The deficit in the Russian HDPE market resulted in record prices in September

MOSCOW (MRC) – In early September the deficit in the Russian HDPE market increased on upcoming outages for maintenance of the major makers and a record price-level, report MRC analysts.

The lack of supply began to be already felt in early August in the Russian HDPE market. HDPE prices kept rising every week on the back of tightened supply. The record increase in prices was registered in early September on the back of the growing deficit and upcoming outages for maintenance at Kazanorgsintez (for 30 days from September 10) and at Nizhnekamskneftekhim (for 10 days from September 26). At the beginning of the week bids at electronic trades for Kazanorgsintez and Niznekamskneftekhim HDPE came close to the level of Rb100,000/tonne, including VAT, FCA, and for some grades they even exceeded this level.

Most acutely the deficit is felt in the market of film, blow moulding and pipe HDPE. Some converters claim that with such a level of PE prices it is more profitable for them to stop their production till the situation in the market is stabilized. Some converters have to accept the current price-level since they have contractual obligations before customers of the finished goods.

August and September are traditionally hot months for Russian HDPE market, but this year has become a surprise to all market participants. In the first half of the year the absence of Stavrolen PE was practically not felt in the market, however, by July the lack of the material from Budenovsk had already started having an impact on the market balance. Scheduled outages at Gazpromneftekhim Salavat and Karpatneftekhim (Ukraine) aggravated the situation in the market.

Gazprom neftekhim Salavat stopped its HDPE production for a monthly turnaround in late July. However, so far the plant has not resumed its production. Since September 1 Karpatneftekhim has shut its HDPE plant for a scheduled two-months’ turnaround. The plant shipped to Russia on average about 7,000 tonnes on monthly basis.

Some Russian traders tried to find an alternative to Russian HDPE in the foreign markets. Still in July traders actively contracted PE in Europe, Asia, the USA and the Middle East. Purchasing volume of European HDPE was insignificant though due to tightened supply. Asian makers have also sold out all their August and September volumes in the regional market. Russian traders only managed to buy small volumes. Meantime, according to importers, most volumes of the contracted PE will start arriving in the Russian market only starting from the next week due to issues in logistics while the first shipments were planned for a second half of August.

Some market participants hope that an early launch of HDPE production at Gazprom neftekhim Salavat and Stavrolen will halt the rise in prices. The highest expectations are assigned to the early resumption of production at Stavrolen. The production capacity of the plant makes 300,000 tpa and there is a possibility to produce several main grades simultaneously. The first stage of the resumption of production at Budenovsk plant, which is a launch of ethylene production, is scheduled for September 15.
MRC

Sumitomo Chemical withdraws Chinese plant plans

(news.szenergy) -- Sumitomo Chemical Co Ltd withdrew its plan to build an LCD panel material plant in China amid falling demand for LCD televisions, the Nikkei reported.

The company now plans to invest in developing OEL (organic electroluminescence) panel materials - which consume less power and offer sharper images - and in Petro Rabigh complex, a large-scale petrochemical joint venture in Saudi Arabia.

But with demand for small and midsize LCD panels expected to continue growing amid the increasing popularity of smartphones and other portable devices, Sumitomo has decided to invest more than 1 billion yen (USD12.8 million) this fall to boost the output capacity at its South Korean plant about 6 percent, the Nikkei reported.
MRC

BASF opened a new research lab for thermoplastic polyurethanes

(basf) -- BASF has opened a new research lab for thermoplastic polyurethanes (TPU) in Wyandotte, Michigan. A multidisciplinary team of product developers, chemists and material scientists will work to discover new products for the American automotive, construction, sports and leisure industries.

Wyandotte is BASF’s largest research and development site in the Midwest of the United States. The company already operates a number of labs specializing in the research and development of polymers and coatings for the North American market. The new polyurethane research team further enhances the technology and knowledge Verbund at this site.

The initially five-person team’s main working area is TPU synthesis and processing. The aim is to customize key material properties such as stiffness, elasticity, transparency and UV stability to meet individual customer wishes by varying the manufacturing conditions. Applications for these highly versatile plastics include cables and tubes in the automotive, mechanical engineering and construction industries. Polyurethane as films is used for packaging, skis and snowboards, air cushioning systems for insoles, and as fibers for clothing textiles.

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. We combine economic success, social responsibility and environmental protection.
MRC

Saudi Aramco and Total start testing Jubail refinery

(plastemart) -- Saudi Aramco and France's Total have started testing their new refinery at Jubail, three sources with knowledge of the project said, raising the prospect of full operation of the USD14 bln facility ahead of a scheduled start-up in Q3-2013.

Saudi Aramco Total Refinery and Petrochemicals Company (SATORP) has fired up the boilers at the plant, and hopes to bring the first of two crude distillation units (CDU) online before year-end.
MRC

Dow Chemical to revamp organizational structure

(hydrocarbonprocessing) -- Effective immediately, Dow is eliminating the current business division structure and move to a global business unit model that will have business presidents. The presidents will be accountable for generating increased earnings and the accelerated advancement and execution of Dow's strategy.

Effective immediately, Dow will eliminate the current business division structure and move to a global business unit model that will have business presidents, the company said.

The business presidents will be fully accountable for generating increased earnings, and the accelerated advancement and execution of company strategy. The business presidents will report to a newly-formed executive committee.

The committee will set the overall direction and strategy for Dow, monitor and deliver results, and optimize resource deployment across the businesses, according to the company. The committee will be headed by Dow CEO Andrew N. Liveris.

Others include James R. Fitterling, executive vice president, who will have executive oversight of feedstocks and performance plastics in Asia and Latin America.

Dow said the business presidents will be announced later this week.
MRC