Export of polyethylene, polypropylene from Brazil unlikely to slow down shortly

MOSCOW (MRC) -- Aggressively priced Brazilian polymer cargoes are likely to continue to appear in the global market in the near future, as per Globalrubbermarkets.

Low-priced polyethylene and polypropylene will continue to flow out of South America as long as the country's economic struggles persist.

Traditionally a net importer of polymers, Brazil has become a much larger global player in recent months as domestic demand has fallen, leaving Braskem (the region's largest petrochemical producer) in search of new markets. Domestic sales for PE, PP and PVC dropped 15% in Q2 from Q1 levels, Braskem said during its Q2 earnings call. The result has been an influx of exports throughout parts of Latin America and Asia, with effects also felt in the US, where sellers have had to contend with lower Brazilian prices that sources said have helped push a sliding market lower
"Brazil has complicated the situation," a US-based polymer trader said. "If the economy was strong, Braskem would not be doing what they are doing now. "If the weak domestic demand persists, the export will continue happen in the same pace as of today," a source familiar with Braskem's business said.

The increased volumes being sent to Asia at more competitive prices levels, have gotten the market's attention. "There have always been some Brazilian cargoes, probably around 20,000 mt regularly into China, but somehow this time round, offers have been blown out of proportion," an Asian producer source said.

As MRC informed earlier, Latin America’s biggest petrochemical maker - Braskem SA will soon decide whether to build a plant in Texas or Pennsylvania to convert low-cost natural gas into polypropylene. The factory would produce at least 1 billion pounds (450,000 metric tons) of resin a year and would be the U.S. polypropylene industry’s first world-scale project in about 12 years, said Mark Nikolich, a vice president at Braskem. Preliminary engineering is under way for construction at existing Braskem sites in either La Porte, Texas, or Marcus Hook, Pennsylvania.
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MOSCOW (MRC) -- Thailand's PTT Global Chemical PCL (PTTGC), said it planned to reduce the export of naphtha and use it instead as a feedstock for its own olefin crackers after declines in global crude prices, said Reuters.

Using naphtha from its refinery to feed the petrochemical plants could raise its annual olefins capacity by 600,000 tonnes to 3.5 million tonnes, Chief Executive Supattanapong Punmeechaow told reporters.

"Global oil prices are likely to stay at low levels over the next five years and we have to prepare for that," he said.

The company will examine more details about investment and focus on high value-added petrochemical products to boost margins, he said, adding the project is part of preparations for a potential decline in domestic gas supplies.

PTTGC normally exports 1.32 million tonnes a year of naphtha. It produces petrochemicals primarily from natural gas, and in the past it enjoyed good margins by using domestic gas supplied by its parent PTT from the Gulf of Thailand.

One of the world's top 10 ethylene makers, PTTGC has a petrochemicals production capacity of 8.75 million tonnes a year and runs a refinery with a crude and condensate refining throughput capacity of 280,000 barrels per day.

As MRC informed earlier, PTT Global Chemical PCL's second quarter net profit surged 45% thanks to higher margins from petrochemical and refining products and rising stock gain. Net profit was 8.9 billion baht (USD253.20 million), in line with 8.8 billion baht average forecast by 16 analysts polled by Reuters. This compared with 6.17 billion baht in the same period a year earlier.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- Biaxially oriented polypropylene (BOPP) specialist Treofan has developed a new film known as Treofan EPT for in-mould labelling in deep drawing or thermoforming, said the company in its press release.

The new film with a special surface that attaches perfectly to deep-drawn films, enabling stable fusing of thermoforming and label film at low temperatures and pressures, while delivering look and feel as good as injection-moulded products, the company said.

This addresses the challenge of attaching BOPP labels to thermoformed products, which required a separate process step until now. The fusion between container and label cannot be differentiated visually and functionally from the complete fusion achieved by injection molding.

The new Treofan EPT has undergone several tests, including with Illig, a provider of machinery and tools for thermoforming and packaging technology. It is being launched to the market on a large scale.

With 1,100 people, Treofan operates four production sites in Germany, Italy and Mexico, where it manufactures BOPP films. The company offers its products under the brand names Treofan and TreoPore. Its products include solutions for the packaging and tobacco industries, labels, and technical films for electronic applications such as batteries and capacitors.

As MRC informed earlier, Max India has sold its 50,000 tpa profitable biaxially oriented polypropylene (BOPP) film facility, Max Speciality Films, to Treofan, a German global technology leader for BOPP film, for Rs 5.4 billion (USD97 mln).

Treofan Group is a global technology leader for biaxially oriented polypropylene film (BOPP). Treofan, which develops and sells BOPP films in over 90 countries around the world, has already production facilities in Europe and the Americas. Company offers the most diverse and comprehensive product range within the industry, providing packaging, label and tobacco film applications as well as films for electronic devices, such as capacitors.
MRC

MOSCOW (MRC) -- INEOS has been awarded three new Petroleum Exploration and Development Licenses covering a total area of approximately 250 km2 in the East Midlands, as per the company's press release.

This additional acreage cements INEOS position as one of the UK’s leading shale gas businesses. The Department of Energy and Climate Change (DECC) awarded these new licenses in the first of a number of announcements from its 14th Licensing Round.

INEOS Shale is INEOS’ new on shore oil and gas exploration and production business. The business made its first move into the shale exploration one year ago on the 18th August with the purchase of a share of the shale section of PEDL 133 from Dart Energy. It has grown rapidly, and now has the third largest portfolio of shale gas assets in the UK. Today’s announcement is a further significant step for INEOS in its plan to become the leading player in the UK shale gas industry.

The first tranche of licenses awarded cover licence blocks that have been screened out as not requiring further environmental assessment under the Conservation of Habitats and Species Regulations 2010. The Habitats Directive, a screening assessment is being carried out on remaining blocks applied for in the 14th Round. As a result, blocks applied for which are close to or in certain Special Areas of Conservation (SACs) and Special Protection Areas (SPAs) will be subject to further environmental assessments before any offer is made. Announcements of the second tranche are expected later this year.

INEOS continues its community engagement programme, aiming to speak directly to people about this important issue and dispel as many of the untruths and the myths about shale gas production as possible.

As MRC informed earlier, INEOS has recently commissioned eight large-volume Dragon class ships to transport liquefied shale gas ethane from the US to Europe. And the company – which owns a number of licences to explore for shale oil / gas in the Central Belt – has now put roof in place that covers Europe’s biggest ethane storage tank at Grangemouth.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.


MRC

MOSCOW (MRC) -- Unipetrol AS has shuttered production at its Chempark Zaluzi petrochemical complex in Litvinov, Czech Republic, following an explosion and ensuing fire at the site’s 544,000-tonne/year (tpy) ethylene plant, said Ogj.

The explosion, which occurred around 9:00 a.m. local time on Aug. 13 following a propylene leak at the plant’s steam cracker, was followed by fires in two separate parts of the unit, the second of which broke out after the cracker’s emergency shutdown, Unipetrol said.

Unipetrol has stopped production of all petrochemicals at the complex, with the plant’s steam cracker, polypropylene unit, and two polyethylene units to remain offline until further notice, the company said on Aug. 14.

As a precautionary measure, production at the complex’s ammonia unit also has been reduced to a minimum, as have crude throughputs at Unipetrol subsidiary Ceska Rafinerska AS’s (CRC) nearby 5.4 million-tpy Litvinov refinery, which acts as key supplier of naphtha feedstock for the cracker.

Given the current uncertainty surrounding a timeframe for the plant’s restart, Unipetrol has declared a force majeure on its petrochemical production supply agreements with customers.

The Litvinov steam cracker recently experienced two unplanned shutdowns that resulted from unidentified technical difficulties, according to June 30 and July 17 releases from Unipetrol. A first shutdown lasted from June 29 to July 5, with a second closure occurring from July 20 to July 25, the company said.

Unipetrol, itself a subsidiary of Polski Koncern Naftowy SA (PKN Orlen), completed its purchase of former partner Eni SPA’s interest in CRC to become sole owner of the company, which in addition to the Litvinov refinery, also operates the 3.3 million-tpy Kralupy refinery.

Unipetrol’s buyout follows the company’s overall strategy for 2013-17, which calls for an increase in capital spending on projects designed to further integrate the refining and petrochemical segments of its business as a means of guaranteeing secure feedstock for its petrochemical operations.

Unipetrol , a.s. is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005 Unipetrol became a part of the PKN ORLEN Group, the largest oil processor in Central Europe. The UNIPETROL Group is oriented mostly towards oil processing, fuel distribution and petrochemical production. In all of these business areas the Unipetrol Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading firms in the Czech Republic in terms of its revenues, and employs almost 4,000 people.
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