Cargo flow limited despite opening of South East Asia polyethylene arbitrage window

(plastemart) -- The arbitrage opportunity to move polyethylene cargoes from China to Southeast Asia is open, but cargo flow is still limited.

Traders are mainly moving linear low density polyethylene (LLDPE) from Chinese bonded warehouses to Southeast Asia, in a practice called "re-exporting." The main factor behind this has largely been slow PE demand in China due to lower-than-usual orders for finished products. Concurrently, this is the conventionally low demand season between April and May for the PE market.

This has caused a big gap between prices of ex-warehouse cargoes and shipment cargoes. China has been closed for a public holiday Monday to Wednesday, preventing any price movements.

PE in Southeast Asia has been on an uptrend due to tight local supply, particularly in Indonesia where domestic production has been low, especially of LLDPE, due to poor margins. Market sources were unable to pinpoint exactly when the arbitrage window opened, but have seen movements over the last two weeks. Traders in China prefer to hold on to their lower cost cargo.
MRC

Octal sets up the world's largest reactor for PET production

(polyestertime) -- Octal Petrochemicals has installed the world's largest reactors of melt-to resin technology (MTR) for the production of highperformance PET as the fourth and fifth manufacturing facilities remain firmly on track for completion in May 2012. To date, one million manhours have been completed without a single lost-time-injury (LTI) that reflects Octal's strong commitment to safety standards.

The expansion will add an additional 527,000 tonne a year of PET bottle grade resin to Octal's current production capacity of 400,000 tonne per annum, making it the largest producer in the world on one site. The highly energy-efficient reactors have proven successful for the production of high viscous melts, enabling Octal to set the global benchmark for superior product quality and sustainability through the application of the most advanced technology available.

The PET resin and sheets produced are acclaimed by international experts to have the lowest carbon footprint, paving the way for others in the industry to follow the company's pioneering footsteps.

MRC

Chinese textile industry to face crisis

(chinadaily) -- The Chinese textile industry is facing crisis as current typical profit margin in the sector is lower than the cost of finance. During 2011, more than 30 percent of textile and clothing firms in Jiangsu and Zhejiang are reported to have gone out of business.

Rising labour costs are cited most frequently as a cause of the industry's difficulties. Low technology, labour-intensive processes have increasingly been transferred to cheaper production sources in South East Asia, such as Cambodia and Vietnam, or to eastern European countries, such as Bulgaria and Poland.

Industry sources also comment that the corporate tax burden is excessive. The difference between sales tax on processed goods (17 percent) and the purchase tax payable on cotton (13 percent) cannot be recouped, for instance.

However, industry participants appear rather gloomy about prospects for the next several months, owing,
in particular, to a poor outlook for demand from the euro-zone countries. The call for tax concessions
appears thus to be increasing.
MRC

Uralkali unveiled Q1 production performance results

(chemmonitor) -- Uralkali, a Russia-headquartered company, has recently disclosed results of its production performance from January 2012 through March 2012. The announcement concerned the making of potassium chloride.

The company itself produced around 2 million tones tonnes, while the output of Silvinit's assets reached 0.7 million tonnes.

The firm generated 1.2 million tonnes of the product in Q1 of the previous year.

MRC

Poland's plastics industry eyes growth

(polyestertime) -- Despite 2011 being a year of steep increases in raw material prices in Poland, plastics industry representatives say the local market will continue to grow in 2012, as several plastics manufacturers plan on expanding the capacities of their production facilities in the country.

Walter T. Kuskowski, chief executive of plastic packaging and car accessories manufacturer Suwary, said material costs in 2011 were the highest in five years. Moreover, the weakening zloty meant a sharp decrease in profit margins last year, he said. However, the market still managed to grow, despite price pressures

The plastics industry is helped by an optimistic economic future in Poland, as hopes for further growth in 2012 are high. Credit Suisse expects gross domestic product (GDP) to grow by 3% in 2012 and a further 3.5% in 2013. In the fourth quarter of 2011, Poland posted GDP growth of 4.3% over the same period a year earlier, as shown by figures from the country's Central Statistical Office.
MRC