Russian PP market: October performance

MOSCOW (MRC) -- Supply of polypropylene (PP) grew significantly in the Russian PP market in October, whereas prices dropped this month. Many market participants expect the downward price trend to continue in November, according to ICIS-MRC Price report.

July and August were quite difficult months for Russian PP consumers. A series of scheduled outages of the key producers led to a record growth in prices and a major shortage. The scheduled turnarounds were over in September and PP supply increased, but deferred demand still created a sense of tight supply in the market. The market situation improved considerably in October. Stavrolen resumed its PP production, and excessive supply of PP started to put serious pressure on prices in the second half of the month.

Buying activity was low in the Russian market in the last week of October, many market participants were slow to do deals for November PP shipments. Companies were trying to get lower offer prices from suppliers, hoping for increased competition in the market among producers. Issues with working capital of converters and refinancing also affected demand.

Demand is the weakest in November, and this factor might also push prices down. But a significant weakening of the rouble against the dollar in the last two weeks made PP exports more attractive for Russian producers. Some manufacturers expressed the desire to increase their export sales, thus intending to balance PP supply in the domestic market. At the same time, to export material is not that easy, as prices continued to go down in foreign markets, following lower oil prices.

This week's offer prices of propylene homopolymer (homopolymer PP) of raffia grade in the spot market remained in the range of Rb71,500-73,000/tonne FCA, including VAT, in the south, whereas in the Povolozhsky region deals were done at an average of Rb72,000/tonne FCA Ufa, including VAT. Offer prices of raffia remained in the range of Rb73,000-74,000/tonne CPT Moscow, including VAT, in the central part of Russia.

Demand also subsided greatly in the injection moulding homopolymer PP market. Offer prices in the central part of Russia have dropped to Rb74,000-75,500/tonne, including VAT and delivery to the central region, by late October.

The copolymers of propylene market was no exception. Here, many market participants also reported price cuts at the end of the month. This week's offer prices were in the range of Rb80,000-82,000/tonne FCA, including VAT.
MRC

MOSCOW (MRC) -- September production of polyethylene terephthalate (PET) in Russia slumped by 14,700 tonnes (48%) from August on a back of outages for maintenance at three Russian plants, according to MRC ScanPlast.

Russia's overall PET output totalled 19,300 tonnes in September. Production dropped at the Solnechnogorsk plant (Senezh), Kaliningrad plant (Alco-Naphtha) and Ufa plant (Polief). The plants shut down production for maintenance works, which negatively affected the overall PET output. At the same time, SIBUR-PETF (Tver) operated at normal capacity utilisation. The plant produced 6,600 tonnes of chips in September.

There was no shortage of material in the market in September and October, despite outages at several plants. High stocks of finished products and PET chips at Russian players' warehouses allowed to fully meet the needs of the industry. The reduced output of PET chips in September helped to stop stocks at producers and converters' warehouses from growing.

Russia's overall PET production totalled 317,000 tonnes over the first three quarters of 2014. Thus, the PET output dropped by 4% year on year. At the same time, imports have been increasing.

As reported earlier, PET imports to the Russian domestic market rose over the first three quarters of 2014 by 22% year on year and totalled 166,000 tonnes.

MRC

MOSCOW (MRC) -- Ineos ChlorVinyls, one of the major chlor-alkali producers in Europe, has restarted a chlor-alkali plant following an unexpected shutdown, reported Apic-online.

A Polymerupdate source in Belgium informed that the plant restarted on October 22, 2014. It was shut in the second week of October 2014 owing to technical issues.

Located at Tessenderlo, Belgium, the plant has a caustic soda capacity of 452,000 mt/year and chlorine capacity of 400,000 mt/year.

As MRC wrote before, in September 2014, Ineos ChlorVinyls announced an increase in its list prices of caustic soda. Thus, Ineos' caustic soda prices increased by EUR65 per dry metric tonne with effect from 1 October 2014. Earlier, Ineos increased its prices of caustic soda from 1 July 2014 by EUR 60 per dry metric tonne.

Ineos ChlorVinyls is one of the major chlor-alkali producers in Europe, a global leader in chlorine derivatives and Europe's largest PVC manufacturer.
MRC

MOSCOW (MRC) -- Olin Corp., a maker of chlor alkali products, on reported a 63% decline in profit for the third quarter from last year, reflecting lower sales at all three of its segment, particularly the Chlor Alkali products segment, said Rttnews.

The company's shares declined 6% in extended trades. Joseph Rupp, Chairman and Chief Executive Officer of Olin said, "During the third quarter of 2014, the Chlor Alkali business experienced lower chlorine and caustic soda shipments and prices compared to the third quarter of 2013. Third quarter 2014 ECU netbacks declined compared to the third quarter of 2013 reflecting both lower chlorine and caustic soda prices."

The Clayton, Missouri-based company's third-quarter net income was USD26.1 million or USD0.33 per share, down from USD69.7 million or USD0.86 per share in the same period last year. The latest quarter's results included USD1.2 million of pretax restructuring charges and USD9.5 million of pretax expense for the call premium and unamortized deferred debt issuance costs.

The prior-year quarter's results included USD1.6 million of pretax restructuring charges, the net recovery of USD11.4 million of pretax legacy legal costs, a pretax gain of USD11.0 million for a favorable Chlor Alkali Products contract settlement and USD8.8 million of favorable tax adjustments.

Sales for the quarter declined 11% to USD593.6 million from USD670.7 million last year.

Chlor Alkali Products sales for the quarter declined 12% from the prior-year period to USD329.2 million. Chlorine and caustic soda volumes decreased 9 percent from last year and ECU netbacks declined about 11%.

Chemical Distribution sales were down 25% from last year to USD76.6 million, reflecting the combination of lower caustic soda volumes and selling prices.

Analysts currently expect the company to earn USD0.33 per share for the quarter. The company expects the fourth-quarter earnings to include pretax restructuring charges of about USD1 million.

As a result of the continued weaker than expected chlorine and caustic soda demand and pricing, Olin revised its full-year adjusted EBITDA forecast to a range of USD345 million to USD365 million.

Olin Corporation manufactures chemicals and ammunition products. The Company manufactures and sells chlorine, caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, sodium chlorate, bleach products, and potassium hydroxide. Olin also manufactures products that include sporting ammunition, reloading components, small caliber military ammunition and industrial cartridges.
MRC

MOSCOW (MRC) -- Huntsman Corp. on posted higher earnings in its third quarter, boosted by strong demand for products such as environmentally-friendly textile dyes and aerospace composites, said the Wall Street Journal.

The maker of insulation, pigments and coatings has recently posted stronger sales following more than a year of declines. Huntsman also has aimed to refocus on key markets and reduce costs to boost its performance.

Earlier this month, Huntsman closed on its USD1.1 billion acquisition of Rockwood Holdings Inc. ’s performance additives and titanium dioxide businesses. Chief Executive Peter R. Huntsman said that the acquisition is expected to add 70 cents to the company’s per-share earnings by mid-2016.

Overall, Huntsman reported a profit of USD188 million, or 76 cents a share, up from USD64 million, or 26 cents a share, a year earlier. Earnings in the quarter included a USD40 million income tax benefit, while prior-year earnings included an USD81 million income tax charge.

Excluding pension-related impacts, restructuring charges and other items, adjusted earnings improved to 60 cents from 54 cents a year earlier.

Revenue edged up 1.5% to USD2.88 billion. Analysts polled by Thomson Reuters expected per-share profit of 53 cents and revenue of USD2.91 billion.

Revenue in Huntsman’s textiles division jumped 12% in the quarter, while revenue in its polyurethanes division edged up 1%. Performance products revenue fell 2%.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over USD11 billion. Huntsman is a global manufacturer and marketer of differentiated chemicals. The company's operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
MRC