EPS imports in Russia decreased by 9% in January-July 2014

MOSCOW (MRC) - Russia's imports of expandable polystyrene (EPS) decreased by 9% in January-July 2014 compared to the same time a year earlier, according to MRC ScanPlast.

Total EPS imports in Russia exceeded 37,000 tonnes over the reporting period. The greatest demand in the current year has occurred for the Chinese grades of EPS-F-SA by Loyal production, with 8,000 tonnes imported in January-July 2014. The second position took F-MS grade by Loyal production, with about 7.600 tonnes imported in January-July 2014.
The decline in imports contributed to the increase in demand for Russian EPS, which is traditionally cheaper than imports, leading to a shortage of the material in the country in the spring and early summer.

Imports of EPS increased in July. Russia's EPS imports were 9,300 tonnes in July, up 1,200 tonnes from the June's level.

Russian companies expectedly increased their EPS purchases this summer on the back of the shortage of domestic production. The increase of EPS imports in June and July helped reduce the acute shortage of the material in the Russian market.
MRC

MOSCOW (MRC) -- Werner Breuers, Board Member of Germany's Lanxess, the world's largest maker of synthetic rubber, and up to now responsible for the segments Performance Polymers and Advanced Intermediates, will leave the company at his own request after his contract ends on May 31, 2015, in order to pursue new challenges, reported the company on its site.

Mr. Breuers will leave the Board of Management with immediate effect. He will, however, remain in an advisory role to Lanxess for a transitional period.

The Supervisory Board has with immediate effect handed over the responsibility for the segments Performance Polymers and Advanced Intermediates to Matthias Zachert, Chairman of the Board of Management of Lanxess, on a temporary basis. The company intends to fill the vacated position in the Board of Management in the next twelve months.

As MRC informed earlier, Lanxess's core earnings rose 21% in the second quarter, helped by cost cuts and solid demand for agrochemicals and construction materials. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to EUR239 million (USD319 million), a touch above the EUR234 million average estimate in a Reuters poll among analysts.

Lanxess is a leading specialty chemicals company with sales of EUR 8.3 billion in 2013 and roughly 17,300 employees in 31 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC

MOSCOW (MRC) -- Saudi Arabia is maintaining its leading position as the region's largest petrochemical producer with an annual 86.4 million tons of capacity a report from the NCB's Economics Department Research Team has confirmed, said Menafn.

But it says the recent discovery of North American shale gas and oil is likely to have an effect on the Saudi petrochemical sector in its trajectory toward remaining upstream or moving downstream. The expansion in ethylene production capacity has resulted in Saudi Arabia being the third largest producer worldwide accounting for 11 percent of global ethylene capacity.

According to the report the Saudi petrochemicals industry is not expected to see a massive rise in overall petrochemicals capacities until 2016 when the Sadara petrochemicals complex is due to come on-stream. Ethylene is a key building block in the petrochemical industry. In recent years the world has witnessed its largest ethylene capacity expansion growing at a compound annual growth rate (CAGR) of 4 percent between 2007 and 2012 to reach 155.9 million tons in 2012. In 2012 worldwide capacity additions were much lower than the record additions registered in 2010 when 11.4 million tons/year of ethylene capacity was added. However GCC capacity addition in 2012 trended downwards by 13 percent.

The majority of capacity additions within the GCC between 2007 and 2012 took place in Saudi Arabia which accounted for 64 percent of the regional capacity additions. With 17.5 million tons/year Saudi Arabia is the largest ethylene producer in the region accounting for 72 percent of the regional ethylene capacity up by 7.7mn tons/year compared to five years ago. This massive expansion in ethylene production capacity has resulted in Saudi Arabia becoming the third largest producer worldwide accounting for 11 percent of global ethylene capacity.

Ethylene's global cost curve reflects that the Middle East overall still has a comparative cost advantage. However according to industry analysts the recent leveling of US gas prices has the potential to render US ethylene more economically cost efficient than Saudi produced ethylene with the transfer price for ethylene in Saudi Arabia and the US amounting to 466 per ton and 323 per ton respectively.

However the recent discovery of North American shale gas and oil especially in the US is likely to have an impact on the Saudi petrochemical sector albeit the technology needed to extract it efficiently and profitably is still in its preliminary stages. Whether Saudi Arabia can retain its global leading position through technology differentiation while leveraging its natural resource abundance remains at the forefront of the sector's concern said the report.

The Saudi petrochemical sector is characterized by three main factors. First the Kingdom has substantial proven feedstock reserves with 264 billion barrels of crude oil 279.7 trillion cubic feet (tcf) of natural gas and an esti-mated 600 tcf of unconventional shale gas. Second low feedstock and energy costs have to-date led to a comparative and in turn a competitive advantage for petro- chemical producers. Third the Kingdom has strong industrial and regulatory infrastructure which have been integrated into specially developed industrial cities.

According to the Gulf Petrochemical and Chemical Association (GPCA) total GCC petrochemicals capacity reached 127.8 million tons in 2012 recording a 5.5 percent growth from the previous year. Saudi Arabia maintained its leading position as the region's largest petrochemical producer with 86.4 million tons of capacity representing 67.6 percent of the total regional capacity. In addition during the same period the Kingdom led production with 6 million tons coming on stream.

The majority of Saudi's nonoil exports consists of petrochemicals which include downstream plastic production and building materials.

MRC

MOSCOW (MRC) -- Yisheng Petrochemical has shut its No 1 purified terephthalic acid (PTA) plant for maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed that the plant was shut on August 6, 2014. It is likely to remain off-stream for around one month.

Located at Dalian in China, the plant has a production capacity of 2.2 million mt/year.

We remind that, as MRC reported earlier, China’s polyester maker Tongkun is in plans to start a new PTA plant in 2017. To be located at Zhapu in Zhejiang province, China, the plant will have a production capacity of 1.5 million mt/year.

Tongkun Group said its net profit for 2013 slumped by 72.1% year on year to yuan (CNY) 72m (USD11.6m), amid the sluggish domestic chemical fibre market. In 2013, the chemical fibre industry developed weakly, as well as oversupply in some regions which made the industry into the predicament, the company said.
MRC

МОSCOW (MRC) -- Formosa Chemicals & Fibre Corp, which produces aromatics and styrenics, is expected to report a decline in revenue for this quarter from last quarter’s TWD110.82 billion (USD3.69 billion), as raw material supply is expected to diminish, said Taipeitimes.

The firm’s raw material supplier, Formosa Petrochemical Corp, plans to conduct annual maintenance on one of its ethylene plants. Formosa Petrochemical, the nation’s only listed oil refiner and a major unit of the Formosa Plastics Group, shut down its third olefin plant, beginning yesterday, for a 45-day maintenance cycle. The closure was announced by Formosa Petrochemical president Tsao Mihn.

Tsao said the ethylene shipments from the plant would decline by 20 percent this month from a month ago and be down by one-third next month from last month. However, having completed annual maintenance for its oil refinery facilities in June, Formosa Petrochemical will still strive to post a revenue increase this quarter from TWD219.56 billion last quarter, it said.

"We will try to hold our profit this quarter steady compared with TWD6.41 billion a quarter earlier," Tsao said.
The company’s utilization rate for its oil refinery facilities is expected to be 100 percent this quarter, which would increase its oil production to close to 540,000 barrels a day this quarter, up from 377,000 barrels a day last quarter, it said.

Formosa Chemicals & Fibre, another major unit of the group, said it also is to conduct maintenance for its factory for making paraxylene and oxylene for 45 days beginning next month to cope with the reduced supply for ethylene, and for another factory for making styrene monomer for 45 days, company general manager Hong Fu-yuan said.

As a result, between next month and October, the company’s shipments for paraxylene and oxylene are likely to drop by 200,000 tonnes, while shipments for styrene monomer is expected to decline by 90,000 tonnes, Hong said.
Formosa Chemicals & Fibre expects revenue to drop 10 percent, to TWD25 billion, compared with last month and that the decline would extend into next month and October.

Also affected by the scarcity of ethylene, Formosa Plastics Corp, the flagship company of the group, expects its factory utilization to drop to 80 percent this quarter, from 85.3 percent last quarter, company president Jason Lin said. However, it still hopes that this quarter’s revenue would be flat, echoing TWD59.03 billion last quarter, on the back of higher product prices.

As MRC wrote before, The US Environmental Protection Agency (EPA) has recently issued three final GHG Prevention of Significant Deterioration construction permits for the Formosa Plastics facility in Point Comfort, Texas.
Formosa is expanding its chemical complex, located near Victoria, and taking three actions with its turbines unit, olefins unit and low-density polyethylene (LDPE) unit.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC