Yule Catto to acquire Malaysian aqueous polymer producer Quality Polymer

(ICIS) -- Yule Catto has acquired Malaysian aqueous polymer producer Quality Polymer for $15.9m on a cash and debt-free basis, the UK specialty chemicals company said on Monday.
⌠This acquisition will allow Yule Catto to expand its southeast Asian production and sales of acrylic and vinylic polymer dispersions for the adhesives, building products and coating sectors, Yule Catto said in a statement on the London Stock Exchange. Following the acquisition, Quality Polymer will be directly owned by the group's subsidiary, Revertex Malaysia, the statement said.

⌠It is expected that the acquisition will be earnings-enhancing in financial year 2012, the statement said without further elaboration. Quality Polymer employs 30 staff at its plant that is located close to Yule Catto's existing unit at Pasir Gudang in Malaysia and has historic annual sales, according to the statement.

MRC

(ICIS) -- Asia's demand for ammonia has weakened as acrylonitrile (ACN) and nitric acid producers in South Korea and Taiwan have lowered the operating rates at their facilities because of falling prices against high feedstock costs, sources said on Friday.

Ammonia is a raw material used in the production of ACN, nitric acid and caprolactam (capro).
South Korea's Tongsuh Petrochemical is running its 70,000 tonne/year and 230,000 tonne/year ACN plants in Ulsan at about 80% capacity, a source familiar with the company's operations said.
However, the company is considering reducing the rates further to 70% or less in the coming weeks as its inventories are high and ACN prices are falling, the source added.

Samsung Fine Chemicals is the main supplier of ammonia to Tongsuh Petrochemical for the latter's ACN production and to South Korean producer Capro Corp for its caprolactam production, according to a source from the former company.

The lower operating rates at Tongsuh Petrochemical's units and maintenance shutdowns at Capro Corp's 150,000 tonne/year and 60,000 tonne/year capro units in Ulsan are expected to lower Samsung Fine Chemicals' ammonia requirements by around 20,000-25,000 tonnes this month, a company source said.

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(ICIS) -- A combination of exports and cracker operating rate reductions over the past four months has helped to offset some of the bearish pressure on propylene, which resulted from poor demand from its derivative polypropylene (PP) and varied production problems, market sources said on Friday.

About 100,000 tonnes of propylene has been booked for export since July, primarily to the US Gulf and Americas, the sources added. This has gone a long way to rebalancing players' systems.
Weak demand and ever decreasing prices in Asia has led to little interest in exporting east. Shipowners are not keen to offer competitive freight rates to Asia, with one saying ⌠ships that end up there have nothing to take back, and rates are just too high".

But despite the slump, European players have worked to inure themselves against the demand slowdown. The propylene market is still viewed as balanced-to-long, and could lengthen further as a result of waning export potential and little sign of improvement in terms of demand.

US propylene contract prices for October settled down a significant 14 cents/lb ($309/tonne, ┬224/tonne) from September, and spot prices have followed suit. This, together with the sizeable volume already imported, will limit export options.

Sources said the ability to move volumes from the European system has been the market's saving grace, but now it would be more difficult to manage volumes.

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(ICIS) -- US acrylic acid and acrylate esters October contract prices are weakening on soft demand and plentiful supply, sources said on Thursday. Declines were heard in the range of 3-5 cents/lb ($66-110/tonne, ┬48-79/tonne) on the high end of most products, but one buyer said it had received offers of 10-15 cents/lb lower for two of the esters than it had in September.

September glacial acrylic acid (GAA) contracts are in the range of $1.41-1.46/lb, as assessed by ICIS.

Producers did not confirm talk of the large decreases, but one said existing margins were unsustainable, given sharply weaker propylene pricing for October. US propylene contract prices for October settled down by 14 cents/lb from September, primarily because of weakening demand.

The settlement brought the chemical-grade propylene (CGP) contract down to 62.50 cents/lb, and the polymer-grade propylene (PGP) contract down to 64 cents/lb.

A recent build-up of refinery-grade propylene (RGP) inventories also was cited as a factor in the lower price settlements. And US propylene inventories rose by 5% in the last week of September despite slightly lower refinery operating rates, according to the Energy Information Administration (EIA).


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(ICIS) -- Investment bank Credit Suisse has initiated coverage of Dutch-based AkzoNobel with an ⌠underperform rating and a ┬39.50/share ($54.86/share) target price, it said on Thursday.
The specialty chemicals and paints maker's earnings before interest and tax (EBIT) for 2012 are expected to be below market forecasts, on the back of sustained end-market weakness in residential housing across Europe and the US, the analysts added.

⌠AkzoNobel is exposed to residential construction markets across Europe, Americas, and Asia. AkzoNobel volumes are therefore heavily dependent on residential activity levels in these markets, analysts said.

Credit Suisse said that European and North American residential activity is near 50-year lows.
The analysts forecast that European construction markets are likely to deteriorate further before getting better, due to above average unemployment levels, low consumer confidence and the inability to access finance, which will place ongoing pressure upon AkzoNobel's volumes.


MRC