Chemical shipments on U.S. railroads rose 17.4 percent for the week that ended Sept. 19, the Association of American Railroads said. Chemical rail car loadings rose to 27,608 from 23,526 in the year-ago period.

Chemical shipments on trains, called rail car loadings, are a measure of demand for products ranging from plastics to fertilizers.

The figures often provide an early glimpse of broader trends for the chemical industry as well as manufacturing, according to analysts.

The weekly data indicated that year-to-date rail car chemical loadings have fallen 14.5 percent compared with the same period in 2008.

Rail car loadings represent about 21 percent of chemical volumes by tonnage. Trucks, barges and pipelines carry the rest.

US Demand Grows for Oil Field Chemicals

Demand for oil field chemicals in the US will reach $10.7 billion in 2013, according to a new study by the Freedonia Group. Although industry’s growth trajectory during 2009-13 will be uneven, this increase represents an average 4.4%/year growth.

The end of the forecast period will see a pronounced slump in demand short term, followed by a strong recovery. Oil and gas pricing, says the study, will be mainly responsible for the decline and rebound.

After hitting all-time highs midyear, prices dropped precipitously in second-half 2008, as the global economic downturn began to affect demand. Numbers of active drilling rigs—which had reached levels not seen for decades—declined dramatically as a result, dipping to fewer than 900 earlier this year from a high of more than 2,000 in mid-2008.

The rig count is projected to increase to nearly 1,600 in 2013, aided not only by higher oil and gas prices, but also by development of high-profile new fields such as the Marcellus shale in the eastern US.

Early in the forecast period, says the study, drilling fluids will suffer sharp overall market-value declines before rallying later. Despite poor current conditions, the overall level of oilfield activity—and, as a result, demand for oil field chemicals and their raw materials—will recover. Well-completion numbers will grow over 2009-13, boosting demand for completion chemicals.

Such stimulation techniques as hydraulic fracturing and acidizing will continue to grow, as “more wells are fractured or otherwise subjected to stimulation methods upon initial completion.” Enhanced oil recovery techniques will remain attractive options, says the study, as prices return closer to levels seen in recent years, boosting demand for gases and other products used in these operations.

COMPANY NEWS

BASF to Increase Asian Sales with China Demand

BASF SE said recently it will invest €2 billion ($2.9 billion) in China and other parts of Asia over the next four years in an effort to double sales there by 2020.

The Asia-Pacific region is already the largest chemicals market in the world but is expected to grow even bigger as demand for cars, skyscrapers and highways rises along with incomes. At the same time, chemical companies are finding that more of their customers are relocating their manufacturing operations to low-cost countries in the region.

BASF, the world's largest chemicals company, said it estimates the overall Asia-Pacific chemical market, excluding pharmaceuticals, has the potential to grow to €1.15 trillion by 2020 from €650 billion last year and account for nearly half of all chemical sales world-wide.

In 2008, the Asia-Pacific region contributed 15%, or €9.3 billion, to BASF's total sales of €62.3 billion. About 45% of Asia-Pacific sales came from China, the company said.

In the first half of 2009, the region accounted for 20% of overall sales, with nearly half coming from China. The company employed 13,700 people there as of the end of 2008.

BASF said about $1.4 billion of the company's new investment will go toward the expansion of its 50% integrated chemical-production joint venture in Nanjing, which was approved by the Chinese government in July. BASF is partners with Sinopec Corp. in the venture and has spent $2.9 billion on the plant, which opened in June 2005.

The expansion will add 5,000 to the regional work force by 2020, taking it up to 20,000. BASF said it has invested €6.2 billion in China over the past 15 years.

The company's strategy for the next decade will be to push farther inland into emerging provinces that are benefiting from new state development incentives. The company also plans to expand in untapped markets such as Vietnam. It says it is nearing its goal of generating 70% of regional sales from local production.

LyondellBasell Focuses on France and Germany

Polyolefins giant LyondellBasell says it will focus its European LDPE production activities in Wesseling, Germany, and Berre, France, after announcing the closure of its UK-based plant.

The firm says the LDPE plant, located at Carrington, is no longer economically viable. Tassilo Bader, LyondellBasell senior vice-president, olefins and polyethylene, Europe and International says: “We are able to meet projected customer demand for LDPE with product supplies from our other LDPE facilities.”

With a capacity of 185 KT per year, the Carrington plant is one of the company’s smallest LDPE manufacturing sites. LyondellBasell has begun consultations with trade union and employee representatives to discuss what will happen to the facility’s 50 employees.

The 210,000 metric tonne-per-year polypropylene plant, also located at the Carrington site, is not affected by the move.

However, LyondellBasell has also reversed its decision to close a PE plant in Texas, the US. The plant — located in Alvin, and known as Chocolate Bayou — was set to close 30 September. But officials with LyondellBasell filed a motion in August with a US Bankruptcy Court to withdraw its request to close the plant, which has an annual capacity of almost 500 million pounds of high density PE.

LyondellBasell's US operations and one of its European holding companies filed for Chapter 11 bankruptcy protection in January, citing drastic drops in demand for plastics and chemicals. The firm has a $23bn (€15.8bn) debt load connected to Basell's $19bn (€13bn) purchase of Lyondell Chemical in late 2007.

Kronos Announces Price Hike for Titanium Dioxide

Kronos Worldwide Inc. said it iss raising prices for all grades of titanium dioxide sold in North America.

The company said the increase effective Oct. 1 was 5 cents per pound. Kronos also raised prices in May and July.

It announced recently that it raised prices for titanium dioxide sold outside North America and Europe by at least $150 per metric ton on Oct. 1.

Titanium dioxide is used as a white pigment in paints and in sunscreens.

Dow Sells Interest in Dutch Refinery

Dow Chemical Co. sold its interest in a Netherlands-based crude oil refinery for about $800 million, including inventory, in a move that furthers the chemical company's efforts to divest noncore assets.

The chemical company completed the sale of its interest in the Total Raffinaderij Nederland NV refinery to Paris-based Total SA.

Dow said the divestiture is in line with its plan to increase financial flexibility, improve cash flow and pay down debt.

PROJECTS/ EXPANSIONS/ACQUISITIONS

DuPont Invests $120M to Expand Solar-Products Production

DuPont will invest more than $120 million to expand production of chemical films for photovoltaic modules. The Wilmington, Del.-based company said recently it is expanding monomer and resin production plants in Louisville, Ky., and Fayetteville, N.C. The facilities will increase by more than 50 percent E.I. DuPont de Nemours & Co.'s capacity to make raw materials for its Tedlar polyvinyl fluoride product line.

Durable Tedlar films, which help block out moisture and ultraviolet light, are used as backsheets in photovoltaic modules and for other applications. DuPont (NYSE: DD) makes Tedlar at plants in Fayetteville and Louisville, as well as at facilities in New York, New Jersey, Iowa and Pennsylvania.

DuPont aims to begin expanded monomer and resin production next summer as part of a broader expansion of Tedlar production for PV module manufacturers, said Cathy Andriadis, a DuPont spokeswoman.

DuPont will spend $55 million to expand the Fayetteville resin plant and $45 million to expand the Louisville monomer plant. The company will spend another $20 million to expand Tedlar production capacity at a site to be determined, she said.

DuPont recently said it would consolidate its 23 businesses into 14 in an attempt to capitalize on growing markets for products that protect the environment and bolster food and energy security. The changes are part of a broader restructuring plan that includes cutting approximately 14,500 DuPont employees and contractors to slash fixed costs by $1 billion and capital expenditures by $200 million this year.

DuPont aims to nearly triple its sales of photovoltaic module components to more than $1 billion by 2012, CEO Ellen Kullman said during a May speech in New York.

DuPont Looking at Building Chemical Plant in Brazil

DuPont Co., the third-largest U.S. chemical maker, may build a Brazilian plant to supply chemicals used by energy companies in oil and natural-gas drilling.

DuPont expects demand for pipe-coating to surge in Brazil as state-controlled oil company Petroleo Brasileiro SA taps the so-called pre-salt crude reserves, Eduardo Wanick, chief executive officer of DuPont’s Latin America unit, said recently.

Oil service companies from pipe suppliers Tenaris SA to DuPont are chasing contracts with Petrobras, which plans to spend $174.4 billion over the next five years, the world’s largest corporate investment plan.

Wanick declined to say how much DuPont would need to invest in a plant in Brazil.

Exxon to Expand Chemicals Business in China

Exxon Mobil Corp., the world’s biggest maker of chemicals used in plastic bottles, is boosting investment in Asian plants on expectations Chinese demand will increase faster than sales of gasoline and diesel.

China’s appetite for chemicals such as paraxylene and polyethylene is climbing 10 percent a year and will continue to expand for at least the next 15 years, said T.J. Wojnar, the senior vice president who oversees Exxon Mobil’s worldwide chemicals business. India probably will be the major driver of global demand a decade from now, he said.

Irving, Texas-based Exxon Mobil is evaluating whether to form a joint venture with Qatar to process the Persian Gulf nation’s natural gas into chemicals for export to China, Wojnar said recently. A new plant in Fujian, China that began production this year will be followed by an expansion at the company’s Singapore complex in 2011.

“We continue to think about opportunities in China,” said Wojnar, who returned from a visit to the company’s Singapore plant earlier this week. “More than half of the world’s petrochemical growth is going to be in China, so there’s definitely room for more facilities to be built out there.”

In China, Exxon Mobil’s biggest chemicals market outside the U.S., demand for products used to make DVDs, beverage bottles and car headlamps didn’t decline when the rest of the world slumped, Wojnar said.

Dow Chemical Sale of Morton Salt to K+S Approved by FTC

Dow Chemical Co said recently the U.S. Federal Trade Commission has cleared the way for its $1.68 billion sale of Morton Salt to Germany's K+S AG.

The companies expect the transaction to close shortly, following FTC acceptance of a consent decree agreed to by K+S, which will become the largest salt producer in the world as a result of the deal.

Dow said it will use the $1.68 billion in gross proceeds from the sale of Morton Salt to fully pay off the balance of a bridge loan it used to partially fund its acquisition of Rohm and Haas Co earlier this year.

In a joint statement, the companies said K+S fulfilled the requirements by the FTC for selling bulk de-icing salt assets in Maine and Connecticut.

The deal was a part of Dow's $15 billion acquisition of Rohm and Haas in April. Dow immediately arranged to sell off Morton Salt, which was founded in 1848, as part of a plan to scale back debt stemming from the merger.

Huntsman, Tronox File for Antitrust Clearance

Chemical company Huntsman Corp. said that required paperwork has been filed with federal officials to get antitrust clearance for its $415 million purchase of Tronox Inc.'s titanium dioxide and electrolytics businesses.

The deal, announced in August, would make Huntsman the world's second-biggest maker of a whitener used in products as diverse as food, plastics and paint.

Texas-based Huntsman said that it signed a "stalking horse" agreement with Oklahoma City-based Tronox, which filed for bankruptcy protection in January.

A stalking horse bid is a binding proposal for the assets of a company in bankruptcy from an interested buyer chosen by the company in bankruptcy, subject to a higher offer through an auction process approved by the bankruptcy court.

A. Shulman Expands Capacity at Mexican Plant

A. Shulman Inc., based in Akron, Ohio, said recently it is expanding the manufacturing capacity of its plastics factory in San Luis Potosi, Mexico.

The plant will focus its new 5 million pounds of capacity on specialty engineered nylons, polyesters and high-performance alloys. It plans to have finished its expansion by the second quarter of fiscal 2010.

Rennovia Raises $12 million for Chemical Production

Rennovia, an early stage chemical development company, recently raised $6 million in startup funding from 5AM Ventures and Versant Ventures, according to regulatory documents.

The funding is the first infusion of a proposed $12.3 million Series A round that the company is seeking, documents show.

The Menlo Park, Calif.-based startup is working to make specialty chemicals from renewable feedstock. The company has not disclosed what chemicals it will make.

Many startups have tried to use renewable, biologic feedstocks to produce fuel. To date, VCs have invested several billion dollars into ethanol refineries that make the gasoline substitute from corn, switchgrass and algae. But few of the startups have made it to maturity, due to volatility in both the cost of inputs and the value of the product they produced.

Co-founder Tom Boussie says that Rennovia is focused on making chemicals, not fuels. "Margins are higher, volumes are lower and the capital barrier for the same return on investment is lower," he said.

McIlvaine Company

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