Prices of plasticizer are expected to rise in September on shortage in Russia

MOSCOW (MRC) - Interruptions in the supply of plasticizer dioctyl phthalate (DOP) in the Russian market have been seen since the beginning of summer. But the supply shortage became very serious in September, and prices reached record levels, as per MRC analysts.

Traditionally, the lack of supply in the Russian market of plasticizers DOP begins in the summer, the current year was no exception. A shortage of the Russian plasticizer was managed to be closed by supplies from South Korea in August, but the problem of the shortage of local raw materials was fully closed in September due to external supplies. Prices for DOP have reached a record level.

Market participants said the shortage of the Russian DOP was a result of the production problems at Gazprom Neftekhim Salavat, forcing the producer to close its August contract shipments in September. Other Russian producers have also limited production volumes due to a shortage of raw materials - alcohol, diethylhexanol (DEG).

Due to the deficit of DOP, prices in the beginning of September increased to Rb115,000-116,000/tonne, including VAT and delivery, for Russian and South Korean plasticizers.

Some companies fearing problems in the future, began to actively contract the South Korean DOP for deliveries in October. Deals are done in the range of Rb103,000-104,000 /tonne, including VAT and delivery.

MRC

MOSCOW (MRC) -- SIBUR Tobolsk, Russia's largest polypropylene (PP) producer, shut down some of its production capacities. The outage was unscheduled, the exact dates of the resumption of PP production has not been announced yet, according to ICIS-MRC's Price report.

The plant's customers said SIBUR Tobolsk took off-stream one of its two polymerization lines last weekend because of techninal issues. However, shipments of material to customers continued from the Tobolsk and other company's sites.The company's representatives also confirmed the unplanned shutdown at the Tobolsk plant, but the exact reasons for the outage and its duration have not been announced yet. The plant's annual production capacity is 500,000 tonnes.

As reported earlier, two more Russian producers plan to shut their production capacities for maintenance in September: Stavrolen (for two months from 6 September) and Ufaorgsintez (for 12 days in mid-September).

The unscheduled outage of PP production in Tobolsk is critical for the Russian market. Strong seasonal demand already led to a certain shortage of polymer in the domestic market back in August. The shortage of PP began to put pressure on prices.

As per MRC's data, SIBUR Tobolsk produced 40,300 tonnes in July, compared to 44,000 tonnes in June. Overall, SIBUR Tobolsk's PP production reached 304,800 tonnes in January-July 2017, up by 25% year on year. Such a major increase in the output was caused by the absence of the plant's shutdown for a scheduled maintenance this year.
MRC

MOSCOW (MRC) -- AkzoNobel Aerospace Coatings has announced that it is expanding its distribution network by partnering with a distributor in Mexico, known as HiscoMex, making AkzoNobel its preferred paint line, as per the company's press release.

"The aerospace industry in Mexico has experienced tremendous growth over the last few years, turning it into a key market for the global industry," says Tami Swearingin, Sales Manager, North America, for AkzoNobel Aerospace Coatings. "We are proud to partner with HiscoMex, which operates five AS9120 Certified warehouses throughout Mexico. This is a great strategic agreement for AkzoNobel that will allow us to provide industry-leading technical support to our customers in the region."

With the HiscoMex partnership, the entire AkzoNobel Aerospace product line will be available to customers in Mexico, including AkzoNobel’s industry leading Aerodur Base Coat/Clear Coat system, Eclipse topcoat, and the full line of Alumigrip products.

"Hisco is excited to be partnering with a world-class manufacturer like AkzoNobel. Their decision to work with Hisco is indicative of our leading role in the aerospace market throughout Mexico. We look forward to bringing AkzoNobel’s industry-leading products to our customers and working with them to add value to their businesses," says Dave Weitner, Vice President of Marketing at Hisco.

As MRC reported earlier, AkzoNobel has just finalized the acquisition of French manufacturer Disa Technology (Disatech). The acquisition strengthens AkzoNobel’s global leadership position in supplying innovative industrial coatings and aerospace and automotive coatings.
MRC

MOSCOW (MRC) -- Evonik has started up a new plant in Shanghai, China, for production of a wide range of organically modified specialty silicones, said the company on its web-site.

The products, which are manufactured in batch processes, are used in, for example, polyurethane, paints, and coatings applications as well as in a variety of industrial applications. Christian Kullmann, Chairman of the Executive Board of Evonik, formally inaugurated the plant on September 5, in the presence of about 300 guests from the worlds of politics and business. On this occasion he said: "The plant is yet another important cornerstone in Evonik’s growth strategy. We’re focusing on businesses with a clear orientation toward specialty chemicals and on powerful innovations to significantly increase the value of the company."

Organically modified specialty silicones form part of specialty additives. This is one of four growth engines in which the Essen-based industrial group sees above-average potential for growth and margins. Kullmann says: "Demand for specialty silicones has grown strongly over the past few years. China and its neighboring countries are key markets for many applications. Thanks to the new plant, we will now be able to support our customers in the Asia region with even more speed and flexibility. At the same time we’ll be consolidating our position as the global market and technology leader for organically modified specialty silicones."

Evonik has been successfully operating in China for more than decades. With the takeover of the specialty additives business of Air Products at the beginning of 2017 and the opening of new plants in Nanjing, Evonik has once again significantly extended its activities in Asia.

"We’re strengthening our presence in some of the world’s most dynamic markets with high growth rates. This gives us the opportunity to spot regional trends earlier and to develop innovative solutions in collaboration with our customers," says Hans-Josef Ritzert, Managing Director of Evonik’s Nutrition & Care Segment.

The specialty chemicals group invested a high two-digit million euro sum in the construction of the new production facilities. Construction took only about a year. In 1.3 million working hours, employees numbering more than 700 in peak periods installed a large number of devices and laid about 23 kilometers of piping and 430 kilometers of wiring harnesses over an area of 30,000 square meters—on schedule, within budget, and without a single recordable occupational accident.

The new plant has simplified Evonik’s supply chain. "Because we now produce many specialty silicones locally, we no longer need to ship them from Europe or North America to Asia. This enables us to react faster to requests and increases our flexibility," says Claus Rettig, Chairman of the Management Board of the Resource Efficiency Segment.

The new plant is part of a global integrated production system that is the backbone for the manufacture of about 3,000 different products. Organically modified specialty silicones are used in many applications, serving for example as plastic additives for comfortable upholstered furniture, car seats, and ergonomic mattresses. They also play an important role in the formulation of insulation material for buildings and ensure energy efficiency in cooling devices. Yet another application area is antifoams, used in the building, textile, and plastics industries. Specialty silicones are also essential ingredients of many paints and coatings other special fields of application.
MRC

MOSCOW (MRC) -- The Linde Gases Division in Germany and Total Raffinerie Mitteldeutschland based in Leuna are extending their existing partnership by a further 15 years, according to Linde's press release.

Signed in Leuna in June 2017, the contract is worth approximately EUR 1 billion and is due to take effect on 1 January 2018. This new deal propels the two-decade partnership between both companies towards a long-term future.

Since the Total refinery in Leuna commenced operations in 1997, Linde has been supplying it with hydrogen, oxygen and nitrogen from its local facilities. With an annual consumption volume of over 560 million standard cubic metres of oxygen, over 180 million standard cubic metres of hydrogen and 120 million standard cubic metres of nitrogen Total’s central Germany location ranks as Linde’s largest single customer in Germany. The agreement also covers the operation of a gas separation plant at the refinery site, which recovers carbon dioxide (CO2) from the refinery’s flue gases for resale to Linde customers.

Dr Willi Frantz, Managing Director, TOTAL Raffinerie Mitteldeutschland GmbH, said: "With the newly agreed provisions we will continue our long-term collaboration over the course of two decades. We are pleased to continue our partner-like relationship and constructive cooperation."

"We are delighted to be further investing in our long-standing and successful collaboration with Total in Leuna. While our Remote Operation Center at this site is of international significance to us, local long-term contracts remain the bedrock of our business there," commented Olaf Reckenhofer, Head of Region Central Europe at Linde’s Gases Division.

The Leuna Chemical Complex is Linde’s largest gases production hub in Europe. The location covers the full spectrum of products, ranging from air gases, carbon dioxide, hydrogen and rare gases to acetylene and specialty gas mixtures. At the Remote Operation Center (ROC) in Leuna, 116 plants across Europe are remotely monitored and operated. Linde has invested more than EUR 500 million in the location since 1990.

As MRC informed previously, in June 2017, technology company The Linde Group was awarded a major contract by PJSC Nizhnekamskneftekhim (NKNK) to supply an olefin plant in the city of Nizhnekamsk, located in the Republic of Tatarstan in the Russian Federation.

The Total Raffinerie Mitteldeutschland is located in the Leuna Chemical Complex. It is regarded as one of Europe’s most high-tech refineries and produces around three million tonnes of petroleum per year. The refinery is also Germany’s largest producer of methanol, which is an important feedstock for the chemicals industry. Diesel, heating oil, LPG, naphtha, aviation fuel and bitumen are also part of the production mix. Every day, the refinery’s distillation plant processes an average of 30,000 tonnes of crude oil, which is mainly piped in to storage tanks from Russia. The finished products are supplied to the world market via road, rail and pipeline.

The Linde Group is a world-leading gases and engineering company. In the 2016 financial year, The Linde Group generated revenue of EUR 16.948 bn, making it one of the leading gases and engineering companies in the world, with approximately 60,000 employees working in more than 100 countries worldwide.
MRC