Russian PP increased by Rb2,000-3,000/tonne in mid-October

MOSCOW (MRC) - Polypropylene (PP) prices in Russia rose by Rb2,000-3, 000/tonne on the back of stronger demand and maintenance works at the plants, according to ICIS-MRC Price Report.

In the first half of this year, Russian PP market was a surplus, and the launch of two new production facilities with total capacity of 680,000 tonnes could only exacerbate the situation in the market. However, since July, the market situation has changed dramatically with the demand growing significantly.

In addition, scheduled and unscheduled maintenance works in September of three producers led to a serious lack of PP in the market, which triggered price rise.

The shortage began to be felt in mid-July, when Tomskneftekhim (SIBUR) stopped its capacities for three-week turnaround. The tight supply of PP from the producer made a lot of market participants form additional stock inventories, which was a rare thing before that.

Tomskneftekhim restarted its PP production a week later from the announced date due to the problems with feedstock.

Polyom (Omsk) planned to go for a turnaround in early September, which also put additional pressure on the PP market.

Lots of Russian producers sold all their PP quotas for September in the first two weeks; converters amid tight supply were buying PP in the stock. Some producers finished shipping September contract PP volumes in the beginning of October.

Polyom instead of two weeks turnaround stood idle a month because of the feedstock shortage.

Two other PP producers also had to suspend PP production in the late September; Stavrolen - because of the technical problems in the production of ethylene and Ufaorgsintez due to the lack of the feedstock.

All these events resulted in the increased shortage of PP in the Russian market and a further price rise. By mid-October raffia prices rose to Rb60,000-62,500/tonne CPT Moscow, including VAT. Deals for injection moulding homopolymer PP were in the range of Rb63 000-66 000/tonne CPT Moscow, including VAT.

As in September, lots of Russian producers have already sold all of their monthly volumes of polypropylene.
MRC

MOSCOW (MRC) - Russian producers increased their production of polyvinyl chloride (PVC) by 3% in the nine months of this year, despite a complete shutdown at the site of SIBUR, according to MRC ScanPlast.

September output of unmixed PVC (suspension and emulsion) in Russia exceeded the level of 51,000 tonnes. In general, Russian production of PVC totalled about 454,400 tonnes in January - August, against 442,500 tonnes in the same period of 2012.

The increase in production in Sayansk, Sterlitamak and Volgograd allowed to compensate a complete shutdown of the capacities at the site of SIBUR-Neftekhim in April of this year.

Production of suspension polyvinyl chloride (SPVC) exceeded the level of 442,000 tonnes in the nine months of this year, while in 2012 this figure was about 426,500 tonnes. Industry leader - SayanskKhimPlast increased its PVC production to 206,000 tonnes over the reported period with an increase of 7%. Bashkir Soda Company (formerly Kaustik (Sterlitamak)) improved its production to 155,700 tonnes against 144,000 year on year. KAUSTIK (Volgograd), traditionally shuts on the turnaround in April - May, but this year it shifted the maintenance works to September - October, as a result, its production of SPVC in January - September totalled more than 70,000 tonnes, from 63,300 tonnes year on year.


The only Russian producer of emulsion polyvinyl chloride (EPVC) - Khimprom (Volgograd) significantly worsened its output. Producer has decreased its production to 12,300 tonnes against 16,100 tonnes because of the emergency shutdown in mid-July (the roof cave-in in the workshop of vinyl chloride monomer production), and the deterioration of the equipment.

MRC

MOSCOW (MRC) -- Taiwan's government has officially lifted its ban on investment by the country's petrochemical sector in naphtha cracking facilities in China, reported Want China Times.

Certain restrictions still apply to such investment projects, however, including that one company is only allowed to take part in one project, according to revised regulations issued by the country's Ministry of Economic Affairs on Tuesday.

Also, the company must hold more than a 50% stake in the project or hold control over the operations of certain product lines, and must give priority to supplying Taiwan's domestic needs, the regulations stipulate.

Vice economics minister Duh Tyzz-jiun said allowing Taiwan's petrochemical companies to invest in China will help resolve a supply gap that is expected to appear after the country's fifth naphtha cracker - operated by state-run oil refinery CPC - is shut down in 2015 when its license expires.

Kuokuang Petrochemical Technology, a subsidiary of CPC, had previously planned to build a petrochemical complex in Changhua county, but the project was scrapped in 2011 over environmental concerns, forcing it to move the project to Malaysia.

Meanwhile, a consortium led by Ho Tung Petrochemical - another shareholder in the Kuokuang project - is planning to invest in a petrochemical complex in the Gulei Development Zone in southeastern China's Fujian province.

As MRC informed previously, analysts have said that Taiwan's downstream petrochemical companies might face a shortage of feedstock. Taiwan is a net importer of ethylene; it produced 3.47 million metric tons of ethylene in 2012 and imported around 348,000 metric tons of the product. Formosa Plastics Group, among the most active Taiwanese petrochemical firms investing in China, has flagged an interest to build ethylene plants in the provinces of Zhejiang and Fujian. The company currently produces petrochemical products, such as ethylene glycol and polyvinyl chloride, in its Ningbo petrochemical complex in Zhejiang province.
MRC

MOSCOW (MRC) -- In order to enhance sustainability within the supply chain the chemical companies BASF, Bayer, Evonik Industries, Henkel, LANXESS and Solvay joined forces in the Together for Sustainability (TfS) initiative, said Solvay in its press release.

The TfS initiative has successfully concluded its first year of piloting sustainability assessments and audits in global supply chains. TfS aims at developing and implementing a global supplier engagement program that assesses and improves sustainability sourcing practices, including ecological and social aspects.

Participating suppliers will now only have to complete one form instead of multiple questionnaires with the relevant sustainability information provided to all participating buyers who would otherwise need separate sustainability assessment or audits from these suppliers. The initiative is based on good practices and builds on established principles – such as the United Nations Global Compact (UNGC) and the Responsible Care Global Charter as well as standards developed by the International Labor Organization (ILO), the International Organization for Standardization (ISO), Social Accountability International (SAI) and others.

During the initiative’s pilot phase, TfS members have initiated about 2,000 assessments and audits. In the next phase of implementation, which draws on the learnings from the successful pilot phase, TfS will increase its activities to further procurement markets and will look to continue growing by onboarding new members.

As MRC wrote before, Solvay SA agreed to buy U.S.-based Chemlogics for USD1.35 billion in cash to expand its offering of chemicals for the oil and gas industry. The Belgian chemical maker is paying 10.7 times earnings before interest, taxes, depreciation and amortization for the business, which generated about USD500 million in annual sales, it said today in a statement. The Brussels-based company will issue about EUR1 billion (USD1.35 billion) in hybrid bonds to support finances.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers – fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.
MRC

MOSCOW (MRC) -- Tosoh Corp. said it will examine and prepare the company for a merger with its wholly-owned subsidiary Nippon Polyurethane Industry Co. (NPU), subsequently dissolving the NPU subsidiary upon completion of the merger, according to Apic-online.

Tosoh's Nanyo complex currently supplies utilities and isocyanate raw materials to NPU, and NPU in turn supplies hydrogen chloride to Tosoh as a raw material for vinyl chloride monomer.

"Recovering and utilizing resources has raised operational competitiveness at NPU and Tosoh, and the merger will increase it further," Tosoh noted.

Subject to shareholder's approval, the merger took effect on 1 October, 2014, and consolidate the two companies' synergies under a single management base for "better, more flexible responses to a changing isocyanate operating environment," Tosoh explained.

As MRC informed previously, Tosoh Corporation has recently announced it will construct a plant to produce Rzeta, the company’s new emission-free reactive amine catalyst for polyurethane foams. The plant will be built on the grounds of the ethyleneamine production facilities at the Nanyo complex for an estimated investment of JPY 2 billion (about EUR 15.3 million). Construction of the Rzeta plant began in September 2013 and is expected to be completed by November 2014. Rzeta-produced PU foams are used in proximity to other resins, such as polyvinyl chloride (PVC) and polycarbonates.

Tosoh is one of the largest chlor-alkali manufacturers in Asia. The company supplies the plastic resins and an array of the basic chemicals that support modern life. Tosoh's petrochemical operations supply ethylene, polymers, and polyethylene.
MRC