# OAR Box 1872

Prepped by Keeia Richards



## Document

Number: 

# 49 ) 11-1-9 8 Docket Number: 

# A-90-1 9

Printed 11/26/20088:51:51 AM Sheet 49of 204 P. 1P,2 

# S ' I

VT-~ I - - •\r. " 

### U S : : ^ . ^ 

### Veom'i n the future, " h

e said . Mr. Reill y sai dthe bil l wa s als o neede

dt o jij t EP A o n equa l footin g wit h othe r Federa l tiepartment s no

w facing majo

r pollution iivobfem s requiring EP

A oversight . Fo

r exr.'mple , h e said EP A woul d b e ake y watchdo-~ ove r cleanu p effort s a t Energy Department'. ' r.uclea r weapons plant s an

dDefense Depart

- • went' s militar

y installations . L i th e internationa

l arena , Mr. Reill

y said ' " cabine t statu s fo r EP A i s necessar

y t o assur e foreig n governments tha

t th e U S take s envi
ronmenta l issue s seriously , particularl y i n vie w o f increasin g worldcooperatio n o n ozon e depletion , globa

l warmin g an docea n pollution . Th e EP A chie f saidhi s lac

k o f cabinet statu s wa s especiall y noticeable whe

n h e rep reserte d th e U

S a t "tw o majo r internationa

l conference s las t

year . "A t eac h o f thes e meeting , most , i

f no t al l o f the countrie s attendin g wer

e represente db

y acabinet
leve l official, " Mr . Reill

y noted . H

e adde d tha t foreig n official s foun

di t "har dt o under
stand " wh y h e di dno t enjo y simila r statas . Elevatin g EP

A to th e cabine

t woul dserv e a s "recognition o

f the ver y importan

t rol e EP A ha s i n maintaining th e well-bein

g o f th e peopl e o f thi s counciy, " sai d Ro

n Va n Mynen , vice-presiden

t o f health , safet

y & environ
men t at Unio n Carbid e Chemical s & Plastics.
-

. Mr . Va n Myne n told t h e pane l a n important objective o

f the ne w department

shoul dbe Continue do n Pag e 2 £ r . ^SSJK&SSS K FEBRUAR Y 12,-(S9 0



### Th e ethylen e glyco l marke t suffere d tw o majo r

blow s last , year , th e disap
pearanc e o

f previousl y vigorou s expor t sale s an damassiv e carryove r o f an tifreez e inventories . Peerin g int o 1990 , producer s ar e confiden t

tha t antifreez e purchasin g wil l b e bac k

t o norma l lev
els , bu t whethe r expor t deman dwil l re viv e o r no t i s anyone' s guess . .- . ' Equall y uncertai n i s whethe r th e long , steep declin

e i n price s ha s com

e t o a n end , o r whethe r furthe r deterioratio n i s i

n the cards . See pg. 54 for

CMR 's Chemical \ Profile on Ethylene Oxide.
in g the Freepor

t employee s wh

o ar e retaine d b y the buyer , an

daccomplishe s a

n importan

t goa l o f Freeport' s previousl

y announce

dre structurin g pla

n t o focus o n the phosphat

e fertilizer an d sulfu r business . Th

e proceed s o f th e sal e wil

l initially b

e use dto pa y dow n deb t bu t ultimatel y wil

l be use dt o fun di n part th e developmen

t o f th e Mai n Fas s Bloc

k 29 9 sulfu r project , a67-million-long-to n sul
fu r discover y i n the Gul f o f Mexic o requiring approximately $32

0 millio n fo r Freeport' s interes t t o bring o n production. " Industria l grade glyco

l i s priceda

t 3 4 cent s

. pe r poun dfo r distributors , dow

n a s muc h a s 2 0 cent s frornjnid : 

### 1989 , an

dethylene oxid

e i s 5 0 cent s per'pijund , dow

n 1 0 cent s i n th e sam e period . Th e collaps e o

f expor t price s ha s playedasignifican

t rol e i n th e Tai l o f domes
ti c prices , an

dth e unexpectednes s o

f th e expor t nosediv e i s makin g peopl e i n th e indus
tr y gun-sh y abou t predicting the future . Th e antifreez e carryover

int o 198 ? wa s a resul t o f th e ethylen e shortage s o f 1988 , which cause dbuyer s t o hoardethylen e derivative s i

n orde r t o hedge agains t

contin
ue dpric e increases . Tha

t buyin g "frenzy " o

r "panic, " a s producej- s hav e calle dit , 

# ETHYLEN E OXIDE : Th e yea r199 0 wil l se e improve - • merit , thank s t o antifreez e demand : 

# ........ Tl . Pag e 5 4 CYCLO;'';Shbrt-ter m outage s reduc e availabilit y o f produc t an d touc h of f a scramble . }•;'. ; 7



# . Pag e 1 6 PHOSPHATES : Producer s shif t t o value-adde d prod uctsan d see k

t o cu t operatin g bosts.. . .Pag e 2 9 amounte dt o abou t 21 7 millio

n gallon s o

f ethylene glycol fo

r antifreez e i

n 1988 ; i n 1989 , preliminar

y purchas e estimate s rang e fro m17 0 million o

r les s t o 18 5 million gal
lons , adro p o f 1 5 to 22percent . .-•.-.'. , ' "Stores , blender s an

dproducer s al l ha

d inventory ; eve

n consumers ha

dacoupl e o f gallon s i n th e basement," : say s aproducer , referrin g to th e inventor

y carryover . Th

e proble mwas exacerbate db

y the hig h value o f th e carried-ove r

material , whic

h wa s bough t in arisin g market . A

s price s weak

ene di n 1989 , seller s wer

e reluctant to bring their product t o the marka

t a t aloss . Mos t bu t no t al l peopl e i n th e industr

y agre e that inventorie s have bee

n draw n dow n an dtha t ethylene glyco

l ca n start 199 0 wit h a clea n slate . Som

e producer s repor

t tha t the y • have ha drequest s fo

r antifreez e materia ! in ; the las t coupl. e o f wveks , t o be resold immedi
ately , during thi s winte

r season . Som

e mar ke t player s caution , however, tha t i t wil l tak e alittl e mor

e tim e t o completel

y woi k dow n the heretofor

e bloatedinventories , an

don e produce r says , "Everyone wa

s caugh t b y surpris e a t the beginnin

g o f th e seaso n whe n the y sa w ho w hig h inventorie s were , s o I don't kno w ho w they' dkno

w th e inventor

y an y bet
te r now. " I n an y case , there i s near-universa l agreemen t tha t 199 0 shoul dbrin g norma l antifreez e buyin

g levels . Th e proble mwit h th e expor

t marke t was tha t Chin aan dih e Far Easter n countrie s tha

t Continue do n Pag e 5 4 . ' 

# •flNSSBECMR-: - Advertisers ' Inde

x 5

2 CM R Busines s Brief s v.v;...;......... . i 3 Chemica l Import s ' F Chemica l Prices . . 3 8 Chemica l Profil e ..-.. ' 5 4 Classifie d Advertisement s ....:. . 5 2 D.C . Current s ........../.,. . 7 Detergent s NewsF i ont.......; . 3 3 Financia l Nev/sFVont . ••••••. ••' • • • 3 2 Job s & Peopl e ...:.. . 5 3 Meciing s Calende r <.. » 5 4 New s Capsul e , S PlasticsWeek.... , ;....'.. . 3 5 Specialtie s NewsFron l 3 6 Complete

News Index on Page 4 I '

•

Febru;:.Yl2 . ~S9 0 CHEMICA L MARKETIN G REPORTE RP. 3

li- Z OJ

C D 

### c n c o O U J C D 

## !re=7e : ~ T
i i • * * . i •

! < F , tP. 4

tfT' O ii 6a . ua February 12,199 0

CAPACITY * ...48 0 45 0 .......21 0 "e x 55 0 11 0 s x 58 5 55 0 ...23 0 ....82 5 ....11 0 90 0 82 0 ; . 1^33 0 .7,51 0 shs t Cetenes e debcrfenecke d b y 12 5 millio n Ian ; i n Augus t 1S88 , afte ri t ha d bee n place d c n ad d 9 0 millio n pound s i n 1991 . Ox y wil l ad d 3 0 In g a 450-miliion-poun d plan t a t th e Gul f i n 1993 . proug h a restar t i n Octobe r19SS . Unio n Carbid e ) millio n pound s i n th e thir d quarte ro f 199 2 by unit s a t th e sit e t o a n oxygen-base d syste m an d ever y an d refinin g systems . I n Alberta , Canada , t o it s existin g 400-miHion-poun d Prentis s unit , n-poun d unit , du e u p a t th e en d o f 199 2 o rearl y 

# S apacitie s a t Seadrif t an d Taf t fro m 67 0 millio n speciively , ove rth e ias t coupl e ot years . Profil e /12/90. ' 5. 9 billio n pounds ; 19S4 : 6. 4 billio n pounds , p , eac h o n th e Olde ro f 2 5 millio n pound s pe r |:en t pe ryear ; future : 2. 5 percen t pe ryea r [5c . pe rpound , tanks , f.o.b . works ; low , 7 c jpound , tanks , f.o.b . works . ioni c surfactants , 1 3 percent ; ethanolamines , nt ; diethylen e glycol , 6 percent ; triethylen e eludin g polyethylen e glycol , urethan e polyol s |ar e growin g a t a greate rrat e tha n E O overall , |inuedonPage3 1 SSSSSrSSS^S 

# fr-*3 Mmke' trad e wit h i t simpl y stoppe dbuying , a s a resul t o f China' s domesti c an dinternationa l problem s followin g th e Tiananme n Squar e massacr e las t

June . B y August , th e expor t pipelin e wa s startin g t o bac k u p an dprice s wer e falling . Export s o f ethylen e glyco l in 193 8 totale d 603. 8 millio n pounds , accordin g t o Interna
tiona l Trad e Commissio n figures , an d198 9 annualize s ou t

t o ove r 1 billio n pounds ; how
ever , amajo r

U S exporte r

warn s tha t

th e 198 9 figure s ar e almos t

certainl y oversiated , probabl y du e t o reportin g error s arisin g ; fro mth e transitio n t o metri c measurements . One U S glyco l manufacture r

says , "Th e growt h o f monoethylen e glyco l ha dbee n drive n b y export s t o th e Fa r

East . Th e indus
tr y wen t afte r tha t market ; the y though t

i t woul dkee p bo<ar.in

g andboomin g an dboom
ing. " H e note s tha t

man y o f th e ethylen e ox id e an dglyco l plant s bein g buii t o r schedule d fo r constructio n wer e planne db y thei r builder s t o mee t

tha t Fa r Easter n demand . Expor t price s hadbeen a s high a s 5 0 t o 5 5 cent s pe r round , bu t

the y plummete dwit

h th e lac k o f demand . No

w tha t expor t price s hav e sun k t o 2 2 cent s o r les s pe r pound , i t is , source s say , amatte r

o f exporter s aroun dth e worl dtryin g t o hol do

n t o thei r shar e o f th e temporaril y diminishe dmarket . Som e fore
cast s cal l for

aretur n o

f Fa r Eas t busines s afte r th e Canto n Fai r

in th e spring , meanin g stronge r export s i n th e secon dhalf . PRIC E STABILITY . SEE N 1 Domesti c tab s hav e followedexport price s down , albei t

a t arespectabl e distance , an do n th e suppl y side , domesti c ethylen e price s ar e though t t o hav e alittl e roo mfor furthe r weakening . Th e Decembe r col dsnap tempo raril y halte dethylene' s fal l (th e pric e in Jan
uar y wa s 2

4 cent s pe r

pound , compare dt o 34 cent s i n Januar y 1989) , bu t i f i t slip s furthe r

i t coul dpu t downwardpressur e on ethylen e oxid e an dethylen e glycol , althoug h no on e seem s t o hav e aclea r

sens e o f how much , i

f any , downwar dmomentu mi s lef t in oxid e an dglycol . Pric e stabilit y i s calle dfo r by some , bu t other s ar e les s sure . Th e ethylen e oxid e balanc e wil l b e aided , source s say , b y th e plan t

turnaround s sched
ule dfo r thi s year , fou

r o f the mi n th e firs t quarter , an da t

less- : on e i n th e summer . Startin g i n 1991 , though , numerou s capacit y expansion s ar e du e u p in th e U S ari dabroad , includin g ane w "450-million-poun dShel l Chemica l Company plan t a t th e Gulf , an da ne w 480-miilion-poun dUnion Carbid e Corpo
ratio n plan t

in Prentiss , Alberta , Canada . Wit h an E O growt

h rat e o f abou t 2. 5 percen t per " year , ther e is som e questio n a s t o ho w readil y tha t

capacit y wil l beabsorbed . : ~ T n additio n t o increasin g capacity , produc
ereo f ethylen e oxid e say the y ar e tryin g t o ensurejtli.'sUh e .1.990' s arcLiw t V repeatp f

th e 1980's , apoo r

decade_for . profits . .Wit h ethylen e oxid e ihejeas t

profitabl e o

f th e ma ; jor^hylene"JcV-rivativ^.a'Oeast".u.nUr_th e pric e run-u p ih:; t

bega n over_ ayea r ago , an d wit h sale s o f oxid e itsel f

Jen s p'rdfitableTha

n sale s o f it s derivatives , sevcrarU S producer s areSej-emphasizin g thei r

;;ierchantE O sales . Texac o Chemica l Cch.pan y intend s to'b e 

# F )^!&2S^^£Zrmam.'%^^^^3gS^8S^3%5&3'£i ^ Continue d fro m Page 3

. ' ou t o f th e merchan t

marke t afte r th e en do f ; thi s year , an dUnio n Carbid e i s lookin g a t th e en do f 1991 . Do w Chemical Company , which i s not amajo r merchan t

supplie r to begi n with , say s tha t

i t wil l continu e t o servic e it s presen t customers , bu t

i s no t seekin g new ^ones . Safet y question s regardin g EO , bot h worker-exposur e an dtransportatio n issues , ar e causin g concern in th e industry , bu t prof
itabilit y i s th e primar y reaso n fo r th e mer chan t pull-outs . Othe r

producers , though , ar e encouragin g thei r

customer s t o locat e thei r derivativ e unit s "acros s th e fence " fro mth e E O sources , in orde r

t o allo w pipelinin g rathe r tha n rai l o r

truc k transportation . Wit h elhyleneglycq l accountin g fo r 6 0 per cen t o f U S E O production , th e fortune' s o f th e tw o ar e closel y tied."Amon g EO' s othe r derivatives , _i^ m etha"n^lami"nes_a'f

e look'ejd"up'o n ".as " th e stronges t source s o f growth, " cm'th

e orde r o f 3 per-cent_o r mor e pe r

year , compare dt

o a n anticipated . averag e "glycoljgr'owth_rate_6 f abou t 2 percent , -..-. . ETHER S PRICE S DOW

N Glyco l ethers , lon g sufferin g fro mhealth an dsafety concerns , ar e expecte dto hav e a growt h rat e o f anywher e fro m1 percen t t o minu s 1 percen t

pe r year , wit h th e exceptio n o f ethylen e glyco l monobuty l ethe r (EB) , whic h ha s fo

r th e mos t par t escape dsuspi
cio n a s ahealt h hazard . Alon g wit h EG , price s o n th e glyco l ether s cam e dow n agai n i n January ; EB i s no

w 4 3 cent s pe r

pound . down 1 2 cent s fro mJanuar y 1989 . Polyester , th e iarges t

ethylen e glycol
derfvaTIve'asidefro mantifreeze , shoul dben
efit'thi s "yea

r fro mth e lowe r

"glyco l prices . Highe r ra w material s cost s hav e mad e ' polyeste r

vulnerabl e t o competitio n fro m othe r materials , notabl y i n th e cas e o f polyethylen e terephthalat e bottle s whic h compet e wit

h glas s an

daInmin"T. . A resur genc e in PE T resi n deman dgrowth i s ex pecte dthi s year . Diethylen e glyco l marketer s ar e lookin g fo r 2 t o 3 percen t

growt h afte r an unspectac ula r 1989 , whic h wa s dampene db y poor an tifreez e demand . Recen t tightenin g ha s brough t a t leas t one pric e hik e thi s mont h (se e th e Aliphatic s market , pag e 19 , fo r de
tails) . Fo r triethylen e glycol , th e recen t col d weathe r brough t aspat e o f buyin g fo

rnatura l ga s dehydration , it s larges t use ; beyon d ' that , stabl e 2 percen t

growth i s expected . TEG , alon g wit

h ethylene , EO , E

G an dDEG , ha s bee n brough t

int o atighte r

balanc e b y th e productio n outage s precipitate dby th e col d weathe r earlie r thi s season . RONAL D BEC-LE Y 

### BASF Correction A previou s repor t

o n sulfon e poly mr s (CMR, 1/29/90 , pg . 3 ) shoul dhav e sai dtha t BAS F firs t

mad e know

n it s intentio n t o mar ket polysulfon e a t

th e Desig n an dEngin-.v»
- in g Sho w i n Apri l 1989 , no t

a t th e Nationa l Plastic s Expositio n in June , a s stated . Also , lower, ' no t

highe r ge l conten t

allow s fo r

a mor e homogenou s extrusion .

' % f-'- l JFi:'-* ^



### Pr. 

# f~;mw%^m §w

* a- , —

—ri