BASF posts an increase in sales by 6% in Q2

(BASF) -- BASF’s business performed solidly in the second quarter. The company improved sales by 6% to EUR19.5 billion and income from operations (EBIT) before special items increased by EUR253 million to EUR2.5 billion. While sales volumes declined in the chemicals business, which comprises the Chemicals, Plastics, Performance Products and Functional Solutions segments, the main contribution came from the strong performance of the Agricultural Solutions and Oil & Gas segments. In the first half of 2012, sales were EUR40.1 billion, 6% more than in the same period of the previous year. At over EUR5 billion, EBIT before special items matched the level of the first half of 2011.

A look at the economic developments in the past months and at the order books have led BASF to become more cautious about its expectations for the global economy in 2012 than originally expected at the beginning of the year (previous forecast in parenthesis):

Growth of gross domestic product: 2.3% (2.7%)
Growth in industrial production: 3.4% (4.1%)
Growth in chemical production: 3.5% (4.1%).

In the Chemicals segment in Q2, sales were slightly below the level of the previous second quarter, primarily due to lower sales volumes. Along with weaker demand, the optimization of the supply chain for steam cracker products, carried out in the third quarter of 2011, contributed to this decline in volumes. Sales to Styrolution Group companies had a positive impact on sales development for the segment. Earnings decreased significantly as a result of falling margins and the scheduled maintenance shutdown of several plants.

In Q2 sales in the Plastics segment surpassed the level of the second quarter of 2011. While sales volumes were weaker, positive currency effects in particular boosted sales growth. Lower margins for some basic products led to a significant decline in earnings.

BASF is the world’s leading chemical company, which portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas.
MRC

MOSCOW (MRC) – Committee of Economy and Industry of Legislative Assembly of Nizhegorodsky region has recommended the Regional Parliament to adopt in two readings the law on the new parameters of the investment agreement between the region and RusVinyl. The document stipulates an increase of tax benefits up to 5,3bln roubles, report MRC analysts.

Members of the Legislative Assembly of Nizhegorodsky region approved the draft law on the new parameters of the investment agreement between the region and RusViny (a Joint-Venture of Sibur and a Belgium company, Solvin). According to the Vice-minister of Investment Policy, Andrey Gneushev, the changes are based on financial and economic indices of the draft law in line with the business-plan dated 13 December, 2011.

According to the new parameters of the draft law, a launch of the complex is postponed till 2013, the level of investments will grow from 22,3bln. to 55,3bln. roubles. The schedule of investments also undergoes changes. The dates of the state support in the form of tax benefits are set from January 1, 2014 till December 31, 2018. The tax benefits increase from 2,2bln. to 5,3bln. roubles and a payback period increases from 148 to 173 months. By 2018 suspension PVC output will have to reach 312 thousand tonnes and emulsion PVC production – 32 thousand tonnes, caustic soda production – 222 thousand tonnes. Supplementary Agreement No.1 stipulates a state support in the form of partial compensation of interest rates on loans in the amount of 271 400 roubles (the dates of the partial compensation of interest rates should be from January 1, 2014 to December 31, 2016).

These changes will be submitted for approval in two readings at the meeting of the Legislative Assembly of Nizhegorodsky region on July 26, 2012.

It should be recalled that pre-project documentation for the construction of PVC and caustic soda complex was prepared in 2007. The complex capacity will allow to produce 300 thousand tonnes of suspension PVC, 30 thousand tonnes of emulsion PVC and 235 thousand tonnes of caustic soda. In June, 2008, Investment Committee of the Governor of Nizhegorodsky region decided to grant tax benefits to RusVinyl. In July, 2010, “the first stone” was laid on the building site of the company opening a construction phase of the plant.

As part of the construction project of the plant in Kstovo, Sibur began a gradual shutdown of its chlorine and caustic soda production capacities at Kaprolaktam plant in Dzerzhinsk. The gradual shutdown of chlorine production will last till spring of 2013.
MRC

MOSCOW (MRC) – The negotiations on contract prices of the Russian PVC for August started this week. Local makers aim to increase the prices by Rb500 - 1,000/tonne on rising qoutations in the foreign markets, strong domestic demand and scheduled turnarounds, according to MRC analysts.

The talks about Russian PVC contract prices for delivery in August began earlier this week. The negotiation process has just begun and not yet entered the active phase, but local producers are going to secure price increase for August by Rb500 - 1,000/tonne.

The demand for the resin in the Russian market is quite high. In July, imports fell significantly. In addition, the prices in external markets for August shipments are rising. The suppliers of North American PVC raised export prices for August on average by USD50 - 70/tonne, from July. European makers are going to raise export prices by EUR50/tonne.

The maintenance of the two largest PVC productions in Russia also contributed to price hikes. Caustic (Sterlitamak) halted production last week on the planned two-week maintenance. The annual production capacity of the plant makes 180,000 tonnes. Sayanskkhimplast plans to stop the production in mid-August for a month. The production capacity in Sayansk is 250,000 tonnes per year.

Ukrainian producer of PVC Karpatneftekhim (Lukoil Group) announced increase in prices for August. The final price is being agreed with customers. The company plans to stop its facilities on the turnaround in early September, though now, many market participants reported about serious disruptions in the supplies of resin from the Ukraine because of the lack of the railwayrolling stock.
MRC

MOSCOW (MRC) -- In June, imports of PVC in China shrank to 64.000 tonnes, from 77,400 tonnes in May. In H1 2012, the total volume of PVC imports to China amounted to about 473,000 tonnes, according to MRC analysts.

After the May surge the Chinese imports of PVC began to decline again. Last month, the total volume of PVC imports to China fell by 17% from May and exceeded 64,000 tonnes.

In June, imports of PVC in China were cut by producers from the U.S., South Korea, Japan and Taiwan, while the producers from Indonesia and Germany managed to slightly increase the supply of resin to the Chinese market.

The imports of the U.S. resin in June were reduced to 16,900 tonnes (in May, about 27,000 tonnes), the Taiwanese makers shipped about 27,000 tonnes, up 10% from May.

Prices of imported PVC in China in June were at USD850 - 870/tonne, CFR CMP. In the domestic market, ethylene resin was offered on average at Yuan 6,700 - 6,900/tonne, FD, acetylene PVC was at Yuan 6,400 - 6,600/tonne, FD.

In general, in H1 2012, imports of PVC in China amounted to about 473,000 tonnes, down 11% year on year.


MRC

(Plastech) -- Brand owners and packaging producers trying to reach sustainability goals profitably are expressing keen interest in the newest color and additive technologies for plastics that are now available from Clariant Masterbatches. It is clear that customers want help in implementing a more sustainable business model. So Clariant has made it a priority to develop solutions involving recycled, renewable and biodegradable materials, as well as technologies to help reduce material use and energy consumption.

Most of Clariant products can be supplied in traditional solid masterbatch form or using new liquid vehicle technology (LVT), which can offer significant sustainability and economic advantages in many applications. Liquid masterbatches disperse readily through the polymer matrix so, in some colors, the amount of colorant needed to achieve the desired look can be cut by 50% or more.

This is especially true for translucent or transparent colors in clear polymers like PET, polyethylene and polypropylene. Liquids can be metered very precisely, eliminating the risk to over-saturating the color. When it comes time to change from one liquid color to another or from liquid color to solid, the switch can be made in a fraction of the time it takes to purge solid color from the processing machine so less scrap is generated. Liquid masterbatches can also be formulated so that they actually improve the flow of the polymer, resulting in faster fill times and shorter injection molding cycles, as well as improved extrusion throughput or lower required screw speeds.

Clariant is a Swiss speciality chemical company with a turnover of around USD8 billion and is headquartered in Muttenz with a corporate centre in Pratteln, both near Basel, Switzerland. Clariant manufactures a range of specialty chemicals based largely on pigment, surfactant and polymer chemistry. Clariant makes pigments for inks, paints, and plastics and masterbatches, which are highly concentrated additives for plastics and textiles. It is also among the leading manufacturers of de-icing agents and fire retardants, and chemicals used in the oil & gas and mining industries.
MRC