Production problems push PP prices up in Russia

MOSCOW (Market Report) - Prices of polypropylene (PP) continued to rise in November in the Russian market, in particular, homopolymer PP. PP problems at two production sites significantly limited supply in the market, and, as a result, led to further price rise, according to the ICIS-MRC Price Report.

Restrictions on homopolymer PP supply to the domestic market from some producers began in August, and were due to a series of scheduled maintenances at several producers at once in September-October. Many consumers expected that with the end of production repairs, PP supply will increase in the market, and as a result, amid falling demand, will lead to price cuts. But the shutdowns dragged on, and the lack of supply only increased.

SIBUR Tobolsk and Ufaorgsintez, due to certain reasons, were rather difficult and late to come out from preventive repairs. And even after the start-up, these plants had to work with a limited load due to raw materials problems. It is highly probable that the restrictions will continue until the end of November.

Russian producers reduced exports almost two times in September-October on order to balance the domestic market.
Exports are expected to decrease further in November due to the deteriorating market situation. Partly the shortage of Russian homopolymer PP were compensated by imports from Central Asian countries, but these producers also had planned and unplanned production shutdowns in October-November.

The most critical at the current moment is the situation in the segment of injection moulding homopolymer PP. Many companies reported a more serious shortage of supply than in homopolymer PP segment. Prices fro raffia last week grew to Rb105,000-107,000/tonne FCA, including VAT. The low end for injection moulding homopolymer PP was at Rb107,000/tonne FCA, including VAT.
MRC

MOSCOW (MRC) - Production of unmixed polyvinyl chloride (PVC) in Russia increased to about 784,900 tonnes in the ten months of this year, up 7% compared to the same period of 2017. All producers increased production volumes over the reported period, according to MRC ScanPlast.

October production of unmixed PVC in Russia rose to 85,000 tonnes from 77,400 tonnes a month earlier, three producers increased capacity utilisation. Overall PVC production reached 784,900 tonnes in January-October 2018, compared to 735,400 tonnes a year earlier. All plants raised their production, with Bashkir Soda Company accounting for the greatest increase in the output.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (JV of SIBUR and SolVin) produced about 32,200 tonnes of PVC in October, with emulsion polyvinyl chloride (EPVC) accounting for 2,700 tonnes, compared to 29,800 tonnes a month earlier. RusVinyl's overall output of resin reached 275,500 tonnes in the first ten months of 2018, up 8% year on year.

SayanskKhimPlast increased capacity utilisation last month, the plant's SPVC production reached 27,600 tonnes, whereas this figure was only 24,000 tonnes in September. The Sayansk plant managed to produce about 224,800 tonnes of resin in the first ten months of 2018, compared to 212,500 tonnes a year earlier.

Bashkir soda company (BSC) in the second half of September - early October, due to technical problems, reduced capacity utilisation, so the total PVC production amounted to 17,300 tonnes against 16,400 tonnes a month earlier. The Bashkir plant's overall production of PVC reached 207,300 tonnes in January-October 2018, up by 5% year on year. Such a great increase in the output was largely caused by the absence of a scheduled shutdown this year, whereas last year, the plant took off-stream its production capacities in mid-July.

Kaustik (Volgograd) in October increased SPVC production, reaching about 7,800 tonnes, compared with 7,200 tonnes in September. The plant's overall production of resin reached 77,300 tonnes over the stated period versus 71,200 tonnes a year earlier.


MRC

MOSCOW (MRC) -- LG Chem Ltd., South Korea's top chemicals firm, said Friday that it has named a top executive of U.S. industrial giant 3M Co. as its new vice chairman and CEO, reported KoreaTimes.

LG Chem said Shin Hak-cheol, a vice chair and executive vice president of 3M, is the "the right person" to respond to rapidly changing business environments while leading a change in corporate culture and structure, citing his global perspective and experience in operating a global materials and components business.

Shin climbed the corporate ladder to a top post after joining 3M Korea as a technical service supervisor in 1984, becoming the first South Korean senior executive to lead 3M's overseas business.

"Based on his accumulated experience in a world-renowned company, we expect LG Chem to take a further step forward in becoming a global innovative company," LG Chem said in a statement.

It marked the first time that LG Chem has nominated a CEO from outside of the company since its foundation in 1947.

Shin is set to replace LG Chem Vice Chairman and CEO Park Jin-soo in March next year if approved by the company's board.

LG Chem makes a wide variety of products, ranging from petrochemical goods to plastics, rechargeable batteries, electronic materials and drugs and vaccines.

Currently, LG Chem is a key supplier of electric vehicle batteries to US auto giant General Motors Co., Volvo and Renault, as well as South Korea's largest carmaker Hyundai Motor Co. and its smaller affiliate Kia Motors Corp. (Yonhap).

As MRC informed earlier, in January 2016, LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) - U.S. liquefied natural gas company Tellurian Inc said on Wednesday it expects to start construction on its Driftwood LNG export terminal in Louisiana in the first half of 2019 and begin operations in 2023, as per Hydrocarbonprocessing.

Chief Executive Meg Gentle said in the company's third-quarter earnings that Tellurian will announce partners in the USD27.5 billion project by the end of 2018. Driftwood is one of dozens LNG export projects under development in the United States seeking customers so they can start construction and enter service over the next decade to meet growing global demand for the fuel.

U.S. LNG exports have almost quadrupled from 183.9 billion cubic feet (bcf) of natural gas in 2016 to 706.4 bcf in 2017, worth about USD3.3 billion, and are on track to top 1,000 bcf in 2018, making the country one of the world's biggest exporters of the super-cooled form of natural gas.

One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day. Including plants under construction, U.S. LNG export capacity is expected to jump from 3.8 billion cubic feet per day (bcfd) now to 5.2 bcfd by the end of the year, 8.9 bcfd by the end of 2019 and 10.3 bcfd by the end of 2020.

Tellurian said about 35 customers were interested in partnering with and buying gas from the project. Unlike most other proposed U.S. LNG export projects that will liquefy gas for a fee, Tellurian is offering customers the opportunity to meet their gas needs by investing in a full range of services from production to pipelines and liquefaction.

In addition to the LNG terminal, Tellurian is also developing pipelines to transport gas from shale formations in Texas and Louisiana to LNG terminals and other Gulf Coast customers.

The company has proposed to put two of those lines into service in 2022 - Permian Global Access and Haynesville Global Access.

Tellurian's partners include Total SA, General Electric Co and Bechtel, which has a $15.2 billion contract to build the liquefaction facility at the center of the project. Pipelines, reserves and other costs make up the rest of the USD27.5 billion price tag of the project.
MRC

MOSCOW (MRC) -- The technology company The Linde Group has signed a contract with U.S. industrial gas company, Praxair Inc., to supply a hydrogen plant that will be part of the company's U.S. Gulf Coast hydrogen system which spans Southeast Texas and Western Louisiana, as per Hydrocarbonprocessing.

"We are very pleased to have won this important contract from Praxair to provide the largest hydrogen production unit in Linde's history," said Dr Christian Bruch, Member of the Executive Board of Linde AG and responsible for the company's plant engineering business. "We attribute this success to our compelling and customer-oriented engineering solutions."

Linde's Engineering Division is responsible for the design and supply of the equipment for the core components of the hydrogen plant. The order includes the steam-methane reformer, designed and supplied by Linde subsidiary Selas Linde in Blue Bell, Pennsylvania, the pressure swing adsorption unit, and the balance of the core plant. The plant will have a production capacity of over 190,000 Nm3/hr of high-purity hydrogen and will also generate steam. The new plant will be highly modularized with world-class reliability and energy efficiency and is scheduled to come on stream in early 2021.

In the 2017 financial year, The Linde Group generated revenue of EUR 17.113 bn, making it one of the leading gases and engineering companies in the world, with approximately 58,000 employees working in more than 100 countries worldwide. The strategy of The Linde Group is geared towards long-term profitable growth and focuses on the expansion of its international business, with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment in every one of its business areas, regions and locations across the globe. The company is committed to technologies and products that unite the goals of customer value and sustainable development.
MRC