NTC probing dumping of PVC products

MOSCOW (MRC) -- The National Tariff Commission (NTC) investigates dumping of PVC Resin by Korean and Taiwanese companies in Pakistan at prices lower than their domestic markets that can potentially hurt the local PVC industry of the country, said Thenews.

Huge capacities of PVC production exist in the Far-East Asian countries such as Taiwan, Korea, Thailand and China and an investigation is being carried out to check the trend of dumping their products in Pakistan at a price, which is even lower than the domestic price in their respective countries, the sources said.

NTC is investigating this matter on the request of Engro Polymer and Chemicals Ltd, the largest producer of PVC in the country, they said.

NTC is investigating if significant dumping margins are the underlying reason of a surge in imports of the investigated product, which have taken a substantial share in the domestic market of Pakistan and can potentially cause injury to the domestic industry engaged in the production of PVC Resin, the sources said.

The commission will also review if the performance of the domestic industry engaged in the production of the same products is suffering material injury as a consequence of the imports of the investigated product from the exporting countries, the sources said.

Industry sources demanded the government to take appropriate action against dumped imports of the investigated product from the exporting countries through imposition of antidumping duties, otherwise, the sources said, the domestic industry will continue to suffer material injury on account of the unfair imports of the investigated product and their viability and competitive position will be unfavourably affected in the future, further increasing the dominance of such dumped imports.

Pakistan has a domestic PVC Resin market of around 145,000 metric tons per annum against the domestic production capacity of around 156,000 metric tons per annum. Imports are around five percent of the total market size. The sources said that due to unnecessary imports of the PVC Resin in the country, Pakistan is forced to export surplus quantity, which is an economically inefficient situation.

The authorities in India, which is a net importer of over one million tons of PVC every year, have recently recommended imposing dumping duty on PVC Resin from Taiwan, China, Korea and other countries because these countries were dumping their products in India at the price lower than their domestic price, the sources said, adding that this step was taken primarily to protect the local PVC industry.

MRC

MOSCOW (MRC) -- Styrindo Mono Indonesia (SMI) is in plans to shut its No.1 styrene monomer (SM) plant for maintenance turnaround, as per Apic-online.

A Polymerupdate source in Indonesia informed that the SM plant is planned to be shut in H2 November 2014. The plant is slated to be shut for around one month.

Located in Merak, Indonesia, the plant has a production capacity of 100,000 mt/year.

As MRC reported previously, Grand Pacific Petrochemical Corp (GPPC) shut its SM plant in Taiwan for maintenance turnaround in late April. It is likely to remain off-stream for around one month. Located in Kaohsiung, Taiwan, the plant has a production capacity of 250,000 mt/year.

Besides, Idemitsu SM (Malaysia), an affiliate of Idemitsu Kosan, one of Japan’s largest refining and petrochemical companies, is likely to shut down its SM plant for maintenance in August 2014. It is likely to remain shut for around one month. Located at Pasir Gudang in Malaysia, the SM plant has a production capacity of 600,000 mt/year.

We also remind that Taiyo Petrochemical is in plans to shut down its SM plant for maintenance in September 2014. The shutdown is expected to remain in force for around 30 days. The plant is currently operating at full production capacity levels. Located at Ube in Japan, the SM plant has a production capacity of 370,000 mt/year.
MRC

MOSCOW (MRC) -- SABIC has shut a low density polyethylene (LDPE) plant for maintenance turnaround, reported Apic-online.

A Polymerupdate source in the UK informed that the plant was shut early last week. It is planned to remain shut for around one month.

Located in Wilton, UK, the plant has a production capacity of 865,000 mt/year.

As MRC wrote previously, SABIC is studying investment opportunities in the US. SABIC's plan for US investments comes as the economic slowdown in Europe and China ebbed demand from clients and affected earnings at the company and its affiliates. SABIC would be joining companies including Dow Chemical Co. and Exxon Mobil Corp. in seeking to take advantage of the US shale boom that has helped drive down natural-gas prices.

Saudi Basic Industries Corporation (SABIC) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers. SABIC manufactures on a global scale in Saudi Arabia, the Americas, Europe and Asia Pacific.
MRC

MOSCOW (MRC) -- Westlake Chemical Corporation, the US plastics maker controlled by the billionaire Chao family, has reported net income for the quarter ended March 31, 2014 of USD158.0 million - a 28% increase year on year - on net sales of USD1,027.7 million, as per the company's report.

This represents an increase in net income of USD34.7 million compared to first quarter 2013 net income of USD123.3 million on net sales of USD864.6 million.

Net sales for the first quarter of 2014 increased by USD163.1 million compared to net sales for the first quarter of 2013, mainly attributable to higher sales volumes for polyethylene and ethylene, higher sales prices for most of our major products and sales contributed by the company's specialty PVC pipe business, which Westlake Chemical acquired in May 2013.

Income from operations was USD248.1 million for the first quarter of 2014 as compared to USD194.1 million for the first quarter of 2013. Income from operations for the first quarter of 2014 benefited primarily from higher olefins volumes and improved integrated product margins, as higher sales prices more than offset the increase in feedstock and energy costs as compared to the prior year period. The increase in first quarter 2014 income from operations was partially offset by the lost sales, lower production rates, unabsorbed fixed manufacturing costs and other costs associated with the planned maintenance turnaround of our Calvert City production facilities for the ethylene plant's feedstock conversion and expansion project and other planned maintenance activities.

Albert Chao, President and Chief Executive Officer, said "We are pleased to report a 28% increase in first quarter net income as compared to the first quarter of last year despite the negative impact on earnings related to elevated propane costs, severe winter weather and the Calvert City planned maintenance turnaround. We also successfully completed the Calvert City ethylene plant conversion to ethane feedstock and its expansion by 180 million pounds a year in capacity in early April which allows our Vinyls segment to capture the advantageous ethylene cost position our Olefins segment has been benefitting from over the past several years and that we expect will continue into the foreseeable future."

The Olefins segment reported income from operations of USD272.3 million in the first quarter of 2014, an increase of USD111.2 million compared to USD161.1 million reported in the first quarter of 2013. The increase was primarily due to higher olefins integrated product margins as compared to the prior year period, as the increase in sales prices outpaced increases in feedstock and energy costs. In addition, first quarter 2014 income from operations benefited from higher polyethylene and ethylene sales volumes and improved production rates for most of our major products. Income from operations in the first quarter of 2013 was negatively impacted as a result of the lost production, unabsorbed fixed manufacturing costs and other costs associated with the turnaround and expansion of the Lake Charles Petro 2 ethylene unit.

Income from operations for the first quarter of 2014 for the Olefins segment of USD272.3 million increased by USD25.0 million from the USD247.3 million reported in the fourth quarter of 2013. The increase in first quarter income from operations was primarily due to higher polyethylene sales prices and volumes, which were partially offset by higher ethane prices than in the fourth quarter of 2013.

The Vinyls segment reported an operating loss of USD21.1 million in the first quarter of 2014 compared to income from operations of USD43.7 million in the first quarter of 2013, a decrease of USD64.8 million. This decrease was primarily driven by the lost sales, lower production rates and the expensing of USD16.9 million related to unabsorbed fixed manufacturing costs and other costs associated with the planned maintenance turnaround of our Calvert City production facilities for the ethylene plant's feedstock conversion and expansion and other planned maintenance activities. In addition, the Vinyls segment's first quarter 2014 operating results were negatively impacted by the severe winter weather and significantly higher propane costs, as average industry prices for propane increased by 50.2% as compared to the prior year period.

The Vinyls segment reported an operating loss of USD21.1 million in the first quarter of 2014, a decrease of USD39.7 million compared to income from operations of USD18.6 million in the fourth quarter of 2013. The results for the first quarter of 2014 were negatively impacted by higher propane costs as compared to the fourth quarter of 2013 and the lost sales and costs associated with the planned maintenance turnaround of our Calvert City facilities.

As MRC informed before, Westlake Chemical Corp. has recently separated its ethylene assets into a tax-advantaged venture in which it plans to sell shares to the public. The master-limited partnership (MLP) includes three US ethylene plants and a 200-mile (322-km) ethylene pipeline.

Westlake Chemical Corporation is a manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC resin and PVC building products including pipe and specialty components, windows and fence.
MRC

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC) expects its planned oil-to-chemicals plant to start operations by the end of 2020, said Reuters.

SABIC, one of the world's largest petrochemical groups, said it expects to use around 10 million tonnes of crude oil annually as feedstock for the plant. That is equivalent to 200,000 barrels per day, or an average-sized oil refinery.

Development of the Saudi petrochemical sector is part of Riyadh's strategy for diversifying the economy away from heavy dependence on crude export revenues.

In its first public announcement on the project, SABIC did not say where the complex would be located, how much it would pay for the oil or if the crude would be subsidised. It did not specify which type of the crude it would use either.

In a statement to the stock exchange, SABIC said it was in the final stages of preliminary studies for the industrial complex in Saudi Arabia which will help provide around 100,000 direct and indirect jobs for Saudis.

Oil Minister Ali al-Naimi said in March the kingdom would build its first plant able to turn crude oil directly into chemicals without having to refine it first. He said the plant would be located in Yanbu, Saudi Arabia's second-largest industrial hub on the West coast.

It is not clear if the development of such a project is linked to finding alternative liquid feedstock to help meet a shortage of gas supplies, which SABIC blamed last month for limiting its expansion plans within Saudi Arabia.

Chemical companies usually process gas or refined oil products into petrochemicals, such as ethylene and propylene, that are then used to make plastics and other products. Using oil as a feedstock is also more expensive than cracking gas.

As MRC wrote before, ExxonMobil started up the world's first plant that processes crude oil into chemicals in Singapore last year.

State-run oil giant Saudi Aramco has been researching ways to make ethylene and propylene directly from oil for years to grow its petrochemicals business.