Asia ethylene prices to ebb on dwindling Chinese imports

(ICIS) -- Asian ethylene prices are likely to ebb for January-delivered cargoes, as the robust Chinese import demand is seen fizzling out on a weakening downstream domestic market, traders said on Wednesday.


For January, top energy user China is expected to reduce spot ethylene imports to possibly 4,000-5,000 tonnes, following a hefty purchase of 10,000 tonnes or more for December delivery to plug a domestic shortfall, they added.


Prices of ethylene - the basic petrochemical building block - were assessed at $1,150-1,170/tonne (┬863-878/tonne) CFR (cost and freight) Northeast (NE) Asia on Wednesday, down $20-30/tonne from levels earlier in the week, ICIS data showed.


Reflecting a weakening market, Asian polyvinyl chloride (PVC) prices were expected to drift lower due to the softening domestic prices in China, traders said. Plus, with the upcoming long Chinese Lunar New Year holidays in early February, buyers could defer their purchases until after the holiday. As a result, demand for January PVC cargoes were expected to be weak, they said.


Furthermore, news that China had met its energy saving and emissions reduction targets, led to market players' beliefs that the power rationing policy would be relaxed or even stopped by the end of the year.


This would lead to increased chlor-alkali operating rates, which would result in an excess supply of PVC from China, further exerting downward pressure on PVC prices, traders said.


MRC

Europe PE spot prices soar as sellers withdraw from market

(ICIS) -- Polyethylene (PE) buyers in Europe who are trying to obtain extra volumes in an effort to avoid higher prices in January face increased spot prices from traders and closed order books from producers, market sources said on Wednesday.


December monthly business was progressing normally. Many large retroactive accounts had not yet settled, and there were expectations of price increases of ┬30/tonne ($40/tonne) from November, which would cover producers' increased ethylene costs.


Extra sales, on top of contractual volumes, were reported at much higher levels, particularly for low density PE (LDPE) and high density PE (HDPE) injection grades.


LDPE gross contractual prices were now reported above ┬1,400/tonne FD (free delivered) NWE (northwest Europe), netting back to around ┬1,300/tonne in some cases as discounts were applied.


Many sellers had taken the decision to hold on to inventories and sell at higher prices in January. As a result, when there was material available, spot LDPE prices were now being offered at ┬1,340-1,350/tonne FD NWE on a net basis. In comparison, November spot LDPE levels had been trading at ┬1,230-1,240/tonne FD NWE.


Price increases were most pronounced in the HDPE sector. After trading around the ┬1,000/tonne FD NWE level for many months, HDPE injection prices now traded as high as ┬1,160/tonne FD NWE on a net basis. Several buyers said that they were unable to get all the extra volumes they needed.


MRC

Polystyrene consumption in Russia reached pre-crisis volumes

MOSCOW (MRC) -- Polystyrene consumption in Russia over the ten months have reached the volumes of 2009 and by the end of the year may reach the level of peak 2007 with 452 KT, according to MRC analysts. The same volumes of polystyrene consumption was observed in pre-crisis 2006-2007 when the market had been growing on average by 23% p.a.


Polystyrene and styrene plastics consumption in Russia depends on 45%on import stock material which is connected with deficit of EPS, ABS and freon-proof HIPS. The sectors that process this material (heat-insulating materials market, electrical goods and car components) are rapidly growing now.


According to Federal State Statistics Service, car production in Russia over the ten months has already exceeded the volumes of 2009 by 60% and made more than 950 KT.

By 2015 the structure of polystyrene consumption may change because of import substitution strategy. This November Sibur-Khimprom has launched EPS Alphapor production with a capacity of 50 KT, soon the second line is to be launched. By 2015 Sibur and Nizhnekamskneftekhim plan to launch ABS plastics production.


More detailed analysis of polystyrene production and consumption volumes by types, technologies and sectors for each producer is presented in the Annual report by MRC ⌠PS and styrene plastics in Russia - 2010.


MRC

Husky gets innovation award from Coca-Cola China

(PRW) -- Husky Injection Molding Systems' lightweighting technology has been recognised with the Best Innovation Award by Coca-Cola China. The award recognises Husky for its work on the development of various lightweighting projects, in particular, the EcoBase preform.


⌠What I really like about the EcoBase preform is that it is both an advance on the sustainable packaging front, as well as a way to help lower the cost of our packaging, said Dan Coe, chief procurement officer of China Bottlers Procurement Consortium.


MRC

Lanxess to acquire DSM Elastomers for ┬310m

(PRW) -- Specialty chemicals company Lanxess has come to an agreement with Royal DSM to acquire DSM Elastomers for ┬310m. Lanxess says the deal help strengthen its production technology for ethylene propylene diene monomer (EPDM).


The price roughly represents six times the expected EBITDA of 2010 and will be financed out of existing liquidity.


Earlier this year, the company said it planned to focus on small to medium-sized acquisitions after announcing a plan to increase its main profit indicator by roughly 80% over the next five years.


DSM says the sale is part of an ongoing strategy to focus on life and material sciences.


The transaction is subject to approval from antitrust authorities and is expected to close in the first months of 2011.


MRC