PP imports to Russia fell by 27% in Q1 2014

MOSCOW (MRC) -- Imports of polypropylene (PP ) into Russia fell by 27% over the first three months of 2014. An unscheduled outage at Stavrolen did not lead to an increase in imports, according to MRC DataScope.

March PP imports to Russia decreased to 15,700 tonnes (16,600 tonnes in February). Thus, the overall imports of polymers of propylene dropped to 42,800 tonnes in the first quarter of 2014 from 58,700 tonnes from January to March 2013. The unplanned shutdown at Stavrolen's PP production did not lead to an increase in imports. New plants in Omsk and Tobolsk offset this factor, but prices grew in the market.

The overall structure of PP imports by grades over the stated period looks as follows.

Last month's imports of homopolymers of propylene (homopolymer PP) fell to 5,400 tonnes (7,200 tonnes in February). The overall imports of homopolymer PP decreased from January to March to 17,400 tonnes from 29,300 tonnes in the same period of 2013.

March imports of block copolymers of propylene (PP-impact) were about 3,300 tonnes (3,900 tonnes a month earlier). The overall imports of PP-impact decreased over the first three months of the year to 9,700 tonnes, down by 25% year on year.

Imports of statistical copolymer of propylene (PP-random) reached last month 3,100 tonnes (2,800 tonnes in February). Imports of PP-random dropped in the first quarter of 2014 to 7,100 tonnes from 8,700 tonnes over the same period of 2013.

Imports of other polymers of propylene reached 3,900 tonnes in March. Imports of these products totalled 8,600 tonnes in the first quarter of 2014 (7,800 tonnes from January to March 2013).

MRC

MOSCOW (MRC) -- Exports of polystyrene (PS) from Russia in the first quarter of 2014 almost doubled year on year and totalled 22,000 tonnes, according to MRC ScanPlast.

Such a major growth in exports was caused by the increased PS production this year. High impact polystyrene (HIPS) grades accounted for the most significant increase in exports. The overall HIPS exports totalled 12,200 tonnes over the first three months of the year, while this figure was 4,800 tonnes over the same period a year earlier. Russian plants most increased HIPS shipments to the foreign markets in March. Last month's HIPS exports rose by 1.2 tonnes from February to about 5,200 tonnes, despite reduced shipments to Ukraine. Exports were substantially increased to such countries, as Turkey, Egypt, Belarus and Lithuania.

Kazakhstan and Egypt demonstated positive dynamics in consumption of Russian general purpose polystyrene (GPPS) in the first quarter of 2014. Shipments to Ukraine remained at the last year's level. The overall exports of Russian GPPS rose in the first quarter of the year by 1.6 times to more than 4,000 tonnes.

Export shipments of expandable polystyrene (EPS) and acrylonitrile-butadiene-styrene (ABS) showed a downward trend. ABS exports fell by 84% because of a growth in domestic consumption and totalled 147 tonnes.

EPS exports dropped by 6% because of the political events in Ukraine (Ukraine accounted for the lion's share of Russian EPS exports) and transport unavalability in April. EPS exports totalled 3,100 tonnes in the first quarter of 2014.

MRC

MOSCOW (MRC) -- Fujian Refining & Petrochemical (FREP) has shut its No.2 high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) line for maintenance turnaround, reported Apic-online.

A Polymerupdate source in China informed that the line was shut on April 15, 2014. It is likely to remain off-stream for around one month.

Located in Fujian province, China, the line has a production capacity of 400,000 mt/year.

As MRC wrote before, Jilin Petrochemical shut its HDPE plant for maintenance turnaround on April 10, 2014. The plant is likely to remain off-stream for around one month. Located in Jilin province, China, the plant has a production capacity of 300,000 mt/year.

Tthe worldwide LLDPE production is likely to see stable growth in the upcoming years to exceed 31.4 mln tons in 2017, as per the Merchant Research & Consulting. The major market growth stimulators include the rising demand for LLDPE worldwide alongside scheduled capacity additions. Meanwhile, in 2015, in volume terms, the global LLDPE production is likely to climb to 29 mln tonnes.
MRC

MOSCOW (MRC) -- Plastic pipe production in China grew 10% last year, to 12.1 million metric tons, fueled by increasing urbanization, expansion of rural drinking water systems and government spending on infrastructure, according to Plasticsanews, citing statistics from a Chinese pipe industry group.

Production growth this year is likely to slow to between 5-10%, reflecting a general softening in the rapid growth rate of China’s economy, but the industry continues to have sizable long-term opportunities, said Wang Zhan Jie, secretary general of the Beijing-based China Plastics Piping Association.

But Wang and others at the event said the huge migration of Chinese residents to cities — estimated at 80 million people by 2020, or roughly the population of Germany — will continue to drive demand. Industry officials also noted demand coming from the country’s focus on developing its western regions, like the site of the conference, Yunnan province.

Plastic pipe production last year in China was only about 50% of installed capacity, according to CPPA figures. The trade association said in a report at the conference that that has led to fierce competition, with larger companies developing more quickly and smaller firms facing more trouble and bankruptcies.

Jiang Jia Cheng, chief executive of Wealpro Pipeline Industry Group Co. Ltd. in Yingkou, Liaoning province, said the market dynamics are encouraging consolidation. He said the industry’s 10% growth in production last year was average, but he said other firms, like his, have grown faster. For example, China’s largest pipe maker, publicly traded Lesso Group Holdings Ltd., reported that its production grew 17% last year, and revenue rose 20 percent.
A company’s success increasingly depends on its management, innovation, and quality and cost control, rather than simply tapping into growth, Jiang said.

CPPA figures say that while China’s pipe industry has between 6,000 and 10,000 plastic pipe manufacturing companies, the 400 members of its association account for about 70% of the country’s production. As MRC wrote before, CPPA is working on new regulations for pipes, and regularly holds meeting with customer groups to try to address concerns and invites them to speak at its events, like the Chengdu conference.


MRC

MOSCOW (MRC) -- Russian independent Lukoil has sold its 50% stake in Kazakh venture Caspian Investment Resources to China’s Sinopec for USD1.2 billion, said Upstreamonline.

The venture was created in 2005 through Lukoil’s acquisition of Canada’s Nelson Resources. It holds stakes in four Kazakzh onshore oil projects – Alibekmola & Kozhasai, North Buzachi, Karakuduk and Arman.

Lukoil’s share of the venture’s production ran to 10.2 million barrels of oil equivalent last year. The Moscow-headquartered explorer said it aimed to optimise its Kazakh portfolio with the sale, which will leave it owning stakes in the Kumkol, Karachaganak and Tengiz projects as well as the Caspian pipeline consortium.

Lukoil chief executive Vagit Alekperov said that the independent planned to "reallocate the investments to geologic exploration projects, including those in the Kazakhstan sector of the Caspian Sea".

The deal is expected to close by the end of the year subject to approval from the Kazakh authorities.

As MRC wrote before, Lukoil Overseas shut down two projects in the Kazakh sector of the Caspian Sea after geological exploration failed to find commercial reserves of hydrocarbons. Work at the Atashsky section was performed by Atash a joint venture between KazMunayGas subsidiary KazMunayTeniz and Lukoil Overseas Atash.
MRC