Praxair earnings grow 7%, cuts outlook on weak volume growth

MOSCOW (MRC) -- Praxair Inc. said its third-quarter earnings grew 7% on higher pricing and sales growth across nearly all of its segments, but the industrial-gas company gave a disappointing outlook for the remainder of the year, said the Wall Street Journal.

Chief Executive Steve Angel said foreign-currency headwinds and weak volume growth in emerging markets will likely weigh on the company in its current quarter.

"In North America, our U.S. and Canadian businesses grew quite well, while sales to energy-related customers in Mexico remained weak," said Mr. Angel. "Asia experienced slowing volume growth in China, while India volumes were strong."

The company cut and narrowed its full-year outlook, now expecting a profit of USD6.23 to USD6.30 a share, down from the USD6.30 to USD6.45 a share it had previously expected.

For the fourth quarter, Praxair expects per-share earnings of USD1.53 to USD1.60, compared with the USD1.65 analysts polled by Thomson Reuters had recently projected.

Weak macroeconomic conditions have pressured Praxair’s results in recent quarters, but the company has pointed to large hydrogen projects and air-separation plants as future contributors to earnings growth.

For the third quarter, Praxair reported a profit of USD477 million, or USD1.62 a share, up from USD445 million, or USD1.49 a share, a year earlier. The company had forecast per-share earnings of USD1.58 to USD1.65.

Sales grew 4.4% to USD3.14 billion, while analysts polled by Thomson Reuters had expected USD3.16 billion. Organic sales, which exclude negative currency impacts, increased 5% on higher volumes and pricing, as well as new project starts in North America, South American and Asia.

Sales in North America, the company’s largest segment by revenue, grew 3.2% to USD1.64 billion. Europe sales were essentially flat, while South America sales grew 5.9%. Sales in Asia grew 10.7%.

As MRC wrote before, Praxair launched its first large-scale air separation plant at Kaustik (Volgograd) in Russia. This plant will produce oxygen, nitrogen and compressed air for Kaustik, a division of the Nikochem Group, under a long-term contract.
MRC

MOSCOW (MRC) - Exports of polyethylene terephthalate (PET) from Russia increased to about 19,000 tonnes in January-September 2014, up 7% year on year, according to MRC ScanPlast.
The main consumer of Russian PET remained Belarus. However, shipments of Russian PET in Belarus decreased to about 7,900 tonnes in the first three quarters, down almost 30% than in January-September of 2013.

Geography of Russian PET exports has widened over the reported period, with supply grown in the United Kingdom, Poland, Ukraine, Serbia and other countries.

The main exporter in Russia was Alco-Naphtha, based in Kaliningrad. The producer's exports of PET in the foreign countries were 18,500 tonnes in the first nine months of the year. The share of export shipments in the total producer's PET production over the reported period was 36.4%.
MRC

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