Surfactants Monthly Review – April 2019
Surfactants Monthly Review – April 2019
Most Influential
Can I remind you briefly here that My surfactants conference coming up in May, is covering covering bio-surfactants, digitalization, EO, EOD’s and the campus opportunity for ethoxylators. We have Estee Lauder, Exxon and every type of company in between. Along with hundreds of your colleagues, this is the authentic world surfactants experience, complete with our third exclusive awards ceremony at which we recognize the best, brightest and most accomplished. Please don’t miss out as we once again fill the Jersey City Hyatt for 3 glorious days of surfactants business. I’ll see you there.
End commercial. Start of the news for April.
I’m going to be upfront with you here. We have strictly the news in this edition and it is crisp and edited right down to the basics. I just don't have time right now for the usual music, pop culture and departures into Kardashian-land. More of that next month, I’m sure.
The talented and knowledgeable, Judith Taylor at ICIS notes at the beginning of the moth that US second-quarter C12-15 mid-cut fatty alcohol contracts remain under downward pressure. Finished business for the mid-cuts is largely at a drop from the first quarter but not as deeply down as some market participants expected. Feedstock price volatility dominated second-quarter contract discussions and continues to influence the natural alcohol price perspectives. Market participants said synthetic alcohol supply is readily available. Prices on the synthetics are said to be competitive with the natural alcohols for the second . By the time the price settled, US second-quarter mid-cut fatty alcohol contract prices fell. ICIS assessed mid-cut C12-15 alcohol second-quarter contracts at 68-77 cents/lb, down 5 cents/lb overall from the first quarter.
Meanwhile, the European fatty alcohols second-quarter prices fell, sliding to a three-year low amid slipping feedstock prices. Second-quarter contracts tumbled €150/tonne to €1,150-1,300/tonne FD (free delivered) NWE (northwest Europe). Prices last fell below this level in the first quarter of 2016, when the average value was €1,175/tonne FD NWE. The EU fatty alcohols market is currently balanced with ample supply and healthy demand.
Also in the US, ethylene oxide (EO) contract prices for March fell by 1 cent/lb ($22/tonne) on the back of a decrease in the March contract settlement for feedstock ethylene according to ICIS data. March EO contracts were assessed at 50.4-59.9 cents/lb FOB (free on board). US EO demand is likely to increase into downstream polyethylene terephthalate (PET) and surfactants in the second quarter during the peak season.
By April, the US ethylene oxide (EO) contract prices for fell by 1.4 cents/lb ($31/tonne) on the back of a decrease in the April contract settlement for feedstock ethylene. April EO contracts were assessed on Friday at 49.0-58.5 cents/lb FOB (free on board).
Meanwhile, Melissa Hurley of ICIS reports that,with a handful of planned turnarounds approaching, European ethylene oxide (EO) supply is expected to become more limited over the next couple of months, but patchy downstream demand could limit any impact on availability. Downstream demand strength is varied, depending on end use in the glycol ether, ethanolamine, monoethylene glycol (MEG) and surfactant markets. There is a general economic slowdown across the board, and EO market players noticed a lag in demand at the start of the year. Strong EO demand had been expected this year, which led to higher adder fees at the beginning of 2019, but this has not been widely seen so far.
By May 1, the EO contract price firmed by €25/tonne at both ends of the range, bringing prices to €1,343-1,511/tonne (free delivered) FD (northwest Europe) NWE.
The acquisitive Vantage Specialty Chemicals, has signed a definitive agreement to acquire Textron Plimon, S.L.U. Natural Oils Business. Textron is a manufacturer, processor and specialty formulator of natural oils for the personal care, food and chemical industries. Located near Barcelona in Granollers, Spain, Textron is focused on supplying high-quality natural oils out of a new state-of-the-art manufacturing facility that sources oils and seeds from all over the world. Textron’s product portfolio includes cosmetic oils, formulations of EVOIL plant oils, food oils, bismuth derivatives, cosmetic ingredients and preservatives. As part of the transaction, Textron will spin off its Spanish distribution business, Plimon, which will remain with the prior ownership group and continue distributing products for Textron.
As a reminder, In late November 2018, Vantage signed an agreement to acquire LEUNA-Tenside GmbH (LTG). LTG is a European manufacturer of high-quality specialty surfactants sold throughout Europe and globally. Located in Leuna, Germany, the company is focused on small-volume niche products supported by flexible manufacturing capabilities. LTG’s product portfolio includes anionic surfactants, non-ionic surfactants and emulsifiers based on naturally derived ingredients and used in a diversified range of end markets including personal care, soaps and detergents, industrial cleaners, lubricants and paints and coatings.
The ICIS Singapore office reported that fatty alcohol ethoxylate (FAE) import markets in Asia are generally stable mid month.bvFor the week ended 17 April, FAE-7,9 spot prices for April/May drummed cargoes were assessed steady at $1,200-1,300/tonne CIF (cost, insurance & freight) China and $1,330-1,380/tonne CIF SE (southeast) Asia, week on week, according to ICIS data.
Strike season ends early in Moerdijk, as Unions and employee representatives of Shell’s Moerdijk, Netherlands, petrochemicals complex agreed to end strike action at the site. An action committee convened on Friday agreed to allow Shell to temporarily take control at the site from 15:00 BST onward, after company management offered an improved salary offer at a meeting with unions on 25 April.
Unions backed the new offer, issued after nearly three weeks of industrial action at Moerdijk and the nearby Pernis refinery, which have delayed a long-planned turnaround for the cracker at Moerdijk, one of the largest in Europe. In what a Shell spokesperson termed an “ultimate” offer, the company has increased its wage hike offer for Pernis and Moerdijk employees to 3% this year, 2% in 2020 and 2.5% in 2021, plus a 1.5% annual merit pot.
While the move allows for normal operations to resume at the site after production was stifled and employees declined to work overtime, FNV will schedule meetings with members on 7-8 May to present the results and formally vote on the proposals. Action at the sites has reduced output at the Pernis refinery to 65% of capacity, according to union estimates, and considerably slowed a turnaround at Moerdijk. The moves to reduce capacity also initially prevented the start of shutdown preparation, and a refusal to work overtime slowing the process once employees agreed to begin the turnaround. The work, which heralds the beginning of a crowded turnaround season in Europe through the summer, was expected to begin on 16 April and last through 21 June, according to market sources.
In documentation submitted as part of summary legal proceedings against the unions initiated by Shell late last week, and subsequently overturned in court, Shell estimated that that first nine days of the action had resulted in €14.5m in costs. Shell's Moerdijk site produces ethylene, propylene, benzene, butadiene, crude C4, ethylbenzene, ethylene glycols, surfactants, and ethylene oxide, among others, according to ICIS data.
ON the last day of April ICIS reported that Stepan’s first-quarter net income fell 22% year on year on the back of an equipment failure at a Mexico surfactants plant during the quarter and higher European polymers costs on the back of debottlenecking in Germany.
Stepan ($)Q1 2019Q1 2018Change (%)Net sales489m499m-2Operating income29.7m41.3m-28Net income24.9m31.9m-22
Key points:
- Surfactants earnings dropped year on year as a result of a $2.3m operating loss incurred at its Ecatepec, Mexico, facility due to equipment failure in January, for which it is pursuing insurance compensation for damaged equipment, supply chain expenses and business interruption.
- First-quarter polymer division earnings also fell on lower volumes for North American phthalic anyhydride (PA) and specialty polyols, and higher European
Finally, one of our favourite International chemicals distributors Brenntag has acquired Marlin Company, a US-based provider of custom chemical blending and packaging services for liquid and powder products. Marlin, of Lenoir, North Carolina, had sales of $7m last year, according to a statement by Germany-headquartered Brenntag late on Thursday.
So what’s with the “Most Influential” tag-line. Time Magazine made the news recently – first by reminding everyone, that there is such a thing as Time magazine, then by publishing a list. Among the most influential people of the year, are not many I have heard of, apart from that bloke that played Freddy Mercury, very well, in the recent Queen film. Then there is the Time list of most influential teens (not making it up). I am proudly ignorant of everyone on that list and will no doubt remain so, as and when any of them make it onto the big-boy list. Why should you care? You really shouldn't unless you are chronicling the decline of Western civilization, but you don’t have time to because you are working. You should care about the Allergen of the Year, however. That is a dubious honor bestowed annually by the American Contact Dermatitis Society on a common material. You should know about this. Many in our industry do and some are talking about it. We will talk about it and many many other topics at our big event in Jersey City, may 15 – 17. I’d love to see you there.
Neil
OK here's one bonus picture of the omnipresent Ms K who aparently has not made the cover of Time but has made the cover of Forbes for her money-making prowess. Influential? I don't really know yet. We'll discuss more in a couple of weeks.
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