Russia to sell Rosneft stock in $59 billion plan to cut deficit

(Bloomberg) -- Russia plans to sell as much as 15 percent of OAO Rosneft, its biggest oil producer, as the government seeks to raise 1.8 trillion rubles ($59 billion) in asset sales in the next five years to help balance the budget.

Prime Minister Vladimir Putin's government approved the plan to sell stakes in about 900 companies, including lenders OAO Sberbank and VTB Group, First Deputy Prime Minister Igor Shuvalov said late yesterday.

The government will use some of the revenue to narrow its budget gap to 1.8 trillion rubles, or 3.6 percent of gross domestic product, in 2011 from an estimated 5.3 percent this year. Russia had a shortfall of 5.9 percent last year, its first deficit in a decade, after the economy posted its biggest contraction on record. Putin said Oct. 5 that the country will balance the budget by 2015.

The Finance Ministry in July proposed selling minority stakes in 10 companies, including Rosneft, Sberbank and VTB, as part of a three-year privatization plan.

MRC

During January-September 2010 72 KT of EPS were supplied to the Russian market which was 30% more compared to the same period last year. EPS import deliveries in September for the first time reached the volume of 15 KT which was 13,2% more compared to the previous month deliveries.

EPS deliveries to Russia are done mostly from China and South Korea whose share in total volume of deliveries for the nine months of 2010 made up 42,2% and 35,9% respectively. In September EPS deliveries from South Korea for the first time since May 2008 exceeded the level of 6 KT, having increased the deliveries volumes by 54,8% compared to August.

For more detailed information on the Russian polystyrene market, see DataScope Report.

MRC

(Bloomberg) -- Profits from making ethylene may be capped in Asia next year after Chinese production jumped to the highest level in eight months.

The net return from producing ethylene by putting naphtha through a cracker is $150 a metric ton, according to Chemical Markets Associates Inc. It was $250 a ton in July, after a fire at Formosa Petrochemical Corp.'s No.1 cracker in Taiwan reduced supplies. The profit may drop to $100 by January as new plants in Asia ramp up utilization rates.

China, the world's second-biggest crude consumer, is buying less ethylene as it boosts domestic production after a 42 percent jump in oil-refining capacity in five years. Manufacturers in South Korea and Taiwan count on China to buy 80 percent of their ethylene-based exports.

⌠There's still supply pressure from new crackers, said Suppata Srisuk, an analyst at Bualuang Securities Pcl. ⌠Most of the crackers in Korea and Japan will be the first group to shut down if the ethylene spread gets too low.

MRC

(Plastemart) --Indian polymer producers have announced price reductions in polypropylene (PP) and polyethylene (PE), as imports grow amid low domestic demand. Demand is low because during the festive season of Diwali, converters run plants at reduced capacity.

This trend is contrary to the rising petrochemical prices globally. In the global markets, as crude oil prices rise, polypropylene (PP) price has risen by US$30, and polyethylene (PE) prices have gone up by US$50 compared to previous month's price amid supply constraints caused by maintenance shutdowns. This is the first time since May that prices have been reduced in India by producers.

Uptil now, Indian polymer producers kept prices very high despite falling crude and global polymer price. Even with the current price reductions, polymer prices in India are still not at par with global levels. As newer capacities come onstream in India, pricing of polymers will be critical. The Indian market is slightly oversupplied due to expected added capacities and rise in imports as other regions face dwindling demand.

MRC

(Plastemart) -- About 500,000 people are on strike across France to protest draft legislation in parliament. This strike is in addition to the ongoing strike by oil refinery workers opposed to the pension reforms that is contributing to fuel shortages across the country.

11 refineries in France have halted operations or reduced output, fuel is out of supply in thousands of gasoline stations in France because strikers are blocking deliveries, and gas prices have propelled because of panic buying.

These strikes are having repercussions beyond France's borders. Analysts say that if the strikes continue, fuel shortage might push prices up across Europe in the coming months.

MRC