Caradol Polyols prices will increase $0.10/lb effective February 1, 2011, or as contracts allow, according to Shell.
By Bloomberg News
Dec. 30 (Bloomberg) -- China’s manufacturing growth slowed for the first time in five months in December as the government tightened monetary policy and chased energy- efficiency and pollution targets, a survey indicated.
A purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics fell to 54.4 from 55.3 in November. The data are seasonally adjusted and a reading above 50 indicates an expansion.
Rising corporate profits and expansions by companies including Aluminum Corp of China Ltd. and Volkswagen AG may help to sustain manufacturing as the government curbs lending to counter inflation. Morgan Stanley and JPMorgan Chase & Co. forecast interest rates will rise at least twice in the first half of 2011 after an increase on Christmas Day that was the second since the global financial crisis.
“Inflation rather than growth still remains as the top policy concern, despite the moderation in December’s manufacturing PMI reading,” said Qu Hongbin, Hong Kong-based China economist for HSBC. “Modest” interest-rate increases are needed to anchor inflation expectations in coming months, Qu said.
The Shanghai Composite Index fell 0.4 percent as of the 11:30 a.m. local time break in trading. The yuan touched 6.6142 per dollar, the strongest since 1993.
Switch From Contraction
While today’s PMI reading was the weakest in three months, it compares with a contraction as recently as July. For the fourth quarter as a whole, the index had the strongest performance since the first three months of this year, HSBC said in a statement.
The measure is based on a survey of executives at more than 430 companies and gives an indication of activity in the manufacturing sector. A separate government-backed PMI is due Jan. 1.
Higher interest rates, a crackdown on real-estate speculation, and closures of energy-wasting and highly polluting factories are among measures by Premier Wen Jiabao’s government that may cool growth. Officials have also boosted reserve requirements for lenders six times this year to counter inflation and limit asset bubbles in the real- estate market.
New export orders rose “only modestly,” indicating that growth centered on the domestic market, the bank said, without giving numbers.
The report contained some encouraging signs for policy makers, with input and output costs rising at a slower pace and job creation quickening to the fastest since June, HSBC said. Still, the inflation measures remain elevated, the bank said.
Today’s data “suggests industrial production momentum is still strong, though sentiment may have been weakened a bit by recent tightening measures and companies’ lingering concern over how such tightening is going to play out,” said Li Wei, Shanghai-based economist with Standard Chartered Bank.
Industrial companies’ profits climbed 49 percent in the first 11 months of 2010 to 3.88 trillion yuan ($585 billion), according to a Dec. 27 government report.
The economy grew 9.6 percent in the third quarter from a year earlier. Consumer prices climbed 5.1 percent in November from a year earlier, the most in 28 months, and producer prices gained 6.1 percent.
Peng Sen, vice chairman of the National Development and Reform Commission, said the nation must prepare for a long- term fight against inflation, according to a Dec. 21 report on state television.
Companies in China, the world’s biggest maker of steel, cement and mobile phones, are expanding after exports topped pre-crisis levels. The momentum of economic growth is “consolidating,” the central bank said Dec. 27.
Aluminum Corp. of China, or Chalco, will build a 17.5 billion yuan base that includes alumina and aluminum smelting plants and a bauxite mine in the southwestern Guizhou province, according to a statement in the government-run People’s Daily newspaper.
German carmaker VW’s two joint ventures in China will spend 10.6 billion euros ($14 billion) in the world’s biggest auto market through 2015, adding two factories to help double production to 3 million cars a year, the company said last month.
To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at +86-10-6649-7560 or firstname.lastname@example.org
To contact the editor responsible for this story: Chris Anstey at email@example.com
Last Updated: December 29, 2010 23:17 EST
December 28, 2010
Dear Valued Customer:
Effective February 1, 2011, or as soon thereafter as the applicable contract
allows, The Dow Chemical Company (“Dow”) will increase its price for all grades
of VORANOL™, VORALUX™, and VORASURF™ polyols USD $0.10/pound.
All other contract terms and conditions remain in full force and effect and orders
must comply with established monthly sales levels and contract commitments.
Your sales representative will be contacting you in order to answer any questions
you might have and to review your sales plan volumes.
Dow appreciates your business, and we look forward to our continued
By Bob Willis
Dec. 28 (Bloomberg) -- Home prices dropped more than forecast in October, a sign housing will remain a weak link as the U.S. recovery accelerates into the new year.
The S&P/Case-Shiller index of property values fell 0.8 percent from October 2009, the biggest year-over-year decline since December 2009, the group said today in New York. The decrease exceeded the 0.2 percent drop projected by the median forecast of economists surveyed by Bloomberg News.
A wave of foreclosures waiting to reach the market means home prices will remain under pressure in 2011, representing a risk to household finances. Federal Reserve policy makers this month said “depressed” housing and high unemployment remained constraints on consumer spending, reasons why they reiterated a plan to expand record monetary stimulus.
“Supply remains huge and we expect housing prices to remain subdued and even keep declining into next year,” Yelena Shulyatyeva, an economist at BNP Paribas in New York, said before the report.
Stock-index futures trimmed earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.1 percent to 1,255 at 9:02 a.m. in New York. Treasury securities were little changed.
The median forecast was based on projections of 17 economists surveyed. Estimates ranged from an increase of 1.4 percent to a decline of 1.3 percent. Year-over-year records began in 2001. Prices rose 0.4 percent in the year ended September.
The gauge fell 1 percent in October from the prior month after adjusting for seasonal variations, matching September’s drop which was larger than previously estimated. Unadjusted prices decreased 1.3 percent from the prior month.
Eighteen of 20 cities showed a decrease in prices in October, led by a 2.1 percent drop in Atlanta, and decreases of 1.8 percent in Chicago and Minneapolis. Denver and Washington were the only two that posted gains.
Six markets, including Atlanta, Charlotte, Miami, Seattle, Tampa and Portland, Oregon, reached their lowest levels in October since prices started to retreat.
“The double-dip is almost here,” said David Blitzer, chairman of the index committee at S&P. Sales aren’t “giving any sense of optimism.”
The 20-city index was down 30 percent in October from its July 2006 peak.
The Case-Shiller gauge is based on a three-month average, which means the October data was influenced by transactions in September and August.
The drop in prices represents a setback for housing after values recovered earlier this year, thanks to an $8,000 homebuyers’ tax credit that lifted purchases.
Reports earlier this month showed the housing market is stuck near recession levels even as the broader economy is recovering. Housing permits fell in November to the third-lowest level on record, while starts rose for the first time in three months, the Commerce Department reported Dec. 16.
Sales of new and existing homes last month rose less than projected by the median forecast of economists surveyed by Bloomberg, reports from the Commerce Department and the National Association of Realtors showed last week.
Atlanta-based Beazer Homes USA Inc, which builds and sells single-family starter homes in the southern part of the country, projects prices will not increase.
“We expect new-home selling prices to be somewhere between flat and down 3 percent in 2011,” Beazer’s Chief Executive Officer Ian McCarthy said on a conference call last month. “While there are clearly risks of further home-price declines, we believe that new homes are well positioned relative to non- distressed existing homes.”
Today’s report may be a reminder why Fed policy makers, who met Dec. 14 for the final time this year, say housing is lagging while the economy rebounds. They cited declines in home values as one of the constraints on consumer spending.
“The housing sector continues to be depressed,” Fed officials said in a statement after the gathering, at which they reiterated a plan to expand record monetary stimulus and said economic growth is “insufficient to bring down unemployment.”
Even so, economists in the past two weeks have boosted projections for fourth-quarter growth, reflecting a pickup in consumer spending and passage of an $858 billion bill extending all Bush-era tax cuts for two years. The legislation also continues expanded unemployment insurance benefits through 2011 and cuts payrolls taxes by 2 percentage points next year.
1-months 3-months 1-year 2-years 3-years
earlier earlier earlier earlier earlier
US Composite-20 -1.32% -2.39% -0.80% -8.08% -24.70%
Washington DC -0.20% -0.28% 3.65% 1.00% -17.97%
Las Vegas -0.21% 0.06% -3.57% -29.26% -51.61%
Denver -0.57% -1.65% -1.79% -1.90% -6.98%
Los Angeles -0.75% -1.26% 3.34% -3.21% -30.24%
Tampa -0.90% -2.19% -3.61% -18.27% -34.48%
Miami -1.11% -2.60% -3.39% -16.95% -41.06%
Phoenix -1.11% -3.93% -4.28% -21.61% -47.21%
Dallas -1.13% -3.83% -3.13% -3.68% -6.66%
Charlotte -1.14% -2.54% -4.19% -10.90% -14.87%
1-months 3-months 1-year 2-years 3-years
earlier earlier earlier earlier earlier
Boston -1.23% -2.82% -0.23% -3.03% -8.85%
Seattle -1.34% -2.66% -4.11% -16.03% -24.61%
Portland -1.48% -4.16% -5.15% -14.59% -23.20%
San Diego -1.50% -3.05% 2.97% 0.55% -26.28%
Cleveland -1.52% -4.76% -2.64% -6.03% -11.83%
New York -1.61% -1.99% -1.67% -9.58% -16.56%
San Francisco -1.91% -3.07% 2.23% -0.43% -31.28%
Minneapolis -1.91% -4.35% -2.80% -10.79% -25.18%
Chicago -1.99% -3.08% -6.48% -15.95% -25.04%
Detroit -2.45% -3.25% -5.52% -20.02% -36.33%
Atlanta -2.90% -6.11% -6.19% -13.77% -22.83%
To contact the editor responsible for this story: Christopher Wellisz at firstname.lastname@example.org
Last Updated: December 28, 2010 09:08 EST
US refinery grade propylene shoots up 2.75 cents/lb on outages
Houston (Platts)--27Dec2010/923 pm EST/223 GMT
US refinery grade propylene maintained its strength Monday with the Platts assessment shooting up 2.75 cents/lb ($61/mt) on the back of three production hiccups.
December RGP was done at 67 cents/lb. While no firm January positions were reported, sources talked a notional 1- to 2-cent backwardation. The 3- to 30-day assessment was at 65.50 cents/lb.
Spot polymer grade for December was bid at 71 cents/lb against no offer. Even excluding conversion costs and simply adding 4 cents freight to Latin America, the landed price for homo polymer grade was around 75 cents/lb ($1,653/mt). Local suppliers in South America though were offering at $1,600/mt, effectively shutting out any US exports.
Typically suppliers add 7 to 10 cents to PGP to account for conversion costs to homo polymer grade.
On Monday the FAS assessment for homo ended the day at $1,650/mt, up $119/mt.
One polymer trader said the FAS Houston export number had to start at 80 cents/lb ($1,764/mt) but others insisted that December price was still available.
Looking ahead participants were bracing themselves for a 12-cent hike in January for the polymer.
In production, Petrologistcs was expected to take its 1.2 billion lbs/year facility in Houston, Texas, down for 10 days in early January. Shell reportedly had a force majeure on propylene at Norco, Louisiana, since December 20, and a third supplier was heard to be producing off-spec material.
--Angie Joe, email@example.com
23 December 2010 12:31 [Source: ICIS news]
LONDON (ICIS)--Firm feedstock costs and a strong US dollar has pushed the European propylene (C3) January monthly contract price (MCP) up 11.5% to a record high, while the ethylene (C2) contract price is the highest seen since the fourth quarter of 2008, market sources said on Friday.
Propylene settled at €1,070/tonne ($1,408/tonne), up by €110/tonne from December. The previous high was when the contract settled for the third quarter 2008 at €1,015/tonne, although in May and June of this year contract prices hit €1,000/tonne.
Ethylene was up by €105/tonne to €1,110/tonne for January, still some way below the record high of €1,228/tonne confirmed for the third quarter 2008.
The contracts, which settle on a free delivered (FD) northwest Europe (NWE) basis, were first agreed late on 22 December by a major producer and a major integrated consumer. Remaining contract buyers and sellers were quick to follow.
Olefins producers were able to secure three-digit increases on both C2 and C3 because of negative pressure on cracker margins and a tighter-than-expected supply and demand balance.
A tighter supply and demand balance was also being envisaged for propylene in January because of some planned maintenance shutdowns at on-purpose propylene production. This was why a higher increment was achieved for propylene than for ethylene.
Discussions had got under way at the end of last week amid some additional time constraints as contract parties were eager to reach agreement ahead of the holidays.
The tough negotiations were further complicated by the increased volatility of crude and naphtha earlier this week.
“Each day we woke up and crude was up and exchange rates stable, it was getting more critical from a producer's point of view,” a key producer said.
Consumers recognised that an increase was justified, but there were concerns about passing such sharp increases on downstream, although some sectors would be more capable than others.
“I would describe this as the most difficult MCP so far. The difficulty faced by polyvinyl chloride (PVC), vinyl acetate monomer (VAM), linear alpha olefins (LAO) etc to complete globally with such prices was a major part of the discussion,” a major integrated ethylene and propylene consumer said.
“It’s a steep increase, even though we know the crackers needed it,” said a key propylene consumer.
“Time will tell whether we can recover this increase, we are looking at a very high price that we haven’t seen before,” it added.
“It’s a fair compromise” said a second major producer referring to the propylene settlement, but added “it will be key how derivatives pass on the increase”.
Sources said that it would be interesting to see how the supply and demand balance for both ethylene and propylene played out in Europe during January.
Because of the cost pressures, derivatives might not produce the marginal tonne and this would reduce monomer consumption. On the other hand however, producers have been able to recover part of their margin and so crackers operating levels should be good.
Olefins supply was tight moving into the year-end because of overruns on cracker maintenance, some unplanned outages, and cracker reductions at certain sites for economic reasons.
Additionally, demand has been unusually healthy for December, which sources said was a combination of recovery in the aftermath of the French strike-induced production constraints, reasonable export interest and most latterly, some pre-buying activities.
Spot prices were very firm and were being indicated around €1,000/tonne FD and above for both ethylene and propylene.
One producer said it was still dreaming of finding "cheap naphtha and a weak US dollar" under the Christmas tree.
($1 = €0.76)
Life-Altering Footwear of the Day: “Footstickers” — a footwear design concept by Dutch product designer Frieke Severs that aims to take advantage of the many benefits of bare feet sporting: “better motion control, more feeling in your feet and direct floor contact.”
CARTERSVILLE, Ga., Dec. 21, 2010 /PRNewswire/ -- Burtin Polymer Laboratories (BPL) has informed Mr. Mac Hess, CEO of Premium Spray Products of the following changes due to the ending of a private label supply agreement for BPL 0.5 lb. and 1.8 lb. for Premium Spray Products.
Burtin Polymer Labs will no longer provide their ICC listings for: 0.5 lb. Open cell insulation foam products (ICC ESR 2580) and 1.8 lb. Closed cell insulation foam (ICC ESR 3130).
Burtin Polymer Laboratories (BPL) remains one of the foremost authorities in research, development, and commercialization of polyurethane systems produced for commercial roofing, commercial and residential insulation, flotation, adhesives, packaging, spray elastomers and custom molding products. Recently launched its new Bullet Liner® products that will be primarily used for pickup truck beds, tailgates, wheel wells and other similar vehicle protection applications. Also, part of the impressive line of Burtin Polymer Labs products is Foametix® Spray Foam Insulation, which is a series of light density, polyurethane spray-applied foam insulation systems designed for residential and commercial / industrial building applications. Plus, continuing to develop some of the very few blast mitigation products tested and approved by the US Military and utilized by the United States government in the refurbishment of the Pentagon after the 9/11 attacks. All Burtin Polymer Labs formulas are proprietary where strict quality controls are implemented using only the finest chemical ingredients and the most sophisticated processing equipment in the industry at their 14-acre, state of the science facility in Cartersville, GA, with warehousing and service operations located in seven States.
FORT WAYNE – FXI-Foamex Innovations is installing $7 million in new equipment at its south-side factory, part of a four-year, $21 million investment designed to increase efficiency and preserve 180 existing jobs, company officials said.
The plant at 3005 Commercial Road is also competing with other FXI locations for about $5 million in capital spending. The proposed expansion would create about 60 new jobs, a 33 percent increase in the local workforce.
Company officials expect to decide by the end of March which projects to approve, CEO Jack Johnson told The Journal Gazette this month in an exclusive interview.
Rich Strozyk, plant manager, is making the case to build an addition on the local operation’s 26-acre campus, where workers earn, on average, $20 an hour making technical products for the medical, aerospace, defense and electronics industries.
Heavy demand has the crew working three shifts, running seven days a week. Mandatory overtime schedules require workers to be on the job 50 to 60 hours each week. The workforce had dwindled to 120 during the depth of the recession, but most workers have been called back from layoff. The peak, two years ago, was 220 employees.
“We have high hopes of bringing everybody back,” Strozyk said.
The Pennsylvania company already has invested more than $15 million in local factory upgrades in the past three years and has budgeted $6 million more for 2011, bringing the total to $21 million. Local production improvements saved the company $1.6 million in 2009 and $1.9 million this year, said Strozyk, who holds a Six Sigma black belt. Six Sigma, a management strategy, is a way to improve quality by identifying and removing the causes of defects and replicating methods that produce the best products. Fewer defective products equal less waste.
The plant manager has implemented numerous efficiency practices to wring every possible excess dollar out of the production process.
Johnson’s goal is make strategic investments that boost FXI’s revenue to more than $1 billion a year. In 2009, at the depth of the recession, sales were about $625 million. This year, revenues have climbed to about $745 million, Johnson said.
Foam is everywhere
Getting through a day without using foam would be surprisingly hard.
Foam components are found in cars, airplanes, movie theaters, mammogram machines, mattresses, stereo systems and computer ink cartridges. The U.S. military even coats some ships and fighter planes in specialized foam to render them undetectable by enemy radar.
Foam filters cabin air on airplanes, reduces bedsores in hospitals, mitigates fuel explosions in stock cars and amplifies sound in concert halls. Foam gutter inserts keep leaves from clogging downspouts and West Nile virus-carrying mosquitoes from reproducing.
The 250,000-square-foot Fort Wayne plant is one of two FXI has in northeast Indiana.
It also has a 450,000-square-foot Auburn plant that opened in 1978. The 159-person workforce makes Memory Foam mattress toppers and specialty-shaped pillows for the mattress industry. A large order from QVC has prompted to the factory to hire 65 temporary workers in addition to the usual crew.
The Fort Wayne FXI plant opened in 1969 as part of Scott Paper Co. The site now specializes in technical products, including foam used to cloak aircraft carriers and foam used to help open wounds heal faster and with less chance of infection.
Staff researchers are constantly looking for ways to expand the product line. They’re now working on foam that can clean a plasma TV screen. A production line employee made the suggestion, earning him a $100 check and the potential for a $1,000 bonus if the product makes it to market.
“We’re trying to build a company where every employee participates in decisions, including ideas for new products,” Johnson said.
The company, which holds more than 400 patents, budgets $3.5 million each year for research and development and $3 million more for launching new products.
Staging a comeback
Like many manufacturers, Foamex International Inc., FXI’s predecessor, struggled during the recession.
The publicly traded company was created in 1984 by combining about 35 smaller businesses, each bringing existing debt, Johnson said. Even before the economy bottomed out, Foamex started cutting costs and consolidating operations.
In 2008, the company closed an Eddystone, Pa., plant, sending 30 jobs to Fort Wayne. The city offered Foamex $150,000 in incentives to move the work.
But the cost-cutting moves weren’t enough. Foamex filed for Chapter 11 in February 2009.
Two private-equity firms joined to buy Foamex assets in June 2009 to create a new company with a new name and logo. The old debt was gone, but the manufacturing operations remained. Johnson, who first worked for the company from 1999 to 2001 and returned in 2007, was excited by the challenge.
“I came back to finish some work,” he said. “I thought it was great when we got a second chance.”
At the time of the bankruptcy proceedings, Fort Wayne had made only one of two promised incentive payments, Strozyk said. City officials didn’t have to make the second payment because Foamex didn’t legally exist anymore, he said.
FXI officials were grateful that city officials made the second payment anyway, saying the company had lived up to its promises to move the work, so the city would fulfill its promises, too.
“That made it easier for us to survive the downturn,” Strozyk said.
Such gestures have convinced FXI officials that Fort Wayne is business-friendly, the executives said. Strozyk is again talking to state officials to ask for incentives for the proposed expansion.
Andi Udris, president of the Fort Wayne-Allen County Economic Development Alliance, last week was unaware of the proposed project. But he discovered a staff member was already on the job, meeting with the company and discussing options.
The Alliance is now juggling 162 projects, 50 percent more than this time last year.
“Which is great news,” Udris said.
The Alliance’s normal procedure includes reviewing project specifics. Certain types of equipment qualify for tax breaks. And job creation can lead to training dollars. If the project would create a substantial energy demand, the Alliance could ask utility companies for discounts or credits for the customer.
Companies choose which economic incentives to accept. Some publicly traded companies don’t want to accept tax breaks, for example, because they fear the public might vilify them, just as General Motors Co. was criticized for receiving a $50 billion taxpayer bailout.
The Alliance evaluates expected economic benefit and benefit to the community, Udris said. Based on those projections, some projects qualify for property tax abatements and other incentives.
The FXI proposal is working through the process.
Strozyk, head of the local operation, is doing all he can to make a more compelling business case than his plant management peers. Factors in his favor include any economic incentives and the quality of the workers.
Strozyk, who joined FXI three years ago, enjoys bragging about his team’s work ethic, safety record and generosity toward local charities. He also swears allegiance to his employer.
“I think we’re the best-kept secret in Fort Wayne,” he said. “I tell people, ‘We don’t make foam here. We impact people’s lives.’ ”
By Jack Kaskey
Dec. 20 (Bloomberg) -- Bayer AG, the world’s largest maker of polyurethane, is trying to persuade potential investors to build a chemical plant on company sites in West Virginia using ethane from adjacent shale-gas deposits.
The Leverkusen, Germany-based company is in talks to lease or sell unused parts of two sites covering 1,460 acres (590 hectares) for construction of a plant known as a cracker, Bryan Iams, a spokesman for Bayer in Pittsburgh, said today in a telephone interview. The cracker would convert ethane into ethylene, a key ingredient in plastics such as polyethylene.
The Bayer properties sit atop the Marcellus Shale formation, which according to Energy Department estimates is the largest known U.S. gas field. New drilling techniques are boosting production from shale formations, keeping U.S. prices of natural-gas low relative to oil. That’s prompted U.S. chemical makers Dow Chemical Co., Eastman Chemical Co. and Chevron Phillips Chemical Co. to use more gas as a raw material.
Chevron Phillips received preliminary approval last month from Texas regulators to reopen a cracker shut in 2008 at its Sweeny complex, according to a filing on the Texas Commission on Environmental Quality’s website. Eastman is opening a mothballed cracker in Longview, Texas, because it says low-cost gas has made the U.S. more competitive. Dow plans to use 30 percent more ethane, a component of natural gas, at its Gulf crackers.
“The burning question is what to do with all the ethane coming out of the Marcellus Shale,” John Schirra, a senior account manager at U.S. chemical maker Ashland Inc., said in a telephone interview.
The Marcellus formation in western Pennsylvania and northern West Virginia is unusually rich in natural-gas liquids including ethane, said Dennis Yablonsky, chief executive officer of the Allegheny Conference, a Pittsburgh-based economic development group. The region has no crackers, he said.
“We are unabashedly trying to attract” the chemical industry, Yablonsky said in a telephone interview. “We have had positive feedback that the general premise does make sense.”
Proposals for getting Marcellus gas to the chemical industry now involve piping it to crackers on the U.S. Gulf Coast, where the country’s chemical industry in concentrated.
Pittsburgh Chemical Day, an annual conference that brings together companies such as Bayer, Eastman and PPG Industries Inc., will focus its May 10 event on using Marcellus Shale gas to bolster investment in the regional chemical industry, said Schirra, an organizer of the meeting.
Bayer’s sites in New Martinsville and Institute, West Virginia, have access to rail, water and road transportation, Iams said. An ethylene plant adjacent to Bayer’s West Virginia plastics or pesticide plants would cut its raw-materials costs and draw more manufacturers to the area, he said.
It would cost at least $500 million and require about 4 years to build an ethane cracker capable of producing 1 million metric tons of ethylene a year, Hassan Ahmed, a New York-based analyst at Alembic Global Advisors, said in a telephone interview.
To contact the editor responsible for this story: Simon Casey at firstname.lastname@example.org
Last Updated: December 20, 2010 15:44 EST