Karpatneftekhim restarted production of HDPE after a long-term forced suspension

MOSCOW (MRC) -- The largest Ukrainian polymers producer Karpatneftekhim (LUKOIL Group) is increasing production volumes, MRC analysts inform. On 10 September 2013, Karpatneftekhim restarted production of high-density polyethylene (HDPE) after a long-term forced suspension. Production has been launched on the basis of import ethylene by TVK, Hungary. In September the enterprise plans to produce about 4,5 thous. tons of HDPE. Production is planned to be increased up to 6 thous. tons in October. Since 1 October 2013, PE is planned to be sold within UAH17400-17900 per tonne, VAT included, FCA Каlush.

As customers inform, Karpatneftekhim will test a new strategy of direct sales only to final customers. At the same time, besides production modernization, Karpatneftekhim needs the state protection, as well. This April Ukraine's government and LUKOIL singed the Memorandum where the main statements for improvement of Karpatneftekhim economy have been described. For the increase of HDPE production, the Ukrainian producer plans to get a support from Ukraine's government in imposition of 6,5% imports duty, as well as setting of indicative prices for import HDPE at the level of European quotes that allows to avoid "grey imports".

Karpatneftekhim (Каlush, Ivano-Frankovsk region) is a subsidiary of LUKOIL, the largest polymers producer in Ukraine. Its capacities allow to produce 300 thous. tons of ethylene, 100 thous. tons of HDPE, 180 thous. tons of caustic and 300 thous. tons of PVC annually.

MRC

MOSCOW (MRC) -- In August imports supplies of PET to Russia went up by 2% in comparison to July and made 15,8 thous. tons, according to ScanPlast.

Imports of PET in August rose on the back of force-majeure at Senezh (Solnechnogorsk). Suspension for unscheduled maintenance works forced the company increase import supplies of Korean bottle PET for provision of current obligations to consumers.

Despite increased imports of the Korean product, Chinese producers take leading positions in the structure of supplies. Overall imports of Chinese PET made 8,4 thous. tons. The largest volumes of supplies fell at HY-W01 (by Shanghai Hengyi Polyester) and made nearly 3 thous. tons.

Overall imports of PET to Russia in January-August made 121,8 thous. tons. Comparing to January-August 2012, imports reduced by 10% (in January-August 2012 - nearly 136 thous. tons). In general, this year the tendency of imports substitution by Russian brands has been kept.

MRC

MOSCOW (MRC) -- In the second half of September prices for low-density polyethylene (LDPE) in the Russian market went up. Mainly the price growth was caused by suspension of capacities in Kazan and Ufa, as ICIS-MRC Price report says. In the second half of September , the prices in the Russian LDPE market unexpectedly started to grow. Short-term scheduled suspensions at Ufaorgsyntez and Kazanorgsyntez resulted in the lack of PE in the market and, as a result, growth of prices. By the end of the month the prices for 108 LDPE exceeded Rb60,000 per tonne, VAT included, СРТ Moscow.

Since 16 September, Ufaorgsyntez has suspended the second LDPE line for 5-days scheduled maintenance. By the beginning of this week PE production had been renewed, though capacities loading is lowered because of the temporary lack of the feedstock.

Since 21 September Kazanorgsyntez forcedly suspended LDPE capacities for 5 days because of the maintenance of
ethylene production.

Despite such short-term suspensions of LDPE production, the Russian market has faced a seriuos lack of PE. The largest deficit is in the market of 108 LDPE. Kazanorgsyntez and Ufaorgsyntez offers for the supplies of this polymer had grown to Rb60,000-61,000/tonne, VAT included, СРТ Moscow, by the late September. The offers for 108 LDPE from Angarsk are within Rb57,700-58,000/tonne, VAT included, FCA Аngarsk.

The deficit in the market of 158 LDPE is not that significant. The offers for supplies of 158 LDPE by Russian producers are within Rb58,500-61,000/tonne, VAT included, СРТ Moscow.

There is no lack of offers in LDPE market of shrinkable films. Bad weather conditions had a strong effect on demand for finished goods. By the end of the week the offers for supplies of 153 LDPE have been fixed within Rb61,500-62,500/tonne, VAT included, СРТ Moscow.

MRC

MOSCOW (MRC) -- Demand for polyolefins in the Belarusian market keeps on growing. Import supplies of PE and PP over the eight months grew by 3% compared to the same period in 2012, MRC analysts say.

Over the seven months, external supplies of polyolefins (PE and PP) to Belarus exceeded 110 thous. tons against 107,3 thous. tons in 2012. The imports growth was mainly stipulated by high-density polyethylene (HDPE).

External supplies of HDPE over the analyzed period made about 36,8 thous. tons against 27,8 thous. tons a year earlier. Russian producers are the leaders in HDPE supplies to Belarus - over 19 thous. tons.

Imports of LDPE and LLDPE in January-July 2013 reduced to 26,4 thous. tons against 32,9 thous. tons in 2012. The leading positions in the external supplies belong to producers from Saudi Arabia (nearly 14,8 thous. tons).

External supplies of PP grew insignificantly and equaled 46,9 thous. tons against 46,6 thous. tons in 2012. This year imports of propylene homopolymer (PP-homo) went up to 34,4 thous. tons (33,8 thous. tons last year) while supplies of propylene copolymers, on the contrary, reduced by 3% to 12,5 thous. tons.

MRC

MOSCOW (MRC) -- Stavrolen (Lukoil Group) Ставролен suspended production of polyethylene (PE) and polypropylene (PP), MRC analysts say.

On 26 September, Stavrolen suspended ethylene production for scheduled maintenance. The works are scheduled for 2 days. Ethylene complex will restart its work on 28 September. On the back of the suspension of the ethylene complex, output of high-density polyethylene (HDPE) and PP have been suspended.

Annual capacity of HDPE and PP at Stavrolen makes 300 thous. tons and 120 thous. tons correspondingly. Over the eight months total production of PE made about 205 thous. tons, PP - 85 thous. tons.

MRC