Prices of North American PVC for CIS markets continue to grow

MOSCOW (MRC) -- Prices for North American polyvinyl chloride (PVC) continued to rise amid strong demand. Price offers for December shipments to the CIS countries exceeded USD1,000/tonne this week, according to ICIS-MRC Price report.

November- December is traditionally a period of an active growth of North American PVC prices. This year was no exception. Export US prices have been growing dynamically on the back of strong demand from Asian markets.

Prices for the CIS markets have already exceeded USD1,000/tonne. At the same time, some suppliers have already begun taking orders for February PVC shipments from the US. Thus, price offers for PVC shipments from the US in the second half of December started from USD1,020/tonne CFR St Petersburg and CIF Odessa this week. Some market participants said they had already managed to come to an agreement on December prices in October at USD950-980/tonne CFR St Petersburg.

There were also offers for January PVC shipments. They started from USD1,040/tonne, an average increase of USD20/tonne from December. Some suppliers (Shintech) have already begun receiving orders for February PVC shipments.
MRC

MOSCOW (MRC) -- Imports of polyethylene (PE) and polypropylene (PP) into Belarus decreased by 2% in the first nine months of 2013 to around 141,100 tonnes. The low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) markets accounted for the greatest drop in imports, reported MRC analysts.

PE and PP imports to Belarus fell to 81,000 tonnes and 60,200 tonnes, respectively, in January-September 2013 from 82,000 tonnes and 62,000 tonnes in the same period a year earlier. Demand for high density polyethylene (HDPE) grew significantly, whereas demand for LDPE and LLDPE fell by almost a quarter.

The structure of polyolefins imports looks the following way.

HDPE imports into Belarus increased to 47,700 tonnes in the first nine months of 2013 from 38,600 tonnes a year earlier. The main HDPE suppliers are Russian companies with their supply volume of about 25,000 tonnes over the said period. Sabic, a PE producer from Saudi Arabia, occupies the second place, with its supply volume of 9,200 tonnes.

LDPE and LLDPE imports in January-September this year fell by 23% year on year and totalled 33,300 tonnes. Sabic's PE accounted for main supplies (about 18,300 tonnes).

Demand for polypropylene dropped by 3% to 60,200 tonnes over the said period. Supplies of homopolymer of propylene (homopolymer PP) decreased to 43,900 tonnes from 46,100 tonnes a year earlier. The share of Russian producers accounted for about 53% of the total homopolymer PP shipments.

Imports of copolymers of propylene, on the contrary, rose to 16,300 tonnes this year from 15,800 tonnes in 2012. Key suppliers of copolymers of propylene to Belarus are German producers with their share of 74% of total imports.
MRC

MOSCOW (MRC) -- Bayer MaterialScience expands technology and production by investing in a new ultra-modern technical centre for polyurethane foams and new production plant for coating raw materials, reported GV.

With the latest equipment for product development and the expansion of its production capacity, materials manufacturer BMS has outfitted a technical centre for the advancement of premium foams with ultra-modern machines and systems. An additional production plant for coating raw materials has also come on stream to supply demand from another global growth market. The total investment in both is more than EUR 45 million.

Many challenges can be met with polyurethane foam, including the insulation of buildings and refrigeration systems, or for components that make cars lighter, more fuel efficient and more comfortable.

As a leading manufacturer of polyurethane precursors, BMS will test innovative solutions and processes at its new, EUR 10 million, technical centre in Leverkusen. In the medium to long term, the company expects the global polyurethane market to continue growing at an average annual rate of about 5 %.

The global market for coating and adhesive raw materials is also on a growth course, and will likely increase by an average of roughly 4% per year. To meet the rising demand, BMS has expanded its production capacity for the precursors HDI and IPDI for polyurethane based coatings. The company has invested 18 months and EUR 35 million in the construction of the newly commissioned multipurpose plant in Leverkusen. The production process used is very environmentally compatible and highly efficient.

We remind that, as MRC informed previously, Bayer MaterialScience has opened its first Polymer Development & Technology Center in South Korea, with a goal of developing new polycarbonate applications for Korean firms. Located in Yongin, near Seoul, the new center adds to Bayer's global network of research and development hubs, and is supported by its network of major production sites in the Asia Pacific region.

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.
MRC

MOSCOW (MRC) -- North America’s PVC suppliers have seen growth in export sales, offsetting stagnation in the domestic market. Domestic PVC processors were impacted by the recession, leading to barely 55-65% operating rates of pipe and siding companies, according to Plastemart with reference to IHS’s PVC Steve Brien.

The region’s PET manufacturers are, however, still suffering from a local decline in the carbonated drinks sector.

"But PVC resin has operating rates of around 90% – and low inventories could tighten the market," he added.

Domestic PVC makers also could reduce the amount they’re selling as exports to meet rebounding demand from the domestic field. Much of this growth will come from the US construction market. Overall North American PVC demand growth is expected to increase from less than 1% in 2013 to almost 3% in 2014.

The North American PVC field also stands to benefit from increasing development of shale gas in the region, which can be used to make PVC feedstock ethylene.

Thus, Mexichem is adding almost 400 mln lbs of PVC in Mexico this year, while on the US Gulf Coast, Westlake Chemical will add about 180 mln lbs in 2014 and Shintech will add almost 700 mln lbs in 2016.

There exists a gap of over 6 mln lbs between the amount of ethylene capacity that’s set to be added and the amount of new polyethylene resin capacity that’s been announced.

Even without expanding, US PVC has the advantage in cash costs. US PVC makers "can make PVC here and ship it to any other part of world and be competitive," Brien said. "I definitely think there will be more (North American PVC) expansions announced sooner than later."

North American PET, on the other hand, doesn't really benefit from shale gas, but is adding large chunks of capacity nonetheless, as the region’s major suppliers work to assert themselves through integration. Announced expansions - including a major one by M&G Group in Corpus Christi, Texas - will add about 3.5 mln lbs of capacity to a North American market that currently operates about 8.4 mln lbs.
MRC

MOSCOW (MRC) -- Zhenhai Refining & Chemical Co (ZRCC) is in plans to shut a polypropylene (PP) plant for maintenance turnaround, as per Apic-online.

A Polymerupdate source in China informed that the plant is likely to be shut in May 2014. The duration of the shutdown could not be ascertained.

Located in Ningbo, Zhejiang province in China, the plant has a production capacity of 250,000 mt/year.

As MRC informed previously, another Chinese petrochemical producer - Shaoxing Sanyuan Petrochemical shut its PP plant for maintenance turnaround on November 20, 2013. It is likely to remain off-stream for around one month. Located in Shaoxing, Zhejiang province, the plant has a production capacity of 200,000 mt/year.

Besides, Shenhua Ningxia Coal Industry Group conducted a 10-day turnaround at its PP plant in late October-early November. Located at Yinchuan city, Ningxia in China, the PP plant has a production capacity of 500,000 mt/year.
MRC