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Chemical industry weekly news roundup, 13 December
11:37 AM MST | December 13, 2013 | By LINDSAY FROST
This Week in CW:
US chemical makers are firmly “back in the game” thanks to the cost advantage enabled by low-cost shale feedstocks, according to ACC’s year-end review and outlook. US chemical production was up 1.6% in 2013 and is expected to rise 2.5% in 2014 and 3.5% in 2015, says Kevin Swift, ACC chief economist and managing director. “Following a decade of lost competitiveness, American chemistry is reemerging as a growth industry,” Swift says. US chemicals production will grow strongly through the second half of the decade as the nearly $100 billion in new chemical investment announced since 2010 comes online.
German chemical trade association VCI (Frankfurt) says it is "cautiously optimistic" for the start of 2014, and expects an increase in chemical production of 2% in the coming year. Chemical industry sales should rise by 1.5%, to €191 billion ($263 billion), with prices falling slightly by 0.5%, according to VCI. The association thinks that the global economy has passed the trough. VCI anticipates an increase in domestic demand in 2014. Most VCI member companies believe that business will pick up in the coming months, but that there are "still too many differences in the signals from the various export markets for a lasting upswing," says VCI.
Honeywell says it will invest $300 million to a build a plant for HFO-1234yf, a hydroflurocarbon refrigerant for automobiles, at its Geismar, LA, site. The plant is expected to be operational in 2016, Honeywell says. The size of the plant "depends on supply agreements that Honeywell is putting in place with major customers," the company says. The investment will be made my Honeywell and "key suppliers," the company adds.
W.R. Grace says the company is targeting an exit from Chapter 11 bankruptcy on or about 31 January 2014, general counsel Mark Shelnitz told investors during a conference call on 12 December. The exact date of emergence depends upon when the US Third Circuit Court of Appeals rules on the final remaining appeal to the company’s reorganization plan. The appeal relates to the amount of interest to be paid on Grace’s prebankuptcy bank debt. Three other appeals, all related to asbestos claims, have passed a 4 December deadline for further filings with the US Supreme Court, Grace said last week.
Around the Web:
According to Bloomberg, the $2.5 trillion hedge-fund industry, whose money managers are among the finance world’s highest paid, is headed for its worst annual performance relative to US stocks since at least 2005. The funds returned 7.1% in 2013 through November, according to data compiled by Bloomberg. That’s 22 percentage points less than the 29.1% return of the Standard & Poor’s 500 Index (S&P 500), with reinvested dividends, as markets rallied to records. Hedge funds, which stand to earn about $50 billion in management fees this year based on industrywide assets, are underperforming the benchmark US index for the fifth year in a row as the Federal Reserve’s economic stimulus program pushes equity markets higher.
An article in NPR says oil giant BP is challenging hundreds of millions of dollars in claims that were filed by businesses after the company's 2010 oil spill in the Gulf of Mexico. The total price tag for BP's oil spill is $42.5 billion. At issue here is a fraction of that but still a lot of money, NPR says. $540 million has been awarded to businesses for losses that "are either nonexistent, exaggerated or have nothing to do with the Deepwater Horizon accident,” the company says.
Scientists from the University of Lyon have discovered a new way to split hydrogen gas from water, using rocks, as reported by BBC news. The method promises a new green energy source, providing copious hydrogen from a simple mixture of rock and water. It speeds up a chemical reaction that takes geological timescales in nature. In the reaction, the mineral olivine strips one oxygen and hydrogen atom from an H2O molecule to form a mineral called serpentine, releasing the spare hydrogen atom.