August 2006 Cambrex for Sale Cambrex has put itself up for sale, offering its Bioproducts division as one business and its Human Health and Biopharma divisions together as a second business. The Bioproducts group offers products and services for research and therapeutic applications. The Human Health business manufactures small-molecule advanced intermediates and APIs. According to analysts, life science companies are interested in the Bioproducts business, while private equity houses are interested in the Human Health division. Several Indian contract manufacturers are also looking at this segment. Initially Cambrex looked to sell the company as a whole, but the comany decided it could likely generate more interest and attract a higher price if the units are sold separately.     Famous Quotes of the Month - I criticize by creation - not by finding fault. (Cicero) - It's not the size of the dog in the fight, it's the size of the fight in the dog. (Mark Twain) - A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. (Sir Winston Churchill) - Opportunities multiply as they are seized. (Sun Tzu) - When I am working on a problem I never think about beauty. I only think about how to solve the problem. But when I have finished, if the solution is not beautiful, I know it is wrong. (Buckminster Fuller)         Why Do Joints Crack? When you stretch a joint by pressing down on your knuckles or twisting your spine, you cause small air bubbles that form between the sacs in the joints to pop. These sacs, called bursas, help cushion the spaces between the bones and keep them lubricated. As creepy as the sound can be, cracking is usually harmless and has no effect on the bursas. Despite what your mother told you, cracking your knuckles or ankles or knees or any other joint does not cause arthritis. But it doesn't do your joints any good either. Any feel-good benefit people claim from joint cracking is purely psychological.       Chemtura Sued by U.S. Tire Manufacturers Bridgestone Americas Holding and subsidiary Bridgestone Firestone, Bandag, and Pirelli Tire filed a lawsuit against Chemtura and its subsidiary Uniroyal Chemical seeking damages and refunds for products purchased while rubber-chemicals makers conspired to fix prices. Crompton, which merged with Great Lakes Chemical in 2005 to form Chemtura, plead guilty in 2004 to conspiring to eliminate competition in the rubber-chemicals market. The company paid a $50 million (Euro 39 million) fine in the U.S. and a $7 million fee to Canada. According to Chemtura, it has settled claims with all other major tire producers, but the three plaintiffs opted out of a proposed class settlement that offered a fair resolution.       Russian Petrochemicals Export Duty Raised Again The Russian export duty on Ethylene, Propylene, Butylene, Butadiene, Benzene, Xylene and Toluene will increase 7.6 percent to $158.1/tonne effective August 20, 2006. This hike follows an increase of 6.5 percent implemented in June, 2006. The government has been raising the rate since January 2005 when it was $57/tonne.       EC Announces First Decision on Hair Dyes The European Commission (EC) is in the process of evaluating the safety of dyes used in cosmetics. In its first announcement, the EC banned 22 hair dye chemicals effective December 1, 2006. These compounds have had no safety data submitted by the industry. According to Colipa, the European Cosmetics Industry Association, the chemicals are not currently used by its members, and the group does not support their use either. Colipa has been working with the EC to identify hair dyes that are safe for human use. The Commission is expected to announce the first set of approved hair dye substances in October, 2006.     Linde Gets Conditional U.S. Approval for BOC Acquisition The U.S. Federal Trade Commission (FTC) awarded conditional approval to Linde for its $14.94 billion (Euro 11.92 billion, GBP 8.2 billion) acquisition of BOC. Linde must sell eight air separation units in the US and dispose of three liquid helium purchase agreements with suppliers in the U.S., Russia, and Poland. The European Commission previously gave approval to the deal if Linde divests certain businesses and activities in Europe and Asia. Air Liquide is considering the purchase of some of these assets. It has some joint ventures with BOC in Asia that it might like to own fully. The company is also interested in increasing its presence in Central Europe and Poland. Linde expects to complete the acquisition of BOC in September.     Opportunity Arises for Bio-based Waxes According to Cargill, the paraffin wax market is facing a 1 billion pound/year shortage as refineries switch to catalytic de-waxing processes from solvent-based methods. With catalytic de-waxing, no paraffin by-products are produced. Some waxes will be available once gas-to-liquids (GTL) production ramps up in the future. In the mean time, Cargill is looking to expand applications of vegetable-based waxes. In order to impart these waxes with hardness, fragrance, ductibility, melt-point range, aesthetics and other properties comparable to paraffin waxes, the company is employing metathesis technology to process the vegetable oils.     Positive Outlook for Regenerated Catalyst Market The global market for regenerated catalysts used in the petroleum refining, flue/waste treatment and petrochemical industries will increase an average of 6.1 percent per year from $2.7 billion (Euro 2.13 billion) in 2005 to $3.5 billion in 2010, according to BCC Research. On-site regeneration, which accounted for only 5 percent of sales in 2005, will decline to just over 2 percent. The refining segment is the largest consumer and accounts for nearly 80 percent of the market.     Tight Market Predicted for Polysilicon Demand for alternative sources of energy is causing increased global consumption of polysilicon for solar panels, resulting in tight supply of the material. Since 2003, contract prices for polysilicon have doubled while spot prices have increased more than ten-fold. Both Degussa and Wacker Chemie have announced capacity expansions, but analysts predict that even with this additional production, supply will fall short of demand from solar manufacturers. The market for polysilicon is predicted to remain tight well beyond 2008.       Bayer Completes Schering Acquisition Bayer completed its $21.5 billion (Euro 16.9 billion) acquisition of Schering after gaining control of 92.4 percent of shares. The company hopes to acquire the remaining shares over time. Bayer immediately began integrating Schering following the announcement.       Positive Outlook for Biochemicals McKinsey and Company estimates that 10 percent of total global chemicals sales in 2010 ($159 billion, Euro 125 billion) will be attributed to products derived from renewable materials or produced by fermentation or enzymatic methods. In 2005, products such as biofuels, plant-extracts, pharmaceutical ingredients, bulk polymers, food/feed ingredients, oleochemicals and enzymes accounted for 7 percent of global chemical sales, or $98 billion (Euro 77 billion). Biofuels, with significant government support, is the largest and most rapidly growing segment. Interest in processes that utilize renewable resources is increasing dramatically as costs for petrochemical based routes continue to climb.       Higher Crude Oil Costs Leading to Rising Ethylene Prices in the U.S. In an attempt to maintain margins in the face of expected further hikes in crude oil prices, at least two U.S. producers of Ethylene have nominated 8-10 cents/pound price hikes for August contracts. Because contracts cannot settle higher than the nominations, the companies are preparing for higher crude prices. For the last couple of months, contract prices have been rolled over from month to month.     Reliance Plant Closure Impacts Indian IPA Market The closure of Reliance Industries' 35,000 tonnes/year Isopropanol (IPA) plant, the only IPA plant in India, has strongly affected prices for the chemical. The age and small size of the plant make it uneconomical in the long term, despite the climbing prices. IPA offers to India rose over 2 percent in response to the announcement. The company is considering the possibility of building a 100,000 tonne/year plant at Jamnagar by 2008-2009.     Rising Crude Impacting Petrochemicals in Asia The rising price of crude oil and naphtha is affecting the pricing of Asian petrochemicals. Toluene, Benzene, Xylene and Styrene prices are all up around 3 percent in response to record crude oil and naphtha costs. The recent hikes in crude values can be attributed to the current conflict in the Middle East and the recent sabotage of oil pipelines in Nigeria.     Rising Prices for Xylene and Toluene in U.S. U.S. producers of Xylene and Toluene are raising prices in response to higher gasoline blend values. These aromatic solvents are being used as octane enhancers to replace methyl tertiary butyl ether (MTBE), which is being phased out. The increased demand for gasoline has reduced available supply for the petrochemical sector.     U.S. Urea Producers Faced with New Imports Some market experts are predicting that Urea prices in the U.S. will be falling again soon when two, and possibly three, cargos totaling more than 100 tonnes arrive. Others are more hopeful that strong demand will keep prices from dropping. This threat comes after Urea producers faced declining prices this spring as excess inventory was unloaded. That time of year is usually noted for rising prices and strong demand. Recently, prices have begun to climb again, but the trend may be reversed as the imported material is introduced into the market.       Acrylate Market in U.S. Still Strong Exports of U.S. produced Acrylic acid and Acrylate esters to Canada and Mexico continued to grow in the first half of 2006 as compared to the same period in 2005 despite increased capacity in Asia. Producers remain concerned, though, that demand could decline. With the new capacity in Asia, U.S. exports to China have likely peaked, and NAFTA region customers will have access to competitively priced material from overseas.     Monoethylene Glycol Market Firm for Now Both European and Asian producers of Monoethylene glycol (MEG) have raised prices in response to a tight market and growing demand. The shortage can be attributed to both planned and unplanned outages. Demand is largely from the Polyethylene terephthalate (PET) market. New capacity coming on stream by the end of 2006 is expected to increase supply in excess of demand, with prices predicted to fall at that time. The new plants are being built by Marun Petrochemicals and Farsa Chemical Company in Iran (800,000 tonne/year total), TOC Glycols in Thailand (300,000 tonne/year), and China Man Made Fiber Corporation in Taiwan (400,000 tonne/year).     U.S. Ethylene Glycol Market Firm Tight supplies of Ethylene glycol (EG) in the U.S. are keeping prices for this key intermediate on the rise. Shortages of EG are attributed to inventory stocking in preparation for the hurricane season of other chemicals produced from Ethylene as well as EG itself. A fire at a Huntsman light olefins plant earlier in 2006 that reduced supply is compounding the effect. EG prices have risen over 10 percent in the last three months.       Plastic Prices Rising in Asia High raw material costs and increasing demand are driving up prices for Asian polymers. High-density Polyethylene (HDPE) and linear low-density PE (lldPE) are up as much as 3 percent. Polypropylene prices have increased up to 6 percent in response to rising costs. Plant shutdowns strongly affected Asian Polystyrene supply, resulting in significant increases in prices. Prices are also rising in the Middle East. In this region, Polystyrene recently experienced a one-year high on rising feedstock costs.       Chemical Plants in Israel Under Threat Shiite militant group Hezbollah has threatened to attack Israeli chemical plants. Potentially affected companies include Carmel Olefins, Gadiv Petrochemical Industries , and Dor Chemicals, which are all located in Haifa. At the time of this report, no plants had yet experienced any damage. However, because of the closure of the city's port and the ongoing rocket attacks, some have declared force majeure and either reduced production levels or closed down operations. Spot prices for Paraxylene reached an 11-year high in Europe after Gadiv declared force majeure. Both Israel and Lebanon were added to the Joint Cargo Committee's (JCC) watch-list for marine strikes. As a result, marine underwriters are charging up to an additional 1 percent to insure ships docking at ports in Israel. Some companies have responded by diverting cargoes.     European Commission Announces Duty on Asian Polyethylene Bags The European Commission (EC) is currently working on legislation to impose anti-dumping duties on Polyethylene (PE) bags coming from Thailand (5-6 percent) and China (10-12 percent) beginning September 1, 2006. Malaysian producers will be exempt. Some bag producers in this country are already experiencing significant demand from European customers. Chinese and Thai PE bag manufacturers are rushing to fill orders before the duty takes effect. As a result, PE prices have risen. British retailers are unhappy with the plan and don't believe there is clear evidence of dumping. The U.S. imposed anti-dumping duties on bags from China, Thailand and Malaysia in 2004.     Reach Agreement by December? The European Parliament is hoping to push through several amendments to the European Union's registration, evaluation and authorization of chemicals (Reach) legislation in order obtain final agreement by the end of 2006. The amendments concern assistance measures for small and medium-sized enterprises, the creation of a European quality mark for chemicals that meet Reach criteria, and the requirement (or not) of evaluation of all substances regardless of production volume that are likely to be carcinogenic, mutagenic or reprotoxic.       In This Issue   Famous Quotes   Imponderables   Companies   Business/Finance   Fine & Specialty Chemicals   Pharma   Biotech   Commodity Chemicals   Intermediates   Plastics   General   Featured Article