can be commercialized, it could truly revolutionize handheld mobile devices, electric cars, and stationary energy storage. Goodenough estimates that the new battery technology could lead to products that store five to ten times as much energy as the current standard lithium batteries. Understandably, the significance of this development has not been lost on the scientific community. The publication has generated intense interest among leading scientists [3,4]. Such claims have also generated a fair number of skeptics. Several scientists contend that the results possibly violate the laws of thermodynamics. No one outside of his group claims to completely understand the new concept or how the new technology works. However, the University of Texas group contends that the results are reproducible and real. Goodenough, who is often referred to as "Father of the Lithium Battery'' has been previously associated with three major breakthroughs in lithium battery technology. In 1980, at the age of 57, Goodenough, working with two postdoctoral associates, invented the cobaltoxide cathode. This cathode is the single most important component in every lithium-ion battery.
The invention was first commercialized in 1991 by Sony, who went onto incorporate it into its breakthrough video and digital cameras. Two years later, Goodenough's laboratory developed a manganese spinel based cathode that was cheaper and safer than the cobalt-oxide cathode. The spinel had the additional advantage that it could charge and discharge faster than the sheet-like cobalt-oxide. Further work on the spinel structure led to the third major discovery, an ironphosphorus compound known as olivine. Goodenough's laboratory managed to extract lithium from the olivine structure and reintroduce it through intercalation. The lithium-iron phosphate technology became the basis for the establishment of the battery company, A123. Goodenough has received numerous awards for his work. He received the National Medal of Science from President Barack Obama in 2011. With this current discovery, at the age of 94, he may have made his most significant scientific breakthrough yet. Tom Degnan [1] M. H. Braga, N. S. Grundish, A. J. Murchison, and J. B. Goodenough, "Alternative strategy for a safe rechargeable battery,’’ Energy & Environmental Science, 2017. [2] J. B. Goodenough, M. H. Braga, J. Do Amaral Ferreira, P. Singh, "Water solvated glass/amorphous solid ionic conductors,’’ U.S. Patent Appl. 20160368777 A1, 22 DEC 2016, assignee: Board of Regents, Univ. of Texas. [3] B. Lynne, "US Inventor’s Battery Could Change the World. . . Again,’’ VOA Learning English, 13 MAY 2017 (Website: https://learningenglish.voanews.com). [4] UT News, "Lithium-Ion Battery Inventor Introduces New Technology for Fast-Charging, Noncombustible Batteries,’’ 28 FEB 2017, (Website: https://news.utexas. edu/2017/02/28/goodenough-introduces-new-batterytechnology) © University of Texas, 2017.
MARKETS AND BUSINESS Reshaping of the chemical industry in the Gulf Cooperation Council Oil-driven economies in the Middle East, particularly those in the Gulf Cooperation Council
CATALYSTS CATALYSTS CATALYSTS CATALYSTS CATALYSTS CATALYSTS
FOCUS (GCC), have experienced challenges in oil and gas exports during the past three years. Rising oil prices worldwide, faltering demand in Western Europe and new gas-based capacities in China, Iran and the US have curtailed competitiveness in the petrochemical sector. These factors have forced the industry to alter course towards diversification and value addition, in the form of cross-border joint ventures (JV) and partnerships on speciality chemical projects. Sadara, a Dow Chemical-Saudi Aramco JV, has pledged $20 bn to build a 3 M tonne/y petrochemical complex in Al Jubail, Saudi Arabia. SABIC has sought overseas projects like a coal-to-chemicals unit in China and a shale gas-based JV unit (with ExxonMobil Chemical) in the US Gulf Coast. Original Source: Chemical Weekly, 11 Apr 2017, 137138 (Website: http://www.chemicalweekly.com) © Sevak Publications & Chemical Weekly Database P Ltd 2017.
Future-oriented spending in chemical sector down in 2016 In 2016, global capital and research and development (R&D) expenditures dropped because of political upheaval, economic uncertainty, and bottom-line-oriented efforts to sustain strong earnings amid dull projections for growth. As a result, most chemical producers diverted finances away from R&D and away from new facilities and equipment. C&EN's yearly R&D spending survey indicates that 19 large European and US chemical companies collectively slashed 2016 research outlays by 5.2% to $9.7 bn. The pullback follows a 0.4% budget increase in 2015, when the companies invested $10.3 bn on R&D. Spending for the group of 18 firms (excluding Evonik Industries as 10 years of data are not available) marginally grew by over 1% after adjusting for inflation. Budgets expanded by roughly 21% without considering inflation. Total sales for the group dropped in 2016, pushing the company sales' share dedicated to R&D to 3.5%. Capital spending for the 19 chemical companies dropped in 2016. The group lowered investment on new facilities and equipment by 15.3% to $18.6 bn. In 2015, this figure also dropped by 3.3%. In 2014, the group's capital outlays attained a decade high of $22.7 bn. Research budgets declined by 34.5% of collective future-oriented spending in 2016 for the 18 firms. C&EN provided short profiles of the future-oriented spending budgets of the chemical market's five leading investors in R&D. In 2016, the R&D investment of BASF, the world's biggest chemical company, stood at $2.06 bn. 3 M, a diversified producer of materials and consumer products, invested $1.74 bn in 2016. The company spends 5.8% of its sales on R&D. DuPont invested $1.64 bn on R&D in 2016. The company slashed R&D investment by 13.5% in 2016, abolished its Central Research & Development organization, and laid off nearly 200 scientists at the R&D unit in Wilmington, DE, US. Dow Chemical spent $1.58 bn in R&D in 2016 and employed 7200 scientists at the end of 2016, an increase from 6800 in 2015. Dow also intends to build an innovation centre at its headquarters in Midland, MI, which will create 100 R&D jobs. Evonik Industries spent $485 M in R&D in 2016 and will invest nearly $4.4 bn on R&D until 2025. In 2016, the company applied for roughly 230 patents, and patent-driven sales represented 56% of its $14.1 bn sales. Two tables show the research investments and capital outlays of 19 major chemical companies from 2011 to 2016. Two line
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graphs show the R&D and capital spending trend for the 19 companies from 2006 to 2016. Original Source: Chemical and Engineering News, 17 Apr 2017, 95 (6), 20-22 (Website: http://cen.acs.org/ index.html) © American Chemical Society 2017.
Oil price roils petrochemicals in 2Q 2017 On 4 May 2017, the plunge of the global futures prices of crude oil dragged both Jul 2017 Brent and Jun 2017 WTI to $48.38/barrel and $45.52/ barrel, respectively. This would pose major challenges to the chemicals sector, which has just experienced a strong 1Q 2017 amid tight supply and improving demand. In effect, prices have and may continue to plunge for Chinese para-xylene and northeast Asian ethylene. Shell has announced its year-on-year results for 1Q 2017. Earnings excluding costs and other items reached $540 M, while underlying chemicals earnings rose from $377 M to $836 M. Plant availability rose from 88% to 93%, and may further continue based on better performance of its 960,000 tonne/y cracker in Pulau Bukom, Singapore. INEOS has raised its estimate for US ethylene operating rates from 85% to as high as 90%. A table shows the sales and profit figures ($M) of key chemical firms for 1Q 2017, with BASF ($17,976 M; $2620 M) leading ahead of Dow Chemical ($13,230 M; $2704 M) and LyondellBasell ($8430 M; $1617 M). Original Source: ICIS Chemical Business, 12-18 May 2017, 291 (19), 10-11 (Website: http://www.icis.com) © Reed Business Information Limited 2017.
North America: slow growth likely to spur more M&A Slow growth will possibly result in mergers and acquisitions (M&A) of chemical firms, which could boost the companies' earnings through synergies. The M&A activity in the petrochemical industry could be fuelled by depressed prices of crude oil and natural gas. The merging of ChemChina and Syngenta; Dow Chemical and DuPont; and Bayer and Monsanto resulted from the sluggish agriculture sector. Weak fertilizers demand caused the merging of Agrium and PotashCorp. Industrial gases companies Linde and Praxair are also merging. Airgas has been purchased by Air Liquide. In the paints and coatings industry, Valspar is being bought by Sherwin-Williams, while PPG Industries is bidding to take over AkzoNobel, which includes a mix of equity and cash. The takeover cost multiple of Vaspar exceeds the company's annual earnings before interest, tax, depreciation and amortization (EBITDA) by over 15 times. The large speciality chemicals segment of AkzoNobel could be sold by PPG. It is anticipated that more M&A activities will occur in the coatings sector, which could boost the competitiveness of the small and medium-sized firms. A line graph displays the GDP in constant prices of the US and worldwide from 2010 to 2020. Original Source: ICIS Chemical Business, 12-18 May 2017, 291 (19), 17 (Website: http://www.icis.com) © Reed Business Information Limited 2017.
Top 50 US chemical producers of 2016 The top 50 chemical companies in the US had total sales of $259.9 bn in 2016, down 5.6% year-
on-year according to C&EN's annual ranking. Dow Chemical led the list with sales of $48.2 bn for 2016, a 1.3% year-on-year drop. ExxonMobil is ranked second with sales of $26.1 bn, a decline of 7.4%. Dow Chemical is also the biggest chemical firm in terms of market capitalization, increasing by 20.5% in 2016 to successfully displace 2015's frontrunner DuPont. Chemours, a DuPont spin-off, has the biggest chemical stock in 2016. Five firms in the C&EN ranking have disappeared in the list due to acquisitions. These are Dow Corning, Sigma-Aldrich, Cytec Industries, Axiall, and Arizona Chemical. Acquisitions benefited other firms like Olin, which is now ranked at the seventeenth position. New firms at the list are AdvanSix, Versum Materials, GCP Applied Technologies, Williams Partners and Calgon Carbon. Some firms are expected to disappear from the list for 2017, including Dow and DuPont; and Chemtura and Williams. ExxonMobil posted $219 bn of sales for 2016, of which 11.9% was attributed to petrochemicals, while Chevron Phillips Chemical had earnings after tax of $1.7 bn. The firm that tops the foreign ranking is BASF. A table shows the top 50 US chemical firms for 2016. Two other tables show the top 25 foreign-owned firms for 2016 and the market capitalization of chemical firms in 2016. Original Source: Chemical and Engineering News, 8 May 2017, 95 (19), 20-23 (Website: http://cen.acs.org/index. html) © American Chemical Society 2017.
BIOFOREVER: converting of biomass from wood to value-added chemicals The Bio-Based Industries Joint Undertaking (BBI JU) public-private partnership between the European Union and the Bio-based Industry Consortium recently commenced the BIO-based products from FORestry via Economically Viable European Routes (BIOFOREVER) project to show the feasibility of transforming lignocellulosic feedstocks into high added value products and chemical building blocks. There are 14 European firms working on the BIOFOREVER project, including Avantium, API Europe, DSM NV, Borregaard AS, nova-Institute GmbH, MetGen Oy and Suiez Environement. The €16.2 M investment will run for three years from Sep 2016 until Sep 2019. The project will demonstrate several conversion platforms for five different feedstock-toproduct value chains up to pre-industrial scale. The consortium will plans to pursue the commercialization of the most promising value chains. Original Source: Chemical Fibers International, Dec 2016, 66 (4), 175 (Website: http://www.chemical-fibers. com/) © Deutscher Fachverlag GmbH 2016.
Nanosilica market to grow to $5.1 bn by 2025 The global nanosilica market is expected to reach $5.1 bn by 2025, according to a new report by Grand View Research Inc. The rubber industry emerged as the largest application segment for the demand of nanosilica supported by substantial growth from the automotive industry. P-type nanosilica was estimated as the largest product segment in 2015 and is expected to continue the trend over the forecast period. The P-type product is extensively utilized by various applications
June 2017
1-3
Reshaping of the chemical industry in the GCC Chemicals future-oriented spending down in 2016 Oil price roils petrochemicals in 2Q 2017 North America: slow growth likely to spur more M&A Top 50 US chemical producers of 2016 BIOFOREVER: from wood to value-added chemicals Nanosilica market to grow to $5.1 bn by 2025 China could form new chemical giants
COMPANY NEWS
3-4
4-6
Arkema's inaugurates new speciality molecular sieve production Topsoe technology chosen for large Uzbek gas-to-liquids project Global Bioenergies successfully scales up isobutene process INEOS mulls propane dehydrogenation (PDH) unit in Europe Dongguan chooses Clariant and CB&I for Chinese project BASF expands mobile emissions catalysts capacity with new facility BASF invests in high performance silica adsorbents in Germany HPCL to use Honeywell UOP technology for clean fuels Axens increases capacity in France ExxonMobil announces $20 bn investment in US Gulf Coast Borealis aims to dodge oversupply Honeywell technology selected for China’s largest petrochemical project Honeywell UOP to provide technology for Jordanian refinery LyondellBasell to supply ACP PE technology to Chinese project Yantai Wanhua commences operation at single-train PDH facility in China
NEW TECHNOLOGY
6
PATENTS
7
UC Berkeley and BASF announce five-year collaboration extension Japanese announce new on-site ammonia production technology Technip Zimmer: cooperation with METabolic Explorer
BASF settles patent dispute Method for producing high-concentration alcohol Electrolysis system for chlorine production Separation, storage, and catalytic conversion of fluids using ITQ-55 Method for preparing caprolactam Process and catalyst for resin hydrogenation
BOOKSHELF
7
Concepts of Modern Catalysis and Kinetics Strategies for Pd-Catalyzed C-H Bond Functionalization Chemical Reaction Kinetics: Concepts, Methods and Case Studies
EVENTS
JOHN GOODENOUGH’S ENCORE BATTERY "I would rather have questions that can't be answered, than answers that can't be questioned.'' – Richard Feynman
Clariant starts 2017 with strong sales and improved absolute EBITDA Clariant catalysts contribute significantly to emission control in China Clariant highlights sustainability- and efficiency-focused gas processing Global Bioenergies secures EU funding for its new value chain CB&I inaugurates PP technology pilot plant Grace reports 1Q 2017 results: Grace Catalysts Technologies Tosoh reports on its consolidated Speciality Group results for FY 2017 Virent to commercialize BioForming technology BASF profiting from a strong oil price Honeywell delivers $1.71 earnings per share, up by 10% BioAmber: higher sales of bio-succinic acid
NEW PLANTS
AN INTERNATIONAL NEWSLETTER MONITORING TECHNICAL AND COMMERCIAL DEVELOPMENTS IN THE MANUFACTURE AND USE OF CATALYSTS ISSN 1351–4180
8
Has Professor John Goodenough done it again? Could this be the materials science discovery that fundamentally changes the way we think about lithium batteries? In January, Goodenough together with three co-workers at the University of Texas, published results describing an all-solidstate battery cell that may lead to safer, more rapidly-charging, higher charge-density, rechargeable batteries [1]. Key to the breakthrough is the replacement of the liquid electrolyte with a special form of glass. The solid glass electrolyte blocks the development of structures known as "dendrites'' that have plagued Li batteries for years. The improved design also includes a pure lithium or sodium anode. The battery cell can operate at temperatures as low as -20 degrees Celsius. In fact, this is the first all-solid-state battery cell that could operate at temperatures lower than 60 degree Celsius, which would allow it to power cars in sub-zero weather. A recently published U. S. patent application appears to disclose more details of the invention [2]. It is likely the first of several patent applications covering the invention that are assigned to the University of Texas Board of Regents. If the discovery can be commercialized, it could truly revolutionize handheld mobile devices, electric cars, and stationary energy storage. Goodenough estimates that the new battery technology could lead to products that store five to ten times as much energy as the current standard lithium batteries. Understandably, the significance of this development has not been lost on the scientific community. The publication has generated intense interest among leading scientists [3,4]. Such claims have also generated a fair number of skeptics. Several scientists contend that the results possibly violate the laws of thermodynamics. No one outside of his group claims to completely understand the new concept or how the new technology works. However, the University of Texas group contends that the results are reproducible and real. Goodenough, who is often referred to as "Father of the Lithium Battery'' has been previously associated with three major breakthroughs in lithium battery technology. In 1980, at the age of 57, Goodenough, working with two postdoctoral associates, invented the cobaltoxide cathode. This cathode is the single most important component in every lithium-ion battery.
The invention was first commercialized in 1991 by Sony, who went onto incorporate it into its breakthrough video and digital cameras. Two years later, Goodenough's laboratory developed a manganese spinel based cathode that was cheaper and safer than the cobalt-oxide cathode. The spinel had the additional advantage that it could charge and discharge faster than the sheet-like cobalt-oxide. Further work on the spinel structure led to the third major discovery, an ironphosphorus compound known as olivine. Goodenough's laboratory managed to extract lithium from the olivine structure and reintroduce it through intercalation. The lithium-iron phosphate technology became the basis for the establishment of the battery company, A123. Goodenough has received numerous awards for his work. He received the National Medal of Science from President Barack Obama in 2011. With this current discovery, at the age of 94, he may have made his most significant scientific breakthrough yet. Tom Degnan [1] M. H. Braga, N. S. Grundish, A. J. Murchison, and J. B. Goodenough, "Alternative strategy for a safe rechargeable battery,’’ Energy & Environmental Science, 2017. [2] J. B. Goodenough, M. H. Braga, J. Do Amaral Ferreira, P. Singh, "Water solvated glass/amorphous solid ionic conductors,’’ U.S. Patent Appl. 20160368777 A1, 22 DEC 2016, assignee: Board of Regents, Univ. of Texas. [3] B. Lynne, "US Inventor’s Battery Could Change the World. . . Again,’’ VOA Learning English, 13 MAY 2017 (Website: https://learningenglish.voanews.com). [4] UT News, "Lithium-Ion Battery Inventor Introduces New Technology for Fast-Charging, Noncombustible Batteries,’’ 28 FEB 2017, (Website: https://news.utexas. edu/2017/02/28/goodenough-introduces-new-batterytechnology) © University of Texas, 2017.
MARKETS AND BUSINESS Reshaping of the chemical industry in the Gulf Cooperation Council Oil-driven economies in the Middle East, particularly those in the Gulf Cooperation Council
CATALYSTS CATALYSTS CATALYSTS CATALYSTS CATALYSTS CATALYSTS
FOCUS (GCC), have experienced challenges in oil and gas exports during the past three years. Rising oil prices worldwide, faltering demand in Western Europe and new gas-based capacities in China, Iran and the US have curtailed competitiveness in the petrochemical sector. These factors have forced the industry to alter course towards diversification and value addition, in the form of cross-border joint ventures (JV) and partnerships on speciality chemical projects. Sadara, a Dow Chemical-Saudi Aramco JV, has pledged $20 bn to build a 3 M tonne/y petrochemical complex in Al Jubail, Saudi Arabia. SABIC has sought overseas projects like a coal-to-chemicals unit in China and a shale gas-based JV unit (with ExxonMobil Chemical) in the US Gulf Coast. Original Source: Chemical Weekly, 11 Apr 2017, 137138 (Website: http://www.chemicalweekly.com) © Sevak Publications & Chemical Weekly Database P Ltd 2017.
Future-oriented spending in chemical sector down in 2016 In 2016, global capital and research and development (R&D) expenditures dropped because of political upheaval, economic uncertainty, and bottom-line-oriented efforts to sustain strong earnings amid dull projections for growth. As a result, most chemical producers diverted finances away from R&D and away from new facilities and equipment. C&EN's yearly R&D spending survey indicates that 19 large European and US chemical companies collectively slashed 2016 research outlays by 5.2% to $9.7 bn. The pullback follows a 0.4% budget increase in 2015, when the companies invested $10.3 bn on R&D. Spending for the group of 18 firms (excluding Evonik Industries as 10 years of data are not available) marginally grew by over 1% after adjusting for inflation. Budgets expanded by roughly 21% without considering inflation. Total sales for the group dropped in 2016, pushing the company sales' share dedicated to R&D to 3.5%. Capital spending for the 19 chemical companies dropped in 2016. The group lowered investment on new facilities and equipment by 15.3% to $18.6 bn. In 2015, this figure also dropped by 3.3%. In 2014, the group's capital outlays attained a decade high of $22.7 bn. Research budgets declined by 34.5% of collective future-oriented spending in 2016 for the 18 firms. C&EN provided short profiles of the future-oriented spending budgets of the chemical market's five leading investors in R&D. In 2016, the R&D investment of BASF, the world's biggest chemical company, stood at $2.06 bn. 3 M, a diversified producer of materials and consumer products, invested $1.74 bn in 2016. The company spends 5.8% of its sales on R&D. DuPont invested $1.64 bn on R&D in 2016. The company slashed R&D investment by 13.5% in 2016, abolished its Central Research & Development organization, and laid off nearly 200 scientists at the R&D unit in Wilmington, DE, US. Dow Chemical spent $1.58 bn in R&D in 2016 and employed 7200 scientists at the end of 2016, an increase from 6800 in 2015. Dow also intends to build an innovation centre at its headquarters in Midland, MI, which will create 100 R&D jobs. Evonik Industries spent $485 M in R&D in 2016 and will invest nearly $4.4 bn on R&D until 2025. In 2016, the company applied for roughly 230 patents, and patent-driven sales represented 56% of its $14.1 bn sales. Two tables show the research investments and capital outlays of 19 major chemical companies from 2011 to 2016. Two line
2
ON
C ATA LY S T S
graphs show the R&D and capital spending trend for the 19 companies from 2006 to 2016. Original Source: Chemical and Engineering News, 17 Apr 2017, 95 (6), 20-22 (Website: http://cen.acs.org/ index.html) © American Chemical Society 2017.
Oil price roils petrochemicals in 2Q 2017 On 4 May 2017, the plunge of the global futures prices of crude oil dragged both Jul 2017 Brent and Jun 2017 WTI to $48.38/barrel and $45.52/ barrel, respectively. This would pose major challenges to the chemicals sector, which has just experienced a strong 1Q 2017 amid tight supply and improving demand. In effect, prices have and may continue to plunge for Chinese para-xylene and northeast Asian ethylene. Shell has announced its year-on-year results for 1Q 2017. Earnings excluding costs and other items reached $540 M, while underlying chemicals earnings rose from $377 M to $836 M. Plant availability rose from 88% to 93%, and may further continue based on better performance of its 960,000 tonne/y cracker in Pulau Bukom, Singapore. INEOS has raised its estimate for US ethylene operating rates from 85% to as high as 90%. A table shows the sales and profit figures ($M) of key chemical firms for 1Q 2017, with BASF ($17,976 M; $2620 M) leading ahead of Dow Chemical ($13,230 M; $2704 M) and LyondellBasell ($8430 M; $1617 M). Original Source: ICIS Chemical Business, 12-18 May 2017, 291 (19), 10-11 (Website: http://www.icis.com) © Reed Business Information Limited 2017.
North America: slow growth likely to spur more M&A Slow growth will possibly result in mergers and acquisitions (M&A) of chemical firms, which could boost the companies' earnings through synergies. The M&A activity in the petrochemical industry could be fuelled by depressed prices of crude oil and natural gas. The merging of ChemChina and Syngenta; Dow Chemical and DuPont; and Bayer and Monsanto resulted from the sluggish agriculture sector. Weak fertilizers demand caused the merging of Agrium and PotashCorp. Industrial gases companies Linde and Praxair are also merging. Airgas has been purchased by Air Liquide. In the paints and coatings industry, Valspar is being bought by Sherwin-Williams, while PPG Industries is bidding to take over AkzoNobel, which includes a mix of equity and cash. The takeover cost multiple of Vaspar exceeds the company's annual earnings before interest, tax, depreciation and amortization (EBITDA) by over 15 times. The large speciality chemicals segment of AkzoNobel could be sold by PPG. It is anticipated that more M&A activities will occur in the coatings sector, which could boost the competitiveness of the small and medium-sized firms. A line graph displays the GDP in constant prices of the US and worldwide from 2010 to 2020. Original Source: ICIS Chemical Business, 12-18 May 2017, 291 (19), 17 (Website: http://www.icis.com) © Reed Business Information Limited 2017.
Top 50 US chemical producers of 2016 The top 50 chemical companies in the US had total sales of $259.9 bn in 2016, down 5.6% year-
on-year according to C&EN's annual ranking. Dow Chemical led the list with sales of $48.2 bn for 2016, a 1.3% year-on-year drop. ExxonMobil is ranked second with sales of $26.1 bn, a decline of 7.4%. Dow Chemical is also the biggest chemical firm in terms of market capitalization, increasing by 20.5% in 2016 to successfully displace 2015's frontrunner DuPont. Chemours, a DuPont spin-off, has the biggest chemical stock in 2016. Five firms in the C&EN ranking have disappeared in the list due to acquisitions. These are Dow Corning, Sigma-Aldrich, Cytec Industries, Axiall, and Arizona Chemical. Acquisitions benefited other firms like Olin, which is now ranked at the seventeenth position. New firms at the list are AdvanSix, Versum Materials, GCP Applied Technologies, Williams Partners and Calgon Carbon. Some firms are expected to disappear from the list for 2017, including Dow and DuPont; and Chemtura and Williams. ExxonMobil posted $219 bn of sales for 2016, of which 11.9% was attributed to petrochemicals, while Chevron Phillips Chemical had earnings after tax of $1.7 bn. The firm that tops the foreign ranking is BASF. A table shows the top 50 US chemical firms for 2016. Two other tables show the top 25 foreign-owned firms for 2016 and the market capitalization of chemical firms in 2016. Original Source: Chemical and Engineering News, 8 May 2017, 95 (19), 20-23 (Website: http://cen.acs.org/index. html) © American Chemical Society 2017.
BIOFOREVER: converting of biomass from wood to value-added chemicals The Bio-Based Industries Joint Undertaking (BBI JU) public-private partnership between the European Union and the Bio-based Industry Consortium recently commenced the BIO-based products from FORestry via Economically Viable European Routes (BIOFOREVER) project to show the feasibility of transforming lignocellulosic feedstocks into high added value products and chemical building blocks. There are 14 European firms working on the BIOFOREVER project, including Avantium, API Europe, DSM NV, Borregaard AS, nova-Institute GmbH, MetGen Oy and Suiez Environement. The €16.2 M investment will run for three years from Sep 2016 until Sep 2019. The project will demonstrate several conversion platforms for five different feedstock-toproduct value chains up to pre-industrial scale. The consortium will plans to pursue the commercialization of the most promising value chains. Original Source: Chemical Fibers International, Dec 2016, 66 (4), 175 (Website: http://www.chemical-fibers. com/) © Deutscher Fachverlag GmbH 2016.
Nanosilica market to grow to $5.1 bn by 2025 The global nanosilica market is expected to reach $5.1 bn by 2025, according to a new report by Grand View Research Inc. The rubber industry emerged as the largest application segment for the demand of nanosilica supported by substantial growth from the automotive industry. P-type nanosilica was estimated as the largest product segment in 2015 and is expected to continue the trend over the forecast period. The P-type product is extensively utilized by various applications
June 2017