Europe PP buyers pay more in Dec, face hikes in January

(ICIS) -- Polypropylene (PP) buyers are being forced to pay more in December because of better-than-expected demand and restricted availability, with some producers beginning to warn of further hikes in January, market sources said on Thursday.

Producers aimed to cover the ┬22/tonne increase in the December propylene monomer contract, a number many now considered too low given the recent rise in upstream costs. The propylene contract settled at ┬960/tonne FD (free delivered) NWE (northwest Europe).

Costs had increased considerably in recent weeks. Brent crude oil was back up to $91.46/bbl on Thursday, in line with levels seen only in October 2008, and naphtha was trading at $828-832/tonne CIF (cost insurance freight) NWE.

Some PP buyers were making parallels with 2008, when it seemed that prices could only go one way, before falling spectacularly to well below the propylene contract price. Producers did not envisage such a drop, however.

MRC

(ICIS) -- China's polyethylene (PE) and polypropylene (PP) prices may rise at the end of December on restocking activity before levelling out in early January, industry players said on Friday.

Transactions had been slow in recent weeks because many importers were concerned that an imminent interest rate hike aimed at curbing inflation would trigger a downtrend in commodity prices, Chinese traders said.

But any downtrend resulting from the interest rate hike was likely to run its course within days, as the lower prices would lead buyers back to replenish stocks and the restocking activity would push prices higher, they added.

PE and PP might trade higher at the end of December when negotiations for January shipments begin, but the increment in PE prices might be limited if import costs stayed above the retail prices, the Chinese traders said. The import costs of most PE grades were currently above their retail prices, they said.

For example, imported linear low density PE (LLDPE) was selling below yuan (CNY) 11,000/tonne (US$1,653/tonne) EXWH (ex-warehouse) in the retail market, about CNY500/tonne lower than the average import costs of December cargoes, they said.

MRC

(PRW) -- West Pharmaceutical Services, a company that makes moulded plastic components such as stoppers and vials for injectable drugs, is closing a plant in Pennsylvania, the US, and downsizing a plant in the UK. The company is laying off 170 workers in Pennsylvania as part of a move to improve the efficiency of manufacturing operations.

The shutdown will begin in January and continue into the third quarter of 2011 as production is transferred to other plants, mostly in the US, the company said in a news release.

West also plans to downsize its plant in St. Austell, the UK, over the next two years, eliminating 150 of the nearly 200 full-time jobs at that location. The company expects a ⌠significant portion of the St Austell plant's business to go away when a current customer contract expires late in 2012. The plant makes moulded rubber components for disposable medical devices, as well as rubber and plastic components used in pharmaceutical packaging.

⌠The changing landscapes in the healthcare and consumer markets we serve require that we regularly evaluate our operations and adapt to changing conditions in order to successfully compete, said chairman and CEO Donald Morel in a 7 December news release.

MRC

(PRW) -- Bayer is building a pilot plant for the kilogram-scale production of polyether polycarbonate polyols (PPPs) from the major greenhouse gas CO2 and propylene oxide. PPPs can be further processed to produce polyurethane. Construction of the plant at Bayer's headquarters facility at the Chempark, Leverkusen got underway in May 2010.

⌠Scientists around the world have been searching for decades for ways in which to expoloit the waste product carbon dioxide (CO2). One major obstacle is that CO2 molecules are very stable and it is difficult to get them to react chemically with other substances. It would be possible to overcome this inertia by using large amounts of energy, but this would make the processes very costly and would result in the release of yet more greenhouse gases", said a Bayer MaterialScience (BMS) spokesman at a ⌠Perspective on Innovation 2010 event at Leverkusen on 7 December.

MRC

(Plastemart) -- Borouge is mulling a new compounding plant in India. With this, the Abu Dhabi based petrochemicals joint venture is set to expand its Asian footprint, as per The National. In April, the company opened a US$70 mln, 105,000 ton polypropylene compounding plant in Shanghai and is planning a production facility in Guangdong province.

The company is also seeking to stand out in Asia's increasingly crowded petrochemicals market by working closely with both the direct buyers of its plastics and the manufacturers who use them.

MRC