Ufaorgsintez raised contract polypropylene prices

MOSCOW (MRC) -- Ufaorgsintez has announced an increase in contract polypropylene (PP) prices by Rb550-2,000/tonne amid strong demand and tight supply, according to ICIS-MRC Price report.

Ufaorgsintez said it will raise contract PP prices from 16 September by Rb550-1,000/tonne for homopolymer of propylene (homopolymer PP) and by Rb2,000/tonne for block-copolymer of propylene (PP-impact). The growth in contract prices was driven by strong demand and tight supply of polypropylene.

The capacity utilisation at Ufaorgsintez PP production was reduced by 20% in the first half of September because of the lack of hydrocarbons. A strong seasonal demand for polypropylene, particularly, raffia, led to an almost complete lack of stocks, given low operational rates at the plant.

OAO Ufaorgsintez manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, poly vinyl chloride and polyethylene items, thinners, and dilutants. The company exports its products to Byelorussia, Kazakhstan, Finland, Germany, France, and Brazil. Ufaorgsintez was founded in 1956 and is based in Ufa, Russia. As of January 22, 2010, Ufaorgsintez OAO operates as a subsidiary of Bashneft Joint Stock Oil Company.
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MOSCOW (MRC) -- Heritage's main raw material, polyethylene, is derived from natural gas. As the US ramps up production of gas released from underground shale formations, output of polyethylene is expected to soar too, creating the potential for lower prices, according to Hydrocarbonprocessing with reference to Dow Jones Newswires.

"I think it's our duty to use this gift of shale gas to rebuild our industrial infrastructure," says Jim Morris, a bluff Texan who serves as chief operating officer of privately owned Heritage Bag Co., which makes plastic trash bags.

There's just one problem: Heritage and other US users of polyethylene -- makers of plastic bags, toys, housewares and myriad other items -- aren't benefiting yet. They may not benefit for years and can't be sure it will fundamentally change the economics of their businesses.

The price of polyethylene in the US has generally risen over the past few years. Polyethylene makers, such as ExxonMobil and Dow Chemical, are enjoying lower costs because higher natural gas production increases the supply of ethane, a component of natural gas used to make polyethylene. Instead of passing on lower costs to their customers, however, they are reporting fatter profit margins.

First-half earnings before interest, tax, depreciation and amortization in Dow's performance plastics division, which makes polyethylene, were up 33% from a year earlier.

Mr. Morris argues that Dow and other chemical makers should try to ensure that the shale boom will lead to more US output of finished plastic goods, such as the trash bags made by Heritage, rather than just more exports of polyethylene to his overseas rivals.

In recent years, polyethylene prices have been higher in the US than in Asia, where big chemical companies from both the Middle East and the US battle for market share. Mr. Morris would like a promise from Dow and other polyethylene makers that their customers in the US won't have to pay more than customers in other parts of the world. So far, he hasn't received such pledges.

A Dow spokeswoman declined to comment on Mr. Morris's suggestion but said the shale boom is "a once-in-a-lifetime chance for the US to regain its competitiveness in manufacturing."

Polyethylene accounts for around 70% of the cost of making a plastic bag; the other main costs include labor and electricity.

Heritage and other US users of polyethylene eventually will get lower prices, once new production capacity is completed in 2016 and beyond, predicts Nick Vafiadis, a senior research director at IHS.

Dow, Royal Dutch Shell and others plan to spend billions of dollars to expand US production of petrochemicals, including polyethylene. Mr. Vafiadis forecasts that US polyethylene capacity will rise more than 30% by 2018 and nearly 60% by 2023.

Most of that increased production will be exported, Mr. Vafiadis believes, but he expects US buyers like Heritage will benefit too.

The US is already a big exporter of polyethylene and other resins, made from oil or natural gas, but has a large trade deficit on plastic products, such as bags and packaging film, made out of those resins. The deficit totaled USD2 billion in this year's first half.

Heritage, based in Carrollton, Texas, has annual sales of more than USD400 million and bills itself as one of the world's largest makers of plastic trash bags used by restaurants, stadiums and other institutional customers. With six plants scattered around the US, Heritage employs about 750 people.

As MRC reported earlier, the ongoing shale revolution will guide the US ethylene industry surge in the near future, growing by more than a third by 2017, according to a new report from business intelligence group GlobalData. Besides, last year, Dow Chemical, Formosa Plastics, Chevron Phillips Chemical, ExxonMobil and Nova Chemicals unveiled their expansion plans in North America on shale gas deposits in the Marcellus Shale Formation in New York, Pennsylvania, Ohio as well as a favourable gas price.
MRC

MOSCOW (MRC) -- Henkel has inaugurated the world’s largest adhesives factory in Shanghai, China. With this new production facility the company says it is expanding its production capacity in a major emerging market and will deliver its adhesive technologies more quickly to the growing number of customers based in China and the Asian region, as per GV.

The new factory comprises 150,000 square meters of space and is now the central production site for the company's industrial adhesives in China and the Asia-Pacific region.

Customers being served by the new adhesives plant include enterprises in the automotive industry and various consumer goods sectors. Annual output is forecast to reach up to 428,000 t of adhesives. Henkel has invested more than EUR50 million in the plant and will employ about 600 people there.

"This new adhesives factory will contribute significantly to the achievement of our strategy 2016: It will enable our Adhesives business to expand and leverage its global reach, and win market share in emerging markets," said Kasper Rorsted, Chairman of the Management Board of the Henkel Group.

According to Henkel, the company is already generating 45 % of its total sales in emerging markets and 55 % of its employees are based in these countries. One of Henkel’s financial targets for the year 2016 is to increase the sales generated in emerging markets to EUR 10 billion while aiming for total sales of EUR 20 billion.

As a supplier to many different industries, Henkel already opened its first production facility in China back in 1990, just two years after entering the market. From that first factory the company served industrial customers who had begun at this early stage to establish their own manufacturing operations in China. Ever since then, Henkel has continued to produce adhesives in this East Asian country with constantly rising sales.

As MRC reported earlier, Altana, specializing in the production of materials for the automotive and other industries, has recently acquired the business of special coatings from Henkel Group.
MRC

MOSCOW (MRC) -- The Hamburg-based German company Velox GmbH will be the preferred distributor for the ABS/SAN-based modifier product range from Spanish company Elix Polymers, S. L., Tarragona, and licensed distributor in Germany, France, Italy, Austria, as well as Switzerland, reported GV.

The modifier range offers various advantages, including improved impact resistance for PC, PBT, PVC and SMA blends, increased mechanical properties of ABS and PC/ABS, improved flow and dimensional stability, superior heat distortion and thermoformability to opaque PVC as well as ABS compounds, as anti-dripping additive for flame retardant ABS, PC/ABS, and HIPS, as intermediate for the production of polymer blends, and as base resin for colour concentrates (ABS, SAN, PVC, PC).

Furthermore, Velox has signed a distribution partnership with the US company FRX Polymers for its Nofia polymeric phosphorus-based flame retardant solutions for PC, PC/ABS, PU, TPU, polyester as well as unsaturated polyester and epoxy resins. Nofia homopolymers, copolymers, and oligomers are non-migrating, halogen-free polymers that are transparent, have outstanding flame retardant properties, and a high melt flow. The products will be distributed by Velox in the UK, France, Scandinavia, Italy, Spain, and Portugal.

We remind that as MRC informed previously, in March 2013, Arkema appointed Velox, as its exclusive distributor for the medical business development in Europe. Besides, in June, Styron Europe, the global materials company and manufacturer of plastics, latex and rubber, appointed Velox, as the European distributor for medical product offerings from Styron. Velox, a supplier and marketer of raw materials specialties will represent products for Styron medical applications, including CALIBRE MEGARAD polycarbonate resins and MAGNUM ABS Resins.
MRC

MOSCOW (MRC) -- Polymers and high-performance plastic maker Bayer MaterialScience has just announced the debottlenecking of its MDI production facility at the Bayer Integrated Site Shanghai (BISS) in Caojing, Shanghai, according to GV.

The production capacity of the current facility will increase from 350,000 t/y to 500,000 t/y by mid-2014.

"MDI is an important raw material for the production of polyurethane rigid foam, which is an effective insulation material for buildings and refrigerators. The debottlenecking will allow the company to further expand its business in China, which is one of the largest markets in the world for Bayer MaterialScience," said Wolfgang Miebach, President of Bayer MaterialScience China.

We remind that, as MRC wrote previously, last year, Bayer MaterialScience (BMS) bought the polycarbonate sheet business of Arkema Inc., the U.S. subsidiary of the French firm Arkema Group. The transaction included the acquisition of Arkema’s Tuffak brand, which is used in such markets as aerospace, transportation and heavy equipment.

Headquartered in Pittsburgh, Pa., BMS is part of the global Bayer MaterialScience business with approximately 14,800 employees at 30 production sites around the world. The company’s 2011 sales in North America were USD2.9 billion.
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