af868628-dad1-4837-86b9-b58a1f5c6cd1

TRANSFORMATION
ICB GOING
DIGITAL IN 2017
SEE P5 FOR DETAILS
CP CHEM START-UP
The Cedar Bayou, Texas,
complex is scheduled to
commence operations
in second half 2017 12
US TOLUENE
Shale gas may cut

supply as the switch
to ethane cracking will
lower aromatics mix 38
17-23 October 2016
Chemical Business
MAKING SENSE OF CHEMICAL PRICES

ICIS AWARDS
INNOVATION
CHAMPIONS
We unveil this years winners in the
prestigious ICIS Innovation Awards
Chemical Business
VOLUME 290 NUMBER 13
17-23 OCTOBER 2016
TRANSFORMATION
ICB GOING
DIGITAL IN 2017
SEE P5 FOR DETAILS
CP CHEM START-UP
The Cedar Bayou, Texas,
complex is scheduled to
commence operations
in second half 2017 12
US TOLUENE
Shale gas may cut

supply as the switch
to ethane cracking will
lower aromatics mix 38
17-23 October 2016
Chemical Business
MAKING SENSE OF CHEMICAL PRICES

ICIS AWARDS
INNOVATION
CHAMPIONS
COVER STORY
We unveil winners of the
2016 ICIS Innovation
Awards
For the full story see
Special Supplement
Distributors have very ambitious European

expansion plans P9
NEWS
BRIEFING
6 EU Q2 chem sales, prices down on
global economy
6 INOVYN completes Europe ECH turnaround
7 Marathon sues BP over Texas refinery sale
8 Ube to increase nylon capacity in Spain
FOCUS
9 Distributor KTM aims to go public
TRENDS

MARKET INTELLIGENCE
10 Tea time and battering

11 CP Chem outreach draws workers
PRICES & MARKETS
12 CP Chem eyes 2017 cracker start-up

13 Supply swamps NE Asia ethylene prices.
The cracker will lack the feedstock flexibility of Chevron

Phillips other plants, as it will use only ethane P12. Sales of
Covestro MDI and TDI are interrupted on force majeure P17
US EPS prices rolling over in October

14 India domestic phenol pushes higher on
Shell
15 Vinyl acetate monomer may rebound on
supply.
Butadiene rise may continue
17 Etac import woes prop up prices.
Covestro declares FM on MDI, TDI
18 Q4 titanium dioxide contracts increase on
margins.
HDPE sees oversupply, low demand
20 Methyl methacrylate anticipates Middle
East imports.
Turkish PP demand levels improving
21 PS steady amid the holidays.
US C3 spike catches players off guard.
US October etac hikes likely to take hold
MARKET OUTLOOK
24 Ashland focuses on solutions
CHEMICAL PROFILE
38 Spot toluene prices in the US have been in a
fairly narrow range within the past months
39 Spot prices of Asias nylon textile chips
trend closely to feedstock capro prices
REGULARS
5 Commentary
35 Whats on
36 Conferences & Events
37 Marketplace
SPECIAL REPORTS
27 K Show Polymer companies are gearing

up for this years K Trade Fair
Innovation Awards A strong shortlist
proved challenging when deciding the
category and overall winners this year
PLANTS & PROJECTS

23 New projects and permanent plant
shutdowns, 3-9 October
Independent pricing information, news and

analysis for more than 120 global commodities
Sign up for free market updates at www.icis.com/keep-in-touch
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17-23 October 2016 | ICIS Chemical Business | 3
Chevron Phillips/Herbert Kehrer/imageBROKER/KeystoneUSA-ZUMAREXShutterstock/
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We unveil this years winners in the

prestigious ICIS Innovation Awards
The 4th ICIS Asian

Polyolefins Conference
22-23 November 2016 // Anantara Riverside, Bangkok, Thailand

NEW FOR 2016:
Analysing US market trends A PE powerhouse in the making?
What does the slowdown in China mean for polyolefins?
Iran A new player in the market
China The PP export market of the future?
ALREADY CONFIRMED SPEAKERS INCLUDE:

Laurence Jones, Vice President Packaging, BOROUGE
Olivier Treuer, Executive Director, MORGAN STANLEY
Mark Saurin, Commercial Vice President, Packaging &
Speciality Plastics, DOW
John Richardson, ICIS Consultant - Asia, ICIS
What do emerging trade dynamics mean for supply chain
Qu Liang, Analyst, PETROCHINA PLANNING &

ENGINEERING INSTITUTE
and logistics?
And many more
Media Partner:
Visit: www.icisconference.com/aspolyolefins
Call: +44 (0)20 8652 4659 Email: events.registration@icis.com
4 | ICIS Chemical Business | 17-23 October 2016
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COMMENTARY
JOSEPH CHANG NEW YORK
ICB to go Digital in 17
ICIS Chemical Business is going Digital in early 2017 with enhanced capabilities and a brand
new premium website. Join us on our journey and transformation in the Digital age!
e are delighted to announce the

upcoming launch of our new digital-only ICIS Chemical Business
magazine in early 2017! In todays
digital world, our goal is to bring
you the very best experience and
functionality to serve your evolving information needs.
Starting in early 2017, the print edition of ICIS Chemical Business will be replaced by access to a digital
package consisting of a new look e-magazine and a premium magazine website with enhanced viewing and
search capabilities.
Rest assured we remain dedicated to bringing you
the most up-to-date and relevant content to make sense
of chemical prices and markets around the world. This
includes macro factors and trends impacting the supply
chain such as global trade and arbitrage, project activity,
and mergers and acquisitions.
You will continue to get expert and unparalleled
market coverage from our team of over 250 experienced
global pricing and news editors, along with ICIS consultants in the Americas, Europe and Asia.
While ICB is indeed going Digital, ICIS custom publishings extensive conference and client print publications will continue as before.
We are committed to delivering the best for our customers and ensuring our products evolve in line with
your current and future needs. Moving to this platform
allows us to invest in a truly digital experience and
meet your expectations around content delivery.
Plus theres a sustainability benefit! From our move
to digital, we will save 25 tonnes of paper annually, as
well as all the fuel needed to make physical deliveries.
If you are not registered for

digital delivery, sign up at
www.icis.com/web
Do you agree?
Email joseph.chang@icis.com
www.icis.com
The new digital offering will include a host of additional features. They include:
Faster PDF download and print: Quick and easy
download/print to read offline or on the go!
Chemical Profiles: Find a profile in just a few clicks
Search: Browse our extensive archive of articles spanning over a decade
ICB news as it breaks: Continuous delivery of content
throughout the week
Most popular articles: See whats trending among
your peers
Save and share: Quickly and easily organise and share
content at your convenience
Enhanced page-turner experience: Interactive content
and user friendly article view
A digital ICB will bring the best in functionality and content

Improved accessibility across all devices: Access ICB
content on desktop, tablet or mobile
The digital package will also include three extra FREE
special editions of ICB
You do not need to do anything at the moment. Your
subscription will not be affected and will continue as
usual. We will be in touch over the coming months with
everything you need to know regarding access to the
new digital offering.
ICIS Chemical Business has a long history, spanning
well over 100 years with legacy publications Oil, Paint
and Drug Reporter (OPD) which became Chemical Market Reporter, along with European Chemical News
(ECN) and Asian Chemical News (ACN).
Please join us on our next journey and transformation
through the digital age! We are confident we will meet
and exceed your expectations in terms of ease of use,
enhanced capabilities and value of content.
Get an advanced preview of the new functionality and help
us shape your ICB by taking part in customer testing. If
you would like to be considered, please email us at
icbenquiries@icis.com.
If you have any questions or concerns around the move

from print to digital, please visit our FAQ page at
www.icis.com/icb/#icb-qanda or contact us at csc@icis.com
NEWS
For real-time news and analysis

from our global team of reporters, visit:
icis.com/about/news
BRIEFING
Finbarr Webster/REX/Shutterstock
EUROPE
BASF SHARES UP ON
BETTER-THAN-FEARED Q3
BASF shares rose on 12 October

after the German chemical majors
better-than-expected third-quarter
earnings, but the company added
the full-year figure will still be
below 2015s level. BASF published on 11 October preliminary
results for the July-September quarter showing sales of 14bn and
earnings before interest and taxes
(EBIT) at 1.5bn, 20% and 22.5%
below the levels achieved in the
third quarter of 2015. However, the
company said the results were
above chemical analysts estimates.
SHORT TURNAROUND AT
INEOS ETHANOL PLANT
Synthetic ethanol producer INEOS

is carrying out a short turnaround
at its ethanol plant in Herne, Germany during October, a company
source said on 11 October. Maintenance work lasting 10 days would
occur at the Swiss-headquartered
chemical groups factory, which
can produce up to 140,000 tonnes
of ethanol per year according to
ICIS Plants & Projects database.
The scheduled turnaround is not
expected to have any impact on
supply, the source said.
RUSSIA APPROVES CHEMICAL

PACKAGING REGULATIONS
Russia has approved new chemical product safety regulations, including packaging and labelling
requirements, according to its government press service on 11 October. The new rules - effective from
1 July 2021 - are to ensure the safety of individuals, businesses and
government institutions, as well as
environmental safety, it said in a
statement. The regulations, in accordance with the UN Globally
Harmonised System of Classification and Labelling of Chemicals,
do not apply to certain substances.
INOVYN COMPLETES EUROPE

ECH TURNAROUND,
INOVYN has completed a planned

turnaround on epichlorohydrin
(ECH) production at one of its two
ture growth. During the second

quarter, moreover, the export-intensive EU chemical industry
suffered a decrease in sales to
overseas territories of 5%.
GERMANY PRODUCTION RISES

AMID FADING BREXIT FEARS
ECONOMICS
UK sterling hits historic low

Concerns about the impact of the UK vote to leave the EU, or Brexit,
on the countrys economy sent the pound plummeting to its lowest
level ever against a basket of major currencies on 11 October.
European sites, a company source

confirmed on 11 October. The
source said that the shutdown was
a normal part of the companys annual plan but that the restart had
taken slightly longer than foreseen.
The shutdown was initially expected to last for around 10 days.
INOVYN has two ECH production
sites in Europe; Tavaux in France
with a 50,000 tonne/year capacity
and Rheinberg in Germany with a
60,000 tonne/year capacity.
EU, EUROZONE AUGUST

CHEMICALS OUTPUT UP
EU August chemicals output increased by 0.3% from July while

production capacity in the eurozone rose by 0.7%, statistics agency Eurostat said on 12 October.
Output in Germany, the eurozones
largest chemical producing country, switched from a decline last
month to rise by 0.9% while
Frances capacity increased by
2.8%. Major chemicals producer
the Netherlands registered a 1.6%
fall in output from the previous
month while Italy was flat. Eurostat did not provide year-on-year
figures for chemical output.
GERMANY INVESTOR
CONFIDENCE IMPROVES
Germanys investor confidence improved in October, reflecting relatively robust economic activity,
the countrys ZEW economic research group said on 11 October,
citing its monthly confidence survey and index. The ZEW index
gained 5.7 points from September,
and now stands at 6.2 points well
below its long-term average of 24.1
points. ZEW president Achim
Wambach said Octobers positive
impulses from industry and exports should not distract from political and economic risks.
EU Q2 CHEM SALES, PRICES

DOWN ON GLOBAL ECONOMY
The EU chemical industry suffered decreases in sales and prices in the second quarter of 5.2%
and 5.7% respectively year on
year while output fell 0.6%,
Cefic said on 10 October. The
trade group said the worlds
economy had suffered a setback
in the third quarter, adding that
the European chemicals business climate is currently stable
but lacking dynamics for fu-
Germanys production from industry, energy and building and

construction rose 2.5% in August, from July, with output in
the chemicals and pharmaceuticals sector also rising, according
to official data released on 7 October. Analysts said that the increase in production, along with
a jump in Augusts manufacturing orders and a recent brightening of key indicators showed
that Europes largest economy
has withstood impacts from the
UKs June referendum vote to
leave the EU (Brexit).
CEFIC PRESIDENT VOWS TO

KEEP EU CHEMS COMPETITIVE
European chemicals have ahead

of them the challenge of keeping
the industry in the region competitive despite five decades of
movement of the centre of gravity for chemicals east toward
Asia, the new president of the European Chemical Industry Council (Cefic) said on 7 October. Hariolf Kottmann, also CEO of Swiss
chemical major Clariant, added
that the European chemical industry is still large, and the diversity of its portfolio makes it indispensable for the economy
and the daily lives of citizens.
ECHA TELLS EUROPE CHEMS

TO STOP COMPLAINING
The European chemicals industry should stop complaining

about the Reach regulation, get
on with the job of registering
their substances in structured,
clear dossiers and set an example for the rest of the world, the
executive director at the European Chemicals Agency (ECHA)
told an industry event late on 6
October. Geert Dancet, invited
by the European Chemical Industry Council (Cefic), warned
there is still a lot of work to do,
www.icis.com
NEWS
Distributor KTM
aims to go public
Marja Airio/REX/Shutterstock
NEWS FOCUS P9
Dancet urges industry action

and added that the Helsinkibased agency will collaborate
with the industry.
AMERICAS
MARATHON SUES BP OVER
TEXAS REFINERY SALE
Marathon Petroleum is suing BP for

breach of contract in the 2012 sale
of a Texas City, Texas, refinery. According to federal court documents,
BP allegedly delivered the refinery
and three products terminals in
Tennessee, North Carolina and Florida in conditions that did not comply with federal regulations. The refinery, which experienced an
explosion in 2005, a 2010 benzene
leak and incidents in 2016, was sold
to Marathon for $2.5bn. A BP
spokesman said the suit is nothing
more than an attempt by Marathon
to renegotiate the terms.
IFF APPOINTS OLEARY AS

NEW CFO; CORNELL DEPARTS
International Flavors & Fragrances (IFF) has appointed Richard

OLeary as its new CFO, effective
immediately. OLeary, who was
IFFs controller and chief accounting officer, succeeds Alison
Cornell. Cornell, who is leaving
the company, became CFO in
July 2015. At the time, she succeeded OLeary, who had taken
over as interim CFO after Kevin
Berryman left IFF to join US energy and petrochemicals engineering major Jacobs as CFO.
BRAZILS RETURN TO HEALTHY

GDP A LONG WAY OFF
Substantial growth in the Brazilian

economy may not happen until
www.icis.com
2019, an oleochemicals industry executive says. Some say next year

2017 will be better, but in reality
[Brazil] will not recover for three
years, said Leonardo Nasser Gardemann, CEO of Brazil-based oleochemical producer and distributor
Meridional TCS. He made his comments at the 2nd ICIS Pan American Oleochemicals Conference in
Miami. Gardemann said the legacy
of impeached President Dilma
Rousseff and her government must
be scrubbed away before Brazil
truly begins to grow again.
PHILLIPS 66 PARTNERS TO
FINANCE ACQUISITION
Phillips 66 Partners has priced senior notes offerings to help finance

its acquisition of 30 crude, refined
products and natural gas liquids
(NGL) logistics assets from refiner
Phillips 66 for about $1.3bn. The
company priced a $500m aggregate principal amount of 3.55%
unsecured senior notes due 2026,
and a $625m aggregate principal
amount of 4.90% unsecured senior
notes due 2046. Phillips 66 Partners was formed by Phillips 66 as a
master limited partnership (MLP).
LYONDELLBASELL ENDS
FORCE MAJEURE ON US LLDPE
LyondellBasell has ended the force

majeure on linear low density polyethylene (LLDPE) material that
was declared in mid-May. In a letter dated 11 October, the company
said the force majeure declared 17
May for plants in Morris, Illinois,
and La Porte, Texas, was over, effective immediately. The Morris
unit has a capacity of 295,425
tonnes/year. La Porte has a capacity of 355,000 tonnes/year. Sources
said earlier this month that the Illinois unit was operating, but had
not made enough material to lift
the force majeure at that time.
KP ENGINEERING WINS
CONTRACT FOR EXPANSION
KP Engineering (KPE) has been

awarded a contract to expand carbon monoxide production at USbased industrial gases major
Praxairs plant in Geismar, Louisiana. Capacity and financial details
of the expansion project, which is
expected to be completed in 2018,
were not disclosed. The overall
scope of KPEs contract includes en-
VOICES FROM THE WEB

BP has decided not to go ahead with its controversial plans to
drill for oil in the commonwealth marine reserve in the Great
Australian Bight.
The Guardian Environment BP ditches plans to drill.
www.theguardian.com/uk/environment
Two years ago, the Saudis government put in place a strategy

intended to protect its position in the world oil market. The
plan was to increase their production to the point where prices
fell. The aim was to squeeze other producers, in particular the
US shale industry, and force them to cut output.
Financial Times Nick Butler on Saudis strategic failure.
www.ft.com/nick-butler
Commercial FDCA (furandicarboxylic acid) production will be

coming soon as Avantium and BASF formally announced the
formation of Synvina, a joint venture to be based in Amsterdam, the Netherlands, that will produce and market FDCA as
well as market the new polymer, polyethylenefuranoate (PEF)
based on FDCA.
Green Chemicals Blog BASF, Avantium form Synvina JV.
greenchemicalsblog.com
The three 2016 Nobel Laureates in Chemistry have miniaturised machines and taken sustainable chemistry to a new
dimension.
SusChem Blog on 2016 Nobel Prize for Chemistry.
suschem.blogspot.co.uk
Oil prices pulled back after the monthly report said global
supplies rose in September.
Wall Street Journal on oil prices fall.
www.wsj.com/news/business/energy-oil-gas
Check out the ICIS blogs at icis.com/blog
MOST-READ
The top five stories for the week just gone:
1 Covestro declares FM on MDI and TDI in Europe
LONDON Covestro has declared FM on production of methyl di-pphenylene isocyanate (MDI), toluene di-isocyanate (TDI).
2 Shell Singapore to restart cracker complex in next few weeks
SINGAPORE Shell expects to restart its cracker complex at Pulau
Bukom in Singapore in the next few weeks.
3 Sasols new US complex in Louisiana now half complete
HOUSTON Sasols new world-scale Lake Charles Chemicals
Project (LCCP) in Louisiana is about half complete.
4 Shell could restart Singapore cracker in late October
SINGAPORE Shell is expected to restart in late October its
cracker at Pulau Bukom in Singapore.
5 NE Asia ethylene market under pressure from ample supply
SINGAPORE Spot ethylene prices in northeast Asia may remain
under pressure despite the outage at Shells Singapore cracker.
These are the most read stories taken from ICIS news last week.
To find out more visit: icis.com/about/news
NEWS
CANEXUS APPOINTS NEW

BOARD CHAIR, EVALUATES BID
Canada-based chlor-alkali and sodium chlorate producer Canexus

has appointed David Collyer as
new chairman of its board of directors. Collyer is a former Shell
executive, and until recently led
Canadas oil industry trade
group, the Canadian Association
of Petroleum Producers. He succeeds Hugh Fergusson as Canexus chairman. Fergusson passed
away on the night of 3 October.
Earlier on 3 October, Canadabased Chemtrade launched a hostile takeover bid for Canexus.
CITGO GETTING REFINERY

READY FOR RESTART
Representatives from the governments of Aruba and Venezuela,

along with officials from Petroleos de Venezuela (PDVSA) and
Citgo, gathered at the main gate
of Arubas Citgo refinery on 7
October to mark the start of activity which will lead to the
eventual restart of the plant. The
refinery, which can produce
209,000 bbl/day, has been idle
since 2012. Citgo said the refinery will undergo a refurbishing
process and it is expected to be
fully operational in the next 18
to 24 months.
MALAYSIAS PALM OIL STOCK

RECOVERS IN SEPTEMBER
Malaysias palm oil stock observed an increase in September

following its year-low reading in
August, official data from the
Malaysian Palm Oil Board indicated. Malaysias closing crude
palm oil (CPO) stock in September rose to 893,187 tonnes from
756,789 tonnes in August, reflecting an 18% month-onmonth increase but a drop of
around 43% year on year.
TAIWANS FPCC SEPTEMBER

SALES FALL 11.4% ON YEAR
Formosa Petrochemical Corp

(FPCC) posted an 11.4% year-onyear decline in September revenues to New Taiwan dollar (NT$)
40.9bn ($1.3bn), the Taiwanese
producer said. On a month-onmonth basis, September sales
slipped by 2%, based on data
posted on FPCCs website. For
the first nine months of 2016,
total revenues shrank 17.8% year
on year to NT$393.9bn.
UBE TO INCREASE NYLON

CAPACITY IN SPAIN
Ube Industries plans to increase

nylon manufacturing capacity by
40,000 tonnes/year at its subsidiary unit, Ube Corporation Europe
(UCE), in Castellon, Spain, the

Japanese company producer said
on 12 October. The expansion
project, which brings its Castellon
sites total capacity to 70,000
tonnes/year, is scheduled to begin
operations in February 2018, the
company said. The company is
also building a new compounding
facility in the same location which
will start operation in August
2017, according to Ube.
axylene (PX) unit at Nanjing in

end-October, a source with
knowledge of the matter said.
The unit will be restarted by
end-October after some repair
works, the source said. The
plants reformer caught fire while
in the midst of a restart following
a shutdown which started in late
August this year.
LOTTE FINE CHEMICAL MAY

LOWER OPS AT ULSAN ECH
Shenhua Xinjiang Mining Co

will shut its 450,000 tonnes/year
polypropylene (PP) and 270,000
tonnes/year linear low density
polyethylene (LDPE) units in
Xinjiang on 20 October for maintenance, a company source said.
The PP and LDPE units are expected to be restarted on 15 November, according to the source.
The two units started commercial production earlier on 2 October after an upstream 6.8m
tonnes/year naphtha cracker was
started up on 28 September.
South Koreas Lotte Fine Chemical

may lower the operating rate of its
120,000 tonne/year epichlorohydrin (ECH) plant in Ulsan to 50% in
November due to weak demand, according to a company source. Lotte
Fine Chemical had lowered its run
rate from 80% to 70% in September. The company is the largest Korean producer of ECH. Spot import
prices of ECH were assessed as unchanged in the previous week
ended 4 October amid a persistent
wide buy-sell gap in the Chinese
market, according to ICIS data.
MIDDLE EAST/AFRICA
SINOPEC PLANS END-OCT

RESTART OF NANJING PX UNIT
SHELL SIGNS DEAL WITH

NPC TO STUDY PETCHEMS
Chinese state-owned chemicals

firm Sinopec is planning to restart its 720,000 tonnes/year par-
ASIA
COVESTRO DOUBLES
POLYCARBONATE CAPACITY
Germanys Covestro will double

its polycarbonate production capacity at its Shanghai site to
400,000 metric tonnes/year to
satisfy growing demand, the
company said on 12 October.
The inauguration of two new
production lines for polycarbonate reins makes Covestro the
worlds largest producer of such
resins, the company said. The
new Chinese production lines
come after another plant was
opened at the same site earlier
this year which is capable of producing up to 50,000 metric
tonnes of HDI/year.
CHINAS SHENHUA XINJIANG

MINING TO SHUT PP, PE UNITS
Miller Transporters
gineering, procurement and construction. Praxair previously said it

plans to invest $100m to expand its
Geismar syngas processing unit in
response to growing demand.

icis.com/about/news
Irans National Petrochemical Company (NPC) and Shell have signed a

letter of intent to study new petrochemical projects in Iran, Irans oil
ministrys news agency SHANA reported. Shell has not issued an official statement on the agreement.
Iran aims to boost its current capacity from over 60m tonnes in
2016 to 100m tonnes in 2020, and
eventually to 160m tonnes in
2025, Marziyeh Shadei, NPC
managing director, was quoted as
saying by the news agency.
LUBEREF TO MARKET GROUP

II PRODUCTS IN Q3 2017
TRANSPORTATION
Miller to mark 75th anniversary

Veteran and decorated truck driver Allen Blair (second from right)
stands in front of a special tractor designed to commemorate liquid
chemicals hauler Miller Transporters 75th anniversary in 2017.
Saudi Aramco Base Oil Co (Luberef) is planning to bring into the

market the products from its new
Group II base oils facility at Yanbu,
Saudi Arabia, in mid-to-late thirdquarter 2017, a company source
said on 12 October. The unit was
previously scheduled to start up
this year but this has been pushed
to 2017 because of civil and contractual delays, the source told ICIS
at the sidelines of the 13th ICIS
Middle Eastern base oils and lubricants conference in Dubai.
www.icis.com
NEWS FOCUS
Tea time and

battering
INTELLIGENCE P10
DISTRIBUTION WILL BEACHAM BUDAPEST
Distributor KTM aims to go public
M&A
Stockmeier to expand in eastern Europe
If you want to grow

significantly, you
must have the set-up
to bring in these
acquisitions
MIKE DANNENBERG
Managing director, Stockmeier
The new business, with around

20m in sales and 30 employees,
will help Stockmeier grow in specialties distribution across eastern
Europe, Mike Dannenberg told ICIS in
an interview at the European
Petrochemical Association (EPCA)
www.icis.com
Will Beacham
German distributor Stockmeier is

near to closing an acquisition which
will significantly boost its presence
in eastern Europe, the groups managing director says.
meeting. We are close to making an

acquisition and will close the deal by
the end of the year, giving us a much
bigger footprint there, he said.
The company has grown through
acquisition activity since 2000, buying distribution groups including
Germanys Kruse, Silbermann and
a 50% stake in Staub. Dannenberg
said the company is going through
a big project to enable it to integrate its acquisitions. If you want
to grow significantly, you must have
the setup to bring in these acquisitions. For the last 12-18 months we
have put a lot of support into consolidation as we prepare for future
organic and acquisitional growth.
The company is also a chemical
producer and is currently more than
doubling production capacity for waterbased cleaning products at its
Bielefeld site in Germany, scheduled
for completion in 2017. The group
has 1,300 employees with turnover of
750m in 2015, which increases to
1.25bn once revenue from its other
shareholdings is added. It also has a
presence in France, Benelux, the UK,
Russia and the US. It has gaps in Italy
and Spain, says Dannenberg.
It is No 2 behind Brenntag in
Germany as a full-line and semispecialties distributor, according to
Dannenberg.
have several targets, are in active discussions, and hope to do

a deal this year.
He said the markets the acquisition services should be similar
to their own. KTMs distribution
portfolio includes plasticisers
and rubber chemicals, monomers, polyurethane raw materials, polymers, pigments, acetates, glycols, alcohols, acids and
anhydrides.
It is also an active trader of oil
products and derivatives, olefins and aromatics, monomers
and polymers.
At present 64% of revenues
come from Turkey, with 35%
from eastern Europe. Liquid
chemicals account for 53% of
group sales, olefins 33% and
polymers 14%.
We want to focus more on
distribution, as this is where we
can add the most value, said
Zulfikari. The company can
offer help with credit and compliance as well as supply chain
management.
Being a hybrid distributor
and trader gives the company
access to good market information on price and market trends,
which is valuable to customers,
he added.
Asked about market conditions, Zulfikari stated: Despite
We are very
interested in making
an acquisition of a
distributor with not
less than $20m sales
KEYAN ZULFIKARI
Managing board member, KTM
the political turmoil in Turkey,

its still quite a solid market,
with more than 3% GDP
growth/year.
However, KTM has delayed
plans for expansion into Middle
East markets such as Syria and
Iraq because of the difficulties
facing these countries.
These plans had included a
new storage tank farm at Yumurtalik in the south of Turkey.
The Middle East could be interesting if sanctions on Iran are
lifted, said Zulfikari.
Andreas Vitting / imageBROKER/REX/Shutterstock
in Budapest, Zulfikari said the

company has acquired a plot of
land at Marmara Ereglisi on the
European side of the Bosphorus
for the construction of a 100,000
m3 liquid storage tank farm. Permission is being sought to construct a jetty to serve the farm.
The facility should be complete
within two to three years.
The family-owned company
is also engaged in discussions
for an acquisition in Spain or
Italy. Its not easy to grow a
team [organically], so we are
very interested in making an acquisition of a distributor with
not less than $20m sales. We
Turkish distributor and trader

KTM plans to expand from eastern Europe to the west and south
as it executes a growth strategy
which could take it public
through an initial public offering
(IPO) within five years.
The company plans to raise
revenues from the low hundreds
of millions of dollars to $1bn by
growing the business through
the construction of a tank farm,
which will improve logistics for
export markets, says managing
board member Keyan Zulfikari.
Speaking on the sidelines of
the 50th European Petrochemical Association (EPCA) meeting
Will Beacham
Rapid expansion from eastern Europe to the west and south, including M&A activity, should ripen group for going public
Distributors have very ambitious European expansion plans

MARKET INTELLIGENCE

icis.com/about/news
Tea time and battering

The European Chemicals Agency (ECHA) tells delegates at an event organised by
Cefic to get on with registrations and assume that more regulations are on their way
JONATHAN LOPEZ LONDON
guest to ones tea party does not normally

batter you with demands, petition you to
be more collaborative and tell you to
stop complaining about facts and figures none of you can change.
But when it comes to European chemicals and its regulators, the scene is more familiar.
The executive director at the European Chemicals
Agency (ECHA) told industry delegates at an event organised by the European chemical trade group Cefic
on 6 October to get on with chemicals registration dossiers and start assuming nanomaterials and animal
testing are next in ECHAs crusade for safer, more
controlled use of chemicals within the EU.
More than 200 chemical industry executives listened
quietly to the extensive list of homework tasks Geert
Dancet spelled out for them, both for 2018 when a
deadline for small chemical quantity registrations
comes into place and beyond.
European chemical companies

often talk about the burden of
regulation and how the EUs
tough Reach places them at a
competitive disadvantage
Do you agree or not?

We want your feedback.
NANOMATERIALS REGS TO COME

It was just a reminder of what the ECHA wants from
companies, however, as most of the speechs content
was already published in May: 56 recommendations
on how Reach might work better and on what more
needs to be done to improve chemicals safety, with
nanomaterials especially in mind.
[There is a] considerable delay on [nanomaterials,
animal testing], perhaps to your liking, but urgent action is coming, said Dancet at Cefics gathering.
Authorisations and restrictions [of substances] are the
best stimuli for substitution. Dont be afraid innovate instead. [Many] applications are receiving authorisation [so]
help us [and] stop complaining. We are making authorisations all the time easier, cheaper and more practical and
its not a drama to have an authorisation, he said.
Many people [who] complain have never gone
through the process [of application and registration],
was one of Dancets gems to his listeners.
ECHA
Despite initial scepticism about Reach within the chemical industry, the most complex and toughest chemical
regulation in the world is already nine years old and Dancet confessed how back in 2007 he was sent to Helsinki,
where ECHA is headquartered, to spend only seven

months in the Finnish capital while setting up the agency.
He continues to be based in Helsinki and has become
ECHAs face. At Cefics event, however, he reminded
chemical executives he only implements regulation in
other words, the lobbying and the demands for change
should be addressed to Brussels, the EUs capital and
where its executive body, the Commission, sits.
Dancet is unafraid to speak frankly about the industrys vices, or deliver the message mandated by his employers. His 45-minute speech in the Italian city of
Florence spelled out what has worked correctly within
Reach and what could be improved.
Self-criticism about how ECHA or the Commission
have dealt with Reach was minimal, and most of the
blame was attributed to the industry itself.
ECHA executive director Geert Dancet takes the chemical industry to task at an event organised by Cefic on 6 October
www.icis.com
MARKET INTELLIGENCE
A key battleground for EU

chemicals within the final phase
of Reach implementation will
come in 2018, when many SMEs
will have to face the registration
of small quantities of chemicals
On the other hand, the Commission and ECHA, supported by most environmentalist groups, as well as
most of the political left and great swaths of the political
right, think Reach is simply too brilliant not to be implemented, and argue it will set up an example for other
countries when updating their chemical regulations.
GLOBAL REACTIONS
Anecdotal evidence about some countries following
Reach has been voiced the CEO of South Koreas
major chemical firm Songwon arguing it was a condition to trade with the EU after the two jurisdictions
signed a free trade deal but there have been many indications China or the US are nowhere near that stance.
Moreover, the American Chemistry Council (ACC)
lobbying in Washington DC achieves a more industryfriendly approach than that of Cefic in Brussels.
Not surprisingly, US regulations are less stringent
than Reach. However, the looser hand in the US also
raises concerns about human health and environment.
SME CHALLENGE
A key battleground for EU chemicals within the final
phase of Reach implementation will come in 2018, when
many small and medium-size (SME) companies will have
to face the registration of small quantities of chemicals.
Some industry participants have voiced concern
that many SMEs will be unable to face the costs, and
may risk going out of business. ECHAs Dancet told
them it is willing to help along the way, but asked the
industry for honest and committed participation.
However, in an interview he gave another hint of
where SMEs may need to head to rationalisation of
their business, reducing their product portfolio.
Asked if that could hurt employment, he was confident that by focusing on core products, firms could
maintain jobs and competitiveness.
Chemicals SMEs are, precisely, those who create the
most employment. In a key high-paying sector like chemicals, and as manufacturing in the EU shrinks in size and
global importance, it is important the still 1.17m chemical
workers across the 28-country bloc keep their jobs.
The figure corresponds to the second quarter, as per
Cefics own data published earlier in October. Although
it spoke about stable business conditions, prices and
sales during the April-June quarter decreased by more
than 5%, although output did so by only 0.2%.
www.icis.com
THINK TANK
AL GREENWOOD HOUSTON
CP CHEM OUTREACH DRAWS WORKERS

The petrochemical industry in the US
has been striving to fill a workforce gap
caused by employees retiring from their
jobs and by new plants starting up.
A Chevron Phillips Chemical executive
warned of the shortage back in 2012.
At the time, Chevron Phillips intended
to hire 2,600-3,000 people in the next
five to six years. Essentially, the company would have turned over about half
its workforce.
Two years later, its CEO Peter Cella
warned about the shortage at the
International Petrochemical Conference
(IPC), hosted by the American Fuel &
Petrochemical Manufacturers (AFPM).
The industry needed to collaborate with
the government and with educators to
attract younger people, Cella said.
Since then, the AFPM introduced several campaigns to raise awareness
about jobs in the industry. Meanwhile,
community colleges in the Houston area
are working with the industry to develop
programmes to train workers.
The outreach is paying off. Chevron
Phillips showcased three new employees
during a tour of the construction site of its
new ethane cracker in Baytown, Texas.
Former beautician Laura Marshall is
now a normal alpha olefins unit operator
at the companys 1-hexene plant. She
completed a process technology programme at San Jacinto College, one of
the schools that worked with the industry
to develop courses. Daniel Hilliard, a former fry cook, lawncare worker and all ter-
rain vehicle repairman, is now an ethylene

operator training at the new cracker. Both
knew people in the industry before joining
the programme. However, the third employee, Pete Rodriguez, simply learned
about the industry from a job fair held at
his high school in Mont Belvieu, Texas.
Other than the military, this was the
only job fair he said was held at his high
school. In other words, chemical companies had almost no competition attracting students to the industry.
Chevron Phillips
showcased three
new employees
during a site tour
Rodriguez did some research, received
a scholarship from Chevron Phillips and
studied at the process technology programme at Lee College. He was hired by
19 and now at 21 owns a house.
This illustrates what the industry can
achieve by reaching out to high schools
and colleges. Such outreach is not limited to Chevron Phillips. Fluor, a contractor, has 12-week programmes that train
people at its centre in Pasadena, Texas.
It expects to certify about 300 people for
pipe fitting, welding and other craft jobs
by the end of the year.
Additional reporting by Franco Capaldo,
Tracy Dang and David Haydon
Chevron Phillips Chemical
European chemical companies often talk about the

burden of regulation and how the EUs tough Reach places them at a competitive disadvantage compared to their
peers in other jurisdictions, namely China and the US.
Former beautician Laura Marshall is a normal alpha olefins unit operator at CP Chem
PRICE & MARKET TRENDS
For up-to-date information on more

than 120 global commodities, visit:
icis.com/about/price-reports
NORTH AMERICA
AL GREENWOOD HOUSTON
CP Chem eyes 2017 cracker start-up

Chevron Phillips Chemical expects to start up its new 1.5m
tonne/year ethane cracker in the
second half of 2017, an executive for the US-based company
said on 5 October.
The company is building the
cracker at its Cedar Bayou complex in Baytown, Texas.
The cracker will provide feedstock for the two new polyethylene (PE) plants the company is
building in Old Ocean, Texas.
The PE plants should start up
in mid-2017, said Ron Corn,
senior vice president of projects
and supply chain for Chevron
Phillips Chemical. He made his
comments during a tour of the
companys cracker site.
One plant can produce 500,000
tonnes/year of bimodal high-density PE (HDPE). The plant will use
Chevron Phillipss Advanced Dual-Loop technology. The other
new plant can produce 500,000
tonnes/year of metallocene linear
low-density PE (LLDPE).
These are modern leadingedge technologies, Corn said.
Our scientists are working on
more customised resins with
more unique properties. These
units will have the flexibility to
make these resins.
EXPORT PLAN
Initially, the company expects to
export about 30-50% of the output
of the PE plants, Corn said. That is
in part because the company will
continue to adjust the plants to
make the companys more advanced grades.
In addition, Chevron Phillips
needs to qualify these grades with
some US customers, Corn said.
Ultimately, the plants level of
exports should match that for the
company as a whole, which exports about 20% of its PE.
Nonetheless, Chevron Phillips
is developing alternative routes to
ship the plants PE in case of any
possible bottlenecks at the port of
Houston, Corn said. One route
will go to the US west coast by
Chevron Phillips
Initially, Chevron Phillips expects to export about 30-50% of the output of the two new polyethylene (PE) plants in Texas
The cracker will lack the feedstock flexibility of Chevron Phillips other plants, as it will use only ethane
way of Fort Worth, Texas, he said.
Another route would ship the pellets to Charleston, South Carolina,
where they could be shipped to
Europe or Latin America.
The cracker will lack the feedstock flexibility of the majority of
Chevron Phillipss other plants in
the US, as it will use only ethane,
said Steven Prusak, commercial
director for the companys US
Gulf Coast Petrochemicals Project.
This decision allowed the new
cracker to take up less space and
to avoid using bulkier parts.
Chevron Phillips will still
have feedstock flexibility, since
most of its other crackers can
use other natural gas liquids
(NGLs), Prusak said.
ETHANE OUTLOOK
The companys new cracker will
be among the first wave of plants
to start up in the US Gulf Coast.
These new plants will increase
demand for ethane.
Prusak expects the ethane supplies in Gulf Coast will be sufficient to meet this increase in demand. Currently, companies that
extract ethane are leaving hun-
dreds of thousands of barrels of

the material in the natural gas
stream because current prices do
not justify separating it out.
Companies will stop rejecting
this ethane once demand rises
from the new crackers, Prusak
said. Overall, US ethane production will remain competitive.
Chevron Phillips is still on the
lookout for new projects, and the
US is one of the prime locations
it would consider, Corn said.
However, the company is currently focused on getting its new
plants up and running.
ORIGINS BACK TO 2010

The origins of Chevron Phillipss
new plants go back to August
2010 during a slide presentation,
Prusak said. At the time, it was
radical thinking to build a such a
project on the Gulf Coast.
However, the US was at the
start of its shale gas boom, in
which production of ethane and
other NGLs would subsequently
rise, bringing down prices for
feedstock and giving the nation
a cost advantage against much
of the world, which relies most-
ly on oil-based feedstock. The

feedstock outlook for the companys US operations started to
change when a pipeline from
west Texas began filling up with
NGLs, Prusak said.
In the past, the company
struggled to get enough volume
from west Texas.
When that slide presentation
was first made in 2010, Prusak expected a few other companies
would also build plants in the US.
Some of these would be Asiabased producers, he said.
Their perspective as naphthabased producers would help
them appreciate the feedstock
advantage that could be
achieved by building in the US.
If you looked from the perspective of Asia, a US plant looked
like a great opportunity.
Others would be companies
like Dow Chemical that buy large
amounts of ethylene, Prusak said.
While he expected a few companies to build crackers, he did not
expect the wave of plants that followed. ExxonMobils announcement of its cracker project confirmed the trend, Prusak said.
www.icis.com
ASIA
HELEN LEE SINGAPORE
Supply swamps northeast Asia ethylene prices

Spot ethylene prices in northeast
Asia may remain under downward pressure despite the outage
at Shells Singapore cracker,
given ample regional supply and
expectations of higher exports
from the Middle East, market
players said on 6 October.
Discussions were heard ongoing for a 3,500-tonne cargo for
first-half November loading at
around $1,030/tonne FOB (free
on board) SE (southeast) Asia.
Prices have plunged by
around 13% over the month of
September amid uncertain
downstream demand and the expectations that tight supply
would ease.
The shutdown of Shells
cracker with a 960,000 tonne/
year ethylene capacity in Singapore the previous week failed to
nudge up prices, as northeast
Asia is awash with deep-sea
supply and as some regional
crackers just resumed production from turnarounds.
Ethylene exports from the

Middle East are expected to
grow in the fourth quarter, with a
Saudi Arabian producer planning to sell spot material for October and November delivery on
top of its regular term supply,
market sources said.
Meanwhile, Taiwanese cracker operators may ship out more
material ahead of the expected
closure of a major ethylene pipe-
line in Kaohsiung late this year,

they stated. Northeast Asia buyers were generally in no hurry to
secure cargoes partly on account
of ample spot deep-sea lots
available in the market.
Moreover, the turnaround of
other northeast Asian crackers
was slated to be completed in
end-October, just in time for the
expected stable operations of
new downstream plants.
ASIA ETHYLENE
$/tonne, spot CFR Asia SE
1,200
1,100
1,000
900
800
Oct
2015
Sep
2016
In Japan, Idemitsu Kosans

cracker in Tokuyama is undergoing a 45-day maintenance from
10 September, while in South
Korea, SK Global Chemicals
Ulsan cracker was taken off line
on 17 September and is due to
restart by the end of the month.
In Chinas downstream market, Qingdao Haijing is expected
to achieve commercial production at its vinyls complex in
Shandong province around endOctober or November, according
to a company official.
The complex has a 400,000
tonne/year vinyl chloride monomer (VCM) plant and a polyvinyl chloride (PVC) unit with the
same capacity. Trial runs are ongoing at the VCM unit.
In Jiangsu province, Abel
Chemical expects to start trial
operations at its 250,000 tonne/
year styrene monomer (SM)
plant this month, after Chinas
week-long National Day celebration (1-7 October).
NORTH AMERICA
DAVID LOVE HOUSTON
US EPS prices rolling over in October

Demand is expected to be strong this month. There are no upcoming turnarounds, and plants are running at capacity
US expandable polystyrene (EPS)
prices have rolled over from September to October, market participants said. EPS prices typically follow the direction of feedstock
benzene contract prices. One source

said that even though October benzene settled down by an average of
17 cents/gal on the month, it was
less of a drop than expected.
US EPS
Cents/lb, spot
85
Block DEL
Packaging DEL
82
79
76
73
70
Oct
2015
www.icis.com
Oct
2016
Benzene contract prices are heavily influenced by spot prices, especially during the final two weeks of
the month. One producer said that
the October benzene price is better
for its company in terms of cost
than the September price.
The 17 cent/gal drop represented about 1.5 cents/gal in the cost
of styrene, and would help it recover part of the lost margin it had
during the last cost/price increase
cycle, the producer added.
The producer said this was why
it was not considering reducing
prices at this point. Additionally,
the producer has not seen any pressure from the market to lower prices. The market seems to understand
that the last EPS price increase did
not reflect all of the additional cost
incurred by producers, one market

source said. Now that the benzene
price has dropped a bit, customers
are not expecting a reduction at this
time, the source added.
Between June and September,
benzene contract prices increased
by 48 cents/gal. EPS prices rolled
over in July and then again in September, after price increases of 2-5
cents/lb went into effect during the
second half of August. Demand is
heard to be strong this month.
One producer said that October
will be a better sales month than
September. No upcoming turnarounds are seen in the EPS market. Producers are said to be running plants at capacity for the rest
of the year in order to meet all of
their market requirements
ASIA
INDIA PHENOL
TRISHA HUANG SINGAPORE
India domestic
phenol pushes
higher on Shell
Spot prices have risen an average of 42% since early
August, after supply disruptions tightened market
The rupee-denominated domestic phenol prices in India extended a rebound that was initially
triggered by a force majeure (FM)
declared by Shell, according to
the market participant.
The benchmark Kandla prices
for readily available material advanced to Indian rupees (Rs)
74-75/kg ex-tank from Rs72-72.50/
kg ex-tank two days ago, the market participants said.
PRICE MOVES
Domestic producer SI Group India
Ltd (SIGIL) has increased its price
by Rs8/kg in the space of one week,
an importer said. SI Groups socalled basic price is at Rs83/kg as
at 6 October, although the producer
typically offers discounts of Rs7-8/
kg, the importer added.
Shell on 29 September declared FM on the supply of base
chemicals from its Pulau Bukom
cracker complex.
With Shells previous force majeure still fresh in the ming of market participants, news of the latest
outage sparked a rebound in the

domestic prices, which had sunk

to a low of Rs65-66/kg ex-tank
early in the week of 26 September.
Even though a Shell spokesperson on 5 October said that
operations at the Pulau Bukom
cracker are expected to be resumed in the next few weeks,
the domestic phenol price rally
is drawing additional strength
from the firmer crude oil prices
and an anticipated tightening in
forward phenol supply.
Prices had been on

a downward trajectory
since late August
Prices are rising because importers are not seeing any new
[CFR India] cargo offers, according to the same importer.
Mitsui Phenols Singapore,
one of the two phenol/acetone
makers in southeast Asia, on the
weekend of 1-2 October reduced its output in the wake of
Shells second FM for the year.
$/tonne, spot CFR India

1,100
1,000
900
800
700
Oct
2015
The producer is heard to have

cancelled or reduced the volume of some phenol and acetone shipments for October.
CAPACITY AND OUTPUT

Mitsui Phenols Singapore was
forced to run its phenol/acetone
plant at 60% capacity between 3
December 2015 and end-April
2016 because of Shells previous
force majeure.
The phenol maker was able to
increase its output to 80% between May and July only by
bridging a propylene supply
shortfall with spot purchases.
Mitsui Phenols Singapore only
attained the 90% output level
on 1 August.
We are not seeing any offers,
according to a separate phenol importer. India, the largest spot phenol buyer in Asia and heavily dependent on imports to meet its
demand, is highly sensitive to
shifts in supply. Prior to the previous weeks rebound, the prices
Sep
2016
had been on a downward trajectory since late August, with the

market fundamentals bogged
down by the reality of bloated
inventories and static demand.
Onshore inventories are at close
to 36,000 tonnes, the first importer
said, and will be further swollen by
a steady inflow of fresh deliveries.
TANKERS ARRIVE
The chemical tankers GC SINGAPORE and BOW TRAJECTORY
arrived recently with 5,500 tonnes
of fresh supplies.
GOLDEN DENISE is due to
discharge 2,000 tonnes each at
Kandla and JNPT in the coming
days, according to a supplier on
4 October. The upcoming Diwali
festival also foreshadows a lull in
demand for phenol between late
October and early November, several Indian importers said.
Despite the still fragile underlying fundamentals, the domestic prices are in their second
week of increase.
SPOT PHENOL PRICES LOOK UP ON TIGHTER FORWARD SUPPLY

Spot phenol prices into India may
revisit the four-digit territory, driven
by tighter forward supply and the
domestic price rally, market participants said on 7 October.
An anticipated tightening in
forward supply, alongside the domestic phenol price rally that was
initially triggered by Shells force
majeure, is setting the stage for a
CFR India phenol price rebound.
The prices closed at an average
of $917.50/tonne CFR India on 30
September, following five consecu-
tive weeks of downturn, ICIS data

showed. The CFR India phenol
market had been mired in a glut of
supply and domestic price slump.
A selling indication for southeast
Asian phenol was heard at
$1,050/tonne CFR India.
Separately, a Chinese cargo was
heard offered at $1,025/tonne
CFR India. Phenol last traded above
$1,000/tonne CFR India on 13
May, ICIS data showed.
Against a backdrop of firmer
crude oil prices, a production issue
in Japan and the unplanned shutdown of Shells Pulau Bukom cracker on 27 September have
combined to tighten the availability
of spot cargoes that can be sold to
Indian buyers for October shipment.
The 30 September shutdown of
Changshu Changchuns cumene
plant in Singapore, a direct consequence of Shells cracker outage,
also has the potential to choke off
cargo availability from one of the
key Chinese suppliers of phenol to
India. A production issue at
Japanese producer Mitsubishi

Chemical has boosted Japanese
demand for phenol imports from
several northeast Asian including
Chinese sources. This has tightened October shipment availability
from South Korea, also a key
source of phenol supply to India.
Mitsui Phenols Singapore, one of
the two phenol/acetone makers in
southeast Asia, is maintaining its
phenol/acetone plant run rate at a
reduced rate, following a cut on the
weekend of 1-2 October.
www.icis.com
Covestro declares
force majeure
on MDI, TDI
TRENDS P17
ASIA
HELEN LEE SINGAPORE
Vinyl acetate monomer may rebound on supply

Asias vinyl acetate monomer
(VAM) spot prices may rebound
from record lows amid reduced
supply and firmer costs of feedstock acetic acid, market sources
said on 7 October.
Natural gas-based VAM from
China was offered at $710/tonne
CFR (cost and freight) India, subject to 7.5% import duty, reflecting
a $20/tonne increase from the previous week. The offer was equivalent to around $763/tonne on a
zero import duty basis.
On 30 September, south Asia
prices were steady at $720-740/
tonne CFR, ICIS data showed.
Across Asia, VAM prices have
shed between 17% and 25%
since the start of the year as supply was outstripping demand,
according to the data.
Scheduled plant shutdowns at
major facilities in China, as well as
output cuts in Singapore, will reduce regional supply amid higher
production cost caused by rising
acetic acid prices, market sources
said. Two VAM plants in China
would be taken off line this month
as producers margins are being
squeezed while exports are weak
amid a wide buy-sell spread.
ASIA VAM
$/tonne, spot
950
CFR Asia NE
850
800
750
700
Oct
2015
Sinopec Great Wall Energy

plans to shut its 450,000 tonne/
year calcium carbide-based VAM
plant at Yinchuan in Ningxia province from 14 October to early November. Sinopec Great Wall Energys VAM plant shutdown was
preceded by the shutdown of Sinopec Shanghai Petrochemical
Companys (SPC) 90,000 tonne/
year ethylene-based plant, which
was shut on 26 September and will
remain down up to 12 October.
The shutdown of the plants
were brought forward due to prevailing weak international market
conditions, a Sinopec official said
ASIA
Butadiene rise
may continue
BD spot prices were at $1,350-1,410/tonne CFR (cost
&freight) northeast (NE) Asia in the week of 30 September
www.icis.com
Oct
2016
without disclosing the original

turnaround schedules.
Separately, Sinopec Sichuan Vinylon Works plans to shut its VAM
plants in Chongqing for a month
from 10 October. The plants have a
combined production capacity of
500,000 tonnes/year.
In Singapore, Dairen Chemical
Corp cut production at its 350,000
tonne/year VAM plant on Jurong
Island in late September due to reduced supply of feedstock following an outage at Shell Singapores
cracker on 27 September.
Shell declared a force majeure
on supply of base chemicals from
ASIA BD
HELEN YAN SINGAPORE
Despite the absence of the major

players, the relentless upsurge in
the butadiene (BD) prices are expected to continue unabated as
traders scrambled to secure an
October cargo that has been unexpectedly made available via a
sales tender, market sources said
in the week ending 7 October.
Traders were expected to put
in strong bids to secure a late
October-loading of a 1,700-2,000
CFR Asia SE
900
its Palau Bukom cracker complex

on 29 September. On 5 October,
the company said it expects the
cracker with a 960,000 tonne/
year ethylene capacity to restart
in the next few weeks.
In the key Indian market in
south Asia, buoyant demand
would help VAM prices to recover,
industry sources said.
Some VAM suppliers hiked
their offers that week for secondhalf October cargoes to India by
$20-30/tonne, with another producer contemplating a $50/tonne
increase in prices. A couple of suppliers have yet to finalise offers on
account of uncertainties on the
feedstock front, market sources
said. Most buyers across Asia were
inclined to adopt a cautious stance
on expectations that the bullish undertone could be a temporary reaction to news of Shells cracker outage. With prices deem to be
reaching bottom, the buyer is seeking a 2,000-tonne cargo to stock up
for the fourth quarter.
A northeast Asia-based buyer
said that a moderate $10/tonne
price increase would be acceptable unless vinyl acetate monomer
supply tightens further.
tonne spot cargo made available

that week via a sales tender issued on 4 October by Malaysias
Lotte Chemical Titan.
The sales tender closed on 5
October. Traders need to cover
short as they have contractual
commitments and supply had
recently been disrupted recently by a spate of unplanned outages, according to a trader.
Butadiene spot prices were at
$/tonne, spot CFR NE Asia

1,400
1,200
1,000
800
600
Oct
2015
Sep
2016
$1,350-1,410/tonne CFR (cost

&freight) northeast (NE) Asia in
the week of 30 September, up
by an average of $405/tonne, or
42%, since early August, ICIS
data showed.
China, which is a key BD
market in Asia, was on holiday
from 1-7 October for the celebration of its National Day,

while most regional players
were also away for the 50th Annual European Petrochemical
Association (EPCA) meeting
being held in Budapest, Hungary, on 1-4 October.
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EUROPE
BEN LAKE LONDON
Etac import woes prop up prices

Bankruptcy of Hanjin shipping line pushes logistics prices up, and low Europe etac prices deter imports to the region
A series of unfortunate events have
conspired to limit Indian ethyl acetate (etac) exports into Europe. Despite two recent significant price
hikes and a clamour for more material, imports into the region have
been short of Europes needs.
Between March and July 2016
etac prices were at their lowest
since the immediate aftermath of
the financial crisis. Indian sources said that these prices were not
profitable for them and they
would focus on other markets
such as Asia and Africa, which
provided plenty of expanding
market opportunities.
The two recent price hikes totalling 190/tonne would, in normal
circumstances, push prices into a
profitable zone for the importers.
Sources said that at best they can
only break even at present prices.
Sources have described a variety of problems that have combined to prevent them from taking
full advantage of the higher prices. The bankruptcy protection fil-
ing of South Korean shipping

company Hanjin, has allowed
other transport companies to increase freight prices up to three
times their original value.
It is also logistically more difficult to move product out of Asia as
companies manoeuvre to pick up
the slack left by Hanjins exit.
A third factor is that ethanol has
been mandated, by the Indian government, to preferentially be given
over to fuel blending. Etac producers have thus found it difficult to

obtain feedstock.
This combination of external factors has rendered a potentially lucrative European market unattractive to Indian importers. In turn, this
lack of imported volume is supporting prices as Europe faces high demand following the summer lull.
Sources in Europe have said
that a lack of imports over the
EUROPE ETAC
/tonne, spot FD NWE
1,000
950
900
850
800
750
Oct
2015
Sep
2016
summer period, due to the low

price, have left little extra capacity stored in Europe. This scarcity
of imports is still fuelling higher
prices, which importers are, ironically, unable to take advantage of.
A source said that were even
more material available, it would
still be cautious over moving too
much into Europe. Shipping delays (four to six weeks normally,
possibly more with current constraints) make importers cautious,
as a rebalancing of the market
would strand their product in European waters at reduced prices.
Currently, however, players report incredibly healthy demand.
Players continue to discuss further
price hikes as supply is tight.
Expectations for the stability of
these prices is mixed. A source said
that it expected the market to slowly
rebalance over the next month and
likely fall in November.
Another source, however, said it
expected prices to continue to rise
and touch four digits.
EUROPE
BEN LAKE LONDON
Covestro has declared force majeure (FM) on production of methyl di-p-phenylene isocyanate
(MDI), toluene di-isocyanate
(TDI) and intermediate products
production in Europe, effective 6
October, a spokesperson for the
Germany-headquartered
firm
said on 7 October.
The spokesperson said: Due to
an unforeseeable production issue
at its nitric acid supplier, Covestros production plants in Europe
can currently only be operated
with reduced capacity.
The missing nitric acid quantities cannot be compensated
through purchases from other
suppliers. Covestro therefore
www.icis.com
predicts significant delivery delays for all affected TDI and MDI
products, including their intermediates, it added. Covestro
currently cannot predict how
long this FM will continue.
Covestro operates three MDI
plants in Europe. A 170,000
tonnes/year facility in Terragona, Spain. A 200,000 tonnes/
year plant in Brunsbuttel, Germany and a 200,000 tonnes/year
unit in Krefeld, Germany, and
300,000 tonnes/year TDI is produced in Dormagen, Germany.
A TDI distributor, reacting to
the news, said If Covestro declares FM, all I can say is fasten
your seatbelt. A Middle East-
Herbert Kehrer/imageBROKER/REX/Shutterstock
Covestro declares force

majeure on MDI, TDI
Sales of MDI and TDI are interrupted with a force majeure

ern source said; I do believe the
MDI price will go up.
I dont know whats going on,
things are moving too fast. I
know its supposed to be a dynamic market but this is too dy-
namic for my liking it added.

TDI is already short in Europe as
market players await the rampup of production at BASFs
300,000 tonne/year plant at its
Ludwigshafen headquarters.

EUROPE
HEIDI FINCH LONDON
Q4 titanium dioxide contracts increase on margins

Early Q4 titanium dioxide (TiO2)
contract prices are up on the back
of producers margin needs, limited supply flexibility and betterthan-expected demand.
However, this upward move
could be tempered by seasonal
and year-end factors, said market
players ahead of the European
Petrochemical Association meeting (EPCA) event in Budapest.
European Q4 TiO2 contract price
discussions are under way in most
cases, although settlements have

been slow to filter through.
Nonetheless, early Q4 settlements show price rises of 50-100/
tonne across various sectors. One
buyer from the downstream paper
sector said it had accepted price
rises of 50-80/tonne, to be implemented in steps during Q4, and on
the back of a firm producer stance.
The latter is taking into account
price erosion for European TiO2
contracts from the end of 2014 until
EUROPE TI02
/tonne, contract FD northwest Europe
2.3
2.1
1.9
1.7
1.5
Jul
2015
Jul
2016
early 2016, and talk of firmer upstream costs, which is also providing leverage for higher TiO2 prices.
One or two resellers said they
were discussing or had agreed a
price rise of 100/tonne for Q4.
A few buyers from the downstream paints and coatings sectors
said they had accepted a similar
level price rise for chloride-based
TiO2 in Q4. One of the buyers quoted prices around 2,000/tonne FD
(free delivered) net, while another
customer said its Q4 invoiced prices were 2,300-2,350/tonne FD.
There is talk that price rises
may be similar or slightly lower
in quarter four for sulphatebased TiO2 when compared to
the chloride-based product.
This is because there are more
supply sources for sulphate-based
TiO2 than for chloride-based. A few
buyers from the downstream paints
and plastics sector considered plus
50-60/tonne to be acceptable, but
not more. This is as the underlying
need to improve profitability is
being weighed against price hikes
over the past few months and what

they consider sufficient supply for
their needs, with lead time of three
to four weeks seen as manageable.
There is also talk of an expected seasonal slowdown and stricter inventory controls at year-end
for working capital reasons and
this could moderate any upward
price movement.
However, for the time being, demand is steady from the downstream paper and paints and coatings sectors, while the downstream
plastics sector is faring particularly
well, notably in parts of northwest
Europe. However, the latter view is
not shared by all.
While the general price sentiment for Q4 is up, price rollovers
and minor price decreases for
sulphate-based TiO2 were heard
in a few cases, but only for lower
quality product and from certain
sources. However, this was not
officially confirmed and there
was no other confirmation in the
wider market to substantiate this
as a general trend.
EUROPE
LINDA NAYLOR LONDON
HDPE sees oversupply, low demand

Destocking at the converter and downstream level is considered the main reason for this complete change
High density polyethylene (HDPE)
pipe supply continues to outstrip
demand in October in Europe, and
imports have added to producers
woes, sources said on 6 October.
The fortunes of HDPE pipe
have undergone a volte-face between 2015 and 2016.
In 2015, HDPE pipe, along with
metallocene linear low density
polyethylene (MLLDPE), were the
strongest polyethylene (PE) grades.
Prices soared and converters
scrambled to find material.
At this point in 2016, there is
simply too much supply and not
enough buyers. Destocking at
the converter and downstream
level is considered the main reason for this complete change.
Many buyers and their customers built up safety stock to ensure

security of supply, fearing the sort
of shortages that left them so vul-
nerable in 2015. But this did not

occur and they are now using
stock ahead of the year end. Another reason given for the current
EUROPE HDPE
$/tonne, pipe black compounded, pressure HDPE 100, domestic FD NWE
1,700
1,650
1,600
1,550
1,500
1,450
1,400
Oct
2015
Oct
2016
slowdown is the amount of imports available in the pipe market.

Some sources suggest that
Middle Eastern suppliers had
switched to pipe production
from other HDPE grades because
of the magnificent margins in
2015 and now these imports
have added to the weight of supply currently in Europe.
Egyptian HDPE pipe is also now
being offered into Europe, from a
new plant, launched by the Egyptian and Derivatives Company
(Ethydco) in recent weeks.
Discussions are also now beginning for pricing contracts for
2017, and these are not expected
to be simple, given the current
state of the market.
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EUROPE
KATHERINE SALE BUDAPEST
Methyl methacrylate anticipates Mid East imports

The European methyl methacrylate (MMA) industry does
not expect to see imports of fresh
capacity coming on stream from
the Middle East before Q4 2017,
players said on the sidelines of
this years European Petrochemical Meeting (EPCA).
The global MMA community is
poised for a shift in trade flows with
new capacity coming from Saudi
Arabia which has the potential to
disrupt the global landscape.
340,000 tonnes/year is scheduled to come on stream in 2017,
and will result in Saudi Arabia
jumping to seventh largest producer
in the world. Mitsubishi Rayon Co,
parent company of MMA major Lucite International, is scheduled to
come on stream in a joint venture
(JV) with SABIC with a 250,000
tonne/year MMA facility in 2017.
Petro Rabigh, a JV between Japans Sumitomo Chemical and
state-owned energy firm Saudi
Aramco, is also scheduled to
have a new 90,000 tonne/year
MMA plant next year.
Petro Rabigh is delaying the
completion of its Phase II expansion project, which includes the
MMA production, to 2Q 2017, citing construction market chal-
lenges, the Saudi Arabia-based

producer said on 30 September.
European players believe a number of hurdles and questions need
to be resolved before the new
product will be seen in Europe.
As SABIC will be a new producer in the MMA market, it will
first have to go through the Registration, Evaluation, Authorisation
and Restriction of Chemicals
(Reach) regulation process before
selling product to Europe.
The introduction of SABIC into
the global market is seen by most
buyers as a key factor behind the
two JVs. Mitsubishi Rayon Co has
plants in Europe, the US and Asia,
and players expect it to pursue a
global strategy for its new capacity.
SABIC is new to the MMA market and buyers expect a freer
movement of material, and potentially higher volumes seen, in Europe offered at a competitive
price, as the cost base in the Middle East is lower than in Europe.
They are, however, unclear on
how much impact it will have
on next years supply level. One
large buyer said it expects to
start seeing material from SABIC
in Q3 2017, while others believe
it will be in Q1 2018.
MMIDDLE EAST TO BECOME AN MMA PRODUCER IN 2017 (capacity tonnes/year)*
Asia - 2,581,000
Americas - 1,059,000
Europe - 671,000
Middle East - 340,000
* Includes planned projects
The majority of market participants expect to see imports trickling

into Europe from Q4 2017, although
they are unsure about the volumes
involved. One player questioned
the use of stabiliser in the Middle
Eastern product and whether it will
be suitable for all European buyers.
At this stage, however, it is clear
that there will be some impact to
global trade flows because Middle
East demand is not enough to absorb all the new capacity.
Views on the future of the European balance are mixed with some
saying global demand will be
enough to meet the new capacity,
while others expect European sup-
ply to lengthen. The new capacity

is, however, seen as a threat to
Asian producers and their market
share in Europe and could see the
Asian market lengthen. The Middle
Eastern product is also expected to
replace European product in lowerpriced regions such as Turkey.
European MMA demand is
largely expected to remain at a stable-to-firm level, with some end-use
applications out growing GDP.
For now, the European supply
level is expected to remain tight
until the end of the year, although
some relief to the current squeeze
may come after two producers recently completed maintenance.
EUROPE/ASIA
MATT TUDBALL LONDON
Turkish PP demand levels improving

Demand levels were not necessarily bad, showing a slight improvement from the previous week, according to sources
Polypropylene (PP) prices in
Turkey were stable this week although demand levels were
slightly improved as buyers
made more enquiries for material, sources said on 7 October.
A majority of participants in
the market said deals done, bids
and offers fell within the same
range as the previous week.
Demand levels were not necessarily bad, showing a slight improvement from the previous
week. Some sources said there had
been an increase in enquiries from
buyers over the last two days, and

October levels were looking to be
better than September. Iranian PP
prices from a producer were in the
same range as the previous week,
and traders in Turkey confirmed
similar levels for Iranian material,
though offers were limited.
There were no new offers for
Uzbekistan PP because the producer was in a planned shutdown.
Egyptian offers were confirmed by
a distributor at $1,080-1,090/tonne
DAP (delivered at place) Turkey for
raffia and $1,100-1,120/tonne DAP
Turkey for fibre, although a Turkish

trader said actual done deals were
slightly below these numbers.
Russian material was being offered in the range of $990-1,000/
tonne, sources said.
A Turkish distributor said demand in Turkey was being impacted by an overall slowdown in demand for finished goods in Europe,
a key export market for the country. Factories in the city of Gaziantep were cutting production levels
to around 50% because of a lack of
orders, the distributor added
TURKEY PP
$/tonne, homopolymer raffia, spot CFR
Turkey, India and Middle East origin
1,200
1,100
1,000
900
800
Oct
2015
Oct
2016
www.icis.com
ASIA
US ETAC
PS steady amid the holidays
52
Suppliers do not have high hopes for an increase in demand after the Chinese holidays
50
CLIVE ONG SINGAPORE
Asias polystyrene (PS) prices

were mostly stable amid the
week-long National Day holidays in China, traders and producers said on 6 October.
Most suppliers maintained
their offers due to subdued trade
although some buyers were lobASIA PS
$/tonne, EPS block, spot CFR China
1,350
1,300
1,250
1,200
1,150
1,100
Oct
2015
Oct
2016
bying for lower prices. Polystyrene offers in northeast (NE) Asia

were heard at $1,170-1,190/tonne
CFR (cost and freight) China and
Hong Kong, but sellers were willing to consider lower prices of
$1,140-1,150/tonne CFR China
and Hong Kong.
Few deals were heard so far
with buyers in China mostly
away and the spot market remains at around $1,150/tonne
and below, said a producer in
Taiwan. China was on holiday
from 1-7 October. Suppliers in
southeast Asia sold polystyrene
at around $1,150/tonne CFR SE
Asia that week, with buying momentum staying weak.
PS resins are used for packaging, toys, consumer electronics
and a variety of consumer items.
For expandable PS (EPS), offers were also mostly stable that
week. Taiwanese suppliers were

quoting $1,180/tonne CFR NE
Asia and $1,180/tonne FOB Taiwan, unchanged from last week.
Buying sentiment is weak,
with customers largely staying
on the sidelines, market sources
said. Buying interest was generally lacking with some bids from
Hong Kong at $1,150-1,160/
tonne CFR level, said a Taiwanbased EPS maker.
Suppliers do not have high
hopes that demand would significantly increase after the Chinese
holidays, as the third-quarter
manufacturing-for-exports season
in China has ended.
Demand for resins in the
fourth quarter typically hinges
on domestic China consumption
as the exports sector will be in a
lull, according to a Hong Kongbased trader.
NORTH AMERICA
JEREMY PAFFORD BUDAPEST
US C3 spike catches players off guard

The recent spike in US propylene
contract prices caught the downstream derivative market off-guard,
an oxo-alcohol producer said.
We were forecasting a bump
but not [to the level] of that second
month, the source stated on the
sidelines of the European Petrochemical Association (EPCA)
meeting. US September propylene
contracts settled at an increase of 6
cents/lb ($132/tonne), putting
September contracts for polymergrade propylene (PGP) at 43.0
cents/lb and chemical-grade propylene (CGP) at 41.5 cents/lb.
The September propylene settlement marked the fourth consecutive month of increases, and
propylene values are up about
40% since February, before the
overall uptrend began.
The September settlement also
puts propylene contracts at their
highest level since April 2015.
www.icis.com
The C3 increases have trickled

down into its derivatives, including oxo-alcohols.
US September oxo-alcohols
free-market contract values were
assessed broadly higher by ICIS
at gains of 4 cents/lb. Most US
suppliers had separately proposed September freely negotiated contract increases of 4 cents/
lb. One seller, however, proposed
September increases of 5 cents/lb
and said that it was largely able to
achieve those increases.
The September initiatives
stemmed from Augusts propylene contract hike of 3.5 cents/lb.
Sellers also made it clear they
wanted to improve their operating
margins. Heading into October,
oxo-alcohols producers previously announced separate October
oxo-alcohols price initiatives of
3-6 cents/lb. Oxo-alcohol prices
tend to be affected by the previous
US N-BUTANOL
Cents/lb, spot DEL
65
64
63
62
61
60
Oct
2015
Sep
2016
months propylene prices, so further price increases for oxo-alcohols could be in the offing.
Despite firmer prices, oxo-alcohol demand is healthy heading in the latter part of 2016, and
early indicators for 2017 is much
the same, according to the oxoalcohol source at EPCA.
Cents/lb, spot FOB US Gulf export
48
46
44
Oct
2015
Oct
2016
NORTH AMERICA
CHRISTIE MOFFAT HOUSTON
US October
etac hikes likely
to take hold
US ethyl acetate (etac) distributor
prices were assessed as unchanged,
despite sources indicating that increases being sought separately by
multiple suppliers were being fully
accepted by the market.
The increase is not reflected in
the assessment, pending further
confirmation from buyers.
Sasol Chemicals North America
announced a 2 cent/lb increase, effective 1 October or as contracts
allow. The company cited market
conditions but did not elaborate.
Eastman proposed a 2 cent/lb increase in North and South America,
effective 1 October or as contracts
allow. The company cited elevated
operating costs in raw materials.
Another producer said that although it originally proposed a 6
cent/lb increase for September, this
level would likely be achieved
over a two-month period for some
customers, with the full increase in
place by October. September US
etac prices moved up by 3 cents/lb,
following price increase announcements from multiple producers.
Sources said the October increases had market support and appeared to be holding. There was talk
that a producer has been experiencing ongoing production issues, and
that producers have implemented a
100% sales control for etac. However, this could not be confirmed.
Feedback from market sources
indicated that supply remains available, while demand is steady.
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PLANTS & PROJECTS
Ashland focuses
on solutions
MARKET OUTLOOK P24
NEW PROJECTS AND PERMANENT PLANT SHUTDOWNS

REPORTED BY ICIS NEWS 3-9 OCTOBER 2016
NEW PROJECTS
Company
Location
Product
Capacity*
Contractor
Cost
Start-up
Status
Austin Powder
El Galpon, Salta,
Argentina
ammonium nitrate (AN)
75,00080,000
2nd stage (x) 110,000T
1,500
-
$180m
May-17
2020
1.5m
H2 2017
500,000
Advanced
Dual-Loop
technology
-
mid 2017
mid 2017
S
S
CAN
end 2017
ammonium nitrate (AN)

BASF
Ludwigshafen, Germany vitamin A
Chevron Phillips Chemical Cedar Bayou, Baytown, ethylene

Texas. US
Old Ocean, Texas, US
bimodal high-density
polyethylene (HDPE)
metallocene linear lowdensity PE (LLDPE)
Rotterdam, Netherlands waste-to-chemicals
Sino-Lao, Vientiane, Lao potash
Enerkem
FYI Resources
Israel Chemical Limited
(ICL)
Koksan
Process
Old Ocean, Texas, US
500,000
Ethiopia
(x) 500,000- 1mT

-
potash
Gaziantep, Turkey
LyondellBasell
polyethylene
216,000
terephthalate (PET)
Gulf coast, US
high density polyethylene 500,000
(HDPE)
Corpus Christi, Texas, USethylene
(x) 363,000
Hyperzone PE technology
-
mid-2019
Nghi Son Refinery and

Petrochemicals
Pertamina
Thanh Hoa province,

Vietnam
Balikpapan, Borneo
end 2016
benzene
250,000
H2 2017
refinery
(x)
Axens
Cilacap, Java, Indonesia refinery
(x)
Axens
Rosneft and Pertamina
Tuban, Indonesia
Synvina (BASF and

Avantium JV)
Antwerp, Belgium
refining and
petrochemical complex
furandicarboxylic acid
(FDCA)
polyethylenefuranoate
(PEF)
Notes: *Capacity: figures given in tonnes/year; tonnes/day are converted by multiplying by 330. (x) = expansion; T = total capacity including expansion.
Start-up: Dates given are for planned start-up. H1 = 1st half year; H2 = 2nd half year; Q1 = 1st quarter; Q2 = 2nd quarter; Q3 = 3rd quarter; Q4 = 4th quarter.
Status: S = study; P = planned; A = approval; E = engineering; U = under construction; C = completed; D = delayed; CAN = cancelled.
NEW PROJECTS AND PLANT SHUTDOWNS INDEXES, JULY - SEPTEMBER 2016

Europe Inc.
Russia & CIS
11%
Middle East
& Africa
3%
North America
34.5%
New Projects
Index (NPI): 64*
Change versus
prior month: -24
Latin America
6%
*
Announced new projects and first
mentions on ICIS news. Excludes studies
www.icis.com
Europe
40%
North America
60%
Plant Shutdowns
Index (PSI): 5
Change versus
prior month: +1
Asia Pacific
45.5%
Announced permanent shutdowns and first mention on ICIS news.

Includes mothballings, but excludes maintenance shutdowns
MARKET OUTLOOK STRATEGY
Ashland
focuses on
solutions
The company rebrands following its IPO of Valvoline.
The head of its chemicals group Luis Fernandez-Moreno
outlines the strategy, including plans for M&A
JOSEPH CHANG NEW YORK
S-based Ashlands rebranding after

the Valvoline initial public offering
(IPO) delivers the message that it is
focused on specialty chemicals and
providing solutions for customers, the head
of its chemicals group said.
This brand effort gives us a consistent way
to present Ashland to the market. It was clear
we needed to tell the world that we are a different Ashland with our transformation, said
Luis Fernandez-Moreno, senior vice president of Ashland and president of the Chemicals Group, in an interview with ICIS.
We are 100% focused on specialty chemicals, and our people and technologies enable us to provide solutions to customers to
help improve their products usability, efficacy, allure, integrity and profitability. We
call these the five Ashland Effects, Fernan-
dez-Moreno added. The new Ashland has a

unique combination of technologies in cellulosics, vinyl pyrrolidones, acrylates, polyurethanes and bio-functionals, said the executive.
And this set of competencies allows it to
provide solutions to key markets in personal
care, pharmaceuticals, coatings and adhesives, automotive and construction materials, as well as nutrition, food and beverage
and composites, he noted.
All of our businesses have a strategy for
understanding their customers. It is very different servicing a pharmaceutical company,
providing products that preserve the integrity or quality, than creating a composite for a
boat. But our goal is to help our customers
improve their profitability, said FernandezMoreno.
Ashlands specialty ingredients segment,
which comprises cellulose ethers, vinyl pyr-
rolidones and biofunctionals, generated

sales of $2.1bn and adjusted earnings before
interest, tax, depreciation and amortisation
(EBITDA) of $478m in the 12 months
through June 2016. This translates to an
EBITDA margin of 22.8%.
Ashlands performance materials segment
includes unsaturated polyester resins (UPR)
and vinyl ester resins. It has two divisions
composites and intermediates/solvents. This
segment generated sales of $1.0bn and EBITDA of $133m in the same period. The EBITDA margin of 13.8% was much lower compared to the specialty ingredients segment.
On 23 September, Ashland separated its
Valvoline lubricants and automotive chemicals business in an IPO.
FOUNDATIONAL BUSINESSES
Within Ashlands performance materials, its
butanediol (BDO), maleic anhydride (MA)
and UPR businesses are not specialties, but
considered foundational providing reliable low-cost supply for downstream businesses, he noted.
We produce a lot more BDO than what
we need for internal use. In the future, this
business could be subject to a different strategic perspective. However, we are comfortable and very happy with our current portfolio, said Fernandez-Moreno.
Around one-quarter of Ashlands BDO
production is consumed internally, with
much of it going into vinyl pyrrolidones. The
rest is sold on the merchant market, he said.
Ashland has two BDO plants one in
Lima, Ohio, with 65,000 tonnes/year of capacity, and one in Marl, Germany, with
100,000 tonnes/year of capacity, according
to the ICIS plants and projects database.
For maleic anhydride, the vast majority of
Ashlands production is consumed internally for UPR. While Ashland sells some maleic
anhydride on the merchant market, it is a net
Ashlands acrylic functional components

improves the quality of paints
Ashland
NEW LOGO AND TAGLINE
Ashlands new logo and tagline, always solving, emerged from both qualitative and
quantitative market research that highlighted
a need to signal a clear change after all the
acquisitions and divestitures Ashland has
undertaken through the years.
The three molecules connected with lines
forming a triangle connote the therefore sign
( ), which is used in logic arguments in mathematical proofs, explained Carolmarie Brown,
director of global marketing and business
communications at Ashland.
If customers are looking for help solving
their greatest challenges in applied chemistry
and want to amplify the efficacy, refine the
usability, add to the allure, ensure the integ-
rity, and improve the profitability of their products and applications, they therefore go to
Ashland, she added.
The triangular logo is tipped on its side to
denote the passion and tenacity of Ashlands
employees always being in motion, always
solving, while the colours of the dots are fresh
and point to a sustainable future. The colours
represent air, water and land, said Brown.
And the traditional font for Ashland pays
homage to its century old founding, while the
font in the lower tagline always solving is
more modern, she noted.
www.icis.com
IN ASSOCIATION WITH
drive shareholder value,

said Fernandez-Moreno.
The highest priority for
M&A efforts will be in core
businesses where Ashland
already has robust product
lines such as personal
THE NEW ASHLAND

Sales ($m)
Adjusted EBITDA ($m)

Performance
Materials
21.8%
Performance
Materials
31.5%
We are 100% focused on

specialty chemicals, and
our people and technologies
enable us to provide
solutions to customers
Specialty
Ingredients
68.5%
Specialty Ingredients
78.2%
LUIS FERNANDEZ-MORENO
President of the Chemicals Group, Ashland
Note: Last 12 months to June 2016
SOURCE: Ashland
purchaser, as its needs vary depending on

geography. Ashland has 54,500 tonnes/year
of maleic anhydride capacity at its plant in
Neal, West Virginia, according to the ICIS
plants and projects database.
M&A STRATEGY
As a pure-play specialty chemical company,
Ashland is seeking mergers and acquisitions
(M&A) opportunities to complement its technologies and build out geographically.
We are always looking and have a pipeline of opportunities that could enhance our
capability to provide solutions to our core or
niche market segments. We look for complementary technologies as well as geographic
expansion, said Fernandez-Moreno.
However, he maintains that Ashland remains incredibly disciplined when it comes
to M&A, even in todays hot deal mar ket.
With current deal multiples, it is a tough
task to make a strategic acquisition that will
care, pharmaceuticals and coatings. That is

followed by niche businesses such as nutrition, adhesives, and food and beverage,
where it can find complementary products.
M&A will be less likely in foundational
businesses, he said.
It is an exciting time for our company,
which is focused on specialty chemicals. It allows us to be more operationally focused and
present our new brand to provide solutions to
customers, said Fernandez-Moreno.
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Innovation Awards 2016

REWARDING EXCELLENCE
MEMBRANE
SYSTEM A
GREAT LEAP
FORWARD
P L U S : I N A U G U R A L W I N N E R S O F T H E A L P H A I N N O VAT O R O F T H E Y E A R
Reuters
The overall winner this year is a

start-up with great potential. Full
details of all 2016 winners inside
WINNERS 2016
Membrane innovation
earns top accolade
A strong shortlist proved a challenge when it came to deciding the category and
overall winners this year. Six companies have been recognised in all, with Compact
Membrane Systems taking the overall top slot. Three individuals have been chosen
to receive awards in the inaugural Alpha Innovator of the Year categories
JOHN BAKER LONDON
THE WINNERS FOR 2016

OVERALL WINNER AND BEST
INNOVATION BY AN SME
Compact Membrane Systems
Membrane separation of olefins and
paraffins
BEST PRODUCT INNOVATION
Dow Chemical
Canvera polyolefin dispersions for
food and beverage metal can coatings
BEST PROCESS INNOVATION
Siluria Technologies
Oxidative coupling of methane
Special mention: Aqua Metals Clean
lead recycling for the battery age
INNOVATION WITH BEST BENEFIT
FOR ENVIRONMENT AND

SUSTAINABILITY
Covestro and CAT Catalytic Center
RWTH Aachen
Use of carbon dioxide in the production
of plastics
Special mention: Dow Chemical
Phormanto fully recyclable
thermoformed packaging
or the first time in the 13-year history

of the ICIS Innovation Awards, the
overall innovation prize has been
won by a small or medium-sized
enterprise (SME). An especially well-earned
congratulations goes to Compact Membrane
Systems, based in Newport, Delaware, US, for
its innovative membrane technology for energy- and capital-efficient separation of olefins
from paraffins.
Not only did the company emerge as the winner from among the four corporate category
winners Dow Chemical, Covestro and Siluria
Technologies being the other three (see panel)
but its chief technology officer Sudip Majumdar
will receive one of the first Alpha Innovator of
the Year Awards, launched this year as part of
the ICIS Innovation Awards in association with
overall sponsor Elsevier R&D Solutions.
The second Alpha Innovator of the Year
award for product development/process

optimisation goes to Marc Swan and Professor Jan Czernuszka for their development of
an innovative medical implant leading to the
creation of Oxtex in the UK, which will take
products to commercial reality.
The judges of the awards this year (see
opposite) commended the Compact Membrane Systems innovation as being technically challenging and deserving of the overall
award because its potential to reduce the
costs of separations will make a big impact in
the refining/petrochemical industry.
Membrane separation of ethylene from
ethane and propylene from propane, for
instance, could eliminate or significantly
reduce the use of the costly distillation columns currently used.
The company has overcome the problems of
stability often encountered with membranes,
developing a silver ion-containing customised
amorphous fluoropolymer system that gives
ALPHA INNOVATOR OF THE YEAR
Environment and Sustainability

Sudip Majumdar
Membrane separation of olefins and
paraffins
New Product Development/Process

Optimisation
Marc Swan and Professor Jan
Czernuszka, Oxtex
Anisotropic self-inflating tissue expanders
in reconstructive plastic surgery
Compact Membrane Systems award winning team (left to right): CEO Erica
Nemser, vice president business development Hannah Murnen, and chief
technology officer Sudip Majumdar
www.icis.com
WINNERS 2016
ICIS INNOVATION AWARDS JUDGING LINEUP
THE JUDGES PANEL FOR 2016
Dr Detlef Kratz
Dr Detlef Kratz is responsible for corporate technology and
operational excellence
at BASF and a member
of BASFs commission
for investment and
mergers and acquisitions (M&A). He has
worked in leadership
positions in both Asia
and Europe and has a
PhD in organic chemistry from the University
of Heidelberg.
Christina Valimaki
Christina Valimaki is
senior director, chemicals industry marketing, for Elsevier, a
leading provider of
information solutions
to science, health and
technology professionals. She has an MBA
from Harvard
Business School and
is a member of the
Chemical Marketing &
Economics Group and
the Chemists Club.
separation units using this approach a short

pay-back period in the order of six to 16
months. The company is currently trialling the
technology with a pilot facility operating on a
mixed C3 refinery stream.
During the judging discussion, Mike Lacey
of ExxonMobil Chemical commented that the
company has overcome difficult challenges to
get the membranes technology to work and
also faces a challenge to get refinery and petrochemical operators to adopt it, given their
huge investments in existing process units.
Christina Valimaki, from Elsevier R&D
Solutions, added that she was impressed by
the cost savings on offer and the clearly outlined fast payback that implementation offers.
If the company can achieve a first implementation of the membrane technology that allows it
to be proved at scale, added independent advisor Just Jansz, that would represent a major step
forward towards full commercialisation.
Richard Northcote of Covestro noted that the
size of the market is potentially huge.
AWARD SPONSORS
You can read more about Compact Membrane
Systems and all this years winners and their
innovations in much more detail in the following pages. You can also discover how the
Awards sponsors Elsevier R&D Solutions,
U.S. Chemicals and ExxonMobil Chemical
view innovation and why they support the
ICIS awards, for which ICIS is most grateful.
All the category winners, and two further
entries that the judges felt deserved special
mentions, highlight important innovations in
www.icis.com
Richard Northcote
Richard Northcote is
chief sustainability
officer at Covestro. He
has a wealth of experience in the chemical
and construction industries and has
worked as a journalist,
corporate communications and government
affairs executive and
latterly in sustainable
development. He
joined ICI in 1996 and
Covestro in 2009.
Michael Lacey
Michael (Mike) Lacey is
new product identification manager within
the New Product
Platform group of
ExxonMobil Chemical
in Houston, Texas, and
manages the pursuit of
new product opportunities. He holds a BS in
chemistry from Texas
A&M University and a
PhD in chemistry from
University of Illinois at
Urbana-Champaign..
David Yankovitz
David Yankovitz is
managing director for
Accentures global
chemical industry practice and has segment
P&L responsibilities in
North America. He has
25 years experience
with clients across all
sectors of the chemical industry and a degree in industrial and
systems engineering
from Case Western
Reserve University.
the chemical industry. Two of them Compact

Membrane Systems and Siluria Technologies
oxidative coupling of methane are innovations right at the heart of the bulk chemicals
value chain, illustrating that innovation even
in well-established, high-volume areas like
petrochemical feedstocks is still possible.
Others address recycling (Dows Phorm-
Dr Just Jansz
Just Jansz is an independent board member and advisor, and
founder and MD of
business and technology management consultancy Expertise
Beyond Borders. He
has 30 years experience with
LyondellBasell and its
precursors and was
formerly president of
technology business
at LyondellBasell.
anto and Aqua Metals) and improved sustainability of products and processes (Covestro
and Dows Canvera).
The award for Best Product Innovation has
been won by Dow Chemical for its development of Canvera aqueous polyolefin dispersions for use in internal coating of food and
beverage cans. Canvera offers food and drink
CATEGORY SPONSOR U.S. CHEMICALS
FOCUS ON SUSTAINABILITY
U.S. CHEMICALS (USC), a
Maroon Group company, is dedicated to enriching the lives of
its employees and community
by practising sustainability and
respect for the environment.
We are pleased to sponsor
for the eighth consecutive year
the Innovation with Best
Benefit to Environment or
Sustainability category of the
ICIS Innovation Awards.
USC is a diversified
chemical distribution company that holds competitive
positions for many commodity and specialty chemicals. Serving the needs of the
chemical industry for over 55
years, USC combines quality,
innovation and service like
none other. It has built a team
that thoroughly understands
the complexities of the chemical industry and includes experts at material sourcing and
acquisition. The company
serves as a single source for
the chemical acquisition
needs of many industry sectors, including paint, ink and
coatings; chemicals and textiles; cosmetic and personal
care products; flame retardants; food and pharmaceutical; plastic; and rubber.
For customers and supply partners, USC is a trusted collaborator. USCs
nimble team is dedicated to
leveraging decades of experience, relationships and a
can-do attitude to assess

risk; thus making decisions
quickly and acting boldly
and accurately.
In addition to a variety of
sustainability programmes
recycling, creation of green
space/organic gardening,
heating/lighting efficiency initiatives and wellness programmes at the headquarters
in Darien USC ensures that
suppliers, principals and logistics providers have sustainable programmes and
processes in place.
Social responsibility and
giving back have long been
part of USCs corporate culture
and the company has an extensive history of supporting
organisations in the environmental and health arenas.
WINNERS 2016
CATEGORY SPONSOR EXXONMOBIL CHEMICAL
BROAD PORTFOLIO OF EXPERTISE

EXXONMOBIL CHEMICAL is
one of the largest chemical
companies in the world. Our
unique portfolio of commodity
and specialty businesses generates annual sales of more
than 24m tonnes of prime
products.
The commitment by
ExxonMobil Chemical to maintain a leadership position in
technology is fundamental to
our continued success.
ExxonMobil Chemical has a
broad portfolio of proprietary

process, product and product
applications expertise.
Now, more so than ever,
chemicals are the building
blocks of modern life.
Chemicals play an essential
role in fields that are integral to
human progress, including
transportation, agriculture, phar-
manufacturers and brand owners an alternative to conventional epoxy-based coatings, which are causing some public concern
over the perceived risks of bisphenol-A (BPA).
Dow says the Canvera coatings can be
applied by the same can coating lines as currently used. The technology is currently in
commercial use and, says Dow, is poised for
world-wide adoption.
The judges were unanimous in giving the
award in this category to Dow. Detlef Kratz
from BASF commented that the invention has
the potential to have a huge impact, given the
number of cans that need coating. It is pushing at an established technology, he added,
and one that must pass regulatory approvals,
but the sheer scale of the market holds much
promise for its uptake. Lacey added that the
development looks like a nimble response to
market needs, given safety concerns, rather
than for improved recyclability.
maceuticals, medical equipment, as well as efficient

manufacturing and packaging of
a wide array of consumer goods.
As an organisation with technological achievements that
have enriched the lives of
people everywhere, ExxonMobil
Chemical is pleased to be the
sponsor of the Best Innovation
by a Small or Medium-sized
Enterprise category of the
2016 ICIS Chemical Business
Innovation.
The judges thought these two were both

strong innovations, but in the end decided the
Silurias OCM had most to recommend it
given the scale of the market and the potential
impact. Judge Dave Yankovitz from Accenture was impressed by both innovations but
gave the nod to Siluria on the basis of expected market impact and the fact the innovation
was well carried through.
Northcote added that it was impressive to
see a technology that offers a new way to utilise a major natural resource, while Lacey and
Kratz both made the point that oxidative coupling was a tough nut to crack, making OCM

The Best Process Innovation category threw
up two strong shortlisted innovations and
was won by Siluria Technologies of San Francisco, California, for its development of oxidative coupling of methane (OCM). This enables
the direct conversion of methane to ethylene,
which the company can then also convert to
liquid fuels such as gasoline. The processes,
says Siluria, enable natural gas to supplement
petroleum as a worldwide basis for transportation fuels and commodity chemicals. It also
allows small-scale, on-purpose production of
ethylene for the first time.
Also based in California, at Alameda, Aqua
Metals receives a special mention in this category for its water-based technology for recycling
lead from batteries, which eliminates the conventional, less environmentally friendly smelting technology (see opposite). Its AquaRefining
technology extracts lead from batteries at room
temperature in a closed-loop, water-based process that results in no hazardous wastes.
a breakthrough technology which is now

seldom seen in upstream chemical production.
The award for the category Innovation with
Best Benefit for Environment and Sustainability went to Covestro and CAT Catalytic Center
RWTH Aachen in Germany for their development of technology to use greenhouse gas carbon dioxide (CO2) as a raw material in polymer production, specifically in polyols for
polyurethanes. They have discovered a zincbased catalytic system that forces the usually
stable CO2 molecule to react so it can be used
as a raw material. Covestro is now operating a
plant in Germany and has commercialised the
first PU products with a 20% CO2 content.
The judges also commended Dow Chemical in this category for its development of a
more easily recyclable thermoformed packaging system, consisting solely of polyethylene
(PE) rather than a hard-to-recycle combinations of PE, ethylene vinyl alcohol (EVOH),
polyamide and polyethylene terephthalate
(PET) that are used. Called Phormanto (see
opposite), the judges decided this innovation
met the environmental criteria of the category
well, while the Covestro entry addressed the
sustainability criteria more effectively.
Most of the judges scored Covestro higher,
given the sustainability story behind the development, but acknowledging that the technology could have little impact on global warming
given the scale of CO2 emissions. Valimaki
noted the appealing story behind the break-
OVERALL SPONSOR ELSEVIER R&D SOLUTIONS
AIM FOR THAT ALPHA MOMENT

IN THE chemicals industry, continuous innovation and process
improvement have been the key
to creating big value for customers and investors. And yet, many
accomplishments from the
industry are not as visible to the
market as they could be.
Industrial chemists, for instance, improve product performance and achieve
customer requirements by
innovating at the molecular
level, discovering the changes
in substances and processes
that may have important implications to manufacturing, the
environment and safety.
The same is true for the
engineers working in manufacturing, where process improvement and engineering design
is the focus, and identifying
changes to plant design,
equipment and processes can
meaningfully improve safety,
reduce cycle times and minimise operational disruptions.

Reaching that alpha
moment where one achieves an
important milestone for the first
time may happen in an instant,
but one does not get there without perseverance and technical
advancement. It is therefore
important to recognise those
who are making these strides.
With demands for high performance products, faster returns
on innovation investments, lower costs of research and manufacturing, lower emissions and
safer manufacturing, the future
of the chemical industry relies
on those who overcome challenges and drive critical advances in compounds, formulations,
advanced materials and produc-
tion processes.
For this reason, Elsevier
R&D Solutions is honoured to
sponsor this years ICIS
Innovation Awards, celebrating
the companies and individual
innovators who have created
and commercialised notable
product and process innovations in the industry.
Lets celebrate those who
are achieving commercial success through innovation while
also paving the way for us to
pass on a better Earth to future
generations.
Elsevier R&D Solutions

Elsevier helps chemical companies bring commercially successful compounds to market
while efficiently managing costs,
safety and regulations by providing immediate access to specialised technical intelligence.
www.elsevier.com/alpha
www.icis.com
WINNERS 2016
SPECIAL MENTION PROCESS CATEGORY CYNTHIA CHALLENER VERMONT
CLEAN LEAD RECYCLING

FOR THE BATTERY AGE
THE WORLD is entering a battery

age, according to Steve Cotton,
chief commercial officer of Aqua
Metals. More than 95% of batteries
in use today are based on lead-acid
technology a $65bn-plus market.
Lead-acid batteries (LABs) are the
only battery type that can be commercially recycled.
However, traditional smelting
ranks as one of the worlds top 10
polluting processes. The resulting
economic, environmental and human health impacts are a major
problem, Cotton observes.
Aqua Metals has developed
AquaRefining as a cleaner and more
cost-efficient process. AquaRefining
extracts lead from LABs in an automated, room-temperature, closedloop, water-based process that
produces very low levels of CO2 and
Aqua Metals first commercial AquaRefinery recycling facility

yields an order of magnitude less
hazardous waste than traditional
means, according to Cotton.
The resulting lead is purer than
mined lead and has favourable conversion cost economics.
AquaRefining is also scalable and
modular, allowing the technology to
be co-located with battery manufacturers and distributors, streamlin-
through but added it was difficult to envisage

the overall impact of the development.
This line of thought was also taken by Yankovitz, who commented that the future potential was just that, and he would like to see what
the next step might be from the partners to reap
further benefits of the breakthrough. Kratz
added that it was good to see close cooperation
between industry and academia on this development, and the use of high-throughput
screening to identify the catalyst.
ENVIRONMENT FOCUS
Sustainability and the environment are
becoming increasingly part of innovation in
the chemical sector. This is where all the
issues are coming from, says Northcote, and
this is what companies are tackling with their
research and development (R&D). This years
awards entries largely confirm this focus on
the environment, with almost all the shortlisted entries being environmentally related.
At Covestro, he adds, 80% of R&D spend is
being focused on the issues raised by the UNs
Sustainable Development Goals. Put another
way, taking the people, profit, planet approach,
no projects go forward unless they are positive
in at least two of these and not negative in the
third, he explains.
ICIS congratulates all the winners selected
to receive awards this year, and especially
Compact Membrane Systems, which has
proved that small need not be a disadvantage
when it comes to innovation. We congratulate
also our first Alpha Innovators of the Year the
first we hope in a long line of individuals to be
recognised in coming years. They have set the
www.icis.com
ing the supply chain. Existing

battery recyclers can also install
AquaRefining, keeping lead recycling businesses in the US.
The technology puts control back
in the hands of distributors and manufacturers and makes the process
both environmentally and economically sustainable, Cotton asserts.
In addition to recycling lead-acid
standard to be followed by future entrants.

We also thank the judges who gave their
time and expertise freely and ensured the
judging was carried out rigorously and fairly.
Northcote and Jansz both declared their interests in specific category entrants and did not
batteries from any industry, the

electrochemical AquaRefining process may be applicable to other
battery chemistries and other metals, including copper and zinc. The
high-surface-area metals produced
in the process may also be used to
greatly increase the power and
energy density and decrease the
cost per kWh of storage for leadacid batteries in the future.
Aqua Metals has filed over 30
global patents covering the
AquaRefining process. The company
launched its first AquaRefinery in
the Tahoe-Reno Industrial Center in
Nevada in July 2016. In addition to
operating its own AquaRefineries
across the US, Aqua Metals plans to
license the AquaRefining technology
and provide equipment to partners
on a global level.
take part in the judging process in these cases.

I hope you find the innovation stories in
the following pages stimulating and that they
spark some ideas for your own innovation
efforts. Maybe next year it might be you or
your company that carries off an award!
SPECIAL MENTION ENVIRONMENT CATEGORY CYNTHIA CHALLENER VERMONT
A FULLY RECYCLABLE PACKAGING SOLUTION

CURRENT THERMOFORMED
packaging (bottom and lid design) comprise multiple layers
of different films including polyethylene (PE), nylon, ethylene
vinyl acetate (EVA), ethylene
vinyl alcohol (EVOH) and polypropylene (PP) to meet performance requirements.
When brand owners expressed concerns about the
lack of recyclability of such
thermoformed packaging for
food applications, researchers
at Dow Chemical in Brazil took
on the challenge of developing
a 100% PE solution. Our goal
was to design a multi-layer
structure using different types
of PE in the Dow portfolio that
offer the same performance,
notes Joao Gargalaka, TS&D
for food and specialty packaging applications.
The solution Phormanto
technology is based on two
Joao Gargalaka
different PE films (bottom and
lid), is 100% recyclable and,
because it has a simpler structure, costs less than conventional thermoforming packaging.
The researchers first
learned about the thermoforming process from equipment
manufacturers in order to determine if making a PE-only
solution would be feasible,
then worked with converters to
test different resin combina-
tions, and eventually with

brand owners/food packagers
to evaluate the optimum solutions, according to Gargalaka.
Dow intends to license the
technology to converters and
downstream users and supply
the PE resins. Initial applications in Argentina and Brazil
are for frozen foods, and the
company expects to sell 200
tonnes of PE pellets in 2016
and double that in 2017.
Due to the wide range of
oxygen barriers covered by
Phormanto structures, most
types of food products can be
packaged in thermoformed
packages. The lower cost of
the technology is, in fact, opening up opportunities for thermoforming packaging in new
applications where it previously was not competitive,
such as packaging for fresh
fruits and vegetables.
OVERALL WINNER/BEST INNOVATION

BY AN SME
Big innovation enables

small separations
New membrane technology
separates olefins from
paraffins with reduced
capital and energy costs
CYNTHIA CHALLENER VERMONT
We were able to build a

very strong team to take
on this programme
HANNAH MURNEN
Vice president, business development, Compact
Membrane Systems
he separation of light olefins from

their saturated counterparts (ie,
propylene from propane and ethylene from ethane) is one of the most
energy- and capital-intensive processes in the
chemical industry.
Large distillation columns (around 150 feet
tall) are the state-of-the-art technology for this
separation and require extensive energy input
due to the similar boiling points and sizes
of the respective molecules, according to
Sudip Majumdar, chief technology officer for
Compact Membrane Systems (CMS), based in
Newport, Delaware.
Membrane separation is an attractive alternative, but efforts over the past 30 to 40 years
to develop membranes for the separation of
these molecules have suffered from instability, with performance declining dramatically
within just hours to days.
With new ideas from fluorochemist
Andrew Feiring about the potential for fluoropolymers to improve the properties of membranes, Majumdar initiated a project to develop
new technology for this challenging separation
problem. The result: a customised amorphous
fluoropolymer (CAF) membrane containing
silver ions complexed to a fluoropolymer that
selectively transport olefins.
The silver ions reversibly
bind to olefins and transport
them across the membrane
via a process known as facilitated transport. Without any
sites of unsaturation,
the paraffins cannot
Compact Membrane Systems technology uses silver ions to reversibly bind to olefins
and transport them across the fluoropolymer membrane
be transported. The fluoropolymer, according
to Majumdar, is believed to protect the silver
ions and maintain them in the appropriate
oxidation state for binding. Complexing the
silver ions to the fluoropolymer prevents the
silver from leaching out of the membrane.
The membrane technology has been shown
by CMS to have a high olefin flux (up to 250
Gas Permeance Units [GPU, a measure of how
quickly the material goes through the membrane] for propylene) and high olefin selectivity (eg, a propylene/propane selectivity of
50+). Most important, though, the membrane
has been shown to operate for 300+ days with
stable performance.
This durability far exceeds previous
attempts to develop membranes for this purpose. In addition, CMSs membrane technol-
ogy has been shown to provide resistance to

traditional poisons such as hydrogen and
acetylene, compounds that are frequently present in petrochemical streams.
STRONG DEVELOPMENT TEAM

The company faced several challenges during
the development of the technology, and
efforts are ongoing to achieve larger scales.
First we needed to expand our fluoropolymer synthesis capabilities and were fortunate
to be able to hire a number of scientists with
expertise in this area. As a result, we were
able to build a very strong team to take on this
programme, says Hannah Murnen, vice president of business development with CMS.
There was also a lot of work involved in
learning how to process the material once the
www.icis.com
OVERALL WINNER/BEST INNOVATION

BY AN SME
right combination of silver ions and fluoropolymer chemistry was identified, she adds.
The research project to develop a membrane technology for the separation of olefins
from paraffins was inherently complex,
involving multiple technical components,
including polymer development, the development of membrane formation processes,
construction of testing apparatus and data
analysis, among others, according to Murnen.
There were numerous processing questions that required a trial-and-error approach.
Sudip was instrumental in keeping the project moving due to his extensive experience
working with various membranes and processing conditions, she notes.
The company continues to work on scaling
up the membrane formation process. Currently CMS can produce membranes with an area
of 50-100 square feet. Commercial membrane
systems will need to be hundreds to thousands of square feet.
Installation of a membrane solution is expected to provide significant cost and energy savings
at that large commercial scale. Initial targets for

the company will be smaller volume separations of olefins from waste streams, allowing
recovery of value that currently is lost. Companies with large distillation units have invested
significant money in them, and therefore their
replacement with an alternative technology will
take place slowly over time.
FAST PAY-BACK TIME

The economics of CMSs membrane technology are very positive at smaller scales too,
though. Our engineering economic estimates
show that payback will be six to 16 months
for our first applications, including recovery
of propylene from a polypropylene purge line
and separation of the C3 splitter bottoms,
says CMS CEO Erica Nemser.
She is also excited about the potential to
couple the membrane separation technology
with new technologies for the production of
ethane/ethylene from methane. The product
streams have low olefin concentrations and
therefore a cost-effective method for separat-
ing them is needed; our membrane technology is ideal for this application, she asserts.
The next step is bringing the membrane to
commercial status. CMS is starting with a pilot
installation at PBF Delaware City Refinery with
the goal of demonstrating the significant value
that can be brought to its customers. The unit,
which will be turned on by the end of 2016, will
operate on a mixed C3 stream and will be designed to allow variation of different system
conditions including pressure and temperature.
The potential of the new membrane technology is significant and is providing CMS,
a small company with approximately 30
employees, with tremendous opportunities.
We are focused on developing novel polymers for difficult separations, and innovation
has always been at the heart of what we do as
a company. We are very excited about the
impact the new technology will have on CMS
and are committed to bringing the technology
to full fruition, says Majumdar.
For more information on CMS, go to:
www.compactmembrane.com
ALPHA INNOVATOR OF THE YEAR ENVIRONMENT AND SUSTAINABILITY CATEGORY
FOR HIS key role in the development of the low-energy technology,

Sudip Majumdar, Compact
Membrane Systems chief technology officer, has been recognised
with the ICIS Alpha Innovator of the
Year Award in the Environment/
Sustainability category.
CMS CEO Erica Nemser attributes the success of the membrane
project and the development of the
technical innovations that underpin
the olefin-paraffin separation technology to Majumdars leadership
and direction of the research and
development programme.
The membrane
development programme required a leader
with an understanding of
the complex ways
Without his unique

set of qualities,
Compact Membrane
Systems would not
be where we are
today
ERICA NEMSER
CEO, Compact Membrane Systems
www.icis.com
in which membranes operate and the

ability to continually reinvent production processes to improve membrane performance, says Nemser.
Sudips broad experience with
membrane separations and deep
expertise with membrane contactors and gas separations enabled
him to identify the white space for
a novel facilitated transport membrane and the unique properties
that make it commercially and technologically successful, she adds.
In addition, he was able to pinpoint
the challenges that would need to be
overcome and identify the team that
could collectively address them.
Most importantly, Sudip helped
his team members avoid dead ends
and identify synergies across their
individual projects. He also had the
unenviable task of coordinating all of
the different pieces of the project and
keeping everything on track as the
project advanced.
Without his experience and
knowledge, the membrane development project would have taken substantially longer to reach the
current stage and performance,
with multiple forays on low yield
paths, she says.
Nimbleness of the team under
Majumdars leadership was also
crucial to the projects success,
SUDIP MAJUMDAR EFFECTIVE LEADERSHIP OF A NIMBLE TEAM
Chief technology office Sudip

Majumdar led the membrane
development project
according to Hannah Murnen, vice
president of business development. If a problem surfaced on a
Tuesday afternoon, by Wednesday
afternoon Sudip had already devised three ways to address the
problem and two had already been
tried while the third was in process.
This ability to pivot quickly while
not losing sight of the overall goal is
critical in the development of any
product. Sudip and his team manage to walk the line between pursuing their ideas to their fullest, but not
getting too attached to any one idea
so that if a problem arises they can

quickly switch tactics to continue
their progress, she explains.
The ability to balance the use of
risky divergent development techniques with powerful risk reduction
techniques also helps maximise
the overall likelihood of success for
the programme, she adds.
As an example, Murnen notes that
many of the problems CMS has
faced have been related to the scaleup of the manufacturing and membrane formation processes from the
very small lab scale processes to a
larger, more commercial process.
Sudip has consistently been
able to suggest ways around our
various scale-up issues and furthermore, he has been able to foster
and encourage creative thinking
amongst the team to try new solutions. This creative mindset coupled
with agile and responsive problemsolving has enabled the team to
overcome many problems in the
innovation process, she says.
Nemser concludes that:
Overall, Sudips leadership has
been critical in advancing our olefin paraffin development programme, and without his unique
set of qualities, Compact
Membrane Systems would not be
where we are today.
ALPHA INNOVATOR OF THE YEAR
Marc Swan (left) and Professor Jan Czernuszka the inaugural winners of the Alpha
Innovator of the Year award for new product development/process innovation
Oxtex creators
achieve Alpha
A unique collaboration between a surgeon and a scientist

has led to the development of a pioneering product for
use in reconstructive surgery
he Alpha Innovator of the Year

Award for Product/Process Development goes jointly to Marc Swan and
Professor Jan Czernuszka, who have
been instrumental in the development of a
unique self-inflating tissue expander that
improves reconstructive surgery in both
humans and animals.
How many surgeons do you know would
be willing to leave their practices to undertake
a PhD and develop new technology to solve
an unmet medical need? That is exactly what
Marc Swan, a consultant in plastic and reconstructive surgery at Oxford University Hospitals NHS Trust in the UK, did.
In the early 2000s, he was finding it difficult
to reconstruct soft tissue defects in children to
repair cleft palates and wanted to develop a
painless, self-inflating tissue expander to
replace the currently used balloon devices.
These expanders would be inserted under the
skin and as they expand, force the skin to grow
in order to accommodate its volume, thus providing extra skin and tissue for the surgeon to
use in reconstructive surgery.
Swan and his colleague Tim Goodacre

approached Jan Czernuszka, Professor of
Materials and head of the biomaterials group at
the University of Oxford, who brought in
Professor David Bucknall, a highly experienced polymer chemist. The group determined that hydrogel, a polymeric system that
swells when exposed to water, would be an
effective material. More importantly, medicalgrade hydrogels are typically used in the body,
such as in intraocular devices. The choice of
hydrogel therefore was a prudent one.
Swan left his practice and joined Professor
Czernuszkas group as a postgraduate student
to develop the new tissue expander. He led
the research effort by fostering collaboration
between researchers in the chemical, material
and surgical sciences. The value of a strong
cohesive team and not giving up on a great
idea cannot be over-emphasised, asserts Dr
Randhir Tindal, quality manager at Oxtex, the
company founded to further develop and
commercialise the new expander technology.
The first challenge was to create a hydrogel
that would preferentially expand in a specified direction. This development is the heart
of the innovation, because hydrogels typically
swell in all directions, notes Czernuszka.

Next, the researchers had to slow the rate of
expansion of the hydrogel to avoid cutting off
the blood supply to surrounding tissues. To
achieve this goal, the poly(vinyl pyrrolidoneco-methyl methacrylate) [P(VP-co-MMA)] hydrogel was coated with a medical-grade silicone polymer that allowed water to pass
through to the hydrogel at a reduced rate.
The final development involved the application of a second, stiffer biodegradable coating to prevent water absorption after insertion
of the expander. This delay allows the sutures
to heal before expansion takes place.
In the end we had a three-step expansion
process involving a time delay of around one
week, with slow expansion of up to six weeks
(with an increase in size of up to 1,500%) in a
single direction to a defined extent, Swan
observes. He successfully trialled the expander in a porcine model and the outcome of this
work generated two patents and, as mentioned above, the formation of Oxtex in 2011.
START-UP CREATED IN OXFORD

With the technology in place, the university
and private equity funders supported the creation of Oxtex to commercialise products for
both human and animal use. The company
was set up and is currently led by experienced entrepreneur Dr David Jackson, with a
board that includes Swan and Czernuszka.
To date, some 1.4m of funding has been
raised. Together with Oxford University, Oxtex
has also secured a 1.25m research collaboration with the University of Malaya to develop
devices for the treatment of crossbite in man.
The unique and integral partnership
between Swan and Professor Czernuszka led
to a pioneering novel solution for use in humans, and for the first time ever, in animal
applications, asserts Jackson.
The veterinary product, Expaniderm, was
launched in April 2016 and the human product is due to be approved by the EU (with CE
certification) in April 2017. It is being targeted
at three main markets: dental, reconstructive
surgery and cosmetic surgery. Oxtex is aiming
to achieve sales in human applications of some
100m by 2021 and to double this by 2025-26.
Swan is planning clinical studies for London in 2017, and Zamri Radzi, a Malay dental
surgeon (also a member of Professor Czernuszkas postgraduate group) is leading the
Malaysia cross bite trials.
The initial response to the veterinary
product has been very positive. Veterinary
surgeons are able to solve problems in horses
and dogs that they were never able to do before. We are also getting invaluable data that is
helping further improve the technology a
win-win situation, says Czernuszka.
For more information on Oxtex, go to:
www.oxtex.com/
www.icis.com
ELSEVIER R&D SOLUTIONS
Our everyday needs

demand chemical
innovations
CHRISTINA VALIMAKI ELSEVIER
R&D SOLUTIONS
t starts with the most fundamental

needs, such as clean water distribution.
The water crisis in Flint, Michigan, and
the controversy around the Dakota
Access Pipeline are two recent instances that
have brought the often taken-for-granted need
for clean water to the fore.
The chemical sector is a key player in ensuring that everyone has drinkable, pollutant-free
water. Virtually every aspect of food, as well,
from seeds to production to distribution (including safe handling and transportation) has
a chemical component.
Chemical innovation has
the power to overcome scarcity,
ensure sustainability and
improve safety.
Water supply and security

is just one of many global
issues that innovative
research can help solve
From food to energy to the environment, there is more

than meets the eye to the big, global challenges that
society faces today. Scientists know that most of our
big-picture social problems are, at heart, chemical
innovation problems. To solve our modern lifestyle
challenges, we need to look to the chemical industry
for groundbreaking solutions
www.icis.com
KeystoneUSA-ZUMA/REX/Shutterstock
By shedding light on critical

trends across sectors,
we seek to empower
organisations to address
sustainability-related
challenges
YOUNGSUK CHI
Chairman, Elsevier, & director of corporate affairs,
RELX Group
Climate change is of course one of the largest and most intimidating problems that must
be faced, and the chemical sector has a role in
the strategies for dealing with its causes and
effects. Greater precision in chemical pesticide development, for instance, has the
potential to partially solve public health
crises like the Zika virus. Meanwhile, the
pressing issue of energy production and storage is already very much entwined with
chemical innovation, which is advancing
new ways to create, capture and store energy.
While the chemical industry pursues solutions to these many serious needs, the RELX
Group and Elsevier R&D Solutions are right
ELSEVIER R&D SOLUTIONS
alongside providing support. As a company focused on science and research,

Elsevier knows that advances in chemistry
will be key to creating the sustainable solutions required to serve our growing global
population in every aspect of living.
Challenges still persist and evolve, however,
which means that chemical company portfolios must be able to shift and rebalance to meet
new or changing global needs. Returning to the
example of the Zika epidemic, that is a problem that emerged seemingly out of nowhere,
and it is one that does not discriminate based
on country or ability to pay it is an equal
opportunity problem that demands an immediate response from the scientific community.
In their efforts, chemical companies need
allies in both the public and private sector. The
United Nations Sustainable Development
Goals (SDGs), which were announced in 2015,
included goals for tackling climate change,
and the UN specifically cites the central role of
scientific research in this endeavour.
INTEGRATING SCIENCE
Thats why the RELX Group is investing its
resources and scientific understanding to help
attain these goals. Elsevier is a leader within
RELX, sharing insights on sustainability
science and its growth, and working with LexisNexis to offer an even broader range of knowledge which includes extensive legal documents
and resources that can provide information critical to dealing with regulatory matters.
As a scientific publisher, Elsevier knows
firsthand that publications on sustainability
topics are growing at a rapid rate as research
in this area is booming. At the same time, governments are addressing environmental concerns with new laws and regulations around
sustainability, and it is the science that is

often driving the legislation in the first place.
No longer can chemists imagine that they
are alone in the lab when working in order
to be truly successful, they have to think
about the regulatory and compliance implications of their research findings. And regulations established as a result of
the science affect the
business world, too,
sometimes in ending
outdated or unsustainable practices and put-
while also contributing to the global push for

a more sustainable world.
By shedding light on critical trends across
sectors, we seek to empower organisations to
address sustainability-related challenges. In
the chemical industry specifically, we support long-term decision-making with insights
on government regulations, green chemistry,
and the environmental impact of chemical
products.
AWARDING INNOVATIVE EXCELLENCE

At the end of the day, it all goes back to the
research, and thats why Elsevier R&D Solutions is proud to be the lead sponsor of the
ICIS Innovation Awards, now in its 13th year.
These annual prizes, which honour outstanding technological and business innovation in the chemical industry, provide a valuable opportunity to recognise the achievements
of innovation-minded companies and hardworking researchers who are making a better
world through scientific discovery.
This years ICIS award winners and runnersup have included truly amazing breakthroughs, such as Compact Membrane
Systems and CTO Sudip Majumdars energysaving method for the separation of olefins and
paraffins; Dow Chemicals Canvera polyolefin
dispersion technology and their Phormanto
recyclable thermoformed packaging; and
Covestros use of carbon dioxide (instead of
crude oil) in the production of plastics.
It is telling how many of these innovations
contribute to environmental sustainability,
and how many have already found or are on
their way to commercial success. More than
ever, in chemical innovation, doing the right
thing for the planet is also doing the right
thing for your businesss bottom line.
No longer can chemists

imagine that they are alone
in the lab when working...
they have to think about the
regulatory and compliance
implications of their research
findings
CHRISTINA VALIMAKI
Senior director, chemicals industry, Elsevier
ting restrictions on chemicals, but also in

opening up new avenues of opportunity for
businesses that innovate with sustainability
in mind.
Youngsuk YS Chi, chairman, Elsevier, &
director of corporate affairs, RELX Group,
notes that RELX Group is deeply committed
to sustainability, and each business unit prioritises sustainable practices in its day-to-day
operations. We believe this approach supports our long-term success as a company
DEDICATED TO A SUSTAINABLE FUTURE

From working towards the UNs sustainability goals to encouraging scientific ingenuity
through sponsorship of the ICIS Innovation
Awards, Elsevier and the RELX Group are
dedicated to establishing partnerships that
bolster sustainable development.
Boasting superior information, tools, technology and human resources, Elsevier is positioned to provide communities and businesses with the knowledge that powers impactful
chemical innovations.
These are the innovations that will solve
our most pressing and pervasive challenges
and ensure a more productive and sustainable
world.
Getty Images
The UN Sustainable Development

Goals agreed last year put great
emphasis on scientific research
Christina Valimaki is senior director, chemicals industry, at Elsevier, based in New York.
Contact her at c.valimaki@elsevier.com
For more details on Elsevier R&D Solutions,
go to: www.elsevier.com/rd-solutions/
chemicals
www.icis.com
BEST PRODUCT INNOVATION
Can coatings go
thermoplastic
ith Canvera polyolefin dispersions from Dow Coating Materials, it is now possible to apply
thin coatings of thermoplastic
olefins to the interiors of steel and aluminium
food and beverage cans.
Coatings are needed to protect the container
from corrosion caused by the contents and also
to protect the contents from contact with the
metal, ensuring preservation, flavour quality
and consumer safety. Conventionally epoxy
coatings are used but the technology requires
the use of bisphenol A (BPA), which is of concern for some consumers and brand owners.
High molecular weight, semi-crystalline,
thermoplastic polyolefins have been used for
decades in flexible and rigid plastic food
packaging. The high viscosities of melted
polyolefins, however, are not compatible
with existing equipment used to apply coatings to metal can interiors. Dow Coating
Materials has overcome this issue by developing aqueous dispersions of polyolefins with
properties suitable for application to metal
cans using existing coating equipment.
The dispersions are formed using Dow
Chemicals proprietary Bluewave mechanical
dispersion process, which enables the dispersion of polyethylene (PE) and polypropylene
(PP), very hydrophobic polymers, into stable
emulsions in water. The small
polymer particles remain suspended in water until applied
to a metal containers surface,
at which point a bake step removes the water and melts
the particles into a defect-free
continuous film coating the inside of the can.
The key to the success of the

project... was collaborating
with everyone in the entire
value chain
JONATHAN MASON
Associate research director, Dow Coating Materials
www.icis.com
The dispersions for use in the formulation of

interior can coatings consist of carefully selected
mixes of functionalised and non-functionalised
PE and PP polymers that afford the properties
required for effective application of the coatings
to cans and performance once they are applied,
according to Jonathan Mason, associate research
director for Dow Coating Materials.
The coatings need to have the right viscosity for application using existing coating equipment plus adhere strongly to metal and provide
protection against the very harsh environments
found inside food cans, he observes.
The mix of polymers was identified using
propriety high-throughput work processes,
and pilot facilities designed to mimic can
manufacturing equipment were used to optimise the polymer dispersions, coating formulations and application conditions to meet
stringent industry performance requirements.
LONG-TERM SOLUTION
The polyolefin can coatings have the same
safety and flavour profiles as polyolefin materials that are widely used in other food packaging applications, which is a big advantage
over the existing epoxy technology. Canvera
can coatings also do not contain any other
materials of concern commonly found in
epoxy coatings, such as styrene, epoxides and
phenolic crosslinkers, so they offer everyone
in the value chain from coating manufacturers
to consumers, including retailers, brand owners, governments, NGOs and can manufacturers, a long-term solution, according to Mason.
The complex value chain, in fact, posed
one of the greatest challenges to bringing this
innovative technology to the market. The
members of the chain are interdependent and
interrelated, yet each has different needs, and
all had to be included in the testing and evaluation of the coating, Mason explains.
The key to the success of the project, consequently, was collaborating with everyone in the
entire value chain, he notes. Other challenges
have included the long history of epoxy coating
use for food and beverage cans, which is evidenced by the fact that some of the testing protocols are epoxy-specific, and the lengthy approv-
Getty Images
New polyolefin dispersions from Dow Chemical are

ideal for the formulation of BPA-free can coatings
Dows Canvera polyolefin coating can be

applied on existing can coating lines
al process, according to Mason.
Canvera polyolefin dispersions were
launched in the third quarter of 2015, and the
milestone first commercial sales were made
in December of that year. Mason notes that
there are over 300bn cans of food and beverages consumed each year worldwide. Our
polyolefin technology is not the only one
under development as an alternative to BPAcontaining epoxy coatings, but our goal is to
be among those selected as the long-term
solution for the industry, he states.
Of course, Dow is also looking at other possible applications for the polyolefin dispersions. The technology allows for the creation
of polyolefin films in a way that was not previously possible, which opens up new applications. We envisage our dispersions being used
where polyolefins are already used but where
it might be better to apply films in a liquid form
and in new applications where polyolefins
would provide advantageous properties but
were never considered before because they
werent available in liquid form, says Mason.
For Dow Coating Materials, the programme
is a major one within the industrial coating
segment, and its potential to have an impact
on the business is significant.
For more details on Dow Canvera, go to:
www.coatings.dow.com/en/products/
canvera
U.S. CHEMICALS
Committed to
innovation and
sustainability
A new member of the Maroon Group, U.S. Chemicals
continues to go well beyond the basics for its customers
and the community
.S. Chemicals, the Connecticutbased chemical distributor, has

been sponsoring the ICIS Innovation Awards category for Best
Benefit for Environment and Sustainability
for eight consecutive years now. The company
supports this specific award as a reflection of its
commitment to innovation and sustainability.
These are core values that drive U.S.
Chemicals day-to-day activities, according
to sales manager Jenny Anderson. Today, if
you are not adapting and evolving, ie innovating, you are not going to continue to be a
viable business partner. We are proud of our
association with many of the companies taking part in the ICIS Innovation Awards.
This sponsorship is an opportunity to
applaud and recognise the people and organisations in the chemical industry that are driving
and developing the future in a
manner that helps ensure a
safer and healthier world
now and for the next
generation.
In May 2016, U.S.
Chemicals became
a member of the
Maroon Group, one
of the fastest
growing
specialty
By continually improving
products, technologies and
processes, chemical
companies can create
competitive advantage
and growth
JENNY ANDERSON
Sales manager, U.S. Chemicals
chemical distributors in North America. Based

in Avon, Ohio, Maroon has thrived on creating
success for customers by forming partnerships
with world-class manufacturers and supplying
consistent products on time, according to Carol
Piccaro, president of U.S. Chemicals.
Maroon Groups culture, values and business model are a great fit with U.S. Chemicals.
This move is an important step for U.S.
Chemicals and we look forward to carrying on
the legacy of our company, she comments.
As a member of Maroon, U.S. Chemicals will
continue to focus on partner needs, adapting
and developing value-added services such as
blending, grinding/micronising, special packaging and toll manufacturing to create value and
growth for all parties, according to Anderson.
Innovation in the industry is critical to
address customer needs. By continually
improving products, technologies and processes, chemical companies can create competitive advantage and growth, she adds.
Distributors not too long ago focused principally on storage and delivery, serving as a pipeline to the marketplace for manufacturers and a
source of materials for customers. Working
between manufacturers and customers, distributors have a unique vantage point from which
to identify opportunities and add value, according to Anderson. The most successful distributors today are pursuing those opportunities and
doing and driving a great deal more, she notes.
U.S. Chemicals recognises that its partners
are looking for more and that in order to set itself
apart the company must deliver beyond the
basics. For Anderson that means forming strategic partnerships, growing the customer base for
suppliers and serving as a reliable, easy-to-work
with source of high-quality products.
We have to continually improve and
enhance our offering to the marketplace in
order to maintain our position as the obvious
go-to distribution partner, she says.
As a small business, U.S. Chemicals also has
the flexibility and nimbleness to trial many

new concepts and services. Says Piccaro:
Whether looking at our internal processes
and organisation or at unique opportunities in
how and what we do for suppliers and customers, weve got a well-lubricated reverse
gear. We try many ideas; if somethings not
going right or working to create value, it wont
take us long to change track.
U.S. Chemicals has over 50 years of history
and culture that places innovation and sustainability at the forefront, according to
Anderson. Our relentless customer focus
feeds a culture of innovation a think outside of the box mentality and a passion for
safe-guarding the environment, she states.
That focus plays
out in many ways,
including actively
seeking out and
supporting environmentally
responsible manufacturers and extensive
involvement in the
Maroon Groups culture,

values and business model are
a great fit with U.S. Chemicals
CAROL PICCARO
President, and CEO, U.S Chemicals
National Association of Chemical Distributors (NACD). Both U.S. Chemicals and Maroon participate in the NACDs Responsible
Distribution Program that enables companies
to demonstrate their commitment to continuous performance improvement in every
phase of chemical storage, handling, transportation and disposal.
U.S. Chemicals anticipates working
toward ISO (International Organization for
Standardization) certification leveraging
Maroons experience in demonstrating conformity to international standards that reassure customers that products are safe, efficient and good for the environment.
Currently, there is great enthusiasm at U.S.
Chemicals for the development of a bag recycling initiative, the latest programme that
supports the companys focus on sustainability. Piccaro is particularly enthusiastic about
a Maroon project that is looking at technology
tools to create paper-less offices for all Group
companies an initiative she has supported
for years in the Darien office.
It is a terrific complement to the recycling,
environmental and re-forestation initiatives
U.S. Chemicals supports, she observes.
For more information on U.S. Chemicals,
go to: www.uschemicals.com
www.icis.com
Covestro
BEST INNOVATION FOR ENVIRONMENT AND SUSTAINABILITY
The Covestro team, led by Dr Christoph Guertler, discovered just the right catalyst
Putting carbon
dioxide to work
New catalytic technology
from Covestro allows the
incorporation of carbon
dioxide into polyurethane
products with reduced
carbon footprint
ardyon polyols from Covestro have

a substantially lower greenhouse
gas potential and consume less
fossil resources in their production
due to the replacement of a portion of the
typical epoxide (propylene/ethylene oxide)
starting materials with carbon dioxide (CO2).
The search for such a reaction began back
in the 1960s, explains Dr Karsten Malsch,
venture manager for CO2-Polyols with Covestro, but finding an effective catalytic solution
was elusive due to the inertness of CO2.
After teaming up with CAT Catalytic Center
at RWTH University in Aachen, Germany,
Covestro was finally successful in developing a
proprietary catalyst system that mediates the
reaction of CO2 with propylene oxide to form
polyether carbonate polyols. The reaction is
not only efficient; it is exothermic and thus
www.icis.com
does not require additional energy inputs,

making the process both ecologically and
economically attractive, according to Malsch.
The heart of the innovation is the catalyst
technology, which was designed to work most
effectively within an optimum process window
with optimum reaction conditions, he says.
Approximately 20wt% of the epoxide consumed to form conventional polyols is replaced
by CO2 in the cardyon products, leading to a
15-20% reduction in the carbon footprint and
fossil resource consumption of the polyols.
In addition, we are conserving other sources of carbon and turning the waste product
CO2 into a raw material for the chemical valueadded chain, Malsch states. Equally important, he notes, is the fact that the new catalyst
technology is allowing access to a new carbon
source for polymer production.
GOVERNMENT SUPPORT
In addition to collaborating closely with
RTWH Aachen on the development of the
catalyst, Covestro received support from the
German Federal Ministry of Education and
Research, which funded the Dream Reaction and Dream Production projects in two
phases from 2008 to 2010 and 2011 to 2013,
respectively. The company has also been partnering with customers in the polyurethane
(PU) industry to evaluate the properties of the
cardyon polyols and determine their feasibil-
ity for production of commercial products.

The first-generation polyols are designed for
production of flexible PU foams used in mattresses and upholstered furniture. Consumers
are looking for more sustainable products, so
brand owners are in turn looking for materials
with favourable life-cycle assessments. Foam
manufacturers thus want to provide foams
with better life-cycle properties, which largely
are derived from having a reduced carbon footprint. Cardyon polyols are helping meet the
expectations for greater sustainability across
the value chain, Malsch asserts.
He adds that one of the challenges that
needed to be overcome initially both internally and externally was convincing people
of the importance of reducing carbon footprints and increasing sustainability. Today
more and more people understand the value
of these efforts for their own sake, and it has
become clear that the technology has real
commercial value as well.
The actual commercial potential depends on
the target market. The flexible foam market for
polyols, the target for the first-generation cardyon technology, is a 3-4m tonne/year market.
Covestro is developing later-generation products for other applications in the coatings, adhesives, sealants and elastomers
market. Polyols are now
being designed specifically
for the production of elastomers.
We are also looking into
ways to broaden the technology further, such as expanding it to other C1
building blocks, and
We are also looking into

ways to broaden the
technology further, such
as expanding it to other C1
building blocks
KARSTEN MALSCH
Venture manager, CO2-Polyols, Covestro
believe there is a lot of potential for its growth,

Malsch observes.
He adds that, The cardyon platform is
considered a lighthouse example of our innovation efforts and an important component of
our innovation strategy, which involves looking at innovation in terms of improving processes or developing sustainable solutions.
Covestro has just finished building a production facility with a capacity of 5,000 tonnes/year
at its Dormagen site in Germany. We are not
just talking about sustainable innovation, we
are making it happen, Malsch concludes.
For more information on Covestro and
cardyon, go to: www.covestro.com
EXXONMOBIL CHEMICAL
Close integration
speeds innovation
ExxonMobil Chemical
develops innovative
products in close
collaboration with its
customers around the
world, helping bring
solutions to their business
cessing windows, application techniques and

service temperature ranges to create much
cleaner and more reliable adhesives.
The company also launched improved
toughness impact copolymer polypropylene
(PP) for automotive applications. This latest
high-impact strength polymer from ExxonMobil enables tailored performance compounds with exceptional cold temperature
properties. The lower specific gravity of impact copolymer PP resins compared with engineering plastics allows lower weight compounds and car components, leading to
improved fuel economy and reduced emissions. Another sustainability attribute is that
this new resin can be recycled within the
manufacturing stream.
By focusing on [customers]
specific market needs, we
develop new products and
advanced solutions for
their businesses
NICK CLAUSI
Vice president, technology, ExxonMobil Chemical
ExxonMobil Chemical
t ExxonMobil Chemical, one of the

worlds largest chemical companies, developing innovative technologies is crucial to maintaining
long-term competitive advantage, according
to vice president of technology Nick Clausi.
ExxonMobil scientists work closely with
customers to develop new products and applications. Our customers want new ideas to
grow and differentiate their businesses quickly, Clausi says. Close integration with our
customers and the entire value chain enables
us to increase the value of our business.
Clausi notes that customers in developing
regions are investing in state-of-the-art equipment to produce the highest quality products
possible. He says that about 60% of new plastics processing equipment is being purchased
in the growth markets. By focusing on their
specific market needs, we develop new products and advanced solutions
for their businesses.
Over the past year, ExxonMobil has launched three
new product lines for wideranging applications in the
packaging, agriculture, construction,
personal
care and automo-
Technical innovation in polyolefin films is

focused closely on customer needs
tive markets. It has expanded its comprehensive slate of polyethylene (PE) products with
the introduction of Exceed XP performance
polymers. Developed with advanced catalyst
technology, process research and applications
expertise, Exceed XP is specifically designed
to give extreme performance in a variety of
film uses and to run at faster production rates.
BALANCED PROPERTIES
Exceed XP offers a balance of performance and
cost, with the potential to deliver co-extrusion
performance in a monolayer structure, according to Clausi. These unique polymers are especially well-suited for demanding applications
such as liquid and food packaging, construction liners and agricultural films. Exceed XP
is the product of choice when extreme performance matters, Clausi says.
ExxonMobil also introduced three new
grades of low viscosity Vistamaxx performance polymers that enable the formulation
of low odour, low density hot-melt adhesives
used in packaging, hygiene products and assembly applications. Our low viscosity Vistamaxx polymers increase hot-melt adhesive
formulation flexibility in response to increasing performance needs from the adhesion industry, says Clausi.
Vistamaxx polymers provide broad pro-
MANY OPPORTUNITIES
ExxonMobil uncovers opportunities for innovation by identifying areas of strong industry
growth and by considering what material may
be needed in the future. Importantly, they are
not limited to existing ExxonMobil Chemical
businesses. Opportunities can present themselves in many forms from improvement of
existing products and processes to entirely
novel technologies. We are interested in all of
them and welcome ideas from all possible
sources, Clausi says.
Collaboration with academic research
groups is one of the ways ExxonMobil speeds
the development of new technologies.
Through collaboration with strong academic
institutions, we are constantly exploring new,
more efficient ways to produce the energy and
chemicals consumers around the world rely
on every day, explains Clausi.
One such collaboration with researchers
at the Georgia Institute of Technology is
a new carbon-based membrane to separate
paraxylene from complex mixtures of
aromatics. The carbon-based membrane is
about 50 times more energy efficient than
the current state-of-the-art membrane separation technology.
According to the company, if it is brought
to industrial scale, the technology could reduce industrys global annual carbon dioxide
emissions by up to 45m tonnes and reduce
global energy costs for plastics production by
up to $2bn/year.
For more details on ExxonMobil Chemical,
go to: www.exxonmobilchemical.com
www.icis.com
Oxidative coupling of methane will soon

be commercially available using a new
catalyst developed by Siluria Technologies
Converting
natural gas
to ethylene
he conversion of methane to ethylene

using the oxidative coupling of
methane (OCM) process has been
one of the holy grails of the petrochemical industry for many years. Catalysts
were developed in the early 1980s, but their
performance and lifetimes were not commercially viable.
Advances in nanotechnology and highthroughput experimentation techniques have
enabled scientists at San Francisco-based
Siluria Technologies to develop a new catalyst system that functions under simple operating conditions and has a practical lifetime
(at least one year to date), according to Erik
Scher, Silurias chief operating officer and
company co-founder.
The catalyst is prepared from readily available, inexpensive raw materials and does not
include any precious metals. Siluria has established a very strong intellectual property position with over 150 patents issued or applications pending, and has successfully produced
the commercial catalyst both in-house and
using a catalyst production partner.
The OCM reaction with this catalyst is
highly exothermic. The heat generated is
captured in the form of steam and used for
downstream processing. Not only are we getting a valuable end product from a very inexpensive feedstock, we are also reducing our
point source emissions and reducing the overall carbon footprint of the process, says chief
financial officer Jeff Wood.
Equally important is the scalability of the
reaction, which is economically competitive
at both small scale, thus matching derivatives
consumption, to the very large scale observed
for current ethylene crackers. As a result,
ethylene production can be achieved where
previously it would not have been considered, opening new opportunities.
www.icis.com
Siluria has also developed and optimised a

process for the conversion of ethylene to
liquid fuels (ETL) via oligomerisation over a
zeolite catalyst, thus creating a non-syngasbased process for natural gas to fuels.
These processes enable natural gas to supplement petroleum as the worldwide basis for
transportation fuels and commodity chemicals and also provide the industrys first and
only solution for small-scale on-purpose
and distributed-scale ethylene production,
observes Robert Trout, Silurias CEO.
With these two reactions, we have access
to very large petrochemical and energy markets. The addressable markets are enormous,
he continues. Trout does not see the company
initially looking at world-scale ethylene production. The focus is currently on smallerscale plants where ethylene production
would be attractive but is not economic using
conventional technologies.
Scher points out that Siluria is not solely an
OCM company, but has a process technology
platform with OCM as the core reaction and is
working to develop other capabilities that
build off the OCM technology. For instance,
Siluria has developed an OCM-to-ethylene
process configuration incorporating ethane as
Silura Technologies
Siluria Technologies demonstration plant

in La Porte, Texas, is on a Braskem site
a co-feed to enhance feedstock flexibility.

In addition, the company has formed partnerships with two companies in 2016 to further develop its technology platform. A strategic partnership with Air Liquide Global E&C
Solutions, the engineering and construction
business of the Air Liquide Group, will focus
on the development of novel catalytic processes utilising both companies expertise in
gas conversion technologies.
And a joint collaboration agreement with
Italys Maire Tecnimont will target the development of a process for the conversion of
natural gas directly into commodity chemicals and their derivative products.
Siluria continues to build upon its partnership with Linde Engineering for bringing its
OCM technology to the market.
Currently Siluria operates a number of
pilot facilities in California that can take natural gas from a pipeline all the way to liquid
fuels and ethylene. A larger OCM demonstration plant (1/60 to 1/400 the size of a commercial plant), is co-located at
Braskem Americas polypropylene plant in La Porte,
Texas, and became operational in 2014. It has allowed
the company to optimise
operating conditions and
evaluate various feedstocks.
Discussions are
underway with sev-
We are excited about

building... an ever-expanding
toolbox of invaluable
catalysts and processes
ERIK SCHER
Chief operating officer, Siluria Technologies
eral different companies that are potentially

interested in commercialising Silurias OCM
and ETL technologies. Some are considering
joint ventures, while others are interested in
licensing agreements, according to Scher.
While it is too early to provide specific
dates, he does expect to see plants up and running within the next few years.
Siluria will not be resting on its laurels,
though. Innovation is core to what the company does. While the OCM and ETL technologies give us access to very large addressable
markets and are creating tremendous opportunities, we will remain an innovation-based
company. We are excited about building on
those technologies to create an ever-expanding toolbox of invaluable catalysts and processes, asserts Scher.
For more details on the Siluria technology,
go to: www.siluria.com
The 2nd largest manufacturer of

polymer stabilizers in the world,
Songwon offers a complete range of
SONGXTEND Stabilizer Solutions

SONGNOX Stabilizers
additives and specialty chemicals to
SONGNOX OPS Blends
the plastics industry.
SABOSTAB Light Stabilizers
We understand the challenges our
SONGSORB Light Stabilizers
customers encounter on a daily basis
SONGSTAB PVC Stabilizers
and what they require to meet the

demands of their various industries.
We strive to provide solutions that give
them a competitive edge.
With our highly advanced production
processes and technology we can
tailor our products to specication.
For more information,

visit us at K 2016, or go to
www.songwon.com/K2016
We serve our customers from
our regional headquarters in Korea,
China, Japan, Switzerland, USA,
India, UAE and Bahrain.
SONGSTAB Acid Scavengers

SONGCAT Organo-Tin Intermediates
SONGCIZER Plasticizers
SONGSTOMER TPU Grades
Cultura/REX/Shutterstock
SPECIAL REPORT K SHOW
Plastic convertors have been keen to secure polymer supplies for their mouldings machines
PE/PP markets
still in turmoil
European PE and PP markets have had a rocky ride in the past 18 months,
with buyers chasing material and supply tightness driving up prices
www.icis.com
THE ECONOMY
CLASS SEAT THATS
ECONOMICAL
ON FUEL
Created using SABIC ULTEM 9085 resin, this stylish
aviation prototype was built from just fifteen 3D printed
components. As well as lower manufacturing costs,
the lighter weight and design would also help save fuel.
Another great example of Chemistry that Matters
delivering more effective solutions.
See this innovative aircraft seat

and discover other solutions from
SABIC at K 2016 Hall 6 Stand D42
SABIC.com/KSHOW
2016 Copyright by SABIC.

All rights reserved.
LINDA NAYLOR LONDON
CRUDE OIL PRICES FELL DRAMATICALLY IN MID-2014 BUT HAVE FIRMED

SINCE THE START OF THE YEAR
lastics players globally are preparing

to attend the K 2016 trade fair in
Dusseldorf, Germany, from 19-26
October, and while some will be presenting their latest shiny machinery to potential customers, others will be looking to
make new fruitful partnerships. Many more
will be maximising their time pressing the
flesh with old contacts, and wondering what
we can expect from the plastics markets in
the months to come.
Since the last K Show in 2013, the European polyethylene (PE) and polypropylene (PP)
markets have been through the wringers, and
are still seeing the effects of the unprecedented events of 2015.
The crash in crude oil prices, the fall of the
euro against the US dollar and a series of
force majeures on both monomer and polymer left the European PE and PP markets
tight last year, with prices soaring. Lines
closed for lack of product and there were
apocryphal tales of product being airlifted at
great cost to stricken converters.
Seasoned polymer buyers were shocked.
In my 30 years in the polymer industry I
have never seen anything like this, said one
large buyer, and this sentiment was echoed
many times.
It led to arguments between buyers and
their suppliers over whose responsibility it
$/tonne
Brent crude oil spot - dated BFOE FOB UK/Norway
1,000
800
600
400
200
0
Jun
Aug
2014 2014
Oct
2014
Dec
2014
Feb
2015
Apr
2015
Jun
2015
was to hold stock.

Early in the year demand in Europe had been
poor on the constant expectation of everdecreasing prices on crude oil weakness, but it
returned in March 2015 when crude oil prices
rose, and PE and PP supply tightened quickly.
Producers had been taking advantage of
the weak euro to export and a perfect storm
arose when European buyers came back to
the market.
Plants that had been expected to run only
at less than optimum rates were pushed hard
and many failed, both on the monomer and
polymer side, leading to a series of force
majeures rarely seen in Europe.
This highly unusual situation led to a
change in behaviour that has lasted through-
RECENT POLYETHYLENE CLOSURES IN EUROPE

Company
PE grade
Location
Capacitytonnes/year
Status
Date
HDPE
Tessenderlo, Belgium
190,00
Closed
End 2012
LLDPE*
Priolo, Italy
150,000
Closed
Q3 2013
HDPE
Wesseling, Germany
100,000
Closed
Q3 2013
LDPE**
Gela, Italy
150,000
Closed
End 2013
Borealis
HDPE
Burghausen, Germany
175,000
Closed
End 2014
Total
HDPE
Antwerp, Belgium
70,000
Closed
End 2014
Repsol
HDPE
Puertollano, Spain
90,000
Closed
Q2 2015
Start-up
Dow Chemical
Versalis
LyondellBasell
Eni
Linear low-density polyethylene

**
Low-density polyethylene
*
PLANNED US POLYETHYLENE START-UPS IN NORTH AMERICA

Company
Braskem Idesa
Sasol/INEOS
NOVA Chemical
Braskem
ExxonMobil Chemical
Chevron Phillips Chemical
Capacity,
tonnes/year
Grades
Location
1.05m
HDPE
Veracruz state, Mexico
2016
470,000
HDPE
La Porte, Texas
2016
454,000
LLDPE
not specified
UHMWPE
La Porte, Texas
Joffre, Alberta Q3, Q4 2016

H2 2016
1.3m
PE (premium)
Mont Belvieu, Texas
H2 2017
1.0m
H2 2017
HDPE, LLDPE, other
Sweeny, Texas
Dow Chemical
750,000 PE (high-value), LDPE
Freeport, Texas
2017
Sasol
470,000
LLDPE
Lake Charles, Louisiana
2017
Sasol
420,000
LDPE
Lake Charles, Louisiana
2018
Formosa Plastics
567,000
LDPE
Point Comfort, Texas
2018
Formosa Plastics
525,000
HDPE
Point Comfort, Texas
2018
SOURCE: ICIS
www.icis.com
Aug
2015
Oct
2015
Dec
2015
Feb
2016
Apr
2016
Jun
2016
Aug
2016
Oct
2016
SOURCE: ICIS
Many converters have

learned the hard way that
security of supply is more
important than price
out 2015, but which could be coming to an
end, said sources.
Throughout 2016 converters and their
own downstream buyers alike have been
making sure they have stock, to ensure security of supply that they feared might be interrupted again.
PE PLANT CLOSURES
Many converters have learned the hard way
that security of supply is more important than
price, and prices certainly rose.
Another reason that supply was tight,
apart from the force majeures, was that less
material was available following the closure
of a series of PE plants in particular, that
began in December 2012, with the last one
closing in Puertollano, Spain, in the second
quarter of 2015.
These closures, along with natural growth,
have left Europe as a net importer of highdensity polyethylene (HDPE), with C4 (butene based) linear low-density polyethylene
(LLDPE) having been a net imported product
already for some years.
There have been some quiet debottleneckings occurring at some sites in Europe, but
major investment has been sadly lacking.
In 2016, contracts on both PE and PP were
negotiated higher than 2015, with producers
being able to impose harsher conditions on
many buyers on annual contracts. Producers
margins have risen and stayed higher, and
there are now signs that sellers are looking for
more margin in 2017.
A couple of producers pointed out that for
any investment to be made in Europe, stronger margins would have to be sustained for several years, and fierce competition from North
America was expected imminently with its
European polyolefin producers

have been hit by a series of
force majeure incidents in
recent years
PP: polypropylene
LDPE: low density polyethylene
LLDPE: linear low density polyethylene
HDPE: high density polyethylene
November 2014
INEOS
Grangemouth
MDPE: medium density polyethylene
November 2014
September 2015
ALL PE
Feb 2014
July 2014
July 2014
May 2015
SABIC
LBI
LBI
July 2015
Wilton
Carington
United
Kingdom
March 2015
DUCOR
Rozenburg
Netherlands
June 2014
April 2015
SABIC
TOTAL
Lillo
EXXON
Czech Republic
BOREALIS
Kallo
March 2015
TOTAL
Lillebonne
Plock
Wesseling
March 2015
April 2015
Carling
TOTAL
Slovakia
LBI
France
Gonfreville
Munchsmunster
Austria
August 2015
May 2015
Sarralbe
INEOS
Lavera
Portugal
Lavera
March 2015
Schwechat
Italy
October 2015
April 2015
TOTAL
March 2015
BOREALIS
INEOS
May 2015
October 2014
May 2015
LBI
Dunkirk
June 2015
BasellOrlen
July 2014
INEOS
POLYCHIM Belgium
July 2014
Germany
March 2015
March 2015
VERSALIS
Dunkirk
April 2015
Poland
July 2015
Gellen
Feluy
May 2014
March 2015
SABIC
Gelsenkirchen
July 2015
March 2015
March 2015
LBI: LyondellBasell
LBI
Aubette
Slovenia
Hungary
Croatia
Montenegro
August 2015
INEOS
Bosnia
Rosignano
May 2015
REPSOL
Sines
April 2014
Spain
June 2015
Serbia
LBI
Brindisi
This infographic shows the number of force

majeures declared on polyethylene and
polypropylene in Europe in 2014 and 2015.
www.icis.com
DELTA BETWEEN LDPE FD EU GROSS PRICE COMPARED WITH PREVAILING

ETHYLENE CONTRACT PRICE
700
600
500
$/tonne
upcoming new ethane-based production.

Some plants are already on stream, and some
are imminent.
At the recent European Petrochemical
Association (EPCA) meeting in Budapest,
Hungary, some sources in the know expected some of this production to be delayed.
They also suggested that producers with assets and partnerships in Europe would be
loath to upset the apple cart with aggressive
selling there.
400
300
200
You can get what you need in

Europe... But nobody is offering
price reductions on anything
BUYER
PE supply has been more available, and a

couple of grades in particular high-density
pipe and metallocene LLDPE have seen
poor demand in recent weeks.
Imports of some grades have had an
impact as buyers and their customers have
been destocking, and producers have found it
hard to pass on the increase in the ethylene
contract to their buyers with the exception
www.icis.com
100
0
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep
2015
2015
2016
SOURCE: ICIS
DELTA BETWEEN HOMOPOLYMER INJECTION PP PRICE COMPARED WITH

PREVAILING PROPYLENE CONTRACT PRICE
600
500
$/tonne
US CAPACITY COMING ON
In an interview with Nigel Davis of ICIS, Bob
Patel, CEO of LyondellBasell, suggested that
ethylene cycle tightness may be buoyed later
this decade if coal-to-olefins and methanol-toolefins plants in China do not come on stream
as planned, because of water use and other
environment related issues.
Even 18 months ago, 2017 was seen as the
on-stream date for many of the new US crackers under construction on the US Gulf Coast,
but those dates appear to have been pushed
out, he suggested, towards 2018, thereby
maintaining a degree of tightness in the global
ethylene market. There may be some excess
in 2018/19, he said but not a lot of new investment has been announced beyond that.
There would not be a wave of PE imports
to Europe, he suggested, because of grade
requirements and a need to maintain close
customer relationships.
Meanwhile, PE and PP sources are watching movements closely in October, and are
concerned with a shorter-term outlook.
The October ethylene contract rose by 15/
tonne, while the propylene contract increased
by 35/tonne, reflecting higher costs, and in
the case of propylene, very tight supply.
The tight upstream supply has also affected some PP production, and unexpectedly
strong demand in August, indeed strong demand for the whole year so far, has meant
that PP has been tight, with only some commodity grades available from European producers for spot.
400
300
200
100
0
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr Mar Apr May Jun July Aug Sep
2015
2015
2016
SOURCE: ICIS
of the UK, where buyers are under pressure

to pay large hikes, as the pound sterling
crashes against the euro.
PP producers, on the other hand, have
managed to pass on at least some, if not the
whole, propylene increase to their customers.
Margins made in 2015 have slipped for both
PE and PP, however.
DELTAS ARE SLIPPING

The charts above show the current deltas between ICIS low-end low-density polyethylene
(LDPE) FD (free delivered) EU gross prices compared to the prevailing ethylene price, and the
ICIS low-end FD (free delivered) EU gross
homopolymer injection prices compared with
prevailing propylene monomer contract prices.
The current spread between ethylene and
PE is down from its highs this year in April
and May, but it is still significantly higher
than at the end of 2014, before the momentous events of 2015 took place. Similarly, the
spread between monomer and PP is lower
than in April and May 2016, but it too
remains higher than end-2014/early 2015.
Pundits are making projections for the rest
of the year. PE demand is soft for some grades,
imports are more available than in the PP sec-
The current spread between

ethylene and PE is down
from its highs this year in
April and May
tor, but crude oil and naphtha are up, and ethylene contracts have been following upstream
costs closely in recent months.
You can get what you need in Europe, said
another large buyer on October pricing, But
nobody is offering price reductions on anything.
We cant see much coming from the US
before 2018, he continued.
PP sellers are confident. We still believe
underlying demand is strong,
Imports are more likely to affect PE than
PP, most sources agreed, and new capacity
from Egypt and Saudi Arabia, also the US,
would have to have some impact, but for the
fourth quarter, contractual sellers were quietly confident.
PE and PP pricing has a habit of moving
quickly during the K trade fair so much so
that some producers no longer discuss prices
with their customers during that time.
BOREALIS, BOROUGE
AND NOVA CHEMICALS
INVITE PARTNERS
AND CUSTOMERS TO
JOIN OUR JOURNEY
AT K 2016
An enhanced customer experience across global markets filled
with cutting-edge innovation, new applications development,
and steady strategic expansion.
Borealis, Borouge and NOVA Chemicals are three leading
providers of chemical and innovative plastics solutions and
members of a global family of polyolefins companies.
Each of these three companies is legally independent and
operates as such, yet all share the strong, stable backing
of their owners OMV, the Abu Dhabi National Oil Company
(ADNOC), and the International Petroleum Investment Company
(IPIC). They share a common foundation of growth through
innovation, and a long-term commitment to maintaining their
engagement along the entire value chain.
K Fair 2016 takes place from 19 to 26 October in Dsseldorf,
Germany. Join our journey and visit us in hall 6 at stand A43.
www.borealisgroup.com
www.borouge.com
www.novachem.com

JOJ ad_85x246_07_09_2016_high.indd 1
www.icis.com
ICB_Template.indd
1
07.09.16 09:57
06/10/2016 16:08
Players ready for

the main event
Polymer companies are gearing up for this years K Trade
Fair to showcase their latest products and technologies
STEPH HIEATT LONDON
usseldorf, Germany, is once again

opening its doors to the worlds largest plastics and rubber trade fair. The
triennial event promises to be bigger
and better than ever, attracting thousands of
delegates and a host of exhibitors from 19-26
October. Here is a selection of some of the
products, technologies and processes being
showcased.
Covestro sheds some light on textiles technology

Covestro is showcasing a luminous dress at K 2016 that
demonstrates the versatility of
its innovative smart circuit systems. The garment grabs the
attention by incorporating an
array of light emitting diodes
(LEDs) which could be used
to illuminate pedestrians or
cyclists, and help to reduce
traffic accidents.
Central to its development is
an electronic system that is

responsive to movement without losing any of its functionality. The LEDs are not positioned
on a panel or strip but on a
piece of soft fabric, allowing
them to bend and flex with the
movement of the wearer.
The system comprises a
flexible and formable film
made of thermoplastic polyurethane (TPU). The TPU is the
substrate for the printed copper circuits that can also be

bent and stretched.
The smart circuits used in
the dress are produced using
an efficient, multi-stage process. Copper films are laminated on to the polyurethane
(PU) films, and printed circuits
are produced in a subsequent
structuring operation featuring
highly effective adhesion.
These coated films are then
shaped using conventional
thermoforming.
The films are resistant to
standard etching and imaging
processes, with the formable
electronic systems able to be
directly laminated on to textiles.
The technology has a variety
of applications including automotive and construction.
DOW UPS PACKAGING

PERFORMANCE
LANXESS TECH PROVIDES FOOD FOR THOUGHT
www.icis.com
The free-flowing properties

of the 0.3mm spheres make
precise metering easier and
prevent clumping during the
mixing process. With four times
higher bulk density than powder, the microgranules allow for
simpler processing, transport
and storage.
LANXESS
Macrolex Gran, the high-tech

microgranule technology developed by LANXESS, can be used
to colour plastics for food contact applications and offers
excellent dispersion properties.
The microgranule form
means the colourants compare
extremely favourably with powders and compact granules,
owing to their dispersion, processing and safe handling
properties. Macrolex consists
of hollow spheres that can be
easily crushed, which means
they can be quickly, evenly and
completely distributed and
incorporated into the plastic.
Providing brilliant colours
With its variable sizes,

Macrolex Gran is both big
enough to form very little dust
yet with a smaller particle size
than powder, it ensures rapid
and complete solution dissolving in the plastic.
As a result, the granules also
make an important contribution
to occupational safety and environmental protection since dust
development in the processing
of Macrolex Gran is much less
than with powders. This not only
considerably reduces the risk of
a dust explosion but cuts costs
for protective measures and
facility cleaning.
Dow Chemicals packaging and specialty plastics unit has introduced its INNATE Precision
Packaging Resins a new family of resins that
balances toughness and stiffness with tear
and puncture resistance.
Suitable for everything from flexible food packaging to heavy-duty industrial shipping sacks,
INNATE resins offer up to twice the abuse resistance in co-extruded films compared to tested
standard polyethylene resins on the market.
Created from a patented molecular catalyst
coupled with advanced process technology,
INNATE resins deliver an unmatched stiffnesstoughness balance, are easy to process and
offer improved sustainability profiles. It means
that individual and bulk packaging needs can
be significantly downgauged, delivering a more
environmentally-friendly and cost effective
packaging solution.
INNATE Precision Packaging Resins were
born from a breakthrough, patented catalyst
and process technology and gives brand owners, retailers and converters what theyre
demanding: the ability to create precision
combinations that deliver high performing
food, consumer and industrial packages,
says Nestor de Mattos, marketing director for
Dow Packaging & Specialty Plastics.
Dow Chemical
Covestro
COVESTRO IMPRESSES WITH LED DRESSES
Solving packaging challenges
EXCEEDINGLY GOOD PERFORMANCE FROM EXXONMOBIL CHEMICAL
Performance polymers provide agricultural harvest protection
BASF has expanded its portfolio of partially

aromatic polyamides and says its new
polyphthalamide (PPA), Ultramid Advanced N,
means it is now possible to design lighter,
smaller and stronger plastic components for
challenging environments where other materials may struggle.
Several grades of Ultramid Advanced N
have been developed, from unreinforced to
varying degrees of glass fibres, carbon fibres
or mineral fillers. Depending on the requirements of the individual application, various
heat stabilizers and flame-retardant grades
are also available.
Dubbed the new superhero for engineers,
BASF says Ultramid Advanced N can deliver excellent mechanics of up to 125C in wet or conditioned state and boasts very low water uptake,
which results in high dimensional stability.
It also offers resistance to hot oil, coolants,
aggressive fuels, acids, calcium or zinc chloride solutions, and has excellent wear behaviour and abrasion resistance.
It is simple to process with a broad parameter window and good flowability, with several
post-processing options such as welding, laser marking, and reflow soldering.
Ultramid Advanced N has a variety of applications, ranging from consumer electronics to
automotive components.
Liquid packaging performance
their businesses, says Cindy

Shulman, plastics and resins vice
president, ExxonMobil Chemical.
Exceed XP allows converters to
develop new film and liner solutions.
Formulations can be designed to
provide a balance of extreme performance and processability, while
helping to manage costs through to
the end-user. There is also potential
to deliver coextrusion performance
in a monolayer structure. As such,
Exceed XP delivers solutions for
liquid packaging film, food packaging film (non-laminated), agricultural
film and construction liners.
Alongside Exceed XP, ExxonMobil
will also be showcasing its recently
introduced Enable 40-02 performance polymers for compression
packaging and geomembranes, as
well as a range of low viscosity
Vistamaxx performance polymers for
home and consumer products and
an array of other applications.
SABIC PROVIDES FOOD PACKAGING SOLUTIONS

With a particular focus on the
need to minimise food waste,
reduce packaging weight and
lower the carbon footprint of
packaging materials, SABIC
will highlight several new products and technologies that
help to address these specific
market needs. According to

the Save Food report by the
Food & Agriculture
Organization of the United
Nations, an estimated onethird of food produced for human consumption is lost or
wasted equivalent to 1.3bn
tonnes of food every year.

Even in the most developed
supply chain systems such as
those in Europe, around 4% of
transported goods are damaged in some shape or form
due to low pallet stability.
At K 2016, SABIC will be
introducing its portfolio of
packaging solutions which
demonstrate how to help overcome these issues.
Where a reduction in packaging weight is required, the
new SABIC PP FLOWPACT product family, especially the very
high MFI grades, are formulated for thin-wall food packaging applications where a good
balance of high stiffness and
high flow is required.
Similarly, the new SABIC
LDPE film grade is a new product from SABIC for manufacturing very thin-gauge
packaging, offering excellent
draw-down ability whilst running stable at a film thickness as low as 12m by using
less raw material and enahigher production
Web note. bling
Web address
is a characterline
style.
speed.
to align on baseline.
The text box
is set up
SABIC
BASFS NEW PRODUCT

IS UP TO THE CHALLENGE
ExxonMobil
ExxonMobil
K 2016 sees ExxonMobil Chemical

introduce its expanded portfolio of
Exceed XP performance polymers,
designed for highly demanding applications, alongside its new Enable
40-02 performance polymers and
Vistamaxx performance polymers.
The new Exceed XP performance
polymers grades, which have been
introduced in response to positive
customer feedback, can help customers in a wide variety of industries
create differentiated solutions that
provide extreme performance.
Customers will now have an
even more powerful toolkit to grow
Innovative plastics help to reduce food waste
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17 - 23 October 2016, | ICIS Chemical Business | 37
US CHEMICAL PROFILE

Toluene
ZACHARY MOORE PROFILE LAST PUBLISHED 19 DECEMBER 2014
USES
Toluene is a clear, water-insoluble liquid
with a characteristic sweet, pungent odour.
Toluene is usually extracted with the other
BTX (benzene, toluene and xylene) aromatics through catalytic reforming of naphtha.
Toluene is used to produce benzene and
xylenes via a number of processes.
It is also used in a number of solvent applications and also in the production of toluene di-isocyanate (TDI), an important raw
material used in the production of polyurethane foams.
Toluene is also frequently used as an octane booster in gasoline, with the highest
demand from gasoline blenders in the US
coming during the summer driving season,
which runs from May to mid-September.
There are three grades of toluene TDI
grade, nitration-grade and commercial-grade.
SUPPLY/DEMAND
The US is a net importer of toluene. Saudi
Arabia, Venezuela and Brazil are among the
largest suppliers of toluene to the US.
Demand for toluene is seasonally stronger during the summer months owing to increased demand from gasoline blenders.
The normal boost in summer demand was
said to be less than expected for 2016 owing
to sufficient supplies of octane, which
dampened demand from the gasoline pool.
The largest source of toluene demand
comes from disproportionation units, which
use toluene as a feedstock to produce benUS TOLUENE
$/gal, N grade, barges, spot FOB
2.3
2.2
2.1
2.0
zene and xylenes. For most of the past year, a

small premium for benzene prices over toluene prices kept operations at disproportionation units limited and acted as a drag on
toluene demand.
Towards the end of the summer months
in 2016; however, toluene demand found a
boost from chemical demand sources as a
favourable premium between benzene and
toluene prices encouraged the operators of
toluene-to-benzene conversion units to run
their plants at higher operating rates.
PRICES
Spot toluene prices in the US have been in
a fairly narrow range within the past few
months and have seen much less volatility
thus far in 2016 as compared with 2015.
In 2015, a strong summer spike in demand for toluene from gasoline blenders
caused prices to spike during the summer
months before dropping back down sharply
in the autumn, leading to a 38% drop in
spot prices between the mid-July peak and
early September, when US toluene prices
dropped to their lowest levels for the second half of 2015.
By comparison, 2016 has seen much
more stability in toluene prices as the major
spike seen in demand during 2015 did not
repeat itself in the summer of 2016. From
spot toluenes year-to-date low point in February to June, toluene spot prices rose 19%.
The main driver in the more stable picture for toluene demand seen in 2016 is the
absence of the major spike in fuel demand
seen in the summer of 2015.
Disproportionation units using toluene as
feedstock to produce benzene and xylenes
were operated at reduced rates throughout
much of the year owing to a limited premium between benzene and toluene prices.
However, these units operated at greater
levels in Q3 2016 as the spread between
benzene and toluene prices made their operation more attractive.
1.9
1.8
1.7
Oct
2015
Sep
2016
TECHNOLOGY
Toluene occurs naturally at low levels in
crude oil, and is usually produced in the
process of making gasoline via a catalytic
reformer, in a cracker producing ethylene,
or making coke from coal. Final separation,
US TOLUENE CAPACITY
000 TONNES/YEAR
Company
LocationCapacity
Marathon
Petroleum
Texas City, Texas
815
ExxonMobil
Chemical
Beaumont, Texas
635
ExxonMobil
Chemical
Baytown, Texas
605
Flint Hills
Resources
Corpus Christi, Texas
495
Husky Energy
Lima, Ohio
330
Total
Petrochemicals
Port Arthur, Texas
330
Phillips 66
Belle Chasse, Louisiana
215
Toledo Refining
Toledo, Ohio
210
Citgo
Corpus Christi, Texas
180
Valero
Three Rivers, Texas
150
NOTE: Top 10 sites
either via distillation or solvent extraction,

takes place in one of the many available processes for extraction of the BTX aromatics.
OUTLOOK
The pricing outlook for toluene going into
Q4 2016 and into 2017 is likely to be largely
determined by fluctuations in energy costs.
Toluene demand is expected to grow at a
fairly modest pace, with the main source of
demand growth for toluene derivatives
coming from TDI for use in the polyurethanes industry.
North America currently accounts for
around 13% of global toluene capacity and
10% of global toluene demand. Both of
these shares are expected to decline owing
to new petrochemical investments in Asia
and the Middle East.
The US shale revolution can impact supply of toluene going forward as the switch
to lighter ethane gas feedstocks for crackers
will result in reduced supply of heavy coproducts such as the BTX aromatics.
While the US chemical industry is set to
expand capacity for several products such
as olefins and polyolefins, no major aromatics expansions have been announced yet.
Keep track of price movements for a wide
range of commodity chemicals by subscribing
to ICIS pricing reports at icis.com
www.icis.com
ASIA CHEMICAL PROFILE
Nylon
LEANNE TAN PROFILE LAST PUBLISHED 10 JANUARY 2014
USES
Nylon (polyamide) comes in two forms: type 6,
based on caprolactam (capro) and type 6,6, based
on adipic acid and hexamethylene diamine
(HMDA). Most nylon production is used in the
manufacture of textiles for clothing and carpets.
Nylon is also used in engineering plastics for the
electrical, electronics and automotive sectors.
SUPPLY/DEMAND
Supply of nylon chips in Asia is balanced-tolong, putting downward pressure on prices in
recent years. Supply continued to grow in the
year, with Taiwans Li Peng Enterprise having
commenced production at its new 180,000
tonne/year nylon chip line in Changhua, Taiwan,
in May 2016. The new line is the companys
sixth, bringing the companys total nylon production capacity to around 576,000 tonne/year.
Average operating rates of polymerisation
plants in China were at around 62% for most of
September 2016, while those rates in Taiwan
were at 70%. Producers opted to keep run-rates
low amid poor margins and weak buying appetite in the region. Downstream demand for nylon
yarn and textile products from the main Chinese
market has been lacklustre for most of the year
amid weak macroeconomic conditions and sluggish growth in the Chinese economy.
China remains a major net importer of the
material, although their import requirements
have steadily declined over the years amid domestic nylon 6 capacity expansions. Chinas
total imports of nylon 6 stood at 535,000 tonnes
for 2014, dropping by 16% to 449,000 tonnes in
ASIA NYLON
$/tonne, nylon chips textile grade, spot CFR China
1,700
1,600
2015. Year-to-date imports from January to August in 2016 currently stand at 276,000 tonnes.
PRICES
Spot prices of Asias nylon textile chips (semidull) trends closely to feedstock capro prices.
Prices fell in May and June 2016, coming under
pressure from fresh production in Taiwan. Despite rising feedstock capro prices in mid-2016,
nylon makers struggled to translate upstream
gains down the capro-nylon chain.
Buying appetite for nylon products in China, a
major importer of nylon, was lacklustre for most
of the year, with downstream demand tempered
by slow-moving growth in the country. Despite
the weak demand, producers had little choice
but to raise offers in Q3 2016, in the wake of rising feedstock costs. Sellers were firm on pushing
through higher offers in a bid to recoup eroded
margins. Prices of nylon 6 in Asia peaked for the
year in mid-September at $1,630-1,650/tonne
CFR China. Margins were negative for many
nylon producers in Q3 2016 as a result of firm
feedstock prices. The optimum spread between
capro and nylon is at around $280-300/tonne,
based on market feedback. The spread between
the two products was below $250/tonne for most
of the third quarter, falling below the $200/tonne
mark in late August.
TECHNOLOGY
Nylon 6 is made from reacting capro with water
and a molecular mass regulator, such as ethanoic
acid. This is heated under nitrogen to 500K. In
nylon 6,6 production, adiponitrile - from butadiene (BD) or propylene - is converted to HMDA,
which is then heated with adipic acid (from benzene) to form a salt.
Ethanoic acid is mixed into a solution with
the salt and the mixture is heated to about 500K.
As pressure develops, the temperature is raised
to 540K and the steam bled off. The pressure is
reduced and the polymer is extruded under nitrogen to yield a lace, which is then granulated.
1,500
1,400
1,300
Sep
2015
www.icis.com
Sep
2016
OUTLOOK
Producers of nylon materials in northeast Asia
have noted that the poor margins that plagued
the capro producers in previous years have gradually been transferred downstream to the nylon
producers. Although the supply of feedstock
capro has begun showing signs of consolidation,
Asias nylon supply has been rising steadily in
ASIA NYLON CAPACITY

000 TONNES/YEAR
Company
LocationCapacity
Li Peng Enterprise Chang-hua, Taiwan
576
Fujian Zhongjin
New Materials
Putian, China
250
Changle LiHeng
Polyamide Technology
Changle, China
230
Zig Sheng IndustrialKuan Yin, Taiwan
216
Fujian Jinjiang
Technology
200
Changle, China
Guangdong Xinhui Xinhui, China

Meida Nylon
195
Formosa
Xingang, Taiwan
Chemicals & Fiber
130
Yueyang Baling
100
Hunan, China
Wuxi Chang'an
Chang'an , China
Polymer Materials
100
Shanghai BASF
Shanghai, China
100
Chain Yarn
Dou Liu, Taiwan
95
Ube Nylon
(Thailand)
Muang, Thailand
75
Zhejiang Mesbon
Chemical Fiber
Xiaoshan, China
70
Zhejiang Fangyuan Hangzhou, China

Polymerized Fiber
70
Xiaoshan, China
70
Hangzhou
Juheshun New
Material
NOTE: Top 15 plants listed by capacity
contrast. The supply of nylon chips is expected

to increase further in the near term, with more
nylon polymerization plants scheduled to startup in 2017. Amongst them, phase II of Petro Rabighs expansion, a joint venture between Saudi
Aramco and Japans Sumitomo Chemical, is expected to include 75,000 tonnes/year of nylon 6
production capacity. The plant would be Saudi
Arabias first nylon 6 manufacturing facility and
is expected to come on stream in early 2017.
Market players note a trend where more upstream players are venturing further downstream
where margins are perceived as better. Many existing producers are wary that this could prove
counter-productive, as the increased production
could exacerbate oversupply in the nylon market
and drive margins further down south.
Subscribe to ICIS pricing reports to keep
up with a wide range of chemical markets
across the globe at icis.com

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TRANSFORMATION

Shale gas may cut

MAKING SENSE OF CHEMICAL PRICES

17-23 OCTOBER 2016

Shale gas may cut

MAKING SENSE OF CHEMICAL PRICES

Distributors have very ambitious European

10 Tea time and battering

PRICES & MARKETS

12 CP Chem eyes 2017 cracker start-up

The cracker will lack the feedstock flexibility of Chevron

US EPS prices rolling over in October

27 K Show Polymer companies are gearing

PLANTS & PROJECTS

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17-23 October 2016 | ICIS Chemical Business | 3

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We unveil this years winners in the

The 4th ICIS Asian

22-23 November 2016 // Anantara Riverside, Bangkok, Thailand

ALREADY CONFIRMED SPEAKERS INCLUDE:

What do emerging trade dynamics mean for supply chain

Qu Liang, Analyst, PETROCHINA PLANNING &

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e are delighted to announce the

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A digital ICB will bring the best in functionality and content

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17-23 October 2016 | ICIS Chemical Business | 5

For real-time news and analysis

BASF shares rose on 12 October

Synthetic ethanol producer INEOS

RUSSIA APPROVES CHEMICAL

INOVYN COMPLETES EUROPE

INOVYN has completed a planned

ture growth. During the second

GERMANY PRODUCTION RISES

UK sterling hits historic low

European sites, a company source

EU, EUROZONE AUGUST

EU August chemicals output increased by 0.3% from July while

6 | ICIS Chemical Business | 17-23 October 2016

EU Q2 CHEM SALES, PRICES

Germanys production from industry, energy and building and

CEFIC PRESIDENT VOWS TO

European chemicals have ahead

ECHA TELLS EUROPE CHEMS

The European chemicals industry should stop complaining

Dancet urges industry action

Marathon Petroleum is suing BP for

IFF APPOINTS OLEARY AS

International Flavors & Fragrances (IFF) has appointed Richard

BRAZILS RETURN TO HEALTHY

Substantial growth in the Brazilian

2019, an oleochemicals industry executive says. Some say next year

Phillips 66 Partners has priced senior notes offerings to help finance

LyondellBasell has ended the force

KP Engineering (KPE) has been

VOICES FROM THE WEB

Two years ago, the Saudis government put in place a strategy

Commercial FDCA (furandicarboxylic acid) production will be

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