US Nov, Dec PE hikes strengthen on upstream outages

(ICIS) -- US polyethylene (PE) contract initiatives for a 4 cent/lb hike in November and a 5 cent/lb increase in December have gained momentum after a supply-driven surge in the feedstock ethylene spot market, buyers said on Thursday.

Producers sought a 4 cent/lb ($88/tonne, ┬62/tonne) increase in October and have announced another 5 cent/lb increase for 1 December. Other buyers echoed the sentiment that the 4 cent/lb increase was a ⌠done deal for November contract pricing.

With spot ethylene prices rising fast, buyers expressed growing concern that the 5 cent/lb December initiative could also hold.

US domestic prices for linear-low-density PE (LLDPE) butene film were 64-67 cents/lb DEL (delivered) as assessed by ICIS.

Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa.

MRC

(ICIS) -- US polyethylene (PE) contract initiatives for a 4 cent/lb hike in November and a 5 cent/lb increase in December have gained momentum after a supply-driven surge in the feedstock ethylene spot market, buyers said on Thursday.

Producers sought a 4 cent/lb ($88/tonne, ┬62/tonne) increase in October and have announced another 5 cent/lb increase for 1 December. Other buyers echoed the sentiment that the 4 cent/lb increase was a ⌠done deal for November contract pricing.

With spot ethylene prices rising fast, buyers expressed growing concern that the 5 cent/lb December initiative could also hold.

US domestic prices for linear-low-density PE (LLDPE) butene film were 64-67 cents/lb DEL (delivered) as assessed by ICIS.

Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa.

MRC

(ICIS)--The Canadian government rejected BHP Billiton's $39bn (┬28bn) hostile foreign takeover bid for PotashCorp, Industry Minister Tony Clement said on Wednesday. Clement said the offer did not present a likely net benefit to Canada, adding that he had notified BHP of the decision.

The proposal was terminated under the Investment Canada Act, marking only the second time in the 25-year history of the law that a bid was blocked.
Following the announcement, PotashCorp's stock dropped $7.98, or 5.5%, to $137.52/share in after-hours electronic trading on the New York Stock Exchange.

The deal had been opposed by Saskatchewan Premier Brad Wall, who said approval of the deal would be ⌠a profound betrayal of our province and its people and did not rule out a constitutional challenge based on provincial ownership of resources. The legislature in Saskatchewan, where PotashCorp is based, had unanimously called on the government in Ottawa to reject BHP's bid.

Saskatchewan's lawmakers were of the opinion that a BHP takeover posed a potential risk to jobs, provincial revenue and Canada's strategic interest, according to news media reports.

If approved, BHP was said to preparing to sweeten its $130/share offer to win shareholder approval, with some analysts estimating a successful offer would have to top $155/share.

MRC

(ICIS) -- Polyolefin consumption in Iran is expected to hit 1.7m tonnes in March next year, translating into an annual growth of 7-8%, industry sources said on Friday. Polyethylene (PE) would account for the bulk of total at 1.09m tonnes, while polypropylene (PP) consumption would total 630,000 tonnes at the end of Iran's fiscal year on 21 March 2011, they said.

Demand would have been stronger, with growth possibly in the 20% level, if not for the international sanctions on Iran, said an industry sources. The sanctions had slowed down investments into Iran's automotive and electronics - the key downstream for polyolefins.

Iran's projected domestic consumption in the current year was about 45% of the country's polyolefin production capacity at 3.8m tonnes/year. The country has around 2.8m tonne/year nameplate capacity for PE and can produce 1m tonnes/year of PP, according to ICIS data. But plants were not running at full capacity due to production hiccups.

Among the high density PE (HDPE) grades, film grade had the strongest growth, with consumption volumes estimated to hit 210,000 tonnes in the current year, industry sources said. This demand would entirely be met by local supply, as Iran enjoys surplus production of HDPE.

MRC

(ICIS) -- Borealis CEO Mark Garrett said on Thursday that the group's third-quarter earnings had exceeded expectations, which had been lowered by the expected negative effect of start-up costs incurred for the company's Borouge 2 project and for its low density polyethylene (LDPE) plant in Sweden.

Earlier on Thursday, Austrian-based plastics producer Borealis reported that its third-quarter net profit rose by 14.8% to ┬54.0m ($76.1m) compared with the same period last year, while sales for the third quarter grew by 24.1% year on year to ┬1.59bn.

⌠We currently get no sales [from Borouge 2] because we are doing all the performance testing; we are slowly filling up the supply chain but product won't get to customers until the December/January timeframe, so we won't see any sales benefits until then, the CEO added.

Garrett said that the Borouge 2 project, which is an Abu Dhabi, United Arab Emirates (UAE)-based joint venture with the UAE's stated-owned Abu Dhabi National Oil Company (ADNOC), was now on track and the expanded plant was starting up as planned, with all olefin and polyolefin units operational.

He added that the group's LDPE plant at Stenungsund in Sweden was manufacturing wire and cable rope and that product was with major customers for testing. However, Borealis was still working to deliver consistent operability, he said.

Meanwhile, Garrett reiterated that Borealis would focus on its existing projects in Europe and the Middle East before looking at any new investments. However, he added that the group expected to make significant additions to monomer and polymer capacity between now and 2015.

MRC