Moodys downgrades 8 Russian non-financial corporates

MOSCOW (MRC) -- Moody's downgrades ratings of 8 non-financial corporations, including Rosneft, Gazprom Neft, Lukoil, Russian Railways, reported the agency.

Moody's Investors Service has downgraded the ratings of Rosneft, Gazprom Neft and 6 other non-financial corporations and their subsidiaries after downgrading Russia's sovereign rating, which it announced in a statement.

In particular, Moody's downgraded to Baa3 from Baa2 the ratings of the following companies: Rosneft and its subsidiaries Rosneft Finance SA, Rosneft International Finance Limited and Rosneft International Holdings Limited; Gazprom Neft and its subsidiary GPN Capital S.A., the Federal Passenger Company, Lukoil and its subsidiary LUKOIL International Finance, MMC Norilsk Nickel and its subsidiary MMC Finance Ltd., Russian Railways and its subsidiary RZD Capital Plc.

All these ratings have been placed under review for further possible downgrade.

The rating action followed Moody's decision to downgrade Russia's sovereign ratings to Baa3 from Baa2 on January 16, 2015.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.

Lukoil is one of the world's biggest vertically integrated companies for production of crude oil & gas, and their refining into petroleum products and petrochemicals. The company is a leader on Russian and international markets in its core business, which accounts for over 20% of Russian oil production and 18% of the total Russian oil refining. Lukoil also controls two of the largest petrochemical plants in Russia and Ukraine: Stavrolen and Karpatneftekhim.

Gazprom Neft, is the fourth largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about 96% of its shares. The company is registered and headquartered in St. Petersburg after central offices were relocated from Moscow in 2011.
MRC

MOSCOW (MRC) -- South Korean petrochemical company LG Chem is in plans to shut its phenol-acetone plant for maintenance turnaround, reported Apic-online.

A Polymerupdate source in South Korea informed that the plant is likely to be shut in May 2015. It is likely to remain off-stream for around one month.

Located at Daesan in South Korea, the plant has a phenol capacity of 300,000 mt/year and acetone capacity of 180,000 mt/year.

As MRC wrote earlier, LG Chem restarted its bisphenol-A (BPA) plant in South Korea in late November 2014 after a maintenance turnaround. The plant was shut on October 26, 2014. Located in Yeosu, South Korea, the plant has a production capacity of 150,000 mt/year.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) -- Japan-based Asahi Kasei Chemicals (AKC) is planning to build a new validation plant at the Mizushima manufacturing complex at Kurashiki, for its newly developed diphenyl carbonate (DPC) production process, as per Chemicals Technology.

The plant, which is scheduled for start-up in January 2017, will produce up to 1,000t per year of DPC, a monomer used in polycarbonate (PC) production, through dialkyl carbonate (DRC).

AKC has built a successful business worldwide, licensing its non-phosgene process for PC using carbon dioxide (CO2) as feedstock. Validation of the new process will help the company to licence it as the intermediate process for DPC, strengthening the competitiveness of the licensing business.

Development of the newly developed process and construction of the validation plant have been supported by grants provided by Japan's New Energy and Industrial Technology Development Organization (NEDO).

The new process uses a catalyst developed by the company to obtain DRC from CO2 and alcohol, with DPC obtained from DRC and phenol in a second step.

As the second step also yields alcohol needed for the first step, the only starting materials are CO2 and phenol, therefore the new process provides better freedom in selection of a plant location than the non-phosgene PC process currently used by AKC, which relies on ethylene oxide (EO) as feedstock.

The new process is said to be more energy-efficient, enabling substantially reduced production costs.

As MRC reported earlier, Asahi Kasei’s (Tokyo, Japan) Fibers division will expand production capacity for polypropylene spunbond nonwovens in Thailand at its subsidiary Asahi Kasei Spunbond (Thailand) Co. AKST will add a new production line of 20,000 metric tons per year capacity which, combined with its existing production line, will double its capacity for spunbond nonwovens to 40,000 m.t/yr. The investment for the capacity expansion is approximately USD5 billion, with a scheduled startup of November 2015.

Asahi Kasei Corporation is a global Japanese chemical company. Its main products are chemicals and materials science.
MRC

MOSCOW (MRC) - Traders increased prices of imported titanium dioxide for the Russian domestic market on the back of the rise of the dollar and the euro against the rouble, according to ICIS-MRC Price Report.

Market players explained the rise in prices by exchange rate of the currency. The prices in dollar terms remained practically steady.

Prices for Asian titanium dioxide were heard in the range of USD2,900-3,000/tonne CPT Moscow, including VAT.
Price offers for titanium dioxide production from DuPont was at USD3,650-3,700/tonne CPT Moscow, including VAT.
Prices for titanium dioxide by Crimean Titan production in the spot market remained practically steady.

The range of spot prices for Crimean titanium dioxide was at Rb105,000-110,000/tonne CPT Moscow, including VAT.
Given the current rate of the rouble (64,97Rb=1USD on 20, January), the price difference between different brands was more than two times. A trader of TiO2 said he has not seen such a wide range of prices for Crimea, European and American feedstock before that.

The demand in the market continued to be seasonally low. Traders and converters also reported high stock inventories at their warehouses.
MRC

MOSCOW (MRC) -- January prices increased by Rb1,000-1,500/tonne in the Russian polypropylene (PP) market. The price rise was mainly caused by the rouble devaluation, higher interest rates also put pressure on prices, according to ICIS-MRC Price report.

The first working week of 2015 was traditionally calm in the Russian PP market. Converters' activity was low, quite a lot of companies formed additional inventories of material back in December and plan to return to PP procurement only in late January - early February. Some Russian producers raised contract PP prices by Rb1,000-1,500/tonne from December, citing the weakening of the rouble; spot prices were affected by increased interest rates and more expensive delivery charges.

Negotiations over January contract PP prices began in mid-December, and prices were agreed this week. SIBUR (sells PP of Neftekhimia, Tobolsk-Polymer, Tomskneftekhim and Poliom) and Nizhnekamskneftekhim raised January prices by Rb1,000/tonne from December to Rb1,500/tonne.

Spot prices rose proportionally to prices in the contract market. Buying activity was low in the market in the first working week of 2015. Some market participants reported temporary suspension of PP shipments from Tobolsk (the plant has been idle for almost two weeks due to technical issues). However, in general, PP supply was more than sufficient in the market.

Freight charges for road and rail transportation have grown by 10-12% since January. Many traders also reported a noticeable increase in interest rates, and they were forced to include this component into polymer prices. This week's offer prices of propylene homopolymer (homopolymer PP) of raffia grade were in the range of Rb75,000-77,500/tonne CPT Moscow, including VAT. Injection moulding homopolymer PP was offered by an average of Rb2,000/tonne higher.
MRC