US Jan ethylene drops 7% on lower spot, feedstock prices

(ICIS) -- US ethylene contracts for January settled down by 3.25 cents/lb ($72/tonne, ┬52/tonne), market sources said on Wednesday, pressured by lower spot prices and softer production costs last month. The decrease from December, which put the monomer at 45.25 cents/lb for January, was widely expected.

Market participants had predicted the monthly contract would drop by 2-4 cents/lb, citing lower spot prices and a drop in production costs throughout January.

US spot ethylene in January traded at 41.500-44.000 cents/lb, dropping from an average of 42.750-51.375 cents/lb in December, as assessed by ICIS. The decrease in January stemmed from a more balanced market, following tighter supply in the previous month.

Ethylene supply in November and December, particularly in the first half of that month, was constrained because of a series of US cracker outages in the fourth quarter. The drop in ethylene prices in January also reflected lower production costs, resulting from a decline in ethane prices.

MRC

(ICIS) -- Forecasters placed the greater Houston region under a winter storm watch on Wednesday, with the hub of the US petrochemical industry likely to face a rare onslaught of snow, freezing rain and sustained low temperatures.

The state of Texas issued rolling power outages early Wednesday, attempting to compensate for a power generation shortage brought on by excessive heating demand. But by Wednesday afternoon, state officials said they were directing utility providers to resume normal operations.

LyondellBasell spokesman David Harpole said his company had not experienced any significant electrical supply issues in Texas and did not anticipate any, since most of the company's power is produced via cogeneration. LyondellBasell had already taken steps to ⌠winterise its Houston-area facilities, including electric trace heating in vulnerable areas of pipes and steam traps to keep condensation from freezing.

Other major refiners and chemical producers, including Huntsman, ExxonMobil and BP, said their Texas operations had yet to be impacted by either the cold or power outages.

Market sources said the midwest snowfall was wreaking havoc on US ethanol plants, with some plants down and others unable to deliver material because they could not get trucks to their facilities.

Temperatures are expected to warm to more seasonal norms for much of the US by Sunday, allowing snow and ice in Houston to thaw.

MRC

(BASF) -- BASF has started operations at its expanded plant for the production of the biodegradable plastic Ecoflex. Expansion of the existing plant in Ludwigshafen will increase production capacity for Ecoflex from 14,000 to 74,000 metric tons per year. At the same time, BASF will ramp up compounding capacity for Ecovio, a derivative of Ecoflex.

Ecoflex is a plastic that has the properties of conventional polyethylene but is fully biodegradable under industrial composting conditions in accordance with DIN EN 13432. Ecovio is a derivative of Ecoflex that is also biodegradable and that contains up to 75 percent renewable raw materials.

Typical applications are shopping bags, organic waste bags, mulch films for agricultural applications, and food packaging. One of the latest innovations is Ecovio FS Paper, which is used to provide a biodegradable waterproof coating on the interior surfaces of paper cups and cardboard containers.

With Ecovio and Ecoflex, BASF is already one of the world's leading suppliers of biobased and biodegradable plastics. Both of these properties are increasingly in demand, and the market for biodegradable and biobased plastics is currently growing by more than 20 percent per year.

MRC

(DSM) -- DSM Engineerging Plastics Europe has announced it will increase prices for its Akulon and Novamid PA6 and PA66 portfolios, due to unprecedented and continued escalations in key raw materials costs (such as benzene, caprolactam, glass fiber, flame retardants and others).

DSM remains committed to the continued implementation of cost-saving initiatives, however, escalating costs necessitate this additional increase to sustain DSM Engineering Plastics' position as an innovative and reliable supplier.

Increases in the range of 200 Eur/tonne have already been implemented with many customers throughout January and will be implemented further as contracts allow.

MRC

(Plastemart) -- Mexican industrial conglomerate ALFA, S.A.B. de C.V. has completed purchase of 3 South Carolina petrochemical plants from Eastman Chemical Company for about US$600 mln. One of the plants produces PTA and the other two produce PET with an annual capacity of 1.27 mln tons. As per the agreement, ALFA's DAK Americas, LLC unit also gets the intellectual property of Eastman's integrated polyethylene terephthalate (PET) and purified terephthalic acid (PTA) business, as well as access to the existing customer base.

MRC