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 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

(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

(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

(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