MRC news digest for the past week

MOSCOW (MRC) -- MRC news digest for the past week.

1. Kazakhstan tightens requirements for PE pipes.

The Water Resources Committee of Kazakhstan has changed requirements for producers of PE pipes for water supply. The proposed changes will toughen requirements for raw materials and PE pipes production, report MRC analysts.The proposed changes will tighten the control over production and raw materials for PE pipes production. According to local market participants, new requirements might dramatically alter Kazakh market of PE pipes, in particular, the geography of supplies since Russian and Asian makers are the main suppliers of pipe PE100 to the local market.

2. In August, import PVC to Ukraine increased to 11,000 tonnes.

Expectedly in August, the import volumes of PVC to the Ukrainian market increased significantly. Last month, the total amount of imports of PVC to Ukraine increased to 11,000 tonnes, while in July this figure made about 8,800 tonnes, as per MRC analysts. The main increase in imports of resin was provided the material from the United States. Limited export quotas in Europe over the last two months did not allow Ukrainian companies to increase seriously the purchases. The import of European resin in August exceeded 5,000 tonnes, while in July the figure made about 5,800 tonnes. In general, over the eight months of this year, the total volume of import PVC to Ukraine amounted to about 55,100 tonnes, down 37% compared to the same period a year ago.

3. HDPE prices in Asia dropped in price by USD10-40/tonne.

Low buying activity, due to the state holidays in China and decline in oil quotations, has resulted in a slight reduction of polyethylene prices in Asia, report MRC analysts. Low buying activity in the region was the main reason of the decline in prices. Chinese companies practically refused from purchasing polyethylene in anticipation of the weekly state holidays which will begin from 1 October. South-Eastern companies also decided to take a break expecting the situation with the price trend to become clear after the holidays in China. Last week, LDPE prices remained intact and were in the range of USD1,310-1,380/tonne, CFR. HDPE prices dropped by USD10-40/tonne depending on the grade. Deals were concluded in the range of USD1,300-1,370/tonne, CFR.

4. High prices of PS in Europe hold down the demand.

European market of polystyrene (PS) remains tight, according to suppliers. Current high prices put pressure on the purchases of polystyrene. Buyers and converters consider such level of prices groundless, which soon will make converters either reduce the purchases volumes, or to look for an alternative feedstock. The latter especially refers to the market of high-impact polystyrene (HIPS), which competes in some sectors of processing with ABS and PET. The September price of polystyrene for direct buyers increased by EUR70-80/tonne, while prices for traders increased by EUR100/tonne.

5. Stavrolen resumes HDPE production.

In October, Stavrolen will reach its full technological capacity utilization with production of on-spec material. The first shipments of polyethylene are expected to start next week, report MRC analysts. The first shipments of PE will be possible from 5 October. Shipments of PP will be resumed starting from 3 October.

6. Low demand for PVC in Asia puts pressure on prices.

The Asian PVC market faced the first signs of sluggish demand, which in the near future may result in price cuts. Some makers are trying to keep prices above USD1,000/tonne, CFR, as per MRC analysts. According to unconfirmed information, on ample inventories PVC some suppliers cut their prices for October shipment to USD980-1,000/tonne, CFR. However, it is early to make conclusions on the October prices in the region. The buying activity in the PVC market in China was very low last week. On the eve of National holidays, many market participants hold back from purchases of the resin, the companies expect the downtrend in the market.

7. Ufaorgsintez stops production line of LDPE.

Ufaorgsintez stops one of the two reactors for the production of low-density polyethylene (LDPE) for technical reasons. The suspension of production will last about two weeks, as per MRC analysts. According to unofficial information, the suspension of the production of 158 LDPE will take about two weeks.

8. Asian PET prices slashed by USD10-20/tonne.

Last week of September, price offers of Asian PET decreased by USD10-20/tonne following the drop in cost of feedstocks and converters’ low buying activity in the domestic market, report MRC analysts. The range of Chinese makers’ spot prices for export shipments were voiced at the level of USD1,380-1,410/tonne, FOB China. This week, market players’ activity will remain weak due to the national holidays started on 30 September. Korean producers sold their PET production at the price which is by USD20/tonne lower from the levels stated the previous week. The price dispersion of the material made USD1,400-1,440/tonne, FOB Korea.

9. European producers cut PP prices for October.

The contract price of propylene in Europe decreased by EUR 20/tonne for October, some companies have achieved EUR 40/tonne decrease in PP export prices, as per MRC analysts. The negotiations on export prices of polypropylene (PP) for October supplies in to the CIS markets began this week. Some market participants reported that they were able to achieve a reduction in export prices by EUR40/tonne, compared to the September level. This week the price of European PP-homo was discussed at EUR1,300-1,340/tonne, FCA.

10. European producers decrease export PE prices for CIS countries.

A serious decline in demand has made European producers reduce PE prices for October shipments. The discussion of export prices for the markets of the CIS countries has just started this week, but some market players report that they managed to get a price reduction by EUR40-50/tonne from September level. Deals for October HDPE shipments are negotiated at the level of EUR1,340-1,400/tonne, FCA. Price offers for LDPE were voiced on average at the level of EUR1,400/tonne, FCA. Many importing companies do not rush to purchase polyethylene from Europe expecting the further reduction of export prices in the second half of October.

11. PS production in Ukraine exceeded 14,000 tonnes.

Total production of polystyrene from Stirol Group (Gorlovka) over the first three quarters in 2012 amounted to 14,405 tonnes, as per MRC analysts. After the launch of new production of polystyrene in the CIS the offer of feedstock for the Ukrainian producer of polystyrene decreased. This affected significantly the production volumes of "Stirol". However, over the three quarters of 2012 the production volumes of the plant made 14,405 tonnes of material, down only 3% year on year. In 2012, the structure of polystyrene production in Ukraine changed. Share of GPPS in total Ukrainian production rose from 30% in 2011 to 42% in 2012. Such a change was resulted from the significant increase in demand for Ukrainian material from Russian converters.

12. Russian makers reduce LDPE prices.

Expectedly, there was a slight drop in prices in October in the Russian LDPE market. Seasonal decline in demand and low volumes of export, despite incomplete capacity utilization at some facilities, made Russian makers reduce prices for the domestic market, report MRC analysts. Over the past eight months of the year, the total LDPE volume in Russia made about 408,100 tonnes. LDPE imports made about 88,500 tonnes while exports slashed to 103,000 tonnes.

13. PET prices in Kazakhstan to rise by Tenge 2,250/tonne in October.

The growth of the cost of import PET in China makes traders raise prices of the material for the domestic market of Kazakhstan. In October, Kazakh traders are going to increase PET price offers on average by Tenge 2,250/tonne, report MRC analysts. This week, price offers of the material in the spot market made Tenge 312,000-315,000/tonne, CPT Almaty, including VAT. By mid-month, local traders plan to increase Asian PET prices up to the level of Tenge 312,000-319,500/tonne, CPT Almaty, including VAT. In the first week of October, sources reported that demand in the domestic market of Kazakhstan is going down due to a seasonal factor. According to market players, by the end of September, consumers’ buying activity had dropped by about 50% from August. Therefore, the sales of the polymer also declined.
MRC

(plastemart) -- Indian Oil Corp cuts its polymer prices for the domestic market with effect from October 8, 2012, as follows:

- all grades of HDPE (except LBM) and LLDPE to reduce by Rs 2500/tonne;

- all grades of polypropylene and LBM to reduce by Rs 3000/tonne.

Besides, price protection has been withdrawn in PE/PP grades.

Indian Oil Corporation Ltd. is India's largest company by sales with a turnover of Rs. 4,09,957 crore (USD 85,550 million) and profit of Rs. 3,955 crore (USD 825 million) for the year 2011-12. IndianOil is focussing on strengthening its petrochemicals business by venturing into downstream polymer units, the production of which includes ethylene, PP, HDPE, LLDPE.
MRC

(cnpc) -- The newly built 600,000 tpa ethylene unit at Daqing Petrochemical has successfully commenced production. After the expansion and upgrading, Daqing Petrochemical will have an annual ethylene productivity of 1.2 million tonnes, which serves as a strategic step forward for CNPC to optimize its portfolio of refining and petrochemical operations and improve business sustainability.

China National Petroleum Corporation (CNPC) is an integrated international energy company. Refining and producing chemicals are among main company's businesses. The company process over 144 million tonness of crude and produce nearly 3.47 million tonnes of ethylene.
MRC

(Platts) -- The European petrochemicals market is unlikely to suffer from severe declines in the fourth quarter of 2012 despite the continuing weakness in demand, Tom Crotty, Ineos group director, told during the European Petrochemical Association Conference in Budapest.

In an interview, Crotty, who is also president of the EPCA, said the Q4 market will continue to be difficult as consumer confidence remained "pretty ropey" on the back of the weak macroeconomic environment in Europe.

"But it's not going to be Armageddon. If it was, it would have happened already," Crotty said.

Crotty expects the rest of the year to be "slow and steady," noting that he does not envisage a "hard bump landing" following the unexpected rebound in the third quarter, fueled mainly by stock replenishment after prices plunged in Q2 in line with the fall in the upstream energy prices.

As for 2013, visibility is unclear, he said, but added that "depressed" demand, on continuing economic uncertainty, and feedstock pricing volatility will likely remain key features of the market in the first quarter.

One of the leading olefins and polyolefins producers in Europe, Ineos has steam crackers in Grangemouth in the UK, Rafnes in Norway and Cologne in Germany with a combined capacity of over 2.5 million mt/year. It also owns a 50% stake in the Naphtachimie joint venture which runs the 740,000 mt/year Lavera cracker in France. The other 50% is held by Total Petrochemicals. The company also produces polyethylene, polypropylene and other derivatives at its European sites.

MRC