Europe C2, C3 Jan CP talks underway, sharp rises expected

(ICIS) -- European ethylene (C2) and propylene (C3) January contracts will rise significantly because of high upstream costs and tight supply and demand fundamentals, market sources said on Friday.

Producers were targeting three-digit increases for both products. The largest adjustments so far in 2010 had been from January to February when the ethylene and propylene contracts increased ┬70/tonne ($92/tonne) and ┬85/tonne respectively.

Cracker margins were under negative pressure from recent and ongoing strength in the crude oil and naphtha markets. A weak euro was exacerbating the impact of higher US-based costs and the result was that the average contract margin for December was the lowest it had been all year.

Cracker margins were ⌠in one word, a disaster, a major producer said. In addition to the cost pressure, supply for both olefins had tightened over recent weeks because of overruns on planned maintenance, slow restarts following the French strikes and reduced operating rates prompted by economics and cold weather.

Some sectors would be able to recover the costs, but for others such as high density polyethylene (HDPE), polyvinyl chloride (PVC) and possibly phenol, a sizeable increase would be of concern and could lead to some cutbacks in monomer consumption, sources said. In general, the view was that propylene derivatives were in a better position to be able to absorb and recover the costs.

MRC

(European Plastics News) -- Major Canadian private equity firm Onex is in talks to sell Husky Injection Molding Systems, according to a report from Bloomberg.com. The story, which cites unnamed "people with direct knowledge of the matter," said Toronto-based Onex is in talks with rival buyout firms, and the price could be as high as $2bn (┬1.5bn), Onex has hired Goldman Sachs Group and JPMorgan Chase & Co. to handle the auction, according to the report.

Onex owns 98% of Ontario-based Husky, which makes injection moulding machines, hot-runner systems and tooling.

Husky was publicly traded for a decade before Onex bought the firm for $1bn in 2007, although Robert and Elizabeth Schad owned or controlled about 44.1% of the shares. Financial analysts have speculated that Onex eventually would cash in on the investment through a sale or an initial public offering.

MRC

(ICIS) -- A Europe-based producer of monoethylene glycol (MEG) is targeting an increase of ┬70/tonne ($92/tonne) in the January contract price, up from December's ┬975/tonne, because of rising feedstock costs and tight supply, a source with the producer said on Thursday.

⌠Ethylene needs to jump, and I also see MEG increasing into the mid-┬1,000/tonne, so a further significant increase of ┬70/tonne. Product is tight, the source said.

Upstream ethylene in Europe was finely balanced. Price ideas for January centred on an increase of ┬80-100/tonne, based on firm crude and naphtha values, as well as robust demand. The December ethylene price settled at ┬1,005/tonne FD (free delivered) NWE (northwest Europe).

The MEG market has also been finely balanced. As a net importer, Europe has been reliant on imports during a time of rising prices in other regions.

Customers remained unhappy about the ┬70/tonne hike implemented from November to December, and they were against seeing further increases in January. They cited decreases in the Asian contract price nominations as a reason to curb calls for an increase in Europe.

MRC

(Plastics News) -- Clariant AG is expanding its global R&D activities at its site in Frankfurt. The new 23,000-square-meter Clariant Innovation Centre is due to be completed by the end of 2012. It will provide space for 500 people.

The planned facility, which will be located in the Frankfurt-Hochst Industrial Park and represents an investment of more than 50 million euros, will cooperate with all of the R&D satellite sites in Gendorf, Germany; Lamotte, France; and Suzano, Brazil, as well as 40 application centers around the globe.

⌠The goal is to establish Clariant as an innovation leader in the field of specialty chemicals within the next few years, said Hariolf Kottmann, CEO of Muttenz, Switzerland-based Clariant.

MRC

(DSM) -- DSM Engineering Plastics has launched a unique new material that can make a significant contribution to air quality. Akulon Fuel Lock, a mono-polyamide 6 technology, dramatically reduces evaporative emissions from the fuel tanks of non-road outdoor equipment and vehicles with small, spark-ignition engines.

In fact, tests of a tank with a nominal 2 mm wall thickness molded from Akulon Fuel Lock showed an exceptionally low evaporative emission rate less than 20 percent of the US Environmental Protection Agency (EPA) regulation limit.

Such ultra-low emissions not only comply with tough agency regulations, but also enable thin-wall designs that reduce system costs. Akulon Fuel Lock further supports sustainable practices by avoiding fluorination, a traditional barrier technology for high-density polyethylene (HDPE) that can pose environmental risks.

The new Akulon material for injection and blow molding applications provides outstanding resistance to permeation right from the container, without the need for additives or post-molding treatments. As a mono-material, it simplifies processing, compared to expensive multi-layer fabrication technologies.

MRC