PVC production in Russia increased by 31% in January 2015

MOSCOW (MRC) - Russia's unmixed polyvinyl chloride (PVC) production exceeded 74,100 tonnes in January 2015, up 31% compared with the same time a year earlier. Such a serious increase in production volumes provided RusVinyl, according to MRC ScanPlast.

January production of unmixed PVC in Russia grew to 74,100 tonnes, compared with 56,600 tonnes in January 2014 and 63,100 tonnes in December 2014. All Russian producers, despite sharp seasonal decline in demand for PVC kept a high level of capacity utilisation. Such a significant increase in production resulted from the increased production volumes at RusVinile - a new production site, which was launched in September last year.

Structure of PVC production over the reported period looked as follows. SayanskKhimPlast in January practically kept the December level of capacity utilisation. January production of suspension PVC (SPVC) at the plant was 24,600 tonnes, compared with 27,600 tonnes in January 2014 and 24,900 tonnes in December 2014.

Bashkir Soda Company (BSC) in January this year increased its capacity utilisation. The company's SPVC production in January was 22,700 tonnes, compared with 19,200 tonnes in January 2014 and 20,900 tonnes in December 2014.

Kaustik (Volgograd) in January 2015 produced 8,400 tonnes of SPVC, while in January and December last year it was 8,100 tonnes and 8,200 tonnes respectively.

RusVinyl (JV SIBUR and SolVin) in January increased capacity utilisation, while in November and December 2014 it had to reduce production volumes because of the technical problems. The producer's resin production in January 2015 was 18,400 tonnes, compared with 9,100 tonnes in December 2014. The main increase occurred for the production of suspension PVC.


MRC

MOSCOW (MRC) -- The ban on the foreign currency purchasing, the hryvnya devaluation and the expected increase in import prices in March have paralyzed the Ukrainian polymer market. Sellers have stopped their sales and importers can not buy the currency to pay for contracts, reported MRC analysts.

On 24 February 2015, the National Bank of Ukraine (NBU) published the NBU Board's Act No.130. This Act came into force yesterday, on 25 February. According to the document, the interbank foreign exchange market is closed this week. Importers have been in no position to buy the currency since then.

Ever since the day before yesterday and yesterday's morning, traders reported the termination of sales of polymers. Material is held at the warehouses, reported MRC analyst Igor Grishchenko. Market players also do not understand what the foreign currency exchange rate will be on Monday, which entails additional risks in case of stocks' sale.

New customs tariffs are another factor in the sales' termination. Sellers are waiting for an increase in the import duty. This is stated in the Law of Ukraine "On Measures to stabilize Ukraine's payment balance in accordance with Art. XII of the General Agreement on Tariffs and Trade 1994". According to the law, the import duty on the entire 39th group of HS will be increased by 5%.

To hold stocks at the warehouses also makes sense because of the expected rise in prices of polymers in foreign markets in March. Higher oil prices have led to an increase in spot prices of aromatic hydrocarbons and monomers in February. As a consequence, market players expect contract prices of polymers to go up.

As reported earlier, the official exchange rate of the dollar against the hryvnya has almost doubled since the beginning of the year and was at UAH 28.3 per USD 1 on 24 February. At the same time, the hryvnya exchange rate against the dollar fell even lower in the interbank market on Tuesday. Bid prices were at UAH 32 per USD 1. Sellers' prices (Ask) were at UAH 33.5 per USD 1.
MRC

MOSCOW (MRC) -- Axiall and Korean firm Lotte Chemical have decided to defer a final investment decision on a USD2 billion ethane cracker in Westlake, La. Via the American Press, Axiall CEO Paul Carrico said uncertainty in U.S. energy, feedstock and labor markets drove the decision, said Bicmagazine.

Carrico did not say when an investment decision would be made. The firms recently completed a front-end engineering and design study for the project.

It is the second major U.S. downstream project to be put on hold since oil prices began to tumble last year. Last month, Sasol said it would delay a decision on a USD14 billion gas-to-liquids facility in Lake Charles, La., due to low oil prices.

Last February, Axiall and Lotte Chemical signed a preliminary agreement to build a USD2 billion ethane cracker on land bordered by Prater and Pete Manena roads. If the project is approved by state and federal officials, Lotte Chemical has agreed to build and operate a monoethylene glycol facility adjacent to the ethylene plant. The total estimated cost of both facilities is USD3 billion.

Axiall is a chemical company formed in 2012 from the chemical assets of PPG and Georgia Gulf. The PPG products are primarily chlor-alkali. The combined companies will be the third largest producer of chlor-alkali in the US after Dow Chemical and Occidental. PPG will own 50.5% of the combined companies. The company is headquartered in Atlanta, GA.

The Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.
MRC

MOSCOW (MRC) -- Total's French petrochemical complex in Feyzin will begin a planned, eight-week maintenance Tuesday, reported Apic-online with reference to the company's statement.

The maintenance will involve the 250,000 mt/year Feyzin cracker, as well as the butadiene, aromatics and ETBE units. The maintenance is to last until April 28.

The works will aim to increase safety, reduce energy consumption and improve environmental performance, the company said.

During the works at the petrochemical site, the refinery will continue to operate normally.

Total operates a 109,000 b/d refinery at Feyzin.

At the start of the maintenance, while the units are gradually halted, flaring, noise and smoke are possible, the company also said.

As MRC wrote previously, Total, Europe’s third-largest oil company, intends to invest EUR160m before 2016 to adapt its petrochemical platform in Carling, in the Lorraine region of eastern France, and to restore its competitiveness.

Besides, in early 2015, Total permanently shut down its high density polyethylene (HDPE) line in Belgium. The plant was shut permanently owing to weak margins which have arisen on account of cheap imports in the region. Located at Antwerp in Belgium, the line has a production capacity of 70,000 mt/year.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- Germany's Bayer AG said it plans to increase its dividend for 2014, in a statement ahead of fourth-quarter results, said the company in its press release.

The drugs and chemicals company said it will propose a dividend of EUR2.25 per share for 2014, up from the EUR2.10 a share dividend paid for 2013.

"The past year was very successful for Bayer" Chief Executive Marijn Dekkers said.

With 826.9 million shares entitled to the dividend, the total dividend payment will come to around 1.86 billion euro, up 7.1% from the payout for 2013, Bayer added.

The Bayer Group’s consolidated financial statements for 2014 will be presented and discussed at the Financial News Conference on February 26, 2015.

As MRC wrote before, Bayer intends in the future to focus entirely on the Life Science businesses – HealthCare and CropScience – and float MaterialScience on the stock market as a separate company. In this way Bayer is positioning itself as a world-leading company in the field of human, animal and plant health.

Bayer is a global enterprise with core competencies in the fields of health care, agriculture and high-tech polymer materials. As an innovation company, it sets trends in research-intensive areas. Bayer’s products and services are designed to benefit people and improve their quality of life. At the same time, the Group aims to create value through innovation, growth and high earning power.
MRC