Russian DOP rose by Rb80,500/tonne in the spot market

MOSCOW (MRC) -- By late May, a price rise of feedstocks and limited supply had led to a major increase in the price of dioctyl phthalate plasticizer (DOP) in the Russian market - by as much as Rb80,500/tonne, according to MRC analysts.

Some market participants do not rule out further price increases.

In late April, Gazprom neftekhim Salavat shut its DOP plasticizer production for a turnaround. In May, the price of one of the feedstocks for DOP production - 2-ethylhexanol - increased by Rb7,000/tonne from April. All these factors have resulted in a serious increase in the price of DOP plasticizer in the Russian market.

By late May, spot prices for Russian DOP plasticizer had reached Rb79,000-80,500/tonne, including VAT and delivery. The limited supply of Russian plasticizer made some companies actively buy imported material. Deals for June shipments of Korean DOP were concluded in the range of Rb81,000-82,000/tonne, including VAT and delivery.

According to unofficial information, one of the Russian producers of alcohol DEG is planning to raise the price for June shipments by Rb7,000/tonne, which will result in an increase in DOP production costs by Rb5,000/tonne.

Many market participants are skeptical about further price increases of the plasticizer. On the one hand, after a monthly turnaround, Gazprom neftekhim Salavat is already planning first shipments of DOP next week, which should take the pressure off the market. On the other hand, the price of Russian DOP has already caught up with the price of imported alternative material, and the further growth of the Russian material will provoke a major increase in imports.
MRC

MOSCOW (MRC) -- A three-fold increase in the excise duty on beer will hit the largest consumption market of PET granulate and adveserly affect the production of PET preforms in the country, according to MRC analysts.

As reported previously, Ukraine's Ministry of Income proposes to increase the rates of the excise duty on beer almost three-fold - from UAH0.87/liter to UAH2.43/liter. This innovation is provided for by the draft law "On Amendments to the Tax Code and other legislative acts."

According to MRC analytics, more than 50% of beer produced in Ukraine are poured in PET bottles. According to the State Statistics Service of Ukraine, in 2012, the country produced 300.5 mln decaliters of beer. Given this index, the share of the beer market accounts for more than 90,000 tonnes of recycled PET granulate in the country. This is equivalent to more than 55% of PET market capacity in Ukraine.

As per Russia's experience, a rapid increase in excise duties on beer will reduce the consumption of the product and market stagnation. The other day, Carlsberg Ukraine's CEO Pyotr Chernyshev also said in his interview to Interfax that in the case of increase in the excise duty on beer in Ukraine, Carlsberg do not rule out the possibility of closing one of the plants in Ukraine.
MRC

MOSCOW (MRC) -- French oil giant Total SA has approved a EUR1 billion (USD1.29 billion) project to modernize its Antwerp refining and petrochemical platform, the company's largest in Europe, according to The Wall Street Journal.

Last September Total first announced its plans of the said investment into its Belgian refining and petrochemical complex to boost its diesel-making capacity and create cost-cutting synergies. This investment could bring Europe's largest refiner extra cash of USD500 mln a year.

"With this investment, Total is demonstrating not only its commitment to maintaining its position as a competitive industry leader in Europe, but also its ability to adapt to market trends by reducing its production capacities and emphasizing higher value-added products that meet the most stringent environmental standards," said Patrick Pouyanne, president of the Total Refining & Chemicals division.

Total said that two major projects will be implemented at its Antwerp facilities: a new refinery upgrading complex--including a solvent de-asphalting unit and a mild hydrocracking unit--and a plant to convert low-value refinery fuel gases into low-cost petrochemical feedstock.

We remind that, as MRC reported earlier, last week Total SA Thursday was awarded ten exploration licenses on several blocks in Brazil, during the country's 11th oil and gas exploration auctions. The announcement is consistent with the group's strategy of looking for oil and gas in risky areas such as deep offshore sites, as in Brazil.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading. Total is also a large-scale chemicals manufacturer.
MRC

MOSCOW (MRC) -- Dow Chemical is interested in shale gas exploration in Poland along with its perspectives and, therefore, is analyzing the chemical industry in Poland at present, reported the company on its site.

As a major chemical manufacturer, Dow is both a potential consumer and contributor to the production of shale gas and its associated products, notably natural gas liquids. Many of Dow's businesses are already developing chemical and technology solutions for shale gas exploration and development, such as advanced microbial control technologies, which help to protect water supplies.

"Dow has been present in Poland for four decades. We have witnessed, supported and participated in this country’s development and growth," said Christoph Sikora, Dow general manager in Central Europe. "Poland is in the forefront of European nations seeking to commercialize the extraction of shale gas and this is another milestone for the country and many industries. The size of Poland’s economy and its position in the region can produce numerous benefits from a well managed and responsible commercial shale gas program," Sikora concluded.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber. In 2012, Dow had annual sales of approximately USD57 billion. The company's more than 5,000 products are manufactured at 188 sites in 36 countries across the globe. Dow has been present in Poland for 40 years, offering a variety of performance and base plastics and chemicals for a wide range of downstream industries including automotive, oil and gas, packaging, building and construction, furniture, wire and cable, large appliances, water treatment and agricultural products.
MRC

MOSCOW (MRC) -- BASF has signed a contract to sell its subsidiary Industrial Water Management France SAS based in Lyon, France to Degremont, the world water treatment specialist for local authorities and industrial customers, according to the company's statement.

Degremont, a subsidiary of SUEZ ENVIRONNEMENT, will continue operations at the production sites in Lyon and La Courneuve, France. Closing of the transaction is expected to take place during the third quarter 2013.

BASF provides a comprehensive range of water treatment chemicals and filtration technology for the industrial and municipal waste water treatment sector. In future, BASF’s water solutions business will fully concentrate on these innovative offerings for the water industry. To this end, BASF previously announced the plan to divest its service-oriented industrial water management business to a strategic partner to further expand the business.

We remind that, as MRC wrote previously, in late April 2013, Jacobs Engineering Group received a frame agreement from BASF to provide engineering services at BASF’s integrated chemicals complex in Antwerp, Belgium. The Antwerp site is BASF’s second-largest Verbund site; it comprises more than 50 installations located on over two square miles.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC