Surfactants Monthly Review – February 2019
Surfactants Monthly Review – February 2019
Surprising and Unexpected
Those accustomed to inventing things in the course of their work, or as a hobby, will be familiar with the concept of “surprising and unexpected”, particularly in the field of chemistry. If your invention is to be judged innovative and not obvious (the most insulting charge that can be leveled against a putative invention) then it helps if your observation of a chemical reaction or its outcome yields a result that is surprising and unexpected. Hanging around P2, (11 granted patents, 20-odd in the pipeline) I am constantly encountering surprising and unexpected things in the lab and pilot plant. Every now and then I will even contribute to the surprise myself (OK once, I got to invent something, US Pat. 10,071,944).
Of course not everything surprising and unexpected is inventive, sometimes tragedies result which can shape history, ultimately for the better as the Hindenberg disaster helped hasten the advance of airplane travel. Thus aiding one, much safer, innovation (the airplane) at the expense of another (the short-lived airship).
[caption id="attachment_1384" align="aligncenter" width="735"]Surprising, Unexpected and Tragic[/caption]
By the way, the level of interest in our upcoming World Surfactants Conference in May in NYC has turned out to be surprising and unexpected, even though this is out 9th. Please book soon or you may be surprised and disappointed at being put on a waiting list.
Here’s the February news:
At the beginning of the month, ICIS reported that European ethylene oxide (EO) formula contracts rolled over on the back of unchanged ethylene feedstock costs for February.. The primary driver was largely flat naphtha feedstock values month on month, despite the volatility in crude oil seen earlier in January. EO February contracts remain between €1,268-1,436/tonne free delivered (FD) northwest Europe (NWE). ICIS reports that supply is currently good and players have started to discuss the heavier turnaround period expected in spring.
Some uncertainty surrounding demand has apparently started to creep in as January re-stocking activity was a bit delayed this year, according to ICIS. Surfactants demand is a bit quieter compared to previous expectations. This could be attributed to concerns over a slowdown in global economic growth. Sources will be waiting to see how demand develops this month for EO derivatives.
Over in the US, ethylene oxide (EO) contract prices for January fell by 0.4 cent/lb ($9/tonne) on the back of a decreasein the January contract settlement for feedstock ethylene, ICIS reported. January EO contracts were assessed on Friday at 52.0-61.5 cents/lb FOB (free on board). US EO supply is likely to be healthy this month as demand into downstream polyethylene terephthalate (PET) and surfactants is soft on seasonality.
The renaissance of MFG continues, as first noted last month. The company named Darin Gyomory as CFO. Gyomory previously served as CFO of WL Plastics (INEOS), Scepter Inc, and area controller at Dean Foods. Regular readers will know that MFG Chemical manufactures specialty and custom chemicals including dioctyl sodium sulfosuccinates (DOSS), water soluble polymers, rheology modifiers, amides, esters, imidazolines, surfactants and specialty anhydrides. It serves various markets, including agriculture, asphalt, graphic arts, lubricants, mining, oilfield, paints and coatings, personal care, pulp and paper, as well as water treatment. Headquartered in Dalton, Georgia, MFG Chemical operates four manufacturing facilities in northwest Georgia and Pasadena, Texas.
[caption id="attachment_1385" align="aligncenter" width="836"]Another Renaissance Man[/caption]
I know how hard it is to build and start a plant, so I can only sympathize when ICIS reports that Sasol has pushed back the estimated start-up date for its new cracker in Lake Charles, Louisiana to July, a five-month delay from its most recent estimate, as projected costs of the petrochemicals complex continue to rise. Surprising and unexpected things like inclement weather in the closing months of 2018 have added to costs and resulted in delays to construction, exacerbated by high absenteeism among workers and unforeseen additions to the scope of the works mean that the final cost of the complex is likely to be $11.6bn-11.8bn. A $200m contingency and weather provision represents the difference between the upper and lower ends of the range, Sasol added.
[caption id="attachment_1386" align="aligncenter" width="1024"]Yep. This is what it's about..[/caption]
The extent of the delays have led Sasol to cut its expected fiscal year 2019 earnings before interest, taxes, depreciation and amortisation (EBITDA) contribution from the complex from $110m-160m to a loss of $165m-195m. Weather issues and engineering cost and wage over-runs have dogged the project and inflated the budget, which was hiked by $2bn in 2016 to $11bn and by a further $130m in late 2017 due to the impact of Hurricane Harvey. The latest budget increases are the result of a cumulative month of work being lost due to excessive rainfall in late 2018, worker absenteeism around public holidays, incomplete engineering work on the cracker that had not previously been noticed. Staff at the site also identified defective carbon steel forgings on the cracker and ethylene oxide/ethylene glycol (EO/EG) units.
The linear low-density polyethylene (LLDPE) unit at the complex reached mechanical completion in December 2018 and produced its first material in 2019, but full operation is not expected now until February, and projected start-up dates for most units have been pushed back.
Engineering and procurement is largely completed at the site, and construction is 84% finished as of the end of December 2018, the company said. Overall project completion stands at 94% and capital expenditure thus far has come to $10.9bn.
Sasol Lake Charles Chemical Project (LCCP) timeline
UnitPrevious estimateUpdateLLDPEDecember 2018February 2019EO/EGFebruary 2019June 2019CrackerFebruary 2019July 2019Low-density PEMarch 2019August 2019Ziegler alcoholsH2 2019November 2019EthoxylateH2 2019December 2019Guerbet alcoholsH2 2019January 2020
In more US Cracker news, ICIS reports that Shintech’s new cracker in Plaquemine, Louisiana, did not reach mechanical completion by the end of 2018 as planned and remains behind schedule, according to market sources familiar with the operations. The company had planned to reach mechanical completion of the 500,000 tonne/year unit by the end of 2018 and to begin start-up during the first quarter. The ethane cracker is part of a $1.45bn expansion planned to support feedstock for the company’s ethylene vinyl chloride (VCM) and polyvinyl chloride (PVC) production.
Meanwhile. US-based Chevron Phillips Chemical (CP Chem) is seeking tax incentives for a possible cracker and at least one downstream unit in Orange County, Texas, according to government documents. The company did not specify the capacity of the units, but it said that the cracker would be worldscale. If the company decides to pursue the project, construction could start in the second quarter of 2020 and commercial operations could start in the third quarter of 2024, the documents said.
[caption id="attachment_1387" align="aligncenter" width="1024"]Tax Incentives !?[/caption]
In EO related news, Braskem and Denmark’s Haldor Topsoe have reached mechanical completion on the first phase of a demonstration plant that will produce bio-based monoethylene glycol (MEG) from sugars. Located in Lyngby, Denmark, the first phase of the project can produce over 100 tonnes/year of glycolaldehyde, which is converted into bio-MEG in the next process step. Operations will begin on 1 March. Construction on the next phase, the downstream conversion to MEG, is underway, with mechanical completion expected before the end of 2019. If this technology takes off, it decouples MEG production from purified EO. Interesting….
[caption id="attachment_1388" align="aligncenter" width="480"]Good Looking Pilot Plant[/caption]
Earnings news: Brazilian surfactants producer Oxiteno reported a sharp year-on-year rise in Q4 operating income because of higher sales and a one-time benefit. Oxiteno reported a benefit of real (R) 208.9m ($56.0m) in other operating income, up from R300,000 from the same time in 2017. Oxiteno attributed the benefit to tax credits.
The following table shows the performance of the company. Figures are in millions of reais.
m reaisQ4 18Q4 17ChangeSales1,199.901,131.906.0%Cost of sales973.7914.56.5%Gross profit226.2217.44.0%Operating income235.334.6
The following table shows the performance of the company's sales volumes. Figures are in thousands of tonnes.
thousands of tonnesQ4 18Q4 17ChangeSpecialty chems148164-9.8%Commodities423810.5%Domestic141146-3.4%Foreign4955-10.9%
Sales rose because of a weaker real, partially offset by lower sales volumes and a greater share of commodities in the mix, Oxiteno said.
[caption id="attachment_1389" align="aligncenter" width="950"]Thankful for a Good Q1[/caption]
We don’t often write about Arkema here but ICIS’s Tom Brown notes in a recent article that the company is set to continue gradual growth of specialty chemicals as a proportion of its portfolio, as tailwinds for intermediates operations weaken in 2019 and the company eyes acquisitions in the adhesives and advanced materials spaces. The France-headquartered chemicals producer is continuing to rebalance its portfolio and geographical exposure as it focuses on resilience as a means of maintaining momentum in weak economic environment this year.
The article is quite long but a key section talks about acuqisitons. The CEO noted that acquisitions in the high-performance materials sector, covering polyamides, organic peroxides and surfactants, among others, are [also] an option.
That’s it for a short month. So what about this "surprising and unexpected" business then? Alert readers may already have guessed what this month’s musical post-script relates to. Led Zeppelin’s eponymously named first album was, in 1969, and is still now, surprising and unexpected. And to me that makes it innovative. In fact that argument can be made for the first 3 albums. Let’s rewind 50 years and join our eager young music fan as he gently places the precious black vinyl of Zep 1 on his turntable.
The first thing you notices is .. no not that it’s a catchy, almost pop, tune.. it’s the drums. John Bonham is a great drummer – and yeah it’s a catchy hard pop tune. But wait for a minute and a half. At 1:30, Jimmy Page appears on the world music scene and makes sure that we know he’s a great heavy rock guitarist. Two surprises, two world class musicians.
Track 2 : Big surprise – Led Zeppelin can sing the blues. But the real point is that Robert Plant can really really sing; vocal acrobatics type sing. 3:26 ++ cements Plant’s place as a vocal great.
So we are less than 10 minutes in and we have 3 world class musicians doing something quite eye opening for 1969. And be honest, isn’t it still quite surprisingly good today?
3rd Track – yeah we already know that these 4 boys from London can actually play the blues. But check out the back to back mellotron, harmonica and guitar solos starting at 2:08. Over 2 and a half minutes of musical bliss, just thrown in there. Wow.
Track 4 is Dazed and Confused. By the end of this track you are a little over 20 minutes into the career of Led Zeppelin and you’re thinking – how can this be so incredibly meaty and innovative. This psychedelic mash up of hard/acid/blues/metal/progressive has confounded your carefully crafted conclusions about the band from the first 15 minutes of listening and then… 3:28 – you think Iron Maiden may have listened to this as part of their 10,000 hours? And what about 4:32 (drums start to wind up ) and 4:57 (John Bonham was truly the bedrock).
So a surprising and unexpected delight for our music fan 50 years ago and we won’t even cover the rest of Zep 1. Let’s go now to Zep 2 and we’ll skip the first 2 tracks and settle into the Lemon Song. Listen only to the bass. Even at 3:00 under Plant’s vocal histrionics. Wait a sec- we now recongise that there are four world class musicians in Zeppelin.? John Paul Jones. Another surprise, that maybe just did not come through in that first album.
And I’ll point out at 4:04 one of the most surprisingly inappropriate lyrics that I will not repeat here in the interest of maintaining the blog’s G rating.
But there is much much more. Skip a track and listen to Heartbreaker. Jones is not done surprising you. That bassline …It is literally a living, breathing thing.
One more song. Third album. Zep 3 the acoustic album, I suppose. But there’s a unexpected thermonuclear device planted at the end of side 1. Since I’ve Been Loving You. The first five notes tell you it's a blues song. You’re just drifting off when the guitar break at 48 seconds serves you notice that you’re about to be laid out on the emotional rack and stretched to breaking point. I don't think I need to write more here. This song is so surprising because it’s so good. For me, 5:08 is a high point, but there are many. Enjoy it.
So what's the lesson? That I've ignored Led Zep for too long on the blog? Yes, but also you have to always be looking for the surprising and unexpected. Even in the most basic and familiar parts of your life. If not for innovation, then at least for preservation. Think about what you learned on your first day on the job. Is there something addtitional there you missed that bears further thought.? In May, we will talk about a familiar topic, surfactants. I guarantee you will learn many surprising and unexpected things and meet very many surprising and unexpected people. See you there.