P.1 

OAR Box 1878 

Prepped by Charmelle Mathews 

Document Number: 

69) 11-1-48 

Docket Number: 

A-90-19 

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All of methyl chloride's end uses are 

doing well this year, including pesticides, quaternary amines, methyl cellulose, butyl rubber and, of course, silicones, which some analysts predict will 

experience double digit growth in the 

coming years. 

Unlike other chemicals experiencing and 

expecting this kind of demand, however, the 

methyl chloride market is not tight and Is not 

expected to have any supply problems in the 

coming years. 

Statistics for methyl chloride capacity, 

production and end-use volumes are all to 

some extent uncertain because production 

often goes into captive use for other chlorinated methanol products and for silicone intermediates. In addition, silicone producers 

recover hydrogen chloride from their proc-. 

esses and can re-methylate that acid when 

the economics favor this over purchasing 

methyl chloride and selling off the acid. 

This "make or buy" decision for GB Silicones, Dow Corning Corporation, and Union 

Carbide Corporation, is influenced by the 

market price of methanol, which lately has 

been extremely high and thus not encouraging the recycling process. The recycling capacity, though, is Increased as any particular 

silicones plant Is eipanded. 

GE, Dow Coming, and Carbide are all net 

buyers of methyl chloride but these companies and their merchant suppliers are too 

competitive to pin down their merchant-tocaptive supply ratios. Merchant marketers 

Vulcan Chemicals, LCP Chemicals and Plastics, and Dow Chemical likewise do not reveal how much methyl chloride they sell into 

the various end-markets. 

In general, methyl chloride consumption 

for silicones was estimated at 405 million 

pounds in 1987. Methyl cellulose consumption accounted for 37 million pounds in that 

year, quaternary amines for 27 million 

pounds, pesticides for 26 million pounds and 

butyl rubber for 7 million pounds. 

Nameplate capacity for methyl chloride is 

approximately 800 million pounds, but over 

200 million pounds of that capacity goes into 

other chlorinated methanol products, according to analysts. SOUK es say the Montreal 

Protocol for limiting production of chlorofluorocarbons may make more of these pounds 

available in the future. 

Vulcan Chemicals announced earlier this 

year that it will build a grassroots methyl 

Continued on Page 14 

Saudi Basic Industries Corporation 

expressed its "disappointment" last 

week at the recent European Community decision to limit duty-free imports 

of Saudi petrochemicals, saying the 

move would only serve to increase . 

prices unnecessarily for European consumers. 

The EC decision will cut In half the 198S 

value of Saudi Arabia's petrochemicals 

which can be imported duty free, and will 

eliminate all duty free imports in 1990. The 

country's tariffs have averaged 12 lo 13 percent for the seven petrochemicals It sends to 

Europe: methanol, styrene, melamine. 

ethylene glycol, low-density, linear low-density and high density polyethylenes. 

Sabic vice-chairman and managing director Ibrahim Salamah said the decision 

"makes other world markets more attractive at a time when these products are in 

great demand in Europe, and it only makes 

economic sense for a manufacturer to sell in 

the most attractive market." 

He also noted that half of the EC Council of 

Ministers — Britain, France. West Germany, 

Italy. Denmark and the Netherlands — abstained, implying strong sentiment for other 

courses of action. 

The EC and the six-member Gulf Cooperation Council have been negotiating for the 

last year to improve trade relations. Mr. 

Salamah contends that the EC decision "is 

bound to havea negative and impeding influence on the course of these talks." 

Edible Oils 

J Battle Sharpens 

RS*£ On Capitol Hill 

KiLLIKB, ON UHE. k&ifcon Chanted Company's now Cyprau pL.-rt st &sct.aburg, S.C. achieves 

promts control through a tftftfbutod pocoss computer. This field opsmtot Incomes the "hends 

and toot" of tho contra! monitoring station operator. 

Memken CR 

To Its Brand Mew Cypress Plant 

With its new Cypress specialty chemical plant at Blacksburg, S.C. up and running since July, Milliken Chemical Division of Milliken & Co. has already broken 

ground for an addition to the facility. 

The expansion centers on the company's 

fast-growing "Millad" polyolefin clarifying 

agents. The addition at Cypress, together 

with existing capacity at Milliken's Dewey 

plant at Inman, S.C. will triple capacity for 

the product line. Completion is scheduled for 

late 1989. 

Once the Cypress unit is fully operational, 

plans call for process improvements the 

company has made in the new plant to be 

incorporated in the Dewey facility, which 

will continue to operate 

Miltnn Churchill, market manager of plastic additives for Milliken's specialty chemcial business, says that while polypropylene 

has been growing at an impressive average 

annual rate of 10 to 12 percent during the 

past couple of years, the US market for clarified PP has been growing at the rate of 25 to 

30 percent. 

Technology advances in polypropylene 

have allowed the resin to penetrate markets 

traditionally held by high-density 

polyethylene, polystyrene and other plastics, 

but PP has not been cohsidered until fairly 

recently in applications; where appearance, 

clarity and overall aesthetics are a major 

concern, he says. 

The proprietary "Milltid" clarifiers, which 

first moved into the hoitsewares market in 

the early 1980's. have since expanded into 

other outlets, p: ..norily In consumer product 

packaging, medical devices and food packaging. 

In the most recent development, Mr. 

Churchill told reporters during a briefing on 

Milliken's chemical operations at its Spartanburg, S.C. headquarters that the company 

is very high on the potential it sees for "Millad" used in a synergistic combination with 

the "ClearTint" polymeric colorants for 

polyoleflns which the firm introduced at 

NPE'88 in Chicago in June. 

The combination gives polypropylene "another order of magnitude of aesthetic improvement", Mr. Churchill maintains, adding 

that some replacement of more expensive 

plastics, such as "K" (butadiene-styrene) 

resin and polyester, "is already starting to 

happen." Applications currently being developed include cosmetic containers, spice Jars 

Continued on Page 16 

The escalating marketing battle between suppliers of edible oils will move 

to Capitol Hill next year where legislators will be asked to consider the health 

effects of competing products that are 

key ingredients in a wide variety of processed foods, such as baked goods and 

breakfast cereals. 

With the backing of the US soybean oil 

industry, Rep. Dan Glickman (D-Kan.) says 

he plans to sponsor legislation that would 

require the words "a saturated fat" to appear 

beside any reference to tropical oils on food 

labels. A similar bill introduced by the Kansas lawmaker died in committee in the last 

session of Congress. 

Tropical oils, such as palm, palmkernal 

and coconut, have been linked to heart attacks, strokes and hardening of the arteries 

because they typically contain large 

amounts of saturated fat. Coconut cil, for 

example, contains 92 percent saturated fat 

compared to 9 percent in safflower oil. a 

vegetable oil competitor. 

However, tropical oil suppliers such as 

Malaysia say the real issue is trade rather 

than health. "Palm oil is just 3 percent of the 

total edible oils consumed in the US. and yet 

people are making statements that palm oil 

is poisoning America." says Dennis Ignatius. 

counselor for political affairs at the Embassy of Malaysia. 

He adds, "If they are so concerned with 

trying to reduce cholesterol, it makes no 

sense to focus on 3 percent and ignore your 

TV dinners, lard, pork and bacon." 

The soybean lobby, whose oil contains IS 

percent saturated fat and costs 20 percent 

more than palm oil, does not deny it is seeking to gain a competitive edge by portraying 

tropical oils as unhealthy. 

"We are competing for a share of the market, but we hope to com- :e for that market 

based on facts and no: jccus3tions." says 

Mark Nestlen, chief congressional lobbyist 

Continued on Page 15 

December 19 1988 CHCMICAL M^RKETIISG REPORTER 

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Methyl Chloride Continued from Page 7 

•enzene derivatives, 

icidet, monpmers 

ACTIONS 

I ~r.A .~..l ..I.X- -

chloride plant at its site in Geismar, La., 

to be on stream by 1991. The capacity for 

the plant will be similar to the 115 million pound capacity of the Vista Chemical Company plant whose output Vulcan 

began marketing this year. 

A silicone supplier says his company talks Corporation has announced a 6 percent price 

\p methyLchlonde producers twice a year increase on gluteraldehyde, effective Januahnijt, in'ng^grmn n^ o -1 fay a\r\ gTJmnri ary it

 1989. The company cites higher costs in 

methyl chloride prod'"'*''"" '" ahnut six [a ^complying with federal and state regulafective January 1,1989. The TVA refers to 

pricing on a 100 percent basis. 

GAMMA-BUTYROLACTONE - GAF 

Chemicals Corporation has instituted a 10c. 

per pound TVA on gamma-butyrolactone, effective December 15. ! 

GLUTERALDEHYDE — Union Carbide 

nipp months," he says "flnrl, thpy know our 

[requirements for the nexj f •»» y*Tfi " : 

"• This supplier also says, "Even though pricing has been very stable this year, methyl 

chloride producers think they're getting 

enough of a return to invest in these expan- . 

sions when they become necessary." 

Methyl chloride is currently list priced at 

about 25 to 26 cents per pound but some 

sources say even this list figure is debatably 

high. Market prices are said to be in the 

neighborhood of 21 cents per pound. Off-list 

prices were raised by 1 to 2 cents per pound 

for the third quarter. 

EXPORTS TO JAPAN RISE 

Prices in Japan, however, are listed at 60 

to 66 cents per pound and contracted at approximately 54 cents per pound, according to 

sources. Exports to Japan rose this year from 

66,000 pounds to close to 1.5 million pounds, 

accounting for the 33 percent jump in total 

annualized exports. International Trade 

Commission figures show methyl chloride 

production up by 60 percent, but several 

sources say that figures must be incorrect 

Most methyl chloride producers expect. 

methanol costs to drop somewhat next year, 

and for that to soften prices for their own 

product. "There was a time," one producer 

says, "when methyl chloride prices were partially driven by end-use demand other than 

chlorinated solvents. That was when semiconductors first took off. I don't see that happening again." 

Another supplier notes that the failed 

merger between GE and Carbide's silicone 

businesses would not have had direct impact 

on raw material supply, but that in the long, 

term, "the aggressive opening of markets 

that could have been achieved would have 

expanded methyl chloride use." 

ACETONE — Dow Chemical Company 

will increase the selling price of acetone by 

lc. per pound, effective January 1,1989, for 

contract barge customers. Selling prices will 

not exceed the following list prices: Zone I, 

27c. per pound; Zone 2,29c. per pound; Zone 3. 

30c. per pound. " 

ACRYLIC ACID - BASF Corporation will 

increase prices on acrylic acid and acrylates, 

effective January 1,1989. New prices will be 

as follows: technical acrylic acid, 63c. per -

pound; glacial acrylic acid, regular, 64c. per 

pound; glacial acrylic acid, "HM," 67c. per 

pound; butyl acrylate 65c. per pound; ethyl 

acrylate, 63c. per pound; methyl acrylate, 

72c. per pound; 2-ethylhexyl acrylate, 73c. 

per pound; isobutyl acrylate, 87c. per pound. 

Prices are quoted for bulk Quantities. Union 

PRICES TRENDLINES 

WEEK ENDING DEC. 16,1988 

CHANt>ES/UP 

CHANGES/DOWN 

ALIPH ATICS INDEX j 

The Aliphatic Organics index reflects 

the prices ot 20 representative materials 

in this sector and the quantity of each 

produced in 1986. j 

December 16,1688 J. 251.29 

December 9,1988 i. 251.29 

November 18,1988 ;. 248.58 

December £8,1987 206.36 

Chomfcaf Meet SUrf on Ptge 34 

tions, and increased raw materials costs as 

reasons for the increase j 

GLYCERINE — Production of crude glycerine (including synthetic) for October totalled 23.7 million pounds, up 3.7 million 

pounds from September, but down 6.1 million 

pounds from October 1987, according to Department of Commerce figures. ! 

> At the end of October, producers'stocks of. 

crude and refined glycerine totalled 35.6 million pounds, down 6.1 million pounds from 

one month earlier. i 

Imports of crude and refined glycerine 

through the first three quarters of 1988 totalled 36.1 million pounds, compared with 

38.4 million pounds for that period of 1987. 

Exports of crude and refined glycerine 

through the first three quarters of 1988 totalled 28.5 million pounds, compared with 

11.8 million pounds for that period of 1987. 

ISOPROPANOLAMTNES - Dow Chemical Company has announced it will increase 

list and off-list prices for isopropanolamines 

by 3c. per pound, effective January 1,1989. 

New list prices are as follows: mono, 71 Via; 

di-, 78 Via; tri-, 80 Vic; mix, 79 ft a; and paint 

removal grade, 79 'Ac. Prices are per pound, 

f.o.b. Midland, Mich. 

N-METHYL-2-PYRROLIDONE - GAF 

Chemicals Corporation has instituted an He. 

per pound TVA on n-methyl-2-pyrrolidone, 

effective December 15. 

OCTYLAMINE - BASF Corporation will 

increase the price of its n-octylamine by 10c. 

ALIPHAT 

pound. Purchase 

be on 100 perce 

monthly contrat 

ments. 

SULFONATE 

announced pr; 

cumene sulfonai 

nium xylene sul: 

1989. Sodium ci 

creased by lc. p 

pound for activ 

will be increase 

by 5c. per pound 

TRIETHYL 

Chemical Com; 

price of its trie 

pound, effectiv 

prices are not to 

follows: technic. 

purity, 75 '/»c.pt 

Edible ( 

Continued from 

for American & 

In order to I 

round of the fc 

ment has hired 

help sell palm o 

ent. Mr. Ignati 

Glickman bill i 

industry to disc 

would threaten 

the evolving Th 

Meanwhile, ti 

tute of Malaysi 

projects around 

the US, to look 

blood cbolestert 

The group SE 

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tumor incident 

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actually reduce 

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Health advo 

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