Supply remains tight in the Russian LDPE market, prices are high

MOSCOW (MRC) -- The situation in the Russian high density polyethylene (LDPE) market had virtually remained unchanged by mid-December compared with November. Tight supply remained because of exports, prices were also high, according to ICIS-MRC Price report.

Buying activity was low in the LDPE market, but demand from converters was stable. Exports have led to constant disruptions in polyethylene (PE) shipments to the domestic market from some Russian producers. The September shortage in the market, caused by scheduled outages at the plants in Kazan and Ufa, has led to higher prices that rolled over up to date.

Offer prices for Kazanorgsintez and Ufaorgsintez's LDPE 108 grade were heard in the range of Rb58,300-59,200/tonne FCA, including VAT. The market was seriously undersupplied. At the same time, there were reports about lengthy delivery time for LDPE under the already concluded deals.

There was a wide price dispertion in the LDPE 158 grade market, offer prices were heard in the range of Rb57,000-59,500/tonne FCA, including VAT. There were also reports on lengthy delivery dates from many producers.

Supply was sufficient in the shrinkable film PE market, demand was weak. Offers for LDPE were heard at Rb60,500-61,800/tonne FCA, including VAT.

As informed earlier, Ufaorgsintez announced an increase of Rb1,000/tonne in contract LDPE prices from 16 December, citing low inventories and sales of some January volumes.
MRC

PP production in Russia increased by 24% from January to November

MOSCOW (MRC) - Production of polypropylene (PP) in Russia increased by 24% in the first eleven months of the year, compared with the same period in 2012. The launch of new capacities in Omsk and significant growth in production by Neftekhimia and Stavrolen and were the main drivers of the increase in output, according to the analytical review MRC ScanPlast.

Russia's PP production decreased to 72,700 tonnes in November, from 74,200 tonnes in October. However, total PP production in Russia increased to 741,300 tonnes in the first eleven months of the year (excluding the production at the facilities of Tobolsk-Polymer), compared with 599,600 tonnes year on year. Such a significant increase in PP production was achieved because of the launch of Poliom (Omsk) with capacity utilisation of 180,000 tonnes/year and increased production rates at Neftekhimia (Kapotnya) and Stavrolen (LUKOIL).


Structure of the Russia's PP production over the reported period was as follows. Stavrolen (LUKOIL) produced about 116,300 tonnes of PP in the first eleven months of the year, from 73,400 tonnes year on year. Such a big difference in the producer's performance can be explained by the shutdown in January and February and weaker capacity utilisation in 2012.

Neftekhimia (Kapotnya) showed a serious increase in PP production. The producer increased PP production to 11,400 tonnes in the first eleven months of the year because of reduced time of maintenance works, compared with 95,200 tonnes year on year.

Nizhnekamskneftekhim (TAIF) produced about 190,200 tonnes of PP in the first eleven months of the year, compared with 194,400 tonnes in the same period in 2012. The decline in PP output resulted from the maintenance works in September at the pyrolysis furnaces, whereas in 2012 the plant was not shut for the turnaround.
Ufaorgsintez (ONC) reduced its PP production to 106,200 tonnes in the first eleven months of the year, down 6% year on year because of the tight supply of feedstock (propane-propylene fraction) in May.

Tomskneftekhim (SIBUR) reduced PP production to 115,700 tonnes in the first eleven of the year, compared with 124,000 tonnes year on year because of long time shutdown for maintenance works in July and August.

Poliom (Titan Group) launched the production of polypropylene on 11 February 2013. The company produced about 101,600 tonnes of PP in less than ten months of the year.

The second line of Tobolsk-Polymer (SIBUR) was launched in late May 2013. RF President Vladimir Putin officially started the production of polypropylene at the plant on October 10. The company has been producing PP using imported feedstock. The producer did not disclosed the information on PP production, but Tobolsk-Polymer exported about 15,700 tonnes of PP from June to November.


MRC

Samsung Total to shut SM plant in South Korea

MOSCOW (MRC) -- Samsung Total is likely to shut its No.1 styrene monomer (SM) plant for maintenance turnaround, as per Apic-online.

A Polymerupdate source in South Korea informed that the plant is planned to be taken off-stream in March 2014. It is likely to remain off-stream for around one month.

Located in Daesan, South Korea, the No.1 SM plant has a production capacity of 650,000 mt/year.

As MRC reported previously, the board of directors of Samsung Total Petrochemicals has approved an investment outlay of Won 1.66 trillion (USD1.44 bln) to build a new 1 mln tpa paraxylene plant at its Daesan complex.The company’s paraxylene capacity will increase to 1.6 mln tpa when the new plant comes on line in September 2014.

Samsung Total is a 50-50 joint venture between South Korea's Samsung Group and the French chemical group Total.
MRC

Haldia Petrochemicals plans temporary shutdown due to severe working capital crisis

MOSCOW (MRC) -- Haldia Petrochemicals is likely to opt for a temporary shutdown from the fourth week of this month following severe working capital crisis that is resulting in a shortage of naphtha and low plant load for the last few months, as per Plastemart.

It has been learnt that most of the technical officers of HPL, as well as shortlisted bidder Indian Oil, are not averse to the idea of a shutdown for a few weeks to cut down continuous losses and maintenance of the plant. The capacity of the plant is 260 tonnes per hour, but it is operating at 110-120 tonnes on average.

The firm had an accumulated loss of Rs 2,500 crore till March 2013. From April to October, 2013, HPL has posted a loss of Rs 521 crore taking the accumulated losses to over Rs 3,000 crore. The net worth of HPL has already eroded by Rs 50 crore. If the losses continue, then the company will have to go to BIFR.

As MRC wrote previously, a division bench of the Calcutta High Court dismissed all appeals of the West Bengal government, WBIDC and Haldia Petrochemicals Ltd over a dispute between them and The Chatterjee Group regarding 155 mln shares of the ailing petrochemical company and allowed the Chatterjee Group to move to International Court in Paris for arbitration regarding the disputed 15.5 crore shares. This block constitutes 9.22% equity stake of the company and holds the key for management control.

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are polyethylene (PE) and polypropylene (PP).
MRC

Korea examines PET film from Japan

MOSCOW (MRC) -- The Korea Trade Commission has decided to launch an investigation into alleged dumping of polyethylene terephthalate (PET) film imported from Japan, reported Apic-online with reference to Yonhap News Agency.

The investigation is the result of a formal complaint filed by three Korean producers of PET film. The commission said it decided to launch the investigation "after a review of materials submitted by the petitioners yielded a conclusion that their complaint was reasonable."

The commission expects to finish its investigation by February, at which time it will make a preliminary determination on possible anti-dumping measures, with a final decision in May.

As MRC wrote earlier, in October 2013, Malaysia imposed anti-dumping duties on PET imported from Thailand and biaxially-oriented polypropylene (BOPP) from China, Indonesia, Taiwan, Thailand and Vietnam. The duty on PET from Thailand will increase to 49.25% from zero for the period from 21 April 2011 through 20 April 2016. For BOPP imported from China, Taiwan, Thailand and Vietnam, a permanent anti-dumping duty of up to 12.37% will apply from 24 April 2013 to 22 April 2018.
MRC