Korean automakers thrive in China as Japan car sales drop

(scmp) -- Japan’s Toyota, Nissan and Honda plan to slash production in China by roughly half, as a territorial row between Asia’s two largest economies cuts sales of Japanese cars in the world’s biggest auto market.

Sales have plunged at Japanese car makers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over the Japanese government’s purchase of a group of disputed islands in the East China Sea from their private owner.

Toyota and Honda plan to cut China production to about half normal levels by shortening working hours and slowing down the speed of production lines, the Nikkei said without citing a source.

Toyota’s China sales fell about 40 per cent in September from a year before to about 50,000 cars, a senior company executive told Reuters last week.

A spokeswoman for Mazda, which halted production for two extra days in late September before it shutdown factories during the holiday season, said plants in China were operating again but declined to comment on details.

A spokesman for Suzuki Motor Corp, which in late September had stopped one of two shifts that it normally runs in China ahead of the holiday season, said production was now back to what it was prior to the holiday.

Anti-Japan sentiment across China escalated last month amid a row over a group of uninhabited islets, known as the Senkaku islands in Japan and the Diaoyu islands in China, whose nearby waters are thought to hold potentially rich natural gas reserves. They have been under Japan’s control since 1895.

But the dramatic drop in demand for cars made by Japanese brands, which had a combined share of roughly a fifth of China’s passenger car market in August before the protests, has been an unexpected boon for foreign rivals. Non-Japanese brands stand to gain as Chinese consumers shun products.

South Korea’s Hyundai Motor Co’s China sales climbed 15 per cent to 84,188 vehicles last month, while Volkswagen’s Audi boosted sales by 20%, BMW by 55 % and Daimler’s Mercedes-Benz by 10 %.

Not all non-Japanese brands capitalized on the protests. General Motors Co. (GM) reported September sales rose 1.7 %from a year earlier to 244,266 units, slowing from the 7.3 percent surge the previous month. Sales of Buicks declined 1.8 % while those of Cadillacs fell 8.3 %, GM said.
MRC

(hydrocarbonprocessing) -- Italy’s Eni said Friday it signed an agreement with Honam Petrochemical for the development of an elastomeric plant at a South Korean facility of the Asian company, as the Italian company seeks to turn around its chemicals subsidiary Versalis.

The new site will use Versalis’ technologies and will have a production capacity of about 200,000 tpy of elastomers, or elastic polymers, which will be delivered mainly to Asian markets, Eni said in a statement.

Start-up is planned for the end of 2015, the Rome-based company said.

Versalis will provide engineering services, commercial development skills and technical assistance, while Honam will provide the primary raw materials, operative sites and existing structures.

On April 2012, the Italian national oil company Eni decided to rename its chemical branch Polimeri Europa into Versalis. Beyond the branding operation, Eni intends to go global with its Europe centric chemical business to benefit from the high growth in emerging countries.

In becoming Versalis, Eni’s chemical activities defined a 2012 – 2015 Strategic Plan to reduce their reliance on the European local markets. For its overseas expansion, Versalis will focus on four core businesses where its owns licenses and innovative technologies in the production of polyethylene (PE), styrenics and elastomers.
MRC

(HaloPolymer) -- An overseas office of the HaloPolymer, HaloPolymer Trading, has opened its warehouses in Busan, South Korea. By doing so, the company aims to optimize sales of polytetrafluoroethylene (PTFE) of different brands in the region.

HaloPolymer Trading supplies to South Koreavarious brands of PTFE (4DE, 4A, 4M). Meanwhile, the company’s warehouses provide services to customers not only in South Korea, but also in Taiwan and other countries in South-East Asia. The company’s year-to-date sales in the region have reached about 140 tonnes.

HaloPolymer is the leader of the industry in Russia and one of the world’s largest manufacturers of fluorinated products, primarily fluorinated polymers. HaloPolymer's production capacity of fluorinated polymers in 2011 amounted to 12,700 tonness. The company supplies about 80% of its products to more than 30 countries around the world. As MRC reported earlier, Halopolymer had become the first Russian company to enter the American Society of Plastics Industry, (SPI). This organization is one of the most influential in the United States and represents the interests of market participants of plastics industry.
MRC

MOSCOW (MRC) -- Last week, buying activity in the Asian PE market was sluggish. The absence of demand from China due to the national holidays did not result in price fluctuations, report MRC analysts.

Last week, PE prices in Asia remained intact. Decreasing oil quotations and uncertainty about the global economic outlook have considerably slashed interest in purchasing from traders from South-Eastern Asia. Many importers in this region have suspended all purchases in anticipation of a clearer price trend.

Chinese market did not work last week due to the national holidays which lasted from October 3 to 7. However, many market participants do not expect prices to rise further with the resumption of work of Chinese companies.

Last week, small deals for LDPE in the South-Eastern Asia were concluded in the range of USD1,370-1,420/tonne, CFR. Deals for HDPE were made in the range of USD1,370-1,460/tonne, CFR.
MRC

MOSCOW (MRC) -- On the increased feedstock cost and low profit margin, European makers have been intending to increase their price offers by EUR40-50/tonne in October for the past two months, report MRC analysts.

The contract cost of styrene-monomer - feedstock for polystyrene production - has risen by EUR8/tonne. Most PS makers have announced a potential increase in October price offers on average by EUR40/tonne in order to make up for the growth of production costs and to increase profit margin.

Last Thursday, on 4 October, Styrolution voiced its intention to increase its price offer by EUR50/tonne for October shipments. Next day, Styrolution also reported the increase of EUR50/tonne in its press release. Total is expected to raise its price offer by the same amount; however, the company’s confirmation has not been received yet.

Producers insist that the profit margin has decreased significantly over the past two months despite high prices in the PS market. However, they understand that the current PS quotations in Europe are at a high level and the further increases may affect consumption.

Buyers have expected polystyrene prices to remain unchanged in October after an insignificant increase in the cost of styrene monomer. It is assumed that negotiations on the formation of the contract PS price in October will be difficult.
MRC