Malaysia to Raise Biodiesel Export

One of the largest biodiesel producer from palm oil, Malaysia has raised its 2008 biodiesel export forecast to 200,000 tonnes a twofold increment from its previous year.

High spread between the selling price of palm methyl ester and the feedstock crude palm oil (CPO) is seen as the main reason behind the huge jump. Malaysia currently has 1.6 million tonnes capability to produce CPO per year mainly for production of methyl ester. Malaysian's biodiesel export mostly goes to the European countries.

BASF Acquired 66.67% Ciba

BASF has reportedly holding 66.67% stake in Swiss specialty chemicals company Ciba after the expiry of the public tender offer period on 28 October. BASF had previously holding some of Ciba's shares. A total of 45,030,453 of Ciba shares had been tendered to BASF as part of the company’s public tender offer to shareholders of Ciba Holding and after combination of BASF's previous shares, it amounted to 1,011,536 Ciba shares capitalizing 66.67%.

US Fertilzer Expected to Continue on Strong Demand

Despite the recent global economic turmoil, US fertilizer industry is looking bright as corn futures prices for December 2009 delivery indicate that the upcoming seasons should be picking up demand. The corn industry is one of the largest consumer for the fertilizer industry and this will boost demand for as farmers are expected to plant corn instead of soybeans which will boost fertilizer demand.

Analysts are predicting that the fundamentals that's driving fertilizer demand remains strong coming from world growing population in developing nations.

Aker in Agreement with Shell for Supply Arrangement

Sarawak Shell Berhad (SSB) has awarded five year supply arrangement with Aker Solutions for subsea production systems equipment and services. The agreement covers five-year supply including design, manufacturing, testing, installation, commissioning, technical support and maintenance of wellheads, subsea trees, subsea control systems, flow bases and tie-in equipment. This is the first such agreement between Aker and Shell in Malaysia.

Middle East Petchem Market Review

Despite the recent financial hiccups in the global market, the Middle East countries continue with exports as usual in 2008.  It looks as if the situation does not affect the demand for Middle East petchem.

This is mainly due to the substantial cost advantage (feed stock advantage) the region has over other producers. In addition to that, many of the countries are booming with new capacity addition of petrochemical plants, boosting competition. Demand for 2008 is expected to remain high despite there is a potential slower growth in the Western world affecting mostly ethylene demands.

Shipyards are also busy with new ships being built pushing supply down on top of other underlying problems such engineering and the design process. 

BG and PETRONAS Agreed on Open Market for Dragon

BG and Petronas who both share and hold the capacity rights at Dragon LNG are expected to operate the terminal on an open-market basis allowing demand to dictate imports into the terminal. The Dragon LNG joint-development partnership comprises of 50% BG Group and Petronas with 30% and Dutch terminal developer 4Gas with 20%. Dragon LNG is built on a former refinery site taking advantage of two storage tanks and one jetty with capacity to handle 6.8 mtpa of LNG. 

China Plastics Demand Slowing

World petchem products are expected to be in a slump due to lower demand in China plastic products as consumer products, such as toys, shopping bags, cables, car foams and packaging film demand are slowing. Analysts are expecting global plastics markets to be in a downturn trend lasting anywhere from 1 to 4 years.

The current situation in the US doesn't help either. United States is the major plastics consumption and currently in a recession bringing demand for consumer products down. This resulted in the world to loose the top two countries for plastics consumers.

However, a slight growth for polyethylene based products are expected to be maintained throughout this year until next year.

Samsung Petrochemicals Running Reduced Capacity

Samsung Petrochemicals's PTA plant is currently operating at reduced capacity levels due to a regular maintenance turnaround. The PTA plant which is now running at 75% capacity is located at Daesan with production capacity of 700,000 metric tons per year.

However, it is expected that the PTA plant will resume production at lower rates especially as many petrochemical plants in South-East Asia are reducing their operating levels due to poor operating margins and decline in demand for petrochemical products from downstream players. This is mainly due to the current financial crisis and the doom of commodity prices.