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CHEMTURA PRESENTS URETHANES SURFACE COATINGS AT THE 2017 EUROPEAN COATINGS SHOW

PHILADELPHIA, Pa., February 27, 2017 -- Chemtura Corporation (NYSE: CHMT) will demonstrate how it has become a leading manufacturer of specialty aqueous urethane dispersions, urethane surface coatings and polyester polyols during the European Coatings Show, 4-7 April 2017 in Nuremberg, Germany.   This leading position has been achieved by working with each customer to deliver the best solution for them and by providing excellence in sales and customer service to inspire customer loyalty, confidence and trust.

Chemtura will be promoting its product innovations including TRIXENE® & ADIPRENE®  Low Monomer Urethanes for 1-K and 2-K coating and adhesive systems;  ADIPRENE® LF prepolymers form part of Chemtura's premium MbOCA replacement technology, which offers improved processing over other MbOCA-free alternatives and outstanding performance in the most demanding urethane applications.

Also featured at the show will be Chemtura's additives and sealants; TRIXENE® SC prepolymers & curatives and TRIXENE® BIocked crosslinkers for heat curing applications and the range of Blocked Urethane  flexibilizers for use with epoxies, alongside the company's range of water-based urethanes including TRIXENE® Aqua blocked crosslinkers and adhesion promoters.  The WITCOBOND® polyurethane dispersions will also be showcased. Alongside WITCOFLEX® polyurethane systems widely used for breathable textile coatings will also be promoted at the Chemtura stand. 

Visit Chemtura on Stand 421 in Hall 1 at the Nuremberg Exhibition Center to speak with a representative and learn more about the company's extensive experience in Urethane products.

About Chemtura

Chemtura Corporation, with 2015 sales of $1.7 billion, is a global manufacturer and marketer of specialty chemicals. Additional information concerning Chemtura is available at www.chemtura.com

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Germany chems welcome key vote on Canada-EU trade deal

20 September 2016 – By Stefan Baumgarten


Germany’s chemical producers trade group VCI has welcomed a key vote by the country’s Social Democrats in support of the pending Canada-EU free-trade deal.

Utz Tillmann, director general of Frankfurt-based VCI, said that the vote to back the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU marked a good day for free trade.

The Social Democrats are junior partner in Chancellor Angela Merkel’s ruling coalition government. It’s unlikely for Germany to ratify CETA without the group's support.

While CETA negotiations began in 2009 and were finalised in August 2014, the deal has yet to be ratified and implemented.

Tillmann said that CETA would not lead to a lowering of EU standards, and that it would be good for consumers, workers and companies.

CETA could be a blueprint for "modern rules" in other free-trade deals, and it could be "a building block for the global economic order in the 21st century," he added.

He urged legislators in Germany and elsewhere to now quickly proceed with ratifying and implementing CETA.

Sigmar Gabriel, German vice chancellor, economic affairs minister and leader of the Social Democrats, lauded CETA as a chance to set "sustainable, good rules for globalisation".

However, over the weekend, demonstrators in a number of German cities again protested against CETA.

They fear that the deal, often seen as template for the stalled but much bigger US-EU Transatlantic Trade and Investment Partnership (TTIP), could turn into a "Trojan horse" for TTIP. Meanwhile, labour unions in Canada have come out against CETA.

Canadian trade minister Chrystia Freeland acknowledged that some of CETA’s provisions remain controversial.

She pointed to issues such as investor protection, public procurement and services, and labour rights.

However, she said that those issues would see "further clarifications", prior to European Council’s resolutions on CETA and the signing of the agreement next month.

As for the timelines of CETA’s ratification and implementation, this would depend on the European Parliament, Gabriel said. Also, certain aspects of CETA were subject to review by EU member countries, he said.

In Canada, political commentators have said that Bulgaria and Romania could yet seek to torpedo CETA in protest against Canada’s unwillingness to lift visa requirements for Bulgarian and Romanian nationals.


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Americas – EU’s premier propylene export destination in H1 2016

20 September 2016 – By Nel Weddle


Mexico and Colombia together accounted for about 48% of Europe’s propylene exports during the first half of 2016, with Egypt coming a close second, according to the latest data released statistics agency Eurostat.
Supply length in Europe at the start of 2016 and through the first quarter together with the comparatively low European prices saw a handful of cargoes exported, much of it either from ARA (Amsterdam, Rotterdam, Antwerp) or the Iberian peninsular.

However, European propylene supply started to tighten moving into the second quarter following a string of planned and unplanned production outages and the impacts were further exacerbated by slower-than-expected recovery following the French stikes.

Even now, in mid-September, robust demand continues to outweigh supply which has been constrained further by high temperatures and, low Rhine water levels.

Deep-sea opportunities have been far and few between as European prices remain low compared to other regions which are also battling supply shots and strong demand.

Russia was the main importer to Europe in the January to June period. US volumes featured more heavily in the first half of 2015 rather than in 2016, not only because of poor European netbacks when compared with elsewhere, but also because availability has not been as long as was generally expected.

European sources anticipate some supply relief towards the second half of October providing scheduled cracker turnarounds are completed in a timely manner.

Eurostat import/export data are in metric tonnes and subject to revision as more detailed information becomes available. EU figures comprise the aggregate of member states data published by Eurostat.


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UK distributors and traders worried about post Brexit vote uncertainty - CBA survey

19 September 2016 – By Nigel Davis


Companies in the chemicals supply chain in the UK are concerned about continuing business uncertainty following the Brexit vote in June, the Chemical Business Association (CBA) has said.

The uncertainty is unwelcome, said CBA chief executive, Peter Newport, following release of the results of a members survey completed on 8 September.

“Our survey shows that the main impact of the decision has been to weaken business optimism and damage investment intentions,” he said.

More than half the association’s membership responded to the survey.

Some 56% were less optimistic of business prospects with only 9% more optimistic.

“A significant minority of companies (29%) have reduced their investment plans as the result of Brexit – just 12% of respondents plan to increase their investment plans over the next three years,” said the CBA.

CBA member companies – the association represents largely distributors and traders in the chemicals supply chain – mainly (79% of the survey respondents) don’t expect the industry’s regulatory framework to change significantly.

“Some 95% of respondents expect the cost of regulatory compliance to increase or remain the same during the next three years,” added the CBA.

More than half of respondents to the survey believe that the EU has made a positive contribution to the growth of their businesses.


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Pure MDI/ TDI exports fall in July year on year- Eurostat

19 September 2016 – By Ben Lake


European exports of pure methyl di-p-phenylene isocyanate (MDI) and toluene di-isocyanate (TDI) were down in July, year on year, according to the latest data from the European statistical agency Eurostat.

Imports of pure MDI and TDI increased in the same period.

The shortage of TDI in the European market may go some way to explain the increase demand for foreign material and reduced ability to export.

Eurostat import/export data is subject to revision as more detailed information becomes available. EU figures comprise the aggregate of member states data published by Eurostat.


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Tight European propylene supply limits derivative potential overseas

16 September 2016 – By Nel Weddle


Europe’s propylene derivatives might well be in a better position to benefit from the high cost of the US and Asian markets, but high spot prices and/or the limited availability of propylene feedstock has prevented players from taking full advantage, some market sources have said.

“We are fighting hard for every molecule,” a source said. “We would like more propylene, but we are not that desperate to pay these prices.”

Europe’s relatively low-priced position versus the rest of the world has boosted domestic propylene consumption because derivatives markets have been able to step up production in the face of reduced imports and increased export opportunities.

“We had extra demand from downstream,” a second source said. “We have really scratched the bottom of our tanks.”

It added: “They have had export possibilities that was not planned.”

European propylene supply has been persistently tight following a string of planned and unplanned production outages and hiccups – including the French strikes – at crackers and refineries over the past few months.

Increased demand has raised the pressure on supply creating a vicious circle, but there are expectations that at least some of the pressure will be alleviated once crackers are back in operation following planned maintenance.

“If [the restarts] are timely, this will bring relief,” a third source said, adding, “if not, it will be a drama.”

Tight supply has kept spot propylene prices at a premium to the prevailing contract price and several buyers have said they are simply unable to buy-in additional propylene citing unaffordability.

“Some derivatives are not having a jolly time,” the third source said. “Yes, they might make a bit more because of their competitive position, but only the polypropylene (PP) and propylene oxide (PO) [sectors] are really doing well.”

The next round of contract discussions – for October – should get under way in a couple of week’s time.

Of course, it is far too early for players to be disclosing their views regarding direction, but they are likely to be mindful that while some sources will likely seek increases on the basis of the supply and demand balance, pushing contract prices considerably higher could have a negative effect.

As another source said last week, much higher prices in Europe would send “a perfect invitation for imports and destroy derivatives.”


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Europe chems growth hit by weaker emerging market demand – HSBC

16 September 2016 – By Tom Brown


Market growth expectations for European chemical stocks are underpinned by unrealistic ideas of emerging market demand, according to the research unit of UK-headquartered banking group HSBC.

The majority of listed European chemicals producers have significantly increased their footprint in emerging market regions over the last decade in response to tepid growth at home. However, growth in those regions is slowing and is unlikely to meet current market expectations for sector performance, HSBC said.

The developing world share of European industry revenue rose by 10 percentage points between 2005 and 2015, to 39% of the total. But emerging market GDP growth is slowing, and growth multipliers for chemicals in those regions are slipping close to developing world levels, the bank said.

Expectations for the sector are likely to be revised down over the next 12-18 months as emerging markets fail to be the growth engine as expected, the bank added.

“Consensus expectations around revenue growth and margin improvement for the sector underpinned by emerging market exposure appear wholly unrealistic,” Sriharsha Pappu, HSBC's Emerging Markets chemicals equity analyst wrote in the report.

“It is also not just emerging market demand growth that has been declining. Returns on investment in emerging market chemicals have consistently trended downward as increased competition and overcapacity have driven prices lower,” he added.

The European industry has benefited from portfolio optimisation and cost-cutting, leaving it less cyclical and more efficient, HSBC said, but sector growth remains strongly tied to GDP growth.

With developed market growth projected by HSBC to be 1.5% in 2016 and 1.6% in 2017, the emerging markets would need to expand by 8% per year in 2016-18 for European chemical companies to reach annual 5% revenue expansion over the period, according to HSBC.

The sector has benefited from lower energy and capital costs, but these have been priced into performance expectations, and margin improvement or strong revenue growth necessary for a producer to outperform the sector, HSBC said.

Local growth by developing market firms has also reduced the amount of product those regions have been able to absorb from western producers.

“In some key markets, China for example, it is hard to think of a major downstream chemical product or product chain, which… is currently undersupplied,” Pappu said.

HSBC identified revenue visibility – the extent to which future earnings projections are probable – as desirable in a sector where general growth estimates are likely to be revised down, as well as additional sector consolidation.

Solvay is most likely to outperform the market on the basis of revenue growth visibility, attractive end markets and structural tailwinds, while AkzoNobel, Covestro and Clariant are most likely to underperform, the bank added.


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Europe benzene watching US arbitrage amid thin spread

13 September 2016 – By Truong Mellor


European benzene players are watching price developments in the US market, sources said, with cheap transatlantic freight rates and a narrow spread between the two regions potentially opening the arbitrage window.

Spot numbers in the US were bullish last week in tandem with some strength on crude oil and balanced regional availability, with prices initially holding around the $740/tonne level.

Curtailed imports from Asia since earlier in 2016 have also tightened US benzene availability.

There was some downward movement by Friday September 9, however, with regional supply showing signs of improvement.

US spot prices were holding around $710-715/tonne so far this week.

Despite this, several European benzene traders were looking at the arbitrage window into the US last week.

Transatlantic freight rates out of the ARA (Amsterdam-Rotterdam-Antwerp) region were talked as low as $20/tonne for larger parcels, with the US market now shifting to more of an export position.

However, some players in Europe were uncertain whether was any profitability in the exercise given the uncertainty on crude oil and the direction of the US market by the fourth quarter.

The widening spread between benzene and toluene in the US is likely to support increased on-purpose benzene production and help rebalance supply in the region by October.

European September benzene bids were at $680-685/tonne while offers were at $700/tonne before a deal was eventually done at $690/tonne.


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INSIGHT: Chemicals growth will be even harder to find

13 September 2016 - By Nigel Davis


The International Energy Agency (IEA) talked recently about the "waiting game" on the world's oil markets as oil supply continues to outstrip weak demand growth.

OECD stockpiles of crude have hit new highs. The market might be expected to tighten given the pressure on supply, but oil output has continued to grow. Meanwhile the world's economies stutter and, as the agency says, refiners appear to have lost their appetite for crude.

It is the oil demand growth trajectory that is so uncertain now. Clearly, OECD demand growth is minimal and likely to remain so. Energy conservation and renewables are denting nations' appetite for crude. At the same time weak GDP growth is providing little impetus to increased demand.

But globally, demand growth is contracting while supply is increasing. What stimulus there has been from cheaper fuels has diminished. The agency says that China and India are "wobbling", economically that is. "Economic worries in developing countries haven't helped either. Unexpected gains in Europe have vanished, while momentum in the US has slowed dramatically," it adds.

Chemicals demand growth has been understandably constrained in this environment. German chemicals trade group VCI presented a sober analysis of Germany's chemicals growth prospects, for example, in its latest national economics report.

The second quarter indicators looked miserable. In the quarter, production, prices and sales in what is Germany's third largest industry declined from the first three months of the year.

"Weaker industrial production in Germany adversely affected domestic chemical sales," the VCI added.

"The demand in Europe, where 70% of the industry’s foreign sales are achieved, dropped too. Other foreign markets did not make up for this, due to low dynamics of the global economy and the growth weakness of emerging nations."

 

The point is that, in the words of VCI president and former Bayer CEO Marijn Dekkers, "No lasting growth impulses are discernible, neither in Germany nor abroad."

 

The UK Brexit vote and the country's intention to leave the EU added further uncertainty.

Government data are showing the slowdown persisting into the third quarter.

Germany's overall production from industry, energy, mining and construction fell 1.5% in July, from June, with output in the country's chemicals and pharmaceuticals sector also falling, according to government statistics published last week.

Production excluding energy and construction was down 2.3% from June. Production of capital goods fell 3.6%, production of consumer goods fell 2.6%, and production of intermediate goods fell 0.8%.

And looking forward, Germany’s July manufacturing orders rose just 0.2% from June but orders for the country’s chemicals and pharmaceuticals fell slightly. Excluding orders for big-ticket items, July orders were down 1.3% from June.

The VCI is forecasting chemicals production growth in Germany of 0.5% in 2016 if pharmaceuticals are included.
Production contracted in the second quarter by 1% against the previous quarter and 0.5% year on year. Capacity utilisation was 84.1%.
Excluding pharmaceuticals, Germany chemicals production shrank by 2.3% in the second quarter compared to Q1. It was down 0.8% year on year.
Couple that with weak pricing and you do not have a pretty picture.
In the second quarter chemicals sales value, including pharmaceuticals, in Germany fell for the fourth quarter in succession. The drop was 1.6% on Q1 and 6.1% year on year.
In a global report, the trade group said that it expected little business dynamism in the industrial nations in the second half. And it sees weaker growth than in the past in many emerging markets.
Its annual forecasts now are for global GDP growth of just 2.1% in 2016; global industrial production growth of 2.0% and chemical industry growth (including pharmaceuticals) of 3.0%.


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Global SR industry faces overcapacity challenges

13 September 2016 – By Tracy Dang


Overcapacity, especially in China, remains a major concern for the global synthetic rubber (SR) industry, a representative of a rubber trade group has said. "We have been talking for three years about overcapacity of SR, and still, you can see already that overcapacity is the single greatest challenge for the SR industry," said Roxanna Petrovic, general director of programs at the International Institute of Synthetic Rubber Producers (IISRP).
She made her comments during the 5th ICIS European Butadiene & Derivatives Conference in Berlin, Germany.
In a breakdown of individual sectors, overcapacity has led to the idling of several polybutadiene (BR or PBR) facilities in China.
Fujian Fuxiang Chemical and Sinopec Baling Company idled their PBR plants in late 2013, while YPC-GPRO Rubber and PetroChina Jinzhou shuttered their PBR plants in early 2014, according to the IISRP.
Other idled PBR facilities in China include Shandong Wanda Chemical and Shandong Huamao New Materials in 2015, as well as Sinopec Shanghai Gaoqiao in 2016.
Global PBR operating rates stand at 65%, Petrovic said.
However, there continue to be new PBR plants and expansion projects, expected to come on line in 2016 and 2017.
In other sectors, the emulsion styrene butadiene rubber (E-SBR) operating rate in the global market is around 67%, with demand showing a downtrend.
Still, new capacity is expected to come on line in 2018.
There is, however, positive demand trends in other areas in the SR industry, Petrovic said.
Solution styrene butadiene rubber (S-SBR) operating rate has been higher at 71%, with demand showing a positive trend.
The IISRP is also seeing positive demand trends in other sectors such as ethylene propylene diene monomer (EPDM), nitrile butadiene rubber (NBR) and styrene butadiene block copolymer, with global operating rates at 74%, 76% and 80%, respectively.
Petrovic said that slow growth in the downstream tyre markets have impacted the SR market by causing delays in the start-up of these expansion projects.


Source: VCI

Additional reporting by Stefan Baumgarten


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INSIGHT: 2020 EU car emissions targets will increase plastics adoption

09 September 2016 - By Mark Victory


French car maker Renault told ICIS that a recent news story suggesting diesel engines will disappear from most of its European vehicles because of the cost of meeting tighter emissions standards was “nothing new”.
Nevertheless, the report reignites the discussion around the future of diesel cars under new EU-wide emissions targets, and the opportunities this creates for automotive plastics markets.
“With regards to the recent Reuters report there is nothing new, Renault has always said that it will adapt its offer according to the local market demand,” said Chloe Yemm, Groupe Renault spokesperson.
Renault has been a leading manufacturer of and a heavy investor in diesel technology. “Diesel makes up around 70 per cent of Renault's sales in the UK today,” Yemm added.
Adoption of diesel cars in Europe was pushed heavily in the wake of the Kyoto treaty in 1997 – which introduced measures to reduce carbon emissions by 25% over a 10 year period – because diesel cars emit 15% less carbon than petrol. Tax breaks on diesel cars in the intervening years and fuel efficiency encouraged consumer take-up.
Nevertheless, diesel cars emit around four times the nitrogen oxides (NOx) of their petrol counterpart and in 2012 the World Health Organisation re-classified diesel engine exhaust from “probably carcinogenic” to “carcinogenic,” and in recent years diesel has been facing a backlash culminating in the VW emissions scandal in 2015.
New EU-wide emissions standards come into force in 2020-2021. By 2021, car manufacturers will need to achieve a fleet average for new vehicles of 95 grams of CO2 per kilometre - representing fuel consumption of 4.1 litres/100km for petrol vehicles and 3.6 litres/100km for diesel, with limits set on a value curve according to vehicle mass, with only the fleet average regulated. The new standards will begin to be phased in by 2020.
There is a strong financial incentive for auto manufacturers to meet these standards. From 2019 any fleet average excess over emissions standards will be charged at €95/gram of emissions excess for each of its registered vehicles.
Prior to the VW emissions scandal, diesel had been seen as a help to auto manufacturers seeking to meet these targets because of its lower CO2 emissions.
Nevertheless, following the scandal new "real world" testing has been introduced which leaves the majority of current diesel models struggling to meet NOx emissions limits without expensive redesign, meaning that they are no longer a cost-effective way to achieve fleet averages.
This is something that ICIS predicted would be one of the major repercussions of the VW scandal in its white paper in the immediate aftermath, and it now appears to be coming to fruition.
With a limited timeframe to meet emissions standards and a major route to achieving this now effectively blocked by the new testing environment, increased lightweighting of vehicles is perhaps the easiest and most cost-effective way of meeting these targets being as it is an already ongoing trend in the market.
Metal prices have strongly rallied in recent months – in part because of investor flight to safety in the wake of the UKs vote to exit the EU. Meanwhile the ICIS Basket of Automotive Petrochemicals (IBAP) – a weighted indicator of the cost of petrochemical raw materials used in the production of automotives – is currently €15/tonne of total vehicle weight (TTVW) below its long-term average of €292.26/TTVW.
This places plastic markets in a strong position to take advantage of any additional lightweighting initiatives as opposed to alternatives such as aluminium-based alloys.
In particular, commodity plastics such as polypropylene (PP), polyvinyl chloride (PVC) and nylon – which are already heavily used in the automotive industry – stand to benefit most.
Newer materials such as carbon fibre are unlikely to see much of a benefit from emissions standard-linked lighweighting because, despite underlying growth of around 25% per annum (according to market estimates) in the carbon fibre market, they are cost prohibitive.
To see why plastics are an exciting metal replacement material for automotive manufacturers, the best example is provided in the American Chemistry Council’s annually published Plastics and Polymer Composites in Light Vehicles report, the latest of which came out in October 2015.
According to that report, automotive plastic materials form approximately 50% of a lightweight vehicle’s volume, but only about 8% of the vehicle’s weight.
Diesel cars had been under fire before the VW scandal. In early 2015, the City of Paris said that in order to improve air quality it was aiming to have diesel cars out of the city by 2020.
Nevertheless, the higher emissions targets and "real world" testing have likely precipitated the shift away from diesel and the limited time frame to provide an alternative will mean auto manufacturers will probably turn to a proven route – such as lightweighting – with proven materials – such as PP, PVC, and nylon – rather than face not being able to engineer cheaper ways to manufacturer material such as carbon fibre, or risk expensive research and development programmes over-running or failing to produce workable solution.
When a deadline looms, you stick to what you know, and – as the ACC figures show – what automotive companies know is how to replace metal with plastic.

Additional reporting by Truong Mellor


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US chem production to grow at accelerated rate - ACC

08 September 2016 – By Tracy Dang

US basic chemical production is expected to continue expanding, with growth rates anticipated to accelerate in the coming years, a trade group representative has said.
After experiencing a growth rate of 2.5% in 2015, basic chemical production is expected to see a gain of 3.1% in 2016 and 4.9% in 2017, said Martha Moore, senior director of policy analysis and economics at the American Chemistry Council (ACC).
Gains will continue to accelerate in 2017 and 2018 as new capacity comes on stream, she said at the 9th ICIS World Chemical Purchasing Conference.
Within the basic chemicals category, petrochemicals and organics are expected to expand by 4.1% in 2016 and 5.7% in 2017.
Plastic resins growth rates are expected to accelerate to 3.3% in 2016 and 5.4% in 2017.
Meanwhile, synthetic rubber is expected to grow by 2.5% in 2016 and 4.7% in 2017.
As production expands, export volumes are expected to continue trending upward as well.


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INSIGHT: Low productivity growth continues to confound US

06 September 2016 - By Al Greenwood


US productivity growth continues to remain below average, a trend that is reshaping the chemical industry. Productivity and GDP growth are closely related, and demand for chemicals tends to rise and fall with GDP.
With growth so elusive, many chemical companies are pursuing consolidation-type mergers and acquisitions (M&A), analysts and consultants have said. These deals are justified by the synergies the companies can achieve from their overlapping businesses.
For companies in general, the slowdown in productivity growth has been correlated with a similar slowdown in investments from businesses. The following chart shows private fixed investment, measured in billions of dollars, from the Bureau of Labor Statistics.

 


For the economy has a whole, low productivity growth limits that for interest rates, as illustrated during the current economic expansion. Since the last recession ended in June 2009, the overnight federal funds rate has increased by just a quarter point, to 0.25-0.50%.
Lowering interest rates is among the main monetary tools that the central bank uses to stimulate the economy during a downturn. If interest rates remain low, the Federal Reserve will have less room to lower rates before it has to rely on more unconventional tools.
The magnitude of the slowdown has been significant.
Since 2010, average growth in productivity has been 0.4%/year, said Kevin Swift, chief economist for the American Chemistry Council (ACC). That compares with 2.9%/year in 1948-1973 and 1.4%/year in 1973-1990.
More recently, productivity growth broke 2% during the 1990s and remained strong in the 2000s, reflecting the advancements in communication and information technology, Swift said.
Many causes have been proposed for this decline in productivity growth.
"I think the most important one is that capital available for each employee across the economy has declined," Swift said. There is a strong correlation between the capital available for each worker and productivity.
"We just haven't been making the investments in this country, in what's referred to as capital deepening," he said.
Other causes include the ageing US population as more members of the baby-boomer generation gets closer to retirement, Swift said. Baby boomers are made up of people born in 1946-1964.
In the book "The Rise and Fall of American Growth", author Robert Gordon writes that the growth of earlier decades was the result of one-time technology innovations, such as automobiles replacing horses and US homes and businesses gaining access to electricity, clean water and sewage treatment. All of these changed daily life throughout the country, and the benefits of these changes lasted for decades.
Current innovations lack the life-altering effects of these earlier ones, and growth has slowed as a result.
In an article published in Foreign Affairs, Larry Summers diagnosed the problem as secular stagnation, in which savings become out of balance with investments.
Excessive saving lowers demand, which reduces growth and inflation, Summers said. The imbalance between savings and investment also lowers real interest rates.
In a recent speech, Stanley Fischer, vice chair of the Federal Reserve, said the decline could possibly be caused by low business dynamism. During such a period, entrepreneurs start fewer companies and the economy as a whole goes through a slower cycle of job creation and destruction.
An index of US start-up activity kept by the Kauffman Foundation reached its lowest level in at least eight years in 2014. It has since recovered, but the index still has not reached the previous highs of 2009 and 2001.
During her speech last week, Fed Chair Janet Yellen implored policy makers to find ways to increase productivity growth.
The question is how.
Some have proposed an expansionary fiscal policy.
Summers wrote that such a policy can reduce national savings, addressing the savings and investment imbalance that causes secular stagnation.
An expansionary fiscal policy can also raise real interest rates and stimulate growth, he said.
In the latest economic policy survey from the National Association for Business Economics (NABE), 43% of the respondents said fiscal policy was too restrictive, while 34% said the current policy was about right.
A majority – 66% – said the main objectives of current fiscal policy should be to adopt structural policies that would stimulate more economic growth in the medium and long term.
Yellen acknowledged that productivity growth is beyond the scope of the central bank, which is charged with setting monetary policy. However, she still shared some general ideas.
These included improving education; spending more on worker training; encouraging capital investment; investing in research and development (R&D); and reducing the burden from regulations without compromising on the problems these rules intend to address.
In Fischer's earlier speech, he said more effective fiscal and regulatory could boost productivity growth. Like Yellen, he also mentioned improvements in education, private investment and education. Fischer also added public infrastructure.


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Chemtura's Petroleum Additives Business Expands Its Distribution Relationship With Canoil Canada Limited To Include Reolube® Phosphate Ester Base Stocks

PHILADELPHIA, Pa., September 6, 2016 - Chemtura Corporation (NYSE: CHMT) announces today that effective October 1, 2016 Canoil Canada Limited will be its distributor for Reolube® Phosphate Ester Base Stocks in Canada and the U.S.

Chemtura will be transitioning North American Reolube® customers to Canoil in the coming few weeks. Customers with questions during the transition should contact Chemtura Account Manager, Geoff McIsaac at Geoffery.McIsaac@chemtura.com or 519-574-6785.

Canoil Canada Limited:
Canoil Canada Ltd., formerly known as Canoil, has been established since 1984 and is located in Mississauga, ON, Canada. Its business is focused on distribution and custom packaging of both grease and fluid lubricants. Canoil Canada Ltd. is ISO 9001: 2008 certified and has a mission of "Meeting Tomorrow's Needs Today."

Chemtura Corporation
Chemtura Corporation, with 2015 sales of $1.7 billion, is a global manufacturer and marketer of specialty chemicals. Additional information concerning Chemtura is available at www.chemtura.com


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For further information: Bill Perry; Bill.Perry@Chemtura.com, +1-203-525-7892


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US toluene-WTI spreads widens

29 August 2016 – By Zachary Moore

The spread between US spot toluene prices and upstream crude oil widened last week, ICIS analysis shows.

For the week ended 26 August, toluene was valued 81 cents/gal above West Texas Intermediate (WTI) crude futures, compared to a 74 cents/gal premium in the prior week.



NYMEX crude fell 1.8% over the past week but gained ground on Friday as oil values traded in a narrow range while market participants search for a clearer direction.

Spot toluene prices, meanwhile, were assessed in a narrower range over the past week while trading activity remained thin. Players are concerned about the medium term demand outlook for toluene given the impending end of the summer driving season, which will result in weaker demand for toluene as an octane booster.

Toluene is most commonly used as a chemical feedstock for on-purpose benzene and paraxylene (PX) production or as a gasoline component to boost octane. Nitration-grade (n-grade) toluene is typically used for chemicals and commercial grade toluene (c-grade) or off-spec n-grade is typically used for fuel blending, but strong demand in either grade can limit supply for both.

As an octane component in fuels, toluene is in its strongest demand season during the summer when fuels must be less volatile. During the winter, fuel blenders can use less expensive octane boosters like butane. The summer fuels season runs through mid-September.

As a chemical feedstock, toluene is converted to other aromatics generally through the use of toluene disproportionation (TDP) units which produce benzene and mixed xylenes (MX) or selective toluene disproportionation units (STDP) which produce benzene and a paraxylene (PX)-rich stream of MX.

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US chem activity up for sixth consecutive month

24 August 2016 – By Stefan Baumgarten

The American Chemistry Council’s (ACC) chemical activity barometer (CAB) expanded for a sixth month in a row in August amid signs of momentum in the US manufacturing and services sectors, according to industry data obtained recently.

The three-month moving average (3MMA) CAB measure was up 0.4% in August, from July, and it was up 3.2% year on year from August 2015. August saw the strongest year-on-year growth since January 2015.

In August, three of the four core CAB components improved. Production-related and inventory indicators were positive, and equity prices continued to gain. However, the CAB’s product price component slipped slightly in August.

"The CAB is signaling higher, and possibly accelerating, US business activity into 2017," said ACC chief economist Kevin Swift.
"The services sectors have begun to improve and likely accelerated during recent months, and manufacturing appears to be gathering momentum," he added.

The CAB is described as a leading economic indicator derived from a composite index of chemical industry activity.

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European TDI players' expectations conflicted for September

24 August 2016 – By Ben Lake

European toluene di-isocyanate (TDI) players have mixed expectations for September contracts, say sources.
Some sources said that, after buyers filled their tanks before the quiet August holiday period, there would be less demand despite the continued production shortage.

"Customers are relaxed because of their full tanks," said a source.

Another source also said it believed that producers would have to limit price increases to preserve market share, adding: "If they [producers] stay on a high price, they will lose customers."

Producers will push for further high price increases, according to another source.

There is still no definitive date for major TDI producers to return to market, so it is difficult to assess when the current supply shortage will end, according to the source.

The current TDI price range stands at €2,270-2,400/tonne FD (free delivered) NWE (northwest Europe).

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Europe Group I base oil availability disputed

23 August 2016 – By Ross Yeo

Availability of Group I base oils in the Europe domestic market remains unclear, sources indicated.

A refiner in northwest Europe sees a balanced market, with reduced volumes for August being in line with planned-for production output. The refinery said a rollover of prices in September currently appears the most likely outcome, but cautioned that demand nominations from consumers can be unpredictable at this time, due to the holiday breaks.

In contrast to recently when two consumers said solvent neutral material appears well supplied, to the extent that they were being actively approached by sellers, this week a different consumer said the market appears short.

It went on to say that it believes price increases in September are likely, once the market has returned to normal levels of activity and participation.

A distributor in the UK agrees material is short and feels prices in the lower half of the ICIS ranges are no longer possible. However, a trader was seen selling two lots of truckloads of SN150 totalling 100 tonnes at $495/tonne FCA (free carrier) Rotterdam.

SN150 is currently assessed at $565-610/tonne FOB (free on board) NWE (northwest Europe).
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INSIGHT: US growth prospects attract chemicals M&A

18 August 2016 - By Al Greenwood

The growth prospects for the US economy, while lacklustre, are still better than other parts of the world, drawing companies to make deals to get a foothold in the country, a director at an investment bank noted.

"When it comes to geography, we have seen significant interest across global players, Europe, Asia and so forth, focused on the US market," said Mario Toukan, managing director and head of chemicals at KeyBanc Capital Markets. "The US is a prime, prime market for acquisitions."

This does not mean that the US economy is growing at an exceptional rate. The International Monetary Fund (IMF) lowered its growth forecast for the country's GDP to 2.2%. Next year, the US economy should grow by 2.5%.

While not phenomenal, it still beats the average for advanced economies as a whole, which the IMF said should grow by 1.8% in 2016 and 2017.

The eurozone is slightly below the average for the advanced economies, while Japan is hardly growing at all.

"Even though US growth is not great, it's still stable, safe growth," Toukan said. "That's why they are buying these businesses."

The US also provides companies with access to a much more dynamic market, he said. Market segments such as coatings, adhesives and sealants are still fragmented. A foothold in the US provides companies with several targets and potential acquisitions.

Toukan highlighted one of the deals that KeyBanc Capital Markets was involved in. This was SK Capital's sale of Calabrian to INEOS.

INEOS is headquartered in Switzerland. Calabrian has a plant in Port Neches, Texas, and is building another one in Timmins, Ontario. Calabrian has a proprietary, on-purpose, high-purity sulphur dioxide production process and sells other, related, chemicals.

"That was a prime example of a large, corporate looking to penetrate the US and North American market in a greater way," Toukan said.

Another example is the possible merger between US-based Praxair and Linde, which was revealed after Toukan talked to ICIS.

In 2015, Linde's gas division derived 31% of its operating profit from the Americas. Europe, the Middle East and Africa (EMEA) made up 43% and Asia Pacific was 26%.

For Praxair, the Americas made up nearly 77% of its operating profit in 2015. Asia was 12% and Europe was nearly 11%.

The following tables compares the companies' 2015 sales and operating profit, with Linde's gas division in millions of euros and Praxair's in millions of dollars.
 


This interest in US businesses illustrate how companies are coping with slow economic growth.

With GDP expanding so slowly, chemical companies have few opportunities for organic growth.

"The chemical market overall isn't growing much," Toukan said.

The American Chemistry Council (ACC) measures production volumes of chemicals through its Global Chemical Production Regional Index (Global CPRI). In June, this grew by just 0.1% on a three-month moving average basis. It was the fourth month in a row that the Global CPRI was essentially flat.

With such a low outlook for growth, companies are using mergers and acquisitions (M&A) to achieve growth through synergies, Toukan said. Synergies, after all, are a type of growth.

Because synergies are easier to achieve through consolidation deals, these are the types of acquisitions being used by chemical companies.

Chemical companies are also becoming more focused on their core businesses, Toukan said.

"With the exception of a few examples, a lot of corporates are focused on narrowing the field because they have influence, more say, they can direct the ship a bit better around businesses they have been in for a long time versus expanding into a bunch of areas they are unfamiliar with," he said. "Based on my dialogues with many CEOs and boards, I would say 80% are focused on being focused."

Activist shareholders have been pushing for such focus for quite some time. However, a more coherent portfolio can help the seller, while the newly independent company would have the freedom to pursue its own strategies for growth.

In other words, the diversification trend of 10-20 years ago is out, Toukan said. Chemical companies want tighter, more focused portfolios.

"This industry goes through waves," Toukan said. "We diversify, we narrow, then we diversify again, then we narrow again. That's why corporates divest businesses. They go through waves of strategy."

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Pure mdi/ tdi exports fall in H1 2016 vs 2015 - Eurostat

17 August 2016 – By Ben Lake

EU exports of pure methyl di-p-phenylene isocyanate (MDI) and toluene di-isocyanate (TDI) from the EU fell by 10.84% in the first half of 2016 compared to the same period in 2015, according to data from European statistics agency Eurostat.

Imports into the EU increased by 6.29% during the same period, the data showed.
    

The month by month breakdown of Eurostat data below shows how 2016 numbers have tracked below 2015 numbers all year despite starting at a similar level. The past two months in particular have seen a continuous drop in 2016 exports according to the data. This may be connected to the shortage of TDI in Europe, caused by issues at numerous plants across the region.


Source: Eurostat

Imports show a similar upwards trend in both years according to Eurostat data. The reduced supply of tdi in Europe may be helping fuel the increase in imports over the past few months of 2016 compared to 2015.


Source: Eurostat
 


Eurostat import/export data are in metric tonnes and subject to revision as more detailed information becomes available. EU figures comprise the aggregate of member states data published by Eurostat.

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Europe base oils stable amid holiday slowdown

02 August 2016 – By Ross Yeo

The European domestic and export base oil markets are assessed stable amid very quiet activity with many participants absent on holidays, ICIS data shows.

Demand in the domestic market is slightly down as blenders are operating at reduced rates due to employee holidays, but the downturn is both expected and not severe, and so is unlikely to have a large impact on market fundamentals.

Low crude oil levels may have an impact on prices but sources do not think this is likely in the immediate future, given the slow activity and lack of any excess material. If feedstock levels remain as they are or lower come September there may well be a greater call from consumers for price reductions.

It was suggested that specialist base oil refineries may take advantage of the lower feedstocks prices to discount base oils and try to increase market share, both from other Group I refineries and from Group II sellers. Yet, if faced with a softening base oil market, those refiners than can producer both base oils and fuels may switch to the latter.

In the export market, no deals were seen and very little feedback was received, with most participants unavailable.

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