The Urethane Blog

November 25, 2019

European Monomer Update

Firmer naphtha could stall falling European ethylene, propylene spot prices

Author: Nel Weddle

2019/11/22

LONDON (ICIS)–A month-on-month increase in feedstock naphtha values might help stave off any further declines in European ethylene and propylene spot prices, but cracker operators might curtail operating rates due to persistent market softness.

“Considering the [spot] discounts and the increase in naphtha, we are close to break-even point,” a source said.

Another said: “Firm naphtha and lack of support from the by-products would certainly put a cap on what some cracker operators can offer.”

Spot prices for both ethylene and propylene have been under downwards pressure in Europe for some time due to an oversupply driven by soft demand and weak global markets.

Double-digit percentage discounts against the prevailing contract reference price persist for both and deeper discounts are being talked although much will depend on the outcome of the December contract reference price negotiations that will start next week.

ICIS Editorial Chart goes here–
These bearish pressures have become more pronounced in November as crackers have come back online following planned maintenance and demand has slowed further as inventory concerns take precedence at year-end.

LACKLUSTRE DEMAND
No improvement in demand is likely before the new year but, on paper at least, supply is expected to grow as planned turnarounds will be finally complete for 2019 and the unplanned issues should also have been resolved.

However, sources said these unplanned issues, if ongoing, would not make too much of a difference in December anyway.

All sources canvassed this week – producers and consumers – anticipate some reductions in cracker operating rates next month but said firm decisions have yet to be made; they are waiting to have cracker restarts confirmed.

“If things don’t improve there will be structural reductions to limit the damage,” a third source said.

Cracker margins have been on a downward trend since early August.

 

 

 

 

 

 

 

–
In previous years, producers had been able to manage year-end cracker balances usually through a raft of ethylene exports mainly to Asia, but prices there are such that the free on board (FOB) Europe netback would be too low – lower than is currently talked for domestic activities – to contemplate at this time.

The second source said it would expect to see some “significant trim next month, especially since export is not an option either.”

Some propylene export has already been fixed through October and November to help address the length in that market, particularly in chemical grade propylene (CGP), but it is not clear whether there will be more.

Market players are watching the situation very carefully.

“It’s going to be interesting to see what happens in the next two weeks,” a fourth source said.

Focus article by Nel Weddle

https://www.icis.com/explore/resources/news/2019/11/22/10447338/firmer-naphtha-could-stall-falling-european-ethylene-propylene-spot-prices?cmpid=SOC%7CRSS%7Ctwitter%7CFreeChemNewsFeed

November 25, 2019

PFA Fall Meeting Highlights

FOR IMMEDIATE RELEASE

Polyurethane Foam Association Fall Meeting Provides Forum For
Issues Discussion, Technical Advances

Jake Barnhardt Inducted Into The Flexible Polyurethane Foam Hall Of Fame

LOUISVILLE, KY (November 19, 2019)—The Polyurethane Foam
Association (PFA) recently concluded its fall meeting, which
spotlighted key regulatory issues and new technical developments.
PFA’s two-day meeting in early November was attended by more than
150 executives from foam manufacturers, chemical suppliers, and other
companies supporting the industry. Attendees saw presentations on
key industry issues including recycling, flammability, and regulatory
developments.

Keynote speaker, Dr. Sharon Kerrick of the University of Louisville
Business School, shared insights on how established companies in
mature industries continue to innovate. She was joined by executives
fromby Yum! Brands and Brown-Forman, both of which are
headquartered in Louisville.

In addition, a Technical Program featured presentations on innovations
and best practices on topics ranging from bismuth catalysts, additives to
minimize compression set, pour line technologies, plant security, and a
recent CertiPUR ® evaluation of VOC emissions from foam in Europe.
Jane Kniss of Evonik won the Herman Stone Technical Excellence
Award, as her technical presentation was voted best by those attending
the Technical Program. “The quality of the technical presentations was
exceptional this year,” noted Bill Gollnitz, Past President of PFA and
Moderator for the Technical Program. “Congratulations to Jane for
standing out in a prestigious field.”

Copies of the technical proceedings are included in registration fees for all attendees, and will
soon be made available for order at www.pfa.org.)

PFA also recognized three individuals for outstanding accomplishments in the flexible
polyurethane foam industry.  Van Delk of Dow Chemical and Tom Robitaille of Lonza were honored with Lifetime
Achievement Awards, while Jacob “Jake” Barnhardt, Jr., longtime President of NCFI
Polyurethanes, was inducted into the Flexible Polyurethane Foam Hall of Fame.

 

 

 

 

 

 

 

Barnhardt

Barnhardt began his more than 50-year career in the industry in 1964, when he became part of
the management team of the newly-formed North Carolina Foam Industries, now NCFI
Polyurethanes. NCFI perfected the “one shot” flexible foam manufacturing process that is the
industry standard today, and expanded its business to include technologies that found their way
into far-flung applications including the Space Shuttle. Barnhardt was at the first meeting that led
to the creation of PFA, and was a long-time supporter of the organization.

 

 

 

 

 

 

 

 

Robitaille

Robitaille’s 36-year career in the flexible polyurethane
foam industry included numerous technical achievements, including patents in the application of
lasers and for novel uses of antimicrobial compounds for commercial and industrial use. Many of
his applications can be found in common household items and footwear.

 

 

 

 

 

 

 

 

Delk

Delk spent more than 33 years at Dow, working as a Technical Service Manager. He was widely
recognized among Dow customers for his technical expertise among Dow customers, and as a
teacher and a mentor within the company.

“PFA is focused not only on the future, but it also recognizes the contributions of people who
have led the industry to where it is today,” said Chip Holton of NCFI Polyurethanes, PFA’s
President.

The Polyurethane Foam Association is a trade association founded in 1980 to help educate foam
users, allied industries and other stakeholders. PFA provides facts on environmental, health and
safety issues and technical information on the performance of FPF in consumer and industrial
products. FPF is used as a key comfort component in most upholstered furniture and mattress
products, along with automotive seating, carpet cushion, packaging, and numerous other
applications.

 

www.pfa.org

November 25, 2019

PFA Fall Meeting Highlights

FOR IMMEDIATE RELEASE

Polyurethane Foam Association Fall Meeting Provides Forum For
Issues Discussion, Technical Advances

Jake Barnhardt Inducted Into The Flexible Polyurethane Foam Hall Of Fame

LOUISVILLE, KY (November 19, 2019)—The Polyurethane Foam
Association (PFA) recently concluded its fall meeting, which
spotlighted key regulatory issues and new technical developments.
PFA’s two-day meeting in early November was attended by more than
150 executives from foam manufacturers, chemical suppliers, and other
companies supporting the industry. Attendees saw presentations on
key industry issues including recycling, flammability, and regulatory
developments.

Keynote speaker, Dr. Sharon Kerrick of the University of Louisville
Business School, shared insights on how established companies in
mature industries continue to innovate. She was joined by executives
fromby Yum! Brands and Brown-Forman, both of which are
headquartered in Louisville.

In addition, a Technical Program featured presentations on innovations
and best practices on topics ranging from bismuth catalysts, additives to
minimize compression set, pour line technologies, plant security, and a
recent CertiPUR ® evaluation of VOC emissions from foam in Europe.
Jane Kniss of Evonik won the Herman Stone Technical Excellence
Award, as her technical presentation was voted best by those attending
the Technical Program. “The quality of the technical presentations was
exceptional this year,” noted Bill Gollnitz, Past President of PFA and
Moderator for the Technical Program. “Congratulations to Jane for
standing out in a prestigious field.”

Copies of the technical proceedings are included in registration fees for all attendees, and will
soon be made available for order at www.pfa.org.)

PFA also recognized three individuals for outstanding accomplishments in the flexible
polyurethane foam industry.  Van Delk of Dow Chemical and Tom Robitaille of Lonza were honored with Lifetime
Achievement Awards, while Jacob “Jake” Barnhardt, Jr., longtime President of NCFI
Polyurethanes, was inducted into the Flexible Polyurethane Foam Hall of Fame.

 

 

 

 

 

 

 

Barnhardt

Barnhardt began his more than 50-year career in the industry in 1964, when he became part of
the management team of the newly-formed North Carolina Foam Industries, now NCFI
Polyurethanes. NCFI perfected the “one shot” flexible foam manufacturing process that is the
industry standard today, and expanded its business to include technologies that found their way
into far-flung applications including the Space Shuttle. Barnhardt was at the first meeting that led
to the creation of PFA, and was a long-time supporter of the organization.

 

 

 

 

 

 

 

 

Robitaille

Robitaille’s 36-year career in the flexible polyurethane
foam industry included numerous technical achievements, including patents in the application of
lasers and for novel uses of antimicrobial compounds for commercial and industrial use. Many of
his applications can be found in common household items and footwear.

 

 

 

 

 

 

 

 

Delk

Delk spent more than 33 years at Dow, working as a Technical Service Manager. He was widely
recognized among Dow customers for his technical expertise among Dow customers, and as a
teacher and a mentor within the company.

“PFA is focused not only on the future, but it also recognizes the contributions of people who
have led the industry to where it is today,” said Chip Holton of NCFI Polyurethanes, PFA’s
President.

The Polyurethane Foam Association is a trade association founded in 1980 to help educate foam
users, allied industries and other stakeholders. PFA provides facts on environmental, health and
safety issues and technical information on the performance of FPF in consumer and industrial
products. FPF is used as a key comfort component in most upholstered furniture and mattress
products, along with automotive seating, carpet cushion, packaging, and numerous other
applications.

 

www.pfa.org

November 25, 2019

CN Rail Strike Update

What is really going on with the CN Rail strike, the propane shortage and Quebec’s ’emergency’

A Teamsters Canada union worker pickets against Canadian National Railway in Brampton, Ont., Nov. 19, 2019.Mark Blinch/Reuters/File

Parts of the country are facing propane shortages as a strike among railway workers causes the transportation system to grind to a halt. This means that some farmers are struggling to dry their grain. It also means, in Quebec, the government is worrying that hospitals and retirement homes are going to run out of the fuel. The Post’s Tyler Dawson explains the situation.

That’s not great, what’s happened?

Canadian National Railway workers are on strike, as of Tuesday. Some 3,000 of them. The sticking point seems to be working conditions. The union says it’s unsafe; CN disagrees. They’ve been in negotiations for months.

But now they’re on strike, so whatever’s being moved on CN tracks is not moving at the same rate.

As it happens, 1,800 locomotive engineers and 600 supervisors can cross picket lines. The Teamsters union said Friday they think CN might be forcing a shortage by throttling rail shipments.

“We wonder if CN is choosing not to ship goods like propane in order to manufacture a crisis and force back-to-work legislation,” said Lyndon Isaak, president of the union, according to Bloomberg.

Why does this matter for propane?

Some 85 per cent of the propane used in Quebec is supplied by rail. So when the rail workers go on strike, the propane isn’t moving. Which means Quebec’s reserves are dwindling, even a few days into the strike. On Thursday, Premier François Legault called it an “emergency” for the province. He said Quebec keeps 12 million litres of propane in reserve, and uses about six million litres per day. Which means two days of propane, in theory. But rationing has begun, media reports said, bringing daily usage down to 2.5 million litres per day.

So how many days until it’s all gone?

Jonatan Julien, the minister of energy, announced Friday a train from western Canada will arrive by Monday with 20 million litres, and that would be sufficient, atop the existing reserves, to carry through to Thursday.

Priority one would be health industries. There have been some concerns about the supply of propane for hospitals and retirement homes, as well as for farmers to dry grain. But, also, Legault said Quebec is attempting to find trucks to bring the needed supplies of propane into the province.

Really? Why propane?

Good question! Hospitals are powered with a variety of other fuels. Roger Holliss, the director of engineering at St. Mary’s General Hospital in Kitchener and president of the Canadian Healthcare Engineering Society, said natural gas is probably the most common (though he cautioned his expertise was mainly in regards to his own hospital).

Diesel is “often the dominant fuel for emergency generators,” said Holliss, but propane is used sometimes too, and for cooking.

“We only use propane for pilot lights/starters on our main boilers. Therefore I don’t need to carry much propane in reserve as my consumption of propane is very low,” wrote Holliss in an email. “For other hospitals, particularly more rural hospitals, this would be quite different.”

In Alberta, hospitals are powered by electricity, with diesel, usually, being the backup fuel. “They would have reserve tanks that could run the generator for at least 72 hours,” said Alberta Health spokesperson Sabrina Atwal in an email.

Trains sit in the yard at the CN Rail Brampton Intermodal Terminal on Nov. 19, 2019. The Teamsters union questions if CN is “choosing not to ship goods like propane in order to manufacture a crisis.” Mark Blinch/Reuters/File

So why does Quebec use propane?

Contrary to what’s been reported, Quebec doesn’t actually use propane as the main source of energy in either hospitals or retirement homes, explained Marie-Claude Lacasse, a spokesperson for the ministry of health.

It uses hydro-electric power. But propane is the backup power in some hospitals, she said, and in some retirement homes.

“It’s mainly used in the kitchen and for some lab activities,” said Lacasse.

It can also be used for washing laundry.

“For now, we’re not talking about a crisis in the hospitals or in Quebec,” she said. “None of that.”

How is this news being received in the West?

Unsurprisingly, Albertans are like: Hey, you could build a pipeline. Said Premier Jason Kenney: “You could actually ship it in by pipeline. We think our friends in Quebec should understand obviously the danger, potential danger, of rail shipments.”

Other politicians, meanwhile, are talking about back-to-work legislation that would force rail workers back on the job.

Can propane even be distributed by pipeline?

Nathalie St-Pierre, the head of the Canadian Propane Association, says propane can be moved in a pipeline as a natural gas liquid. When transported by truck and rail, it’s in the form of a gas.

Much of the natural gas liquids come from Alberta, and are transported via pipeline to Sarnia, Ont., where they are processed into ethane, butane and propane.

“In Quebec there’s some local production, but the rest is mostly by rail,” said St-Pierre. “Ontario east, you’d have more rail, and the rest is a lot more pipelines.”

About 100,000 litres of propane can be carried in one rail car, she said. About 30 per cent of Quebec’s propane is used in agriculture.

In the end, are old people really going to start dying in retirement homes and hospitals because of this propane shortage?

It’s possible that when Albertans said “let the eastern bastards freeze in the dark” they didn’t actually mean it literally. The announcement Friday that there will be reserves enough to get through the week is likely good news for everyone.

https://nationalpost.com/news/what-is-really-going-on-with-the-cn-rail-strike-the-propane-shortage-and-quebecs-emergency

November 25, 2019

CN Rail Strike Update

What is really going on with the CN Rail strike, the propane shortage and Quebec’s ’emergency’

A Teamsters Canada union worker pickets against Canadian National Railway in Brampton, Ont., Nov. 19, 2019.Mark Blinch/Reuters/File

Parts of the country are facing propane shortages as a strike among railway workers causes the transportation system to grind to a halt. This means that some farmers are struggling to dry their grain. It also means, in Quebec, the government is worrying that hospitals and retirement homes are going to run out of the fuel. The Post’s Tyler Dawson explains the situation.

That’s not great, what’s happened?

Canadian National Railway workers are on strike, as of Tuesday. Some 3,000 of them. The sticking point seems to be working conditions. The union says it’s unsafe; CN disagrees. They’ve been in negotiations for months.

But now they’re on strike, so whatever’s being moved on CN tracks is not moving at the same rate.

As it happens, 1,800 locomotive engineers and 600 supervisors can cross picket lines. The Teamsters union said Friday they think CN might be forcing a shortage by throttling rail shipments.

“We wonder if CN is choosing not to ship goods like propane in order to manufacture a crisis and force back-to-work legislation,” said Lyndon Isaak, president of the union, according to Bloomberg.

Why does this matter for propane?

Some 85 per cent of the propane used in Quebec is supplied by rail. So when the rail workers go on strike, the propane isn’t moving. Which means Quebec’s reserves are dwindling, even a few days into the strike. On Thursday, Premier François Legault called it an “emergency” for the province. He said Quebec keeps 12 million litres of propane in reserve, and uses about six million litres per day. Which means two days of propane, in theory. But rationing has begun, media reports said, bringing daily usage down to 2.5 million litres per day.

So how many days until it’s all gone?

Jonatan Julien, the minister of energy, announced Friday a train from western Canada will arrive by Monday with 20 million litres, and that would be sufficient, atop the existing reserves, to carry through to Thursday.

Priority one would be health industries. There have been some concerns about the supply of propane for hospitals and retirement homes, as well as for farmers to dry grain. But, also, Legault said Quebec is attempting to find trucks to bring the needed supplies of propane into the province.

Really? Why propane?

Good question! Hospitals are powered with a variety of other fuels. Roger Holliss, the director of engineering at St. Mary’s General Hospital in Kitchener and president of the Canadian Healthcare Engineering Society, said natural gas is probably the most common (though he cautioned his expertise was mainly in regards to his own hospital).

Diesel is “often the dominant fuel for emergency generators,” said Holliss, but propane is used sometimes too, and for cooking.

“We only use propane for pilot lights/starters on our main boilers. Therefore I don’t need to carry much propane in reserve as my consumption of propane is very low,” wrote Holliss in an email. “For other hospitals, particularly more rural hospitals, this would be quite different.”

In Alberta, hospitals are powered by electricity, with diesel, usually, being the backup fuel. “They would have reserve tanks that could run the generator for at least 72 hours,” said Alberta Health spokesperson Sabrina Atwal in an email.

Trains sit in the yard at the CN Rail Brampton Intermodal Terminal on Nov. 19, 2019. The Teamsters union questions if CN is “choosing not to ship goods like propane in order to manufacture a crisis.” Mark Blinch/Reuters/File

So why does Quebec use propane?

Contrary to what’s been reported, Quebec doesn’t actually use propane as the main source of energy in either hospitals or retirement homes, explained Marie-Claude Lacasse, a spokesperson for the ministry of health.

It uses hydro-electric power. But propane is the backup power in some hospitals, she said, and in some retirement homes.

“It’s mainly used in the kitchen and for some lab activities,” said Lacasse.

It can also be used for washing laundry.

“For now, we’re not talking about a crisis in the hospitals or in Quebec,” she said. “None of that.”

How is this news being received in the West?

Unsurprisingly, Albertans are like: Hey, you could build a pipeline. Said Premier Jason Kenney: “You could actually ship it in by pipeline. We think our friends in Quebec should understand obviously the danger, potential danger, of rail shipments.”

Other politicians, meanwhile, are talking about back-to-work legislation that would force rail workers back on the job.

Can propane even be distributed by pipeline?

Nathalie St-Pierre, the head of the Canadian Propane Association, says propane can be moved in a pipeline as a natural gas liquid. When transported by truck and rail, it’s in the form of a gas.

Much of the natural gas liquids come from Alberta, and are transported via pipeline to Sarnia, Ont., where they are processed into ethane, butane and propane.

“In Quebec there’s some local production, but the rest is mostly by rail,” said St-Pierre. “Ontario east, you’d have more rail, and the rest is a lot more pipelines.”

About 100,000 litres of propane can be carried in one rail car, she said. About 30 per cent of Quebec’s propane is used in agriculture.

In the end, are old people really going to start dying in retirement homes and hospitals because of this propane shortage?

It’s possible that when Albertans said “let the eastern bastards freeze in the dark” they didn’t actually mean it literally. The announcement Friday that there will be reserves enough to get through the week is likely good news for everyone.

https://nationalpost.com/news/what-is-really-going-on-with-the-cn-rail-strike-the-propane-shortage-and-quebecs-emergency