HDPE imports to Russia fell by a third from January to August 2015

MOSCOW (MRC) -- The overall imports of high density polyethylene (HDPE) to Russia totalled 123,100 tonnes over the first eight months of 2015, down by 33% year on year. Film grade and pipe grade polyethylene (PE) accounted for the main fall in imports, according to MRC DataScope report.

In August, Russian companies slightly increased their HDPE purchasing in foreign markets. Thus, shipments of PE for extrusion coating of large diameter steel pipes rose significantly. The last month's HDPE imports were 19,400 tonnes versus 18,800 tonnes a month earlier. The overall HDPE imports totalled 123,100 tonnes from January to August 2015 versus 182,900 tonnes a year earlier. Import shipments decreased in all consumption sectors, except for the rotational moulding sector, with pipe grade and film grade PE accounting for the greatest fall in imports.

The supply structure by consumption sectors looks the following way over the stated period.

August imports of HDPE for extrusion coating of large diameter steel pipes rose to 5,300 tonnes from 3,400 tonnes a month earlier. The overall imports of this PE grade dropped to 38,700 tonnes over the said period, down by only 1% year on year.

The last month's imports of injection moulding HDPE were 3,800 tonnes versus 4,100 tonnes in July (local producers of caps for PET containers accounted for a slight decline in purchasing). Imports of injection moulding PE totalled 31,100 tonnes from January to August 2015, down by 4% year on year.

August imports of HDPE for pipe extrusion fell to 4,800 tonnes from 6,600 tonnes. Local pipes producers were forced to reduce their purchasing of material in foreign markets because of the rouble devaluation. The overall imports of pipe grade PE to Russia totalled 20,500 tonnes versus 51,800 tonnes a year earlier. A major fall in demand for finished products in the domestic market (20-25%), high HDPE prices in the foreign markets and a significant devaluation of the Russian rouble against the major world currencies were the key factors that affected imports negatively.

The last month's imports of HDPE for extrusion blow moulding grew to 2,200 tonnes from 2,000 tonnes a month earlier. The overall imports of this PE grade to Russia totalled 16,700 tonnes over the stated period versus 29,600 tonnes a year earlier.

August imports of film grade HDPE rose to 1,900 tonnes from 1,500 tonnes in July. Imports of film grade HDPE slumped to 8,700 tonnes over the first eight months of 2015 from 21,400 tonnes a year earlier.

The overall HDPE imports into other consumption sectors, including the cable products extrusion sector, totalled 7,400 tonnes from January to August 2015 versus 8,700 tonnes in 2014.

MRC

MOSCOW (MRC) -- JX Nippon Oil and Energy shut the crude distillation unit (CDU) at its Mizushima refinery in Japan, as per Apic-online.

A Polymerupdate source in Japan informed that the CDU with a processing capacity of 140,000 bpd was taken offstream on September 16, 2015. It is likely to restart operations on November 7, 2015.

Located at Mizushima in Japan, the refinery has a crude processing capacity of 140,000 bpd.

As MRC wrote before, on January 6 2015, Japan's JX Nippon Oil and Energy shut its olefins conversion unit (OCU) in Kawasaki indefinitely. The shutdown was attributed to compressed margins in the wake of low propylene prices as compared to prices of ethylene.

Besides, on June 27, 2015, JX Nippon Oil and Energy restarted the No.1 crude distillation unit (CDU) at its Kashima refinery in Japan, as per Apic-online. The CDU with 189,000 bpd was shut on May 29, 2015 following a fire at the Kashima refinery. The Kashima refinery of JX Nippon has a crude processing capacity of 252,000 bpd.

The Nippon Oil Corporation, or NOC or Shin-Nisseki is a Japanese petroleum company. Its businesses include the exploration, importation, and refining of crude oil; the manufacture and sale of petroleum products, including olefines (ethylene, propylene) and aromatics.
MRC

MOSCOW (MRC) -- Japan's Sumitomo Chemical Co. is in plans to shut its caprolactam plant for maintenance turnaround, according to Apic-online.

A Polymerupdate source in Japan informed that the plant is planned to be shut towards the end of October 2015. It is likely to remain off-stream for around one month. Currently, the plant is operating at around 80-85% production capacity rates.

Located in Ehime, Japan, the plant has a production capacity of 180,000 mt/year.

As MRC reported earlier, in May 2015, Sumitomo Chemical Co. announced its plans to mothball the ageing 415,000 tpa naphtha cracker at its Chiba plant from May 11. Though Sumitomo Chemical's cracker is shut for good, the company resumed operations of downstream petrochemical units at the Chiba plant from the beginning of July, using petrochemical feedstock from Keiyo Ethylene's 768,000 tpy cracker located nearby.

Sumitomo Chemical is a Japanese based manufacturer of a diverse range of products, including basic chemicals, petrochemicals and plastics, fine chemicals, agricultural chemicals, IT-related chemicals and pharmaceuticals.
MRC

MOSCOW (MRC) -- Asahi Kasei is partnering with Taiwanese chemical manufacturer Formosa Plastics to construct a facility in Taiwan for making fibers used in sports apparel, a move that will boost the Japanese company's production capacity there by 60%, said Nikkei.

Subsidiary Asahi Kasei Fibers, the core company in the fibers division, already runs a plant with an annual capacity of 5,000 tons under a joint venture with Formosa Plastics. The new plant will be built on a site adjacent to the existing facility in Yunlin County. Construction is slated to begin this year, with the plant expected to begin operations during 2017.

Investment is expected to fall just short of 3 billion yen (USD24.6 million). When completed, the plant will be able to turn out 3,000 tons a year of polyurethane elastic fibers, which will be supplied to major sporting goods makers. Many large sporting goods companies such as Nike and Adidas have production sites in Taiwan, so ample local demand for the fibers is anticipated.

By boosting capacity, Asahi Kasei hopes to be able to respond more flexibly to increases in orders and also improve product development.

The Japanese chemical company's fibers division suffered an operating loss in the year ended March 2009 but rebounded last fiscal year, posting a profit of 10.5 billion. The company is enhancing production capacity in Japan as well in response to growing inquiries for nonwoven cloth made from cupro, a highly absorbent fiber.

Through these measures, Asahi Kasei aims under a new three-year business plan to boost the fibers division's sales by 15% to 150 billion yen and operating profit by 43% to 15 billion yen by fiscal 2018.

As MRC informed earlier, Asahi Kasei is in plans to take off-stream its No.3 styrene monomer (SM) plant for a maintenance turnaround. The plant is likely to be shut next week. The shutdown is expected to remain in force for a period of around 45-50 days. Located in Mizushima, Japan, the plant has a production capacity of 390,000 mt/year.

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

MOSCOW (MRC) -- State-owned ONGC Videsh Ltd (OVL) has evinced interest in acquiring another 10% in Russia’s second-largest oilfield (by production), owned by OAO Rosneft, taking its total stake in CSJC Vankorneft to 25%, reported LiveMint with reference to a person familiar with the matter.

In response to a query about OVL’s interest in acquiring another 10% stake in Vankorneft, N.K. Verma, managing director of OVL, said: "At the moment we have agreed for a 15% stake."

The person familiar with the matter, who asked not to be identified, said the 10% additional stake was that which was originally offered to China National Petroleum Corp.

OVL, Mint learns, is also considering other acquisition opportunities in Russia.

Earlier this month, OVL, the overseas arm of Oil and Natural Gas Corp. Ltd (ONGC), said it was buying a 15% stake in the OAO Rosneft subsidiary for USD1.26 billion.

At that price, the additional 10% stake will be valued at around USD840 million. The deal was structured with crude oil prices pegged between USD60 and USD70 per barrel. Rosneft claims to have the world’s lowest production cost per barrel of USD2.8 per barrel.

Indian investments in Russia, mainly in the hydrocarbon sector, total around USD4.25 billion. OVL has invested USD23.81 billion in overseas assets till date.

The acquisition in CJSC Vankorneft will give OVL access to the crude oil being produced by the company. Vankorneft operates the Vankor field, in the Turukhansky district of Krasnoyarsk province, which has an output of 22 million tonnes (mt) per annum. A 15% stake will give OVL 3.3 mt of oil per annum as per its entitlement, with the effective value date of the agreement being 31 May. A 25% stake would give it 5.5 mt of oil a year.

We remind that, as MRC wrote before, in September 2015, China National Chemical (ChemChina) signed a memorandum of understanding (MoU) with Rosneft to acquire a majority stake in Far-East Petrochemical Company (FEPCO) project in Nakhodka, Russia. The agreement was signed by Rosneft management board chairman Igor Sechin and ChemChina chairman Ren Jianxin during Russia President Vladimir Putin's visit to China. The transaction is subject to due diligence, and corporate and regulatory approvals. "The achieved agreements are indicative of a special level of cooperation with our Chinese partners."
MRC