Volume 22 Issue 3 December 2014 newnsa ndern fFneAC. Dedicated to the cause of chemical industry * CRUDE PRICE FALL - WILL THE EUPHORIA FOR CONSUMING COUNTRIES BE SHORT LIVED? * FOCUS ON HFO 1234 yf - NEXT GENERATION REFRIGERANT * ACRYLONITRILE - PRODUCT PROFILE * POLYCARBONATE – GLOBAL SCENARIO * SPOTLIGHT ON SPECIALITY CHEMICAL - ETFBO * PHOSGENE – PRODUCT PROFILE * NON PHOSGENE ROUTES TO ELIMINATE USE OF PHOSGENE Nandini Chemical Journal, December,2014 Page 1 ductVOLUME Profile77 XXII DECEMBER 2014 ISSUE 3 Publisher: Nandini Institute of Chemical Industries CONTENTS Editor - Publisher 03 Talk of the month Crude price fall - will the euphoria N.S.Venkataraman for consuming countries be short lived? Editorial & Administrative Office: 05 Shutting down sick PSUs M 60/1, IV Cross Street, – Is it a step forward or backward ? Besant Nagar, Chennai-600 090 India 06 Coal to liquid project abandoned in Odisha A counter productive development Phone: 43511945,/43540719/24916037 08 Cold cracking technology to process heavy crude oil Fax: (91-44) 24916037 13 Proceedings of Seminar on how to make Clean India Campaign successful? E-mail Address: [email protected] 15 Overview of municipal waste scenario in India [email protected] 20 Bio digester technology to treat human waste 22 Uncertainties facing TAPI pipeline project Website: 23 Safety and accident page www.nandinichemical.com 24 Plant closures 25 Anti dumping page 26 Switch Over from naphtha to ethane Annual Subscription Rates: as feed stock - Global trend 27 Focus on HFO 1234 yf - Next generation refrigerant 30 Carbon fiber – Updates Inland : Rs.1200/- 12 issues 31 Update on gas / oil exploration 33 Acrylonitrile - Product profile Overseas: US $ 100 12 issues 37 Polycarbonate – Global scenario US $ 180 24 issues 42 Spotlight on speciality chemical - ETFBO 44 Phosgene – Product profile 48 Non phosgene routes to eliminate use of phosgene Subscription Charges payable in 52 Solvay’s plans for soda ash advance in favour of 53 News round up – International Nandini Institute of Chemical 55 Technology development Industries 58 China news 59 News round up – India 61 Agro chemical page 61 Global palm oil scenario 64 Pharma page 64 Cannabis chemicals slow down cancer 66 Energy page 66 Prospects for nuclear energy 68 Installed rooftop solar capacity potential in India Views expressed in this journal are not 69 Proposed solar park in India necessarily of the 70 Environmental page 70 Proposed amendment to montreal protocol on HFC Editor - Publisher 72 Target to cut co2 emissions 74 Tender 75 Price details 76 Ex factory prices in China During the month of October 2014 81 Chemicals imported at the Chennai port During the month of September 2014 Nandini Chemical Journal, December,2014 Page 2 TALK OF THE MONTH CRUDE PRICE FALL - WILL THE EUPHORIA FOR CONSUMING COUNTRIES BE SHORT LIVED? Around a year back, nobody really expected that the price of crude oil would fall below 70 USD per barrel. Now many explanations are being advanced for such crude price fall and also guesses are being made as to what extent the price fall would take place and how long it would persist. The question being debated is whether the global crude oil price would stabilise at around 60 USD per barrel. Some agencies say that the so called recession in Japan and Europe and fall in demand in China could have resulted in crude price fall. However, the credible explanation appears to be that the price fall have been caused due to steady increase in the production of crude in USA in recent months , as a result of the spectacular increase in the investment in shale gas fields, which has resulted in the global supply scenario of crude moving to surplus . U S remains as one of the largest consumers of crude oil in the world. Until recently, US has been substantially importing its crude oil requirement , not wanting to exploit its own resources. With the production of crude in USA significantly going up, the import level of crude by USA is likely to come down steadily in the coming months. Further, the export of crude from USA is now banned but there are demand by US oil companies that US government should remove this ban. In such case, not only import of crude oil by US will decrease but the export also will take place that would nearly flood the global oil market. Nandini Chemical Journal, December,2014 Page 3 CRUDE PRICE FALL - WILL THE EUPHORIA FOR CONSUMING COUNTRIES BE SHORT LIVED? The fact today is that the actual global production of crude is more than the global demand. In the past , whenever such situation has developed , the oil producing countries used to reduce the production to ensure that the supply situation would remain tight. This is not happening now , as several oil producing regions such as Venezuela, Russia, Iraq, Iran are largely dependent on income from export of crude and cannot afford to reduce the crude production , whatever may be the compulsions. Saudi Arabia also does not want to reduce the crude production when others would not do so, as it would result in loss of market share for Saudi Arabia. In recent years, it has been seen that the price of the crude in the world market is significantly influenced by the speculators , who are not consumers but traders. They buy and sell crude anticipating the price behaviour and profit potential. The current situation is that the speculators have understood that the global market is likely to have substantial oversupply in the coming months, that would result in price pressure and therefore , the speculators do not want to burn their fingers by buying oil anticipating any windfall in profit. As the speculators become hesitant and tend to withdraw to some extent, the demand for oil really come down in the speculative market. This inevitably lead to price fall. The situation is grim for shale oil producers in north America, as they would break even only at price of 80 dollars per barrel and above, as they have invested huge amount in drilling and the cost of operations are going up. Any price less than $ 80 per barrel would hurt them severely. At the same time, Saudi Arabia, another large oil producer appears to think that it would be comfortable with the price of 60 USD per barrel. Perhaps, by not reducing the oil production and reconciling for the price of $ 60 per barrel, Saudi Arabia wants to make it difficult for the crude producers in North America and drive them out of the market to some extent, if possible. The likely future scenario would be that the oil producers in North America would try to come to sort of agreement with the other oil producing countries to hike the price of crude in the global market. Certainly, the governments in USA and West Europe would try to make this possible. China , a large consumer of oil is trying to make the best out of the situation by importing more crude when the price is low and building the stock. However, this can have only a limited impact in the global market, as there are limits for storage capacity. The biggest beneficiaries of crude price fall are the large importing countries like India and China and other non oil producing countries like Sri Lanka. However, as of now , it appears that the consuming countries have no particular strategy to convert the present crude price fall into their advantage. While they are having an euphoria now due to the crude price fall, such euphoria may be short lived, as sooner or later, perhaps sooner than later , the crude price would rise to USD 80 per barrel and more due to the manoeuvre of the oil producing countries. However, the speculators who operate from the gallery will have the last laugh as they scheme and skillfully plan , without the type of botheration and risk that oil producing countries have. An investigative and well researched analysis of the global crude price trend has now been released by Nandini Consultancy , Singapore. www.nandinichemical.com) Nandini Chemical Journal, December,2014 Page 4 SHUTTING DOWN SICK PSUs IS IT A STEP FORWARD OR BACKWARD ? Government data shows that there are 61 sick central public sector enterprises that had 1.53 lakh employees as on March 31, 2013. The government has been paying the salaries of all these employees largely through the budget. It is reported that Government of India has begun the process of shutting some of the sick public sector undertakings. The list of six firms for closure under the department of heavy industry includes Hindustan Photo Films, HMT Bearings, HMT Chinar Watches, Tungbhadra Steel, Hindustan Cable and the iconic HMT Watches. In the second round, 15 more loss-making firms will be under consideration, including British India Corporation, IDPL and their subsidiaries. The Cabinet note seeking closure of the six companies proposes to offer a voluntary retirement scheme (VRS) option at the 2007 pay scale for around 3,600 employees in these firms, along with additional benefits.This could amount to a total package of `Rs.1,000 crore. While Government of India has proposed to close down some sick and unviable public sector units, there are quiet a number of other units such as fertilizer plants that remain closed for long time. Continued closure of these units help no one. It is counter productive to take a view that the public sector units should continue to be operated irrespective of the standard of efficiency and profitability in operation. Operation of such units only result in wastage of resources due to poor efficiency and loss to the government. It is necessary to quickly identify all such units and wipe them away from the scene, if there would be no possibility of revival.