Asian phenol prices are likely to trend higher in the coming weeks

(ICIS) -- Asian phenol prices are likely to trend higher in the coming weeks, bolstered by rare spot purchases by quake-ravaged Japan and regional plant maintenance, as well as firm downstream demand, market players said on Friday. Stubbornly high feedstock prices, both propylene and benzene alike, also led to rising prices, they added.

In the week ended 25 March, phenol prices were assessed as USD1.920-1.950/tonne (EUR 1.344-1.365/tonne) cost and freight (CFR) China Main Port versus USD 1.810-1.840/tonne CFR CMP a month ago, according to ICIS data.

Compounding the situation, the trade flow has reversed with Japan switching to a spot phenol buyer from a net exporter. No spot shipments were seen from Japan after the devastating earthquake last month, traders said.

Japan has made an unusual spot purchase of 10 KT of phenol from China, Taiwan and South Korea for delivery in April, amid production turmoil in the aftermath of the 11 March disaster.

Japan is expected to continue buying phenol on the spot market from April to June, a move that would fuel prices further.

MRC

(ICIS) -- US polyethylene terephthalate (PET) domestic prices increased by 5-7 cents/lb in March on high raw material costs, tight supply and strong demand, sources said on Thursday. Domestic prices for bottle grade PET were assessed by ICIS at 99.50-101.50 cents/lb (USD 2.194-2.238/tonne, EUR 1.558-1589/tonne) DEL (delivered), representing an increase of 5.29 cents/lb.

While several producers achieved their targeted March price increase of 7 cents/lb, sources said that the majority of prices were settled at or just below 100 cents/lb.

The primary driver for PET price hikes was the conclusion of the March paraxylene (PX) contract price at a split settlement of 84.75 cents/lb and 85.50 cents/lb DEL, up 2.75 and 3.50 cents/lb respectively from the February price.

This resulted in a March contract price for downstream purified terephthalic acid (PTA) of 70.68-70.78 cents/lb DEL, up 2.10 cents/lb from February. PTA is the principal feedstock for PET.

PET producers said their margins had been severely eroded in recent months, and the current strong market fundamentals provided an opportunity to remedy this situation.

MRC

(ICIS) -- The strengthening downstream wind energy sector was causing epoxy resins shortages for coatings manufacturers, sources at the 2011 European Coatings Show in Nuremberg, Germany, said on Thursday. Heavy epoxies used in the manufacture of wind turbines, a fast-growing industry, meant less was available for the traditional coatings industry, according to several players.

Producers and buyers also said that many composites and amines, used as curing agents for epoxies, were now heading to China where they could be sold for a much higher price. This has compounded long-running problems with upstream bisphenol A (BPA), as plant outages and high prices of the feedstock have restricted epoxy production.

This has led to epoxy resins hitting EUR 2.950-3,050/tonne FD (free delivered) NWE (northwest Europe) in March.

Adding further tension was the fact that the traditional downstream paints and coatings season was about to kick in as the weather warms across Europe, so epoxies demand was set to increase and keep availability short.

Manufacturers were already chasing EUR 100/tonne (USD 141/tonne) hikes for April contracts, though so far most seemed to be settling for half that.

MRC

(Mitsubishi) -- Mitsubishi Heavy Industries Plastic Technology Co., Ltd., an injection molding machinery subsidiary of Mitsubishi Heavy Industries, Ltd., and Chen Hsong Group of Hong Kong, a major injection molding machine producer in China, have signed an agreement under which the two companies will collaborate in the area of large-sized hydraulic injection molding machines.

Under the tie-up agreement, MHI-PT will design the "MMX series" - high-quality, low-cost, energy-saving large-sized hydraulic injection molding machine lineup optimized for market needs in the emerging economies - and OEM production of the series will be consigned to Chen Hsong for marketing under the MHI-PT brand. In tandem with the OEM arrangement, MHI-PT will also license production and sales of same-platform machines to Chen Hsong, to be supplied under the Chen Hsong brand. The tie-up partners plan to launch the first OEM machines within the next six months, and to expand the lineups of both OEM and licensed machines progressively.

Through collaboration with Chen Hsong, MHI-PT will produce its own brand MMX series in China leveraging Chen Hsong's outstanding production capability and local supply chain. The OEM initiative will enable MHI-PT to maintain and further strengthen its competitiveness even amidst the strong yen.

Chen Hsong has one of the world's largest production capacities among injection molding machinery manufacturers. Locally the company is focusing on raising the production/sales ratio of high-performance machines that respond to the needs of manufacturers of electrical appliances and automobile parts, while expanding production capacity at its plants in Shenzhen, Foshan and other cities. The company is also aggressively working to develop a global market.

MRC

(ICIS) -- Polimeri Europa plans to restart its 200 KTa low density polyethylene (LDPE) line at Dunkirk, France, following a prolonged shutdown that began at the end of August 2010, a company source said on Wednesday. With its new tubular reactor, the line is expected to be back on stream soon, the source said.

Polimeri Europa shut down the Dunkirk PE site for a two-month planned maintenance project in August last year.

While the site's 140 KTa linear low density polyethylene (LLDPE) plant came back on line in November, the LDPE line has remained out of action and attempts to restart it have been unsuccessful.

The company declared force majeure in January, and this is expected to remain in place until a sustainable stock level is built, the source said.

The effects of the permanent closures of several older autoclave units in Europe in 2009 have made LDPE availability tight in recent months, and prices have risen to record-high levels.

MRC