Shutdowns simultaneously at several plants did not affect PP prices in Russia

MOSCOW (MRC) -- Four Russian producers shut down their production capacities for scheduled maintenance works in September, but this factor did not affect the balance of the polypropylene (PP) market. As a result, PP prices virtually remained at the level of August, according to ICIS-MRC Price report.

The first shutdowns of Russian producers' production capacities began on 5 September, Tomskneftekhim took off-stream its production for a two-week turnaround. And then, within two weeks, Stavrolen, Poliom and Ufaorgsintez shut their production capacities with a total capacity of 470,000 tonnes per year for maintenance. However, a series of shutdowns for maintenance did not lead to a shortage of PP in the market, and did not affect prices.

The Russian PP market was surplus for eight months of the year, and ongoing outages did not lead to any acute shortage of PP in the market. Converters built up additional inventories of polymer for the period of shutdowns, and sellers also built up stocks.

In addition, in most cases, the outages were short, Tomskneftekhim already resumed its PP production last week after the shutdown. Poliom and Ufaorgsintez are expected to launch their PP production by the end of this week. Stavrolen planned to restart its production on 15 October.

This year's last shutdown is scheduled for October - Nizhnekamskneftekhim intends to take off-stream its production capacities for 10 days from 3 October. Some market participants do not rule out that an outage at the Nizhnekamsk plant may affect the balance of the propylene copolymer market, since it is the key supplier. At the same time, the main consumers have been building up additional inventories of propylene copolymers for quite a long time, and the short outage at Nizhnekamskneftekhim might go unnoticed by consumers.

In the second half of September, prices of propylene homopolymers (homopolymer PP) virtually remained at the level of August. Spot prices of Russian homopolymer PP raffia were kept in the range of Rb94,500-96,000/tonne CPT Moscow, including VAT.

Some sellers had a limited supply of homopolymer PP raffia, thus, many sellers in the south sold all their stocks of Turkmen PP. But next shipments of polymer from Turkmenistan are already expected in October.

Some sellers' supply of injection moulding homopolymer PP has significantly subsided by late September, but there was no excitement in this regard. Prices of Russian PP remained in the range of Rb97,000-98,000/tonne CPT Moscow, including VAT.
MRC

MOSCOW (MRC) -- Germany's Burghausen refinery, run by Austrian energy group OMV, was back to normal operations, and fully supplying petrochemical products, reported S&P Global with reference to the company's statement.

Following an incident on August 24 at its petrochemical section, the plant has been producing at reduced rates until 12 September after the restart.

As MRC informed before, all petrochemical units at Burghausen refinery had gradually restarted following a technical incident and had come back in operation by Sunday, 1 September 2019.

The cracker at this site can produce 450,000 tonnes of ethylene and 210,000 tonnes of propylene per year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

MOSCOW (MRC) - Import deliveries of injection moulded PET chips to the Belarusian market increased by 27% in seven months of this year and reached 14,250 tonnes compared to 11,240 tonnes in January-July last year, said MRC DataScope.

July imports of material into Belarus decreased by 6% and amounted to 2,040 tonnes compared to 2,180 tonnes in July last year, in June of the current supply amounted to 1,760 tonnes.

The share of Russian imports for this period was 85% (12,150 tonnes) compared with 9% (10,680 tonnes) for the same period last year.
July imports of material from Russian increased by 13% to 2,000 tonnes against 1,760 tonnes in June.
MRC

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, has increased its September list and off-list selling prices for Vinyl Acetate Monomer (VAM) in Europe, the Middle East and Africa, as per the company's press release.

The price rise below is for orders shipped on or after 18 September, 2019 , or as contracts otherwise allow, and is incremental to any previously announced increases.

Thus, VAM prices rose by EUR50/mt for Europe, the Middle East & Africa.

As MRC reported earlier, Celanese last raised its VAM prices for the stated above regions and Asia on 30 July, 2019, by EUR125/mt.

According to MRC's DataScope report, July EVA imports to Russia increased by 4% year on year to 3,490 tonnes from 3,350 tonnes in July 2018, and overall imports of this grade of ethylene copolymer into the Russian Federation decreased in January-July 2019 by 14, 3% year on year to 22,440 tonnes (26,170 tonnes in the first seven months of 2018).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2018 net sales of USD7.2 billion.
MRC

MOSCOW (MRC) -- The global market for polypropylene (PP) is expected to grow at a CAGR of 5% to reach USD115 bln until 2022, according to Plastemart with reference to Beroe Inc.

The key-driving end-use applications of the PP market are the CPG segment (food/non-food containers, caps-closures, films) and auto components (internal structures, bumpers, dashboard carriers, door panels).

Matured markets such as the U.S. and few European countries have a dominant automotive segment and possess a greater demand for the molding grade of PP. Rise in disposable income, increasing demand from CPG, and the medical industry is likely to drive the growth in emerging markets such as Brazil and Asia.

One of the principal industry drivers for PP is the automobile industry, which has been a major consumer of PP due to its weight properties. Over a third of the plastics utilized in the automotive industry are PP and its alloys. Thus, the demand from the automotive industry is expected to rise globally. However, a major constraint for the PP market is the threat of substitutes. With certain regions concentrating on promoting environment-friendly products in the packaging sector, rPET and PET are attractive options as compared to PP due to their recyclable properties. The market trends in MEA infer that the demand for PP is expected to increase at a steady rate of 4.1 percent until 2022 from the CPG industry. Additionally, the food and beverage industry, followed by the health and hygiene industry, will drive the demand for PP across the African region. Key Findings include:

- Demand from the film and packaging industry is a growth driver for the PP market as almost 50% of PP is used in the packaging segment.
- In the long run, PP supplies are likely to strengthen in the European market after the arrival of new plants by existing manufacturers.
- The raw material is the major cost driver of PP; hence North America and the Middle East have greater control over its pricing due to their self-sufficiency.
- The top 10 suppliers contribute to nearly 50% of the overall PP production in the world. TOTAL Petrochemicals has the largest polypropylene plant across the globe with a capacity of 1.224 mln mtpa.
- Capacity additions of almost 18 mln mtpa in the PP market are expected to be supplemented by 2022, primarily from Asia, the Middle East, and Russia.
- A hybrid sourcing strategy is being adopted by companies to capitalize on the advantages of both regional and global sourcing strategies, which is ideal for the procurement of PP resins.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC