LDPE prices fell significantly in Russian market in second half of May

MOSCOW (MRC) -- The Russian low density polyethylene (LDPE) market faced an acute shortage and large price increases in April. The market situation has levelled off since May, prices have rolled back significantly by the end of the month, according to ICIS-MRC Price report.

The shortage of LDPE began to be felt in the Russian market in the second half of March. In April, the deficit reached its peak, LDPE prices also reached their new record. Demand for polymer subsided in May, partially because of long May holidays, prices fell sharply in the market in the second half of the month.

The traditional April's deficit of LDPE in the Russian market was caused by a seasonal increase in demand and a scheduled shutdown for maintenance at Kazanorgsintez, the second-largest producer. The shortage of material intensified in the market this year because of an upcoming outage for maintenance and modernization at Tomskneftekhim (the plant has limited its LDPE sales in the domestic market since April, in order to build up sufficient inventories for the period of shutdown).

In mid-April, LDPE prices hit their historical record in 2015, with the price spread being very wide. Deals for LDPE were done in the range of Rb114,000-125,000/tonne CPT Moscow, including VAT. Deals for shrinkable film polyethylene (PE) reached Rb127,000/tonne CPT Moscow, including VAT.

The boom subsided in the market in the second half of April, which was partlially caused by a record level of prices. Restrictions on road transportation in most regions, which led to higher delivery costs, also made a major contribution in the decline of demand. As a consequence, some converters suspended their LDPE purchasing before to the opening of roads.

Buying activity had increased in the LDPE market by mid-May, all restrictions on road transportation were lifted, and converters returned to the polymer procurement. Supply of PE was still tight in the market in the second half of May because of some producers (Tomskneftekhim and Kazanorgsintez), but this factor could not prevent the price roll-back.

LDPE prices have fallen to Rb108,000-115,500/tonne CPT Moscow, including VAT, by end-May. Prices of shrinkable film PE dropped to Rb112,000-116,500/tonne CPT Moscow, including VAT.

At the same time, the current slowdown in the market can not last long. Ufaorgsintez will shut down some of its LDPE production capacities for maintenance in early June. Tomskneftekhim and Gazprom neftekhim Salavat will take off-stream their production for a on-month turnaround in the second half of June.
MRC

MOSCOW (MRC) -- LyondellBasell, one of the world's largest plastics, chemical and refining companies, has announced that Bolivia's state-owned petrochemical company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), has selected LyondellBasell's 5th Generation Spheripol polypropylene (PP) process technology for a 250 Mtpy plant in Tarija, Plurinational State of Bolivia, as per Hydrocarbonprocessing.

Mario Salazar Gonzales, Petrochemical Plants Manager at YPFB stated, "We selected the Spheripol process for Bolivia’s first polymer plant because of its superior economics, proven track record and broad product slate.”

"The Spheripol process is the most widely practiced polypropylene technology in the world and is well established in Latin America," said Dan Coombs, executive vice president of Global Olefins & Polyolefins and Technology at LyondellBasell. "Customers appreciate the Spheripol process’s track record of high plant operability, leading operating cost, excellent product properties and the ability to make rapid grade changes."

As MRC informed before, in April 2016, LyondellBasell completed the previously announced acquisition of the PP compounding assets of Zylog Plastalloys Pvt. Ltd. (Zylog) in India. The company entered into a definitive agreement to acquire Zylog's PP compounding assets in November 2015.

LyondellBasell is a leading licensor of polypropylene and polyethylene technologies with more than 250 polyolefin process licenses. Spheripol is the leading polypropylene process technology with more than 22 million tons of licensed capacity. It combines globally recognized quality polypropylene grades with leading monomer efficiency and investment costs to make it the technology of choice.
MRC

MOSCOW (MRC) -- Celanese Corporation, a global technology and specialty materials company, had increased June list and off-list selling prices for acetic acid in view of recent market conditions, said the producer on its site.

The price increase for China was RMB100/mt.

Besides, the company will raise list and off-list selling prices for acetic acid in the European region. The price rise will be effective July 1, 2016, or as contracts allow and will be EUR30/tonne.

As MRC informed previously, Celanese Corporation raised list and off-list selling prices for vinyl acetate monomer (VAM) from 1 June, 2016, or as contracts allowed, as follows:

- by EUR50/mt - for Europe;
- by USD50/mt for Central and South America and Mexico;
- by USD0.02/lb for USA and Canada.

Besides, earlier, Celanese Corporation increased its list and off-list selling prices for Ateva EVA and LDPE polymers, effective May 1st, 2016 or as contracts allowed. Prices of Ateva EVA rose by USD50/tonne for Asia, whereas LDPE prices grew by USD0.04/lg (USD 0.09/kg or USD90/tonne) for North and South America and by USD50/tonne for Asia.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,000 employees worldwide and had 2015 net sales of USD5.7 billion.
MRC

MOSCOW (MRC) -- The Reserve Bank of India has capped weekly dollar purchases by oil refiners to pay off their debts to Iran in order to avoid pressure on the rupee, three sources said on Monday, as per Hydrocarbonprocessing.

India is one of the biggest buyers of Iranian crude and built up a payments backlog when Iran was under Western sanctions, with its refiners owing about USD6.5 B to Iran.

They have cleared USD770 MM in Euros through Turkey's Halkbank to National Iranian Oil Co (NIOC). State-run Union Bank of India facilitated the payments.

The refiners had been holding back 55% of payments to Iran after a channel through Halkbank was closed in 2013, although payment of some of those funds was allowed after an initial temporary deal to lift the sanctions.

Last week, on the basis of an RBI advisory, India's oil ministry wrote to refiners saying the remaining dues can be settled in three months from May 30 and told companies to ensure demand for foreign exchange is limited to USD500 MM per week, the sources told Reuters.

"RBI wants to stagger payments to Iran to pre-empt any undue volatility in the domestic forex market," said one source.

The rupee touched a near three-month low of 67.77 to the dollar last week, partly due to dollar purchases to settle a portion of the Iranian oil dues the week before.

India's oil ministry has asked state refiner Mangalore Refinery and Petrochemicals Ltd. (MRPL) to coordinate with other firms to ensure that weekly payments do not exceed USD500 million.

We remind that, as MRC informed earlier, in August 2015, MRPL initiated its downward integration by amalgamation with ONGC Mangalore Petrochemicals Limited (OMPL). Last year, OMPL had commissioned a state-of-the-art aromatic complex with 914,000 tpa capacity of paraxylene and 283,000 tpa capacity benzene adjacent to the refinery. The amalgamation will ensure optimal utilization of resources which will lead to improvement in overall working culture and environment.
MRC

MOSCOW (MRC) -- Chemtura has announced that Azelis Americas (formerly Koda Distribution Group) will be the sole distributor for its pre-polymer urethanes, curatives, and polyester polyols product lines in North America, reported GV.

The agreement will be effective from 26 July 2016, in addition to the current urethanes surface coatings portfolio. At the same date, Chemtura will be discontinuing its relationship with AdipreneDirect in North America.

Azelis Americas with headquarters in Stamford, CT, USA, is part of the Azelis Group, which is based in Luxembourg.

As MRC reported earlier, in April 2016, Chemtura Corporation announced the expansion of the Low Free (LF) MDI polyurethane elastomers production capacity at its Latina, Italy, facility. The expansion, due for completion by the end of 2016, will complement the company’s existing LF MDI production capability in Gastonia, NC, USA, and ensure a flexible, reliable supply to its customers. Chemtura is increasing production of Adiprene LF MDI prepolymers to ensure a flexible and reliable supply to customers.

Chemtura, with 2015 sales of USD 1.7 billion, is a global manufacturer and marketer of speciality chemicals headquartered in Philadelphia, Pennsylvania, with its other principal executive office in Middlebury, Connecticut. The company focuses on specialty chemicals for various industrial sectors, and these are transportation (including automotive), energy, and electronics.
MRC