in this issue
Chemical industry weekly news roundup, 25 October
12:56 PM MDT | October 25, 2013 | By LINDSAY FROST
This Week in CW:
Earnings season is in full swing as companies continue to report varied results. BASF reported an 18.5% increase in third-quarter net income to €1.1 billion ($1.5 billion) on 1.5% higher sales of €17.7 billion. The company also announced a restructuring plan for its pigments business, with a planned reduction of 650 jobs by 2017. Dow Chemical posted a nearly 20% gain in third-quarter profits versus last year, although compressed epoxy margins kept results below Wall Street expectations. The company also announced that it has increased its divestiture target to $3-$4 billion—more than double the $1.5-billion target Dow announced in March of this year. Air Liquide reported €3.77 billion ($5.19 billion) in adjusted sales revenue during the third quarter of 2013, and Solvay reported a 13% fall in recurring Ebitda (Rebitda) to €439 million for the third quarter. DuPont reported third-quarter operating earnings of $426 million, up 5% from the year-ago quarter, and all operating segments except for performance chemicals posted stronger earnings. The company also announced that it will divest its $7-billion performance chemicals segment through a tax-free spin-off to shareholders.
Ineos Grangemouth announced that it will reopen its petrochemicals business with immediate effect and it will restart the oil refinery immediately. The move follows “Unite union’s dramatic U turn and its belated recognition that Ineos’s ‘survival plan’ is the only way to ensure Grangemouth’s long term survival,” the company said. Unite has agreed to no-strikes for three years; to move to a modern pension scheme; a pay freeze for three years; and changes to union agreements on site, including no full-time union convenors, Ineos says.
ACC says that its monthly Chemical Activity Barometer (CAB) increased 0.3% in October on a three-month moving average basis and remains up 3.1% year-on-year (YOY). The CAB remains at its highest point since June 2008, ACC says. Other notable strong indicators include chemical equities—which continued to outpace the overall market as measured by the S&P 500—and the expansion of inventories and new orders, which was likely restored by a return of business confidence following the end of the government shutdown.
Around the Web:
The NY Times writes on Europe’s economy—including results from the purchasing managers’ index, compiled by Markit Economics, a data and analysis firm. The results show that Europe’s fragile recovery remains alive—with the composite coming in at 51.5 in October, above the 50.0 mark that signals expansion. While that is a slight deceleration from September’s 52.2 showing, it was the fourth consecutive month in positive territory.
According to the New Statesmen, Robo-trading is the fast stockbroking strategy that affects your retirement funds. Advocates of HFT argue that it provides additional liquidity and so narrows the gap between buying and selling prices. Yet when market conditions turn adverse, HFT firms can switch off their robo-traders and then liquidity vanishes —as we saw in the “flash crash” of 6 May 2010, when the US market fell by cent in minutes. A few critical factors explain the rapid development of HFT: the increase in computing power available to investment banks and trading firms, for example, and the deregulation of many stock exchanges in the United States and Europe.
CTV News writes that a newly published study says air downwind from a cluster of petrochemical plants northeast of Edmonton contains pollutants at levels equal to some of the world's largest cities. Other pollutants, including some known to cause cancer, also measured well above normal. And cancer rates linked to those chemicals were found to be higher in communities closest to the so-called Industrial Heartland. Although scientists don't definitively link the two, one of the report's co-authors said the findings raise concern about the possible long-term effects of exposure to petrochemical emissions.