Sinopec to pay compensation over pipeline blast

MOSCOW (MRC) -- Chinese state-owned oil giant Sinopec will pay compensation over a November pipeline explosion at its facility in the city of Qingdao that killed dozens of people and caused losses of more than USD100 million,said Channelnewsasia.

Sinopec is listed in Hong Kong and in a filing to the stock exchange there, said that an official Chinese government investigation determined that "direct economic loss" from the accident totalled 751.72 million yuan (USD124.3 million).

The company said it "will pay its share of the compensation", although it did not say how much that would be, or what proportion of it would go directly to victims of the disaster, which killed 62 people and injured 136.

Sinopec said in the statement on Sunday that its pledged compensation would come mostly from company insurance policies, adding that its "production, operation and financial position are currently stable". Citing the probe by China's State Administration of Work Safety, it said the direct cause of the explosion was vapours from oil leaking from an underground pipeline, which were ignited by sparks from a hydraulic hammer.

The investigation also found that Sinopec and its subsidiaries' failure to ensure safe operations contributed to the accident, as did local authorities' failure to properly conduct safety inspections and identify risks, Sinopec's statement said.

The huge blast ripped roads apart, turned cars over and sent thick black smoke billowing over the city. The explosion happened seven hours after an oil leak was first spotted, and questions remain as to why local residents were not ordered to evacuate in the intervening period.

According to state media, 15 people, including unspecified numbers of Sinopec employees and Qingdao city staff, have been detained in connection with the explosion.

Sinopec issued an apology for the incident but denied that it was slow to respond.

MRC

MOSCOW (MRC) -- Chinese producers have reduced prices of bottle grade polyethyleneterephthalate (PET) chips by an average of USD10-20/tonne for export markets, including the CIS countries, following lower feedstock prices, according to ICIS-MRC Price report.

To date, prices of major Chinese producers are USD1,300-1,310/tonne FOB large Chinese ports, excluding VAT.

Some buyers in the CIS countries said they expect a slight drop in prices in the future on the back of lower prices of terephthalic acid (PTA) and monoethylene glycol (MEG).

Asian traders siad they anticipate reductions in prices of bottle grade PET, citing sluggish demand, despite the upcoming Chinese New Year. At the same time, buying activity in the fibre PET markets was also weak because of low capacity utilisation.

Offer prices of Korean bottle grade PET were in the range of USD1,350-1,360/tonne FOB Korea, but buyers managed to reduce prices during negotiations to USD1,330-1,340/tonne FOB Korea.

MRC

Moscow (MRC) -- Supply of low density polyethylene (LDPE) in the Russian market continues to be tight, despite the long New Year's holiday. Disruptions in LDPE shipments resulted in a price rise, according to ICIS-MRC Price report.

Long New Year's holiday did not lead to an increase in supply of LDPE in the Russian market. A slight tightness in LDPE supply remains, despite a weak buying activity. LDPE prices also increased on the back of exports growth in the first working week of January.

Kazanorgsintez, Ufaorgsintez and Gazprom Neftekhim Salavat offered LDPE of 108 grade in the range of Rb58,800-59,300/tonne FCA, including VAT in the spot market.

Price offer for LDPE Angarsk Polymer Plant production started from Rb61,500/tonne FCA Angarsk, including VAT.
Price for LDPE of 158 grade in the first week of January rose to Rb57,500-59,900/tonne FCA, including VAT.

One of the main reasons for the increase in prices was the information about the export shipments of polyethylene by Ufaorgsintez, which reduced the quotas for the domestic market.

Situation in the market of shrinkable film LDPE remained steady in the early weeks of 2014. Buying activity is very low, with spot offers heard in the range Rb61,000-61,700/tonne FCA, including VAT.
MRC

MOSCOW (MRC) -- January prices of expandable polystyrene (EPS) in Europe grew by EUR30-40/tonne for all buyers in the CIS countries, according to ICIS-MRC Price report.

The reason for higher European EPS prices was an increase in the production cost of the polymer in January, which is directly connected with styrene monomer (SM) prices. The contract SM price for January shipments rose by EUR35/tonne and was EUR1,410/tonne.

Thus, January EPS purchase prices of the Polish producer Synthos (Dwory) for customers in the CIS countries increased by EUR35/tonne from December.

As reported previously, SIBUR reduced export EPS prices for January shipments by USD50/tonne on the back of seasonal weakening in consumer activity.
MRC

MOSCOW (MRC) -- Ming Dih Group is in plans to shut an expandable polystyrene (EPS) plant during the Chinese Lunar New Year holidays, said Apic-Online.

A source in Taiwan informed that the plant is likely to be shut in late January, 2014. The plant is expected to remain off-stream for around one week.

As MRC informed before, Ming Dih Group plans to expand its expandable polystyrene (EPS) plant in Bangkok, Thailand, in the third quarter of 2014. The expansion next year will lift the plant’s capacity by 10,000 tonnes/year to 50,000 tonnes/year.

Ming Dih operates a 180,000 tonne/year unit in Taiwan, a 100,000 tonne/year unit in China and a 40,000 tonne/year unit in Thailand.
MRC