Earthquake in Japan to have no direct effect on polymers market in FSU

MOSCOW (MRC) -- Earthquake in Japan, whose economy is the third biggest in the world, resulted in serious consequences. In particular, the earthquake forced to shutdown some petrochemical plants, according to ICIS-MRC Price report.


Operation at some crackers with total capacity 1.8 mln tpa has been suspended, other enterprises have lowered their loading. On the one side, suspension and lowered loading at crackers resulted in reduced demand for naptha in the region that immediately resulted in decreasing quotations for naptha for the first time over a few weeks.


On the other hand, it is not excluded that the absence of ethylene and propylene supplies in the region from some Japanese producers may result in deficit in the market and, as a consequence, in growing quotations for olefins/polyolefins. Now many market players expect complete estimation of the Japanese catastrophe consequences for a whole Asian region.


The earthquake in Japan, though, won't have a direct effect on polymers market in FSU. Polymers supplies form this country are single for a whole FSU region and have no effect on market balance. At the same time this fact may have an indirect influence through Chinese and South Korean producers whose share in the markets of FSU by some products makes 30-50% (pipe polyethylene and polypropylene, PVC, EPS, etc).


MRC

Formosa Petrochemical partly replace naphtha in ethylene production

(Plastemart) -- As oil costs escalate past USD100, and upstream naphtha at USD 990 peaks to a 29 month high, Formosa Petrochemical Corp. (FPCC) plans to switch to liquefied petroleum gas (LPG) to partly replace naphtha in ethylene production. This switch will reduce material costs and boost earnings, as reported by CENS. The move will also benefit FPCC`s affiliated firms including Formosa Plastics Corp., Nan Ya Plastics Corp. and Formosa Chemical & Fibre Corp., which heavily rely on ethylene in production.


At present, LPG is quoted USD 84 per ton lower than naphtha. If FPCC uses LPG to partly replace naphtha, it will be able to increase gross profit by USD 21 mln per month in producing ethylene.


MRC

US foam buyers sue more producers

(ICIS) -- US buyers have sued five more polyurethane (PU) flexible-foam producers, alleging that they conspired to fix prices and allocate the market, a development on which the companies had no immediate comment on Thursday. In the lawsuit, the foam buyers allege that the producers have been fixing prices since at least 1 January 1999. As a result, the buyers said they paid too much for foam, since the market was no longer competitive.


The alleged price fixing came to light in February 2010, when producer Vitafoam approached the anti-trust division of the US Department of Justice, saying it and others had illegally fixed prices.


Vitafoam has since been cooperating with investigators.


According to the buyers, about two to three times a year, the producers would allegedly discuss how they would allocate the market and raise prices.


These price hikes were often prompted by increases in the raw materials used to make foam, such as toluene di-isocyanate (TDI) and polyether polyols, the buyers said.


The producers viewed price fixing as a necessity because, the buyers allege, if the producers did not increase prices by the same percentage and at the same time, their initiatives would fail.


The producers even policed themselves to ensure that they all raised their foam prices, the buyers said. For example, the producers would share draft letters of proposals before announcing price increases.


MRC

A massive earthquake disrupted petrochemical operations in Japan

(ICIS) -- A massive earthquake and tsunami in northern Japan killed more than 50 people and disrupted petrochemical operations on Friday. At least 55 people have been killed and over 50 have been reported missing, according to local media reports.


The quake struck Japan's northeast coast, some 373 km (231 miles) northeast of Tokyo, and 130km east of Sendai, Honshu - the largest island in the country, according to the US Geological Survey (USGS). USGS earlier put the magnitude of the quake on the Richter scale at 7.9 but revised it up to 8.8, then to 8.9. It generated a huge tsunami with waves up to 10 metres high, which swept inland destroying buildings and infrastructure.


Following the quake, fire broke out at the chemical factory of JFE Chemical in the Chuo ward in the city of Chiba, Chiba prefecture, as well as at the 220.000 bpd refinery of Cosmo Oil, located in the city of Ichihara, Chiba prefecture.


JFE Chemical produces coal tar, benzene, toluene and xylene and industrial gases including oxygen, nitrogen and argon.

JX Nippon Oil & Energy shut its paraxylene facilities in Kashima, with a combined capacity of 600 KTa and in Kawasaki with a combined capacity of 350 KTa, market sources said.


MRC

Foster Wheeler to provide design services for plastics converting plant

(Plastemart) -- Foster Wheeler's Global Engineering and Construction Group has been awarded a contract by Cynar Plc to provide basic process engineering design services for a 6 KTa plant to convert non-recyclable waste plastics into liquid fuels, primarily diesel. The plant will utilize Cynar's pyrolysis technology, supplemented with Foster Wheeler's refining knowledge to produce liquid fuels. The basic design package is expected to be completed in Q1-2011.


The Foster Wheeler contract value for this project is undisclosed. Approximately half of the value was included in the company's Q4-2010 bookings and the remainder will be included in the company's Q1-2011 bookings.


MRC