As with LDPE, HDPE exports will peak this year, then drop. U.S.I, expects 1979 HDPE exports to reach 650 million lb, 30% above 1978's 500 million lb. But—and, again, assuming an end to the naphtha shortage— exports are expected to fall to 500 million lb in 1980 and 450 million lb in 1983. "Exports thus will play a decreasing role in total demand after 1979," according to Kappas, "dropping to 7.3% in 1983 from 12.1% in 1978/' Diamond Shamrock is bullish long-term on polyvinyl chloride. According to Steve Schaefer, general manager of the firm's plastics division, PVC demand will grow on average 7.5% per year, compounded, over the next four years. Furthermore, demand likely will remain ahead of projected capacity, and prices and profitability are expected to improve. Currently, Schaefer says, U.S. nameplate PVC capacity is about 7 billion lb per year. But production has been depressed because of the need to comply with the stricter environmental standards, so that the industry has been operating at about 85% of nameplate capacity. Demand is strong. As new plants come on stream, and as older plants become better equipped to meet standards for vinyl chloride emissions, effective capacity probably will increase to 90% of nameplate, Schaefer says. He predicts that this will happen in 1980. "The expansions now announced plus a conservative estimate of anticipated expansions will bring the total PVC nameplate capacity to 8.5 billion lb per year during 1983," Schaefer says. "Since it takes at least three years for a grass-roots facility to come on stream, we feel that industry demand will be in excess of capacity through the 1983 period." There is "the potential for a slowdown or a mild recession toward the end of this year or the beginning of 1980," Schaefer admits. However, he adds, "One of the indicators that presage a recession is an inventory buildup. We are carefully looking for any signs of an inventory buildup among PVC customers, and so far, we haven't seen this occur." Even if there is a recession, Schaefer says, most of any "shortfall" in U.S. demand could be offset by stepping up exports. "Whereas Europe and the Far East are dependent on naphtha to produce ethylene, the U.S. uses ethane, which is available and cost-effective. This cost advantage will allow the [PVC] industry to be competitive in the export market," he says. Ward Worthy, C&EN Chicago
More HCI producers turn to chlorine burning Late last month, Pennwalt Corp. brought on stream an expansion that boosted its hydrochloric acid capacity at Calvert City, Ky., 25,000 tons per year. For an old-line commodity chemical like hydrochloric acid, with total output in the U.S. approaching 3 million tons per year, Pennwalt's expansion may not seem very significant. But Pennwalt makes its acid by burning chlorine. And interest in chlorine burning has been increasing lately. In Orrington, Mo., International Minerals & Chemical (IMC) has been steadily expanding its chlorineburning capacity over the past few years. Last year, it installed another incremental expansion that added 8000 tons a year of hydrochloric acid capability to the plant and .brought total capacity up to 55,000 to 60,000 tons. Earlier this year, LCP Chemicals, a division of Linden Chemicals & Plastics, debottlenecked its plant at Linden, N.J., added another compressor, and increased its capacity to make hydrochloric acid by burning chlorine. LCP now can produce 12,600 tons per year of anhydrous hydrochloric acid and 54,000 tons per year of 33% solutions of hydrochloric acid in water. Developments such as these (there no doubt are others) help support the contention that chlorine burning will play an increasingly important role in the future supplies of hydrochloric acid. William L. Joyce expressed just such an idea at a recent meeting of the Chemical Marketing Research Association in New York City. Joyce, who is hydrochloric acid product manager for Hooker Chemical's electrochemi c a l division, says that 1978 and 1979 can be considered as the turnaround years for hydrochloric acid, particularly for chlorine burning. Describing himself as bullish, he estimates that chlorine burning will continue to increase in the early 1980's at an average annual rate of 10%. This will bring an additional 30,000 to 40,000 tons of acid made from chlorine burning into the marketplace each year. Through 1985, he expects that demand for hydrochloric acid will increase 3.4% per year, the same rate at which it has increased in the past five years. It's the supply side of hydrochloric acid, however, that holds the key for chlorine burning. By far, most hydrochloric acid produced in the U.S. is a by-product from processes in which other products hold the trump
card. According to Joyce's figures, 92% of all hydrochloric acid produced last year was by-product material. According to the Bureau of the Census, it was 90%. Joyce points out that virtually all of the "main products" that have hydrochloric acid as a by-product will experience slower growth in the years ahead than they have enjoyed in the past. These include vinyl chloride, fluorocarbons, chloroethanes, other chlorinated products, and isocyanates. In fact, says Joyce, the average growth rate for all of these "main products" will fall below that of hydrochloric acid demand in the eighties. As a result, he expects to see more "on purpose" hydrochloric acid produced by chlorine burning and less by-product acid disposed of by neutralizing it. According to one market researcher, hydrochloric acid is a market researcher's nightmare. Too many sources. Too many end uses. Too many customers. And too many distributors. Almost 70 companies produce hydrochloric acid from a wide variety of processes in about 140 different locations. To complicate matters, because acid solutions are about two thirds water, transportation costs play an important role in marketing the acid. Its effective marketing radius is probably no more than 250 to 300 miles. As a result, hydrochloric acid markets are regional and each region has its own distinct characteristics. To make matters worse, market researchers traditionally doubt the
Hydrochloric acid output has shown strong growth Millions of tons 3 3.2 I 3.0
o7 1 1 I I I I I I T 1970 71
72
73
74
75
76
77
78 7 9 b
a 100% HCI basis, b C&EN estimate. Source: Bureau of the Census
July 2, 1979 C&EN
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CHECKOFF MERGERS • American Can—Acquires publicly owned interest of subsidiary Inolex Corp. for stock on cash valued at more than $2 million. American Can already owns 75% of outstanding common stock of Inolex, which produces and markets chemicals and related products for pharmaceutical, health care, personal care, and industrial uses. Inolex had loss of about $1.3 million in 1978 on sales of $38.3 million. • Ashland Oil—Completes acquisition of Allied Chemical's South Point, Ohio, chemical plant for undisclosed price. Ashland has not decided on use for 610-acre site. Allied had produced ammonia, urea, melamine, formaldehyde, and urea-formaldehyde at facility. • Becton Dickinson—Will purchase Medical Development Corp., Salt Lake City, for $7 million; it makes medical products for operative and postoperative care. • Cabot—Completes purchase of TUCO Inc., subsidiary of Southwestern Public Service, for $33.8 million. TUCO was formed to provide Southwestern with firm supply of fuel, including natural gas; coal, and fuel oil. It and subsidiary own about 500 miles of gas-gathering pipelines and two gas processing plants. • Dexter—Acquires assets of Ornsteen Chemicals of Seabrook, N.H., for undisclosed amount of cash. Ornsteen, with annual sales of about $5 million, designs and makes shaped hot-melt adhesives and related application tools and equipment. • Diamond Shamrock—Completes purchase of Shell Chemical's animal health business for undisclosed amount of cash. Business, which had sales of about $20 million annually, includes insecticides, swine reproduction and anthelmintic products, and products for horse and small-pet care. Deal includes rights to Shell's animal health product line, patents, formulas, trademarks, and labels, and company's manufacturing facility in Princeton. N.J.
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C&EN July 2, 1979
• GAF—Sells its business forms operations in Shelby, Ohio, to Uforma Inc., privately held printer based in Roseville, Mich., for about $12 million. Operation has 670 employees and sales of about $26 million. • Gulf Oil Chemicals—Will purchase 30% interest in Taita Chemical Co. of Taiwan. Taita produces high-impact, expandable, and general-purpose polystyrene and will double its capacity of all three grades to 25,000 metric tons per year by end of 1979. It also plans to build 15,000 metric-ton-per-year acrylonitrile-butadiene-styrene plant to come on stream by end of 1980. • Handy & Harman — Acquires American Chemical & Refining of Waterbury, Conn., for undisclosed terms. American Chemical & Refining makes chemical salts for electroplating of precious metals and other uses, and provides chemical and refining services for recovering precious metals from industrial scrap. • Perkin-Elmer— Completes acquisition of Ktec Corp., Hayward, Calif., for undisclosed amount of cash. Narragansett Capital Corp., Providence, R.I., was major stockholder of Ktec, supplier of electron beam exposure systems for use by semiconductor industry. It also produces electron scanning microscopes. • Pfizer—Acquires Shiley Inc., privately held California-based manufacturer of artificial heart valves and other health-care products, in exchange for 2.4 million shares of Pfizer common stock. Shiley had sales in 1978 of $37 million.
• S c h e r i n g - P l o u g h —Purchases Burns-Biotec, animal health business of Chromalloy American, for undisclosed price. Burns-Biotec, headquartered in Omaha, markets vaccines and pharmaceuticals to veterinarians and other products to swine and cattle marketers. • Standard Oil (Ohio)—Will acquire Webb Resources and Newco Exploration Co., both based in Denver. Two acquired firms have about 1.5 million net acres in Rocky Mountain states for oil and gas exploration.
Little HCI production is from chlorine burninq Chlorine burning 6.5% Salt and acid 3.5% By-product and other 90.0%
Output 1978: 2.75 million tons Source: Bureau of the Census
accuracy of the Census Bureau's production statistics. The bureau's figures, they claim, usually are on the low side because it is never able to pick up all of the hydrochloric acid produced from all sources. For all of these reasons, it's difficult to pinpoint exactly what is happening with chlorine burning. In 1978, for instance, Joyce estimates that companies produced 112,000 tons of acid by burning chlorine. That's a tidy 13% higher than in 1977. Based on Census Bureau figures, a whopping 178,000 tons of acid was produced by burning chlorine. That's more than double the 1977 figure. Hydrochloric acid marketers agree, almost unanimously, that the volume of acid made by chlorine burning couldn't have doubled last year. But many of them think that the jump was much more impressive than Joyce's 13%. A similar statistical puzzle will face market researchers this year. Joyce believes that chlorine burning will crank out 139,000 tons of acid this year, up 24% over 1978. Yet, for the first quarter, the most recent period for which statistics are available, the Census Bureau has chlorine burning down 21%, compared to the first quarter of 1978. Companies can't seem to agree on this one. Some say there's no way that acid from chlorine burning could be down that much. Others say it is possible. They say that several "main products" processes that produce hydrochloric acid as a by-product have had a strong first quarter. Despite these statistical discrepancies, chlorine burning no doubt will play a bigger role as a hydrochloric acid source. It may be pushed aside when by-product acid is plentiful. But it will be the preferred route to fill the gap when by-product acid is scarce. D
