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April 14, 2008 02:00 AM

SHOW BRIEFS

Frank Esposito
Senior Staff Reporter
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    Reprints Print

    Plastics News senior reporter Frank Esposito gathered these news briefs from Chemical Market Associates Inc.'s World Petrochemical Conference, held March 26-27 in Houston.

    Eastman expands on PET plant's success

    Eastman Chemical Co.'s Integrex-brand PET capacity in Columbia, S.C., is already ``sold out,'' according to Chief Executive Officer Brian Ferguson.

    As previously reported, the plant, which opened in 2006, will add almost 400 million pounds of Integrex PET capacity.

    ``It's got lower energy inputs and it's like any typical project where you find more headroom than you think you have,'' Ferguson said about the plant. ``This gives us a more visible focus.''

    He also detailed Eastman's efforts to use coal for industrial gasification - a process that will allow Eastman to equal or beat U.S. natural gas prices, he said.

    Feedstock pressures have caused Eastman's PET business to limit itself to the U.S. The Kingsport, Tenn.-based firm has sold off PET plants in Mexico, Argentina, Spain, England and the Netherlands in the past two years.

    In 2007, Eastman's sales were roughly flat at $6.8 billion, but profit fell 27 percent to $300 million.

    N. American profits to plummet for PVC

    Profit margins on North American PVC are expected to decline in 2008 and bottom out in 2009, said Steve Brien, global practice leader for chlor-alkali and vinyls at Houston-based CMAI.

    Overall, North American PVC margins are expected to remain below 2007 levels through 2012. New capacity set to hit the market in the 2008-10 period - including a major new plant by Shintech Inc. in Iberville, La. - will put more downward pressure on operating rates and margins in the industry.

    ``Just the threat of new PVC capacity coming on line in North America has already moved North America to much lower margins today compared to 2006 or early 2007,'' Brien said.

    A soft housing market, higher PVC prices and imports of finished goods from Asia caused PVC demand to dip in 2005-07 even though North America as a whole had solid gross domestic product growth.

    PET capacity glut threatens market

    The PET market continues to add unneeded material both globally and in North America.

    North America's capacity growth - including upcoming projects from M&G Group of Tortona, Italy, and Indorama Polymers Public Co. Ltd. of Bangkok, Thailand - has been ``particularly problematic,'' said Chase Willett, CMAI polyester and polyester raw materials director.

    By 2010, North America will have about 3 billion pounds of excess PET unless older capacities are shut down, Willett said. The situation is complicated further by North American demand growth slowing from about 550 million pounds to less than 400 million pounds per year.

    Lighter PET bottles with shorter necks are a major reason for the slowdown, along with consumers choosing to drink water - water bottles average only about 12 grams of PET per bottle vs. soft drinks (24 grams) and sports drinks (36 grams).

    ``A consumer will need to drink two bottles of water per bottle of soft drink or three bottles of water per sports drink to use the equivalent amount of PET,'' Willett said. ``Since consumers are concerned only with refreshment and not with PET consumption, this is not likely to happen.''

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