Strong crude prices could squeeze petrochemical margins

(ICIS) -- Strong supply amid continued weakness in demand may keep petrochemical prices soft in Asia next year, with producers' margins likely to be squeezed by higher oil prices, an industry analyst said on Tuesday.

Oil prices were hovering close to $90/bbl (┬68/bbl), largely on account of the US dollar weakness that makes investments in dollar-denominated commodities more attractive. At noon, light sweet crude for January delivery was trading at $88.47/bbl, up by more than 8% from the start of the year.

Among petrochemical products, ethylene gained 2.2% in value in northeast Asia from the start of the year, while toluene was up 1.1% while benzene fell 5.72% over the same period, according to ICIS data.

Ethylene capacity additions in Asia this year would be about 7m tonnes, based on earlier projections from Chemical Market Associates, Inc (CMAI).

MRC

(ICIS) -- Dow Chemical has stopped all fresh orders in Europe for linear low density polyethylene (LLDPE) for December, a company source said on Tuesday. ⌠We are seeing a very strong December and put an order-stop on new sales yesterday (13 December), said the source. Dow Chemical is the leading C8 LLDPE manufacturer in Europe.

Sales of polyethylene (PE) last month were also very strong, according to several sources with access to sales data. For many producers, November was the best month for sales in 2010, although LLDPE volumes this year have not been running higher than 2009. LLDPE prices in December were increasing by about ┬30/tonne ($40/tonne) compared with November.

It was not clear whether the strong demand for PE in December was a result of improved downstream demand, or whether converters bought extra volumes for stock, as a buffer against higher prices in January.

The ethylene contract for January was widely expected to rise by a hefty amount, as crude oil and naphtha prices rose and the euro continued weaken against the US dollar. Producers were expected to recover any increase in the ethylene contract price in higher PE prices in January.

The December ethylene monomer contract price rose by ┬27/tonne from November to ┬1,005/tonne FD NWE.

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(Plastics Today) -- The automotive systems supplier made the presentation to injection molding machine manufacturer Arburg as part of Delphi's awards convention, held in Sao Paulo. The leading global supplier of mobile electronics and transport systems for the automotive sector bestowed the award on the Arburg subsidiary in Brazil for its role as an outstanding supplier in South America.

Delphi presented supplier awards for each of its seven locations in South America. At Delphi EEA (Electrical/Electronic Architecture) in Sao Paulo, several dozen electric and hydraulic injection molding machines from Arburg (Lossburg, Germany) are in use. Arburg manufacturers all of its machines at its HQ plant in Lossburg. Arburg also co-operates with Delphi at other locations throughout the world.

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(Plastics Today) -- Erema, the Austrian manufacturer of plastics recycling machinery, says the weeks leading up to and immediately following the triennial K show proved to be some of the best in the company's history as it took orders for ┬38 million worth of equipment in the span of just three months.

The trend of a rapidly increasing volume of order intake that began before the trade fair has continued since, according to the manufacturer, which is based in Ansfelden, Austria, near Linz. The expansion of the company's infrastructure is also making progress with a new customer test center due to be completed by mid-2011. The volume of orders was the most the company has ever recorded in such a short period of time. Total turnover for the company in its FY 2009/10 was ┬74 million.

Erema Engineering Recycling Maschinen und Anlagen Ges.m.b.H. is the world's market leader in the development and production of plastics recycling systems and components. Over 3,500 Erema systems around the globe now produce more than 12 million tonnes of plastic pellets every year.

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(Plastemart) -- The Board of Brazil's state-run energy giant Petroleo Brasileiro SA (Petrobras) has approved incorporation of two units at the Comperj refinery. With this, Comperj's basic petrochemicals and PET producing units will become operational units of Petrobras. Shareholders will vote to approve the change at a meeting that will be scheduled for a later date.

Plans for the Comperj refinery have been altered by Petrobas because of high construction costs and global excess petrochemicals production capacity. The initial outlook for the Comperj refinery when it was first approved has seen changes in light of economics, market dynamics and costs, which led to a new configuration transforming Comperj in a new project comprising three steps and a new timeline. Petrobras faced glitches finding partners for the project, which was originally designed as a US$8.5 billion standalone petrochemicals plant

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