Ineos inks deal for US ethane supply to European steam crackers from 2015


(Platts) -- Chemicals major Ineos said it has signed an agreement to secure ethane from the US that it will use as a feedstock to operate its steam crackers in Europe.

It has agreed a long-term deal with Range Resources Corp. for the lifting of ethane from the Marcus Hook facility, located near Philadelphia, from 2015.

The agreement is effective upon the US Federal Energy Regulatory Commission's approval of the Mariner East project, a pipeline, processing and terminalling project that will interconnect the natural gas liquids resources in southwest Pennsylvania to the Marcus Hook facility, operated by Sunoco Logistics.

These agreements with the Sunoco units will be valid for 15 years and will provide Ineos Olefins & Polymers Europe with "significant supply options for the future," Ineos said in a statement late-Wednesday.

Once completed, the Mariner East project will transport 70,000 b/d of ethane and propane from Houston, Pennsylvania to the Marcus Hook terminal.

Ethane will then be separated by fractionation and held in storage ready for shipment to Europe, Ineos said, adding it is expected that ethane from the Mariner East Project will become available in the first half of 2015.

"Ineos can now position itself as an attractive customer for upstream companies with interests in the Marcellus, Utica and Upper Devonian gas formations. We will provide these companies with a credible option to diversify sales and supply ethane into our downstream cracker complexes in Europe," Thompson said.

As MRC wrote earlier, in September, eleven employees from Tobolsk-Polymer were trained in INEOS, Houston, Texas (USA). During training staff familiar with the technology of gas-phase polymerization of propylene Innovene PP. INEOS is Sibur's licensor of engineering of largest ethylene pyrolysis in integrated complex "ZapSibNeftehim in Tobolsk.

Ineos operates steam crackers in Grangemouth in the UK, Cologne in Germany, Lavera in France and Rafnes in Norway.
MRC

PTA plant of Jiaxing Petrochemical operates at lower rates

(polymerupdate) -- Jiaxing Petrochemical Co. Ltd is operating its new purified terephthalic acid (PTA) plant at lower rates.

Located at Jiaxing, Zhejiang province in China, the new PTA plant has a production capacity of 1.5 million mt/year. The company started commercial production at the plant on September 2, 2012.

The plant is currently operating at 70% production capacity rates. The company is likely to increase the operating rates to 100% by the end of the current week.

Jiaxing Petrochemical’s parent firm – Tongkun Group – runs six polyester yarn plants at Tongxiang in Zhejiang province, with a total capacity of 1.6m tonnes/year.

PTA is the primary feedstock of polyester production. A 1.5m tonne/year PTA plant can meet requirement for the production of 1.7m tonnes/year polyester products.

MRC

MRC news digest as of 01.10.12.

MOSCOW (MRC) -- MRC news digest as of 01.10.12.

1. HDPE import to Russia grew by 17% in August.

In August, Russian traders increased import volumes of HDPE to 37,800 tonnes, up 17% from July. Over the past eight months HDPE import to Russia rose almost by a quarter, report MRC analysts. The main growth of import volumes accounted for film and pipe HDPE. Russian PE pipes producers significantly increased the purchasing volumes in the foreign markets on the back of a series of outages at local HDPE plants for maintenance. Also, quite a low price level of HDPE in Europe and Asia in July added to the growth of purchases in the foreign markets. In August, pipe PE import rose to the record levels and made about 14,200 tonnes. Film HDPE import made about 8,300 tonnes in August, up 33% from July. In general, in January-August, the total import of HDPE to the Russian market made about 248,000 tonnes, up 24% year-on-year.

2. The year-to-date EPS output in Russia exceeded 50,000 tonnes.

Russian makers have increased EPS production since the beginning of the year and reached the production level of 51,400 tonnes of the material, report MRC analysts. In August, 2012, EPS output in Russia reached its historical maximum exceeding 9,000 tonnes of the material. In August, SIBUR-Khimprom officially announced a launch of the second EPS production line at Perm with the production capacity of 50,000 tpa. As a result, the total capacity of Perm facility rose to 100,000 tonnes of EPS per year. Tthe year-to-date EPS output at Perm increased to 6,900 tonnes of the material, which is equivalent to 80% of the potential capacity utilization. Also, the increased production was influenced by Plastik (Uzlovaya), which reached its planned indices of 750 tonnes in September. In July, 2012, the production was reduced to 280 tonnes. In September, Angarsk Polymers plant shut its EPS production for maintenance. It is expected that the outage will last one or two months.

3. Asian PX prices dropped by USD77-87/tonne on falling oil quotations.

Last week, the spot prices of paraxylene in Asia decreased by USD77-87/tonne, breaking the upward trend that lasted from the beginning of July. The decline resulted from the decrease of the oil futures, as well as the already weak demand from PTA producers, analysts MRC. In September, the traders of paraxylene speculatively inflated prices based on the price of oil, while the demand from PTA market remained weak. Due to decline in oil prices producers of paraxylene had to make concessions to its customers in order to retain the desired sales volumes.

4. In Asia PP prices grew by USD20-40/tonne.

Last week, in Asia the prices of polypropylene (PP) increased by USD20-40/tonne on the back of consumer activity and rising oil quotations in the first half of the week. But on Thursday decreased oil prices dampened buying activity in the region. Future prospects for the market remain unclear, as per MRC analysts. Local producers are confident that in Q4 the demand for polypropylene in the region will increase, as local converters will actively replenish their inventories.

5. Stavrolen shut PP production.

By the beginning of this week Stavrolen had shut its polypropylene production. The outage at PP production was due to the launch of ethylene production, report MRC analysts. The exact dates of the resumption of PP production have not been disclosed yet. It is expected that the outage will last 10 days. The annual PP production capacity at Stavrolen makes 120,000 tonnes. In March-August, the plant produced about 49,000 tonnes of polypropylene.

6. Russian converters refuse from imported PET.

Over the period from January to August Russian converters reduced imported PET consumption by more than half preferring domestic feedstock makers, report MRC analysts. This year Asian PET makers are rapidly losing Russian market. In January-August last year, Russian companies imported about 237,000 tonnes of PET granulate and over the same period this year, this figure was reduced to the level of 114,000 tonnes. China and South Korea are still the main suppliers of import PET to Russia.

7. Russian prices of HDPE are coming down.

A serious fall in demand and expectations of Stavrolen’s resumption resulted in significant decrease in HDPE prices in the Russian market over the last two weeks of September, as per MRC analysts. Expectedly in early September amid strong demand and upcoming scheduled shutdowns of Nizhnekamskneftekhim and Kazanorgsintez prices of low pressure polyethylene in Russia began rising. The prices reached its ten years peak, with prices of some HDPE grades having Rb100,000/tonne, including VAT, CPT Moscow. Russian companies did not manage to offset deficit in the market by increasing the imports volumes of HDPE. Over three weeks of September, the imports of HDPE to Russia amounted to about 28,700 tonnes, which is comparable to the August volumes. Record level of HDPE prices made many local converters cut their purchases in anticipation of price decrease.

8. Russian producers aimed to raise contract prices pf PVC.

The negotiations on contract prices of PVC for October began this week in Russia. Russian producers aimed to raise contract prices by Rb1,000-2,000/tonne, as per MRC analysts. Traditionally the negotiations on contract prices of PVC in Russia are held over the last week of the month. This week, Russian producers began talks with converters on the contract prices of PVC for delivery in October. Local producers expectedly plan to increase prices. Due to the deficit of PVC, which began in late August, Russian producers are going to raise the price by Rb1,000-2,000/tonne, from September. The supply of PVC is tightened in the market, the spot price will start from Rb49,500/tonne, including VAT, FCA. The demand for finished goods is stable, although some converters have reported serious difficulties with working capital on the rising PVC prices in September (spot quotations grew by 8-10%, from August).

9. Poliom to launch PP production in November.

Poliom (Titan group) plans to launch PP production in November. According to a company source, at present the plant is 99% ready to start the production. The plant capacity allows to produce 180,000 tonnes of PP. Spheripol technology of LyondellBasell will allow the facility to produce up to 78 grades of polypropylene.

10. Price of Ukrainian EPS keeps growing.

Strong demand for the material amid tightened supply, allow suppliers of EPS to the Ukrainian market to increase prices, as per MRC analysts. Traditionally, the peak consumption of expandable polystyrene in Ukraine falls on Q3. In September 2012, the demand for the polymer has been at a high level. A similar situation will be in the first half of October, said market participants. Amid high demand and limited supply, the producers can take an opportunity to raise a prices. Amid limited supply and high level of demand, the price of Russian polystyrene was increased again.

11. Chinese traders increased PVC import by 21% in August.

In August, Chinese traders increased PVC import volumes up to 98,700 tonnes, up 21% from July. Over the past eight months, PVC import to China exceeded 653,000 tonnes, report MRC analysts. High seasonal demand in the Chinese domestic market keeps boosting dependence on imports. Last month the total PVC import to China grew by 21% from July and reached the level of 98,700 tonnes. Meantime, PVC export from China rose by 130% in August and made about 36,400 tonnes.
MRC

Poliom to launch PP production in November

MOSCOW (MRC) – Omsk Poliom is going to start PP production in November, report MRC analysts.

Poliom (Titan group) plans to launch PP production in November. According to a company source, at present the plant is 99% ready to start the production. In August, the tests of technological lines were conducted at polymerization section. Tests of control-gauging instruments (CGI), installed on the production equipment for propane-propylene fraction (PPF) processing, started in September.

Implementation of the project on construction of the PP plant already started in 2005 and the startup was scheduled for 2011. However, due to a series of reasons including financing, the project implementation period shifted to the end of 2012.

The plant capacity allows to produce 180,000 tonnes of PP. Spheripol technology of LyondellBasell will allow the facility to produce up to 78 grades of polypropylene.
MRC

Price of Ukrainian EPS keeps growing

MOSCOW (MRC) – Strong demand for the material amid tightened supply, allow suppliers of EPS to the Ukrainian market to increase prices, as per MRC analysts.

Traditionally, the peak consumption of expandable polystyrene in Ukraine falls on Q3. In September 2012, the demand for the polymer has been at a high level. A similar situation will be in the first half of October, said market participants.

Amid high demand and limited supply, the producers can take an opportunity to raise a prices. In 2012, the biggest share of consumption fell on the polystyrene by Alfapor brand from Russian producer Sibur-Khimprom. Russian maker managed to get about a third of the market due to the convenient logistics, as well as an attractive price relative to Asian EPS.

In September Alfapor price increased from USD1,800/tonne to USD1,840/tonne, FCA Perm. Despite the launch of the second production line of EPS in Perm and the total capacity of 100,000 tonnes of material per year, export volumes for Ukrainian consumers was not enough. This situation puts pressure on the EPS supplies to Ukraine, as feedstock of EPS from Asia is not acceptable due to the long arm of logistics.

Amid limited supply and high level of demand, the price of Russian polystyrene was increased again. According to preliminary information, the minimum possible price of Alfapor in October will be at USD1,900/tonne, FCA Perm.
In the Ukrainian market Alfapor price is now in the range of UAH19,250-19,700/tonne, including VAT, depending on the region and the terms of payment.

Chinese material is expected to be supplied to the Ukrainian market early next week. According to traders, the price of this batch will make UAH20,500/tonne.

The price of imported Asian polystyrene also increases. Last week, China set the maximum price of EPS in the current year USD1,800-1,810/tonne, FOB. This week price slightly decreased to USD1,790-1,800/tonne, FOB. The price soared to this level on expensive styrene monomer USD1,625/tonne last week.

For Ukrainian consumers Chinese EPS for late September was at USd1,910-1,930/tonne, CIF Odessa, which economically is inefficient.

Amid rising prices from competitors Ukrainian producer of EPS Stirol (Gorlovka) also aims to increase the price. The prices for shipment in October will be voiced next week.

MRC