European propylene contract price for August down by EUR 15/tonne

(ICIS) -- The European propylene contract price for August has fully settled at EUR 1.115/tonne (USD 1.593/tonne), down by EUR 15/tonne, market sources said on Friday. This was the second number to emerge as the initial EUR 1.130/tonne rollover settlement on 26 July failed to garner the necessary support from the majority of propylene consumers.

They said the rollover was unacceptable and out of line with reality. One source said that buyers were utterly dismayed because a rollover had been the opening position of most suppliers and that firm offers had already been received at EUR 20-30/tonne reductions.

The opposition to the rollover settlement was primarily because many sources felt it did not accurately reflect the current bearish market conditions. Sources added that it was especially unrepresentative in the light of the August ethylene contract settlement, which was up by EUR 30/tonne at EUR 1.120/tonne. A higher contract price for propylene compared with ethylene would indicate that firmer market conditions prevail, but this is clearly not the case.

MRC

(Plastemart) -- Solvay announced that it plans to create a 50:50 joint venture with Sadara Chemical Company (itself a planned joint venture of Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company (Dow)) for the construction and operation of a Hydrogen Peroxide Plant in Jubail industrial City, Kingdom of Saudi Arabia.

Scheduled to be operational in the second half of 2015, this new plant is intended to supply Hydrogen Peroxide (HP) as a raw material for the manufacture of propylene oxide (PO) by Sadara at its world-scale, fully integrated chemicals complex. Propylene oxide is used to produce propylene glycol, polyurethanes and glycol ethers. Solvay will use its proprietary, high-yield hydrogen peroxide technology for the world-scale plant.

Dow and Saudi Aramco announced the planned formation of Sadara on July 25, 2011. Building on Saudi Aramco's project management and execution expertise, and utilizing many of Dow's industry leading technologies, the Sadara chemicals complex, comprising 26 manufacturing units, will be one of the world's largest integrated chemical facilities, and the largest ever built in one single phase.

MRC

(Plastemart) -- Formosa Plastics Group will invest about USD 413 mln to improve pipelines at a major oil refinery amid fresh safety concerns after recent blazes. The group plans to work on 1,063 pipelines totaling 1,266 kilometres (786 miles) at its affiliate Formosa Petrochemical Corp.'s oil refining unit, as per Commercial Times.

The project is expected to be completed in mid-2014. The economic ministry has demanded of Formosa to speed up replacing old pipelines after the latest blaze was reported this week -- the sixth since last year. The ministry has reportedly halted the group's recent China-bound investment applications in a bid to pressure it to enhance safety measures.

MRC

(Plastemart) -- Japan's Mitsui Chemicals plans to restart a 553 KTa naphtha cracker at its Ichihara plant in Chiba, after a turnaround, as per Reuters. The cracker was shut on July 1 and was originally due to resume on July 27, but the restart was delayed by two days.

MRC

(ICIS) -- Braskem's purchase of Dow Chemical's global polypropylene (PP) business could bring more discipline to the US market, but it will not solve the fundamental problem of feedstock shortness, market sources said on Thursday.

The purchase, announced on Wednesday, includes two PP plants in the US and two in Germany, with a total capacity of more than 1m tonnes/year.

By acquiring the two Texas plants, one in Freeport and one in Seadrift, Brazil-based Braskem will increase its PP capacity in the US by 50% to 1.4m tonnes/year, making the company the leading PP producer in North America, the company said.

But there are still nine other PP producers operating in the market, sources said, adding that it will be difficult for one company to exert much influence. It also does not change the most significant factor in the market, which is the short supply of feedstock propylene, sources said.

MRC