PP imports to Russia dropped by 22% in January-September 2013

MOSCOW (MRC) -- The launch of two new plants in Omsk and Tobolsk has reduced the dependence of the Russian polypropylene (PP) market from imports. Imports of propylene polymers fell by 22% in January-September 2013, according to MRC DataScope.

The start-up of the two new plants in Omsk and Tobolsk with the annual capacity of 180,000 tonnes and 500,000 tonnes, respectively (without launching the propane dehydrogenation unit), this year has reduced the dependence of the Russian market from imports. Imports of propylene polymers in the first nine months of 2013 dropped to 162,700 tonnes from 209,500 tonnes a year earlier. Homopolymer of propylene (homopolymer PP) and statistical copolymer of polypropylene (PP-random) accounted for the main decrease in imports.

In the structure of supply by PP grades, the situation was, as follows:

Imports of homopolymer PP in January-September 2013 dropped to 64,300 tonnes from 110,100 tonnes in 2012. Imports of homopolymer PP fell from all regions, with Europe accounting for the largest decrease in PP shipments.

Import of block copolymers of propylene (PP-impact) in the first nine months of the year reached about 43,000 tonnes, while a year earlier it was 38,200 tonnes. Imports of PP-impact for the production of pressure pipes and PP compositions (PP compound) for the automotive industry grew significanlty.

Imports of PP-random decreased by 24% to around 27,300 tonnes. Reduced imports were registeres in all consumption sectors, injection moulding and pipe grades of PP-random accounted for the largest decrease.

Import of other copolymers of propylene in January-September 2013 totalled about 28,000 tonnes.

MRC

MOSCOW (MRC) -- Russian President Vladimir Putin has dealt a potential blow to minority shareholders in TNK-BP after saying state oil giant Rosneft should only pay market rate to buy them out, reported Upstreamonline.

Rosneft said in late September it was intent on buying the remaining shares in compatriot oil producer TNK-BP that it did not acquire following its USD55 billion purchase of shares from UK supermajor and a consortium of Russian businessmen.

Rosneft president Igor Sechin indicated that the company would be willing to pay a premium of between 20% and 30% for the remaining shares, totalling around 5% of TNK-BP.

The oil behemoth set a price of 67 Russian rubles (USD2.06) per ordinary share and 55 rubles per preferred share.

Speaking at the opening of a Rosneft refinery in the Black Sea port city of Tuapse, Putin said: "The valuation and payouts should be carried out for those who wish to sell not at peak levels but today's market price.

"That should be the basis. No one should be deceived or robbed,” Reuters quoted the president as saying.

As MRC informed previously, in June, Rosneft said it could buy the minority stakes but would be paying less than the takeover price. Sechin has held talks in recent weeks with the minority shareholders, who had indicated earlier this year they could go to court over the issue.
MRC

MOSCOW (MRC) -- INEOS was extremely disappointed at the lack of progress at Monday's ACAS meeting following Unite's refusal to engage in any discussions about protecting North Sea oil flows and fuels for Scotland, reported the company on its site.

The company was also extremely disappointed that the Unite delegation insisted on including Stephen Deans, who is himself the subject of the dispute, in its list of attendees. It is completely inappropriate that Mr Deans should be part of these talks.

Nonetheless, INEOS is determined to do all it can to ensure these discussions have a positive outcome and of the talks.

Calum MacLean Grangemouth Petrochemicals (UK) Chairman who will lead today's talks at ACAS, said, "We came to ACAS in good faith and remain determined to resolve the issues facing us if at all possible. Unfortunately, Unite seems determined to insist on one rule for union officials and one rule for everyone else which is completely unacceptable to the company. It also seems determined to ignore the fact that a strike could destroy Grangemouth and cause significant damage to the whole of Scotland."

As MRC wrote previously, Ineos has invited the Unite union for talks in a bid to prevent workers at Ineos’s Grangemouth, United Kingdom operations from going on 48-hour strike on 20 October. These talks are intended to find a way to resolve the dispute over Stephen Deans, an employee representative on the site and to prevent strike action planned by the union. Ineos said it has started the process of taking the plants down in anticipation of the strike.

Ineos is considering closing its Grangemouth facility in what has been described by union representatives as a "shocking" attempt to browbeat the work. Company chairman Jim Ratcliffe described the plant as "expensive", citing "old-fashioned pensions" as a being a prime cause for concern. He was quoted as saying: "To have a future, it needs cheap feedstocks and a sensible cost structure. If we can’t resolve those issues it would need to shut down."

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- The rupee's steep slide, combined with strong petrochem margins, is likely to help energy-to-retail conglomerate Reliance Industries (RIL) offset the weakness in its refining margins and the decline in oil and gas production when it reports results for the July-September quarter, as per Financial Express.

Analysts on an average expect RIL to report a profit of R5,449 crore for the second quarter ended 30 September. In the same quarter last year, RIL earned R5,409 crore.

"We highlight that RIL is likely to benefit from the full impact of customs duty hike in polymers announced during May, as well as INR depreciation, resulting in margin expansion in its petchem business," analysts at Morgan Stanley wrote in a recent client note.

The government in May raised the import duty on polymer products to 7.5% from 5%. This was a major boost for RIL as polymers, which are used as a key input in sectors as diverse as automobiles, mining and steel, contribute 44% to RIL's petrochemicals revenue according to a report by Goldman Sachs. Revenue from the petrochemicals business accounts for around 24% of the company's total revenue.

Meanwhile, a weak rupee is also a major boost for RIL, which is responsible for about 14% of India's total exports according to the company's annual report.

As MRC wrote previously, Reliance Industries posted a better-than-expected net profit that was also its biggest in six quarters, helped by an increase in refining margin. Net profit for the fiscal fourth quarter ended on March 31 rose 32% to 55.89 billion rupees (USD1.03 billion) from 42.36 billion rupees a year earlier. Sales, however, fell 1.2% to 841.98 billion rupees from 851.82 billion rupees due to declining natural-gas production at its block off India's east coast.

Reliance Industries is one of the world's largest producers of polymers. The company's polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes. Reliance Industries is one of the world's largest producers of polymers.
MRC

MOSCOW (MRC) -- Brazilian imports of plastic resins rose 26% to USD1.39bn in the first half of 2013 from USD1.10bn in the same period last year, said Bnamericas.

There was a sharp increase in imports of polyethylene from the US, reflecting the renewed competitiveness of US chemical exports as a result of the use of feedstocks from shale gas.

In the same period, Brazilian resin exports fell 15.9% to USD914mn from USD1.08bn.

Based on data from the ministry of trade, Abiplast said that 25% of Brazil's imports, the highest share, came from Nafta excluding Mexico, 18% came from the Mercosur trade bloc, 16% from non-Mercosur countries in Latin America, and 10% from the European Union.

Of Brazil's resin exports, 33% went to Mercosur, 25% to the rest of Latin America and 16% to the EU.

Imports of low-density polyethylene (LDPE) rose 48% to USD109mn, with 38% of the imports originating in Nafta excluding Mexico.

Linear low-density polyethylene imports (LLDPE) were up 25% at US$281mn, 43% from Nafta excluding Mexico, and high-density polyethylene (HDPE) imports rose 35% to USD239mn, 47% from Nafta excluding Mexico.

Polyvinyl chloride (PVC) imports increased 19% to USD306mn, while imports of polyethylene terephthalate (PET) increased 39% to USD120mn, 65% of which came from Asia.

Polypropylene (PP) imports rose 11.9% to US$234mn, with the European Union supplying 15% of imports. Brazil's imports of polystyrene (PS) increased 28% in the first half of the year to USD30.6mn. Expanded polystyrene (EPS) imports were up 53% at USD44.4mn.

As MRC wrote before, Brazilian manufacturers and others that import thermoplastic resins will likely slow their buying until new, lower tariffs go into effect on 1 October. Brazilian Minister of Finance Guido Mantega announced on 1 August that the government will not renew an import tariff increase on 100 products, including polyethylene grades such as HDPE, LDPE and LLDPE.
MRC