US propylene contracts for April will likely rise by 15 cents/lb

(ICIS) -- US propylene contracts for April will likely rise by 15 cents/lb (USD 331/tonne, EUR 228/tonne), market sources said on Friday, citing the initial contracts that have already settled at that level. The 20% increase, which stems from tight supply, puts polymer-grade propylene (PGP) at 87.50 cents/lb, topping the 85 cent/lb record settlement of July 2008. The 15 cent/lb jump puts chemical-grade propylene (CGP) at 86 cents/lb. According to sources, a number of contracts were agreed at those levels, but a full-market settlement was yet to be reached.

A significant April increase in propylene was widely expected because of sharply higher refinery-grade propylene (RGP) spot prices in recent weeks. Spot RGP is an indicator for trends on the contract side as the product accounts for around 60% of the US propylene market.

RGP for April was bid on Friday at 85 cents/lb, which is up from deals done at 71.50-72.00 cents/lb four weeks ago.

US producers had initially nominated increases of 15% for April propylene, but later withdrew the initiatives and pushed for a larger increase because of a continued uptrend in RGP.

MRC

(ICIS) -- China's ethylene (C2) production in March jumped 25.4% year on year to 1.36 m tonnes, bringing its total first-quarter output of the material to 3.95 m tonnes, official statistics showed on Monday. Compared to February, production last month was 102 KT higher, according to data from China Petroleum and Chemical Industry Federation (CPCIF). March ethylene production has had to keep up with increased requirement from downstream polyethylene (PE) sector, market sources said. But it looks like production of the basic petrochemical building block may come off this month as a 1m tonne/year cracker in Tianjin is scheduled for a turnaround, market sources said.

The cracker, jointly operated by Saudi Arabia's SABIC and China's stated-owned energy firm Sinopec, is due for a 20-day maintenance this month, said a source at operator Sinopec SABIC Tianjin Petrochemical, without disclosing the exact dates of the shutdown period.

Meanwhile, a much smaller 160 KTa ethylene plant in Beijing, owned by Sinopec unit, Beijing Eastern Petrochemical, will be out for eight days in April, said a company source.

In 2010, China produced 13.7m tonnes of ethylene and imported 815.4 KT of the material. It exported very little of the monomer at just 33.5 KT last year, according to official statistics.

MRC

(Plastemart) -- As it seeks expansion and revenue growth in Asia, Honam Petrochemical Corp. has planned to buy out minority shareholders in subsidiary KP Chemical Corp. this year. KP Chemical, which is 52% owned by Honam, has production bases in Korea, UK and Pakistan This step will enable to company to grow from its position as South Korea's second-biggest ethylene producer.

Honam, which targets sales of USD 37 bln by 2018 from an estimated 14 trillion won this year, is diversifying its product range. The company is investing in rising demand for low- carbon energy business as governments tighten regulations on emissions. Honam acquired Malaysia's Titan Chemicals Corp. in 2010 for 1.5 trillion won and plans to partner USA's ZBB Energy Corp. to move into the energy -storage business.

MRC

(Plastemart) -- The Punjab Government has decided to strictly implement The Punjab Plastic Bags (Manufacture, Usage and Disposal) Control Act', prohibiting the manufacture, disposal and usage of polyethylene bags from virgin plastic of thickness not less than 30 micron and size not less than 8 X 12 inches and of a colour other than specified. The Council of Minister look forward to a strict implementation of the ban from May 1, 2011.

Every manufacturer of polyethylene would print on each carry bag his name, address, registration number, size, thickness and nature of plastic and codification as per IS :14534 :1998. The Act specified that no person would throw in any drain, ventilation shaft, pipe and fitting connected with private or public drainage or at any public place or in any place open to public view any non-biodegradable garbage or plastic or biodegradable garbage in a non-biodegradable bag. The violation of the act by the manufacturer, carrier, user or unauthorised disposal of the polyethylene would attract imprisonment up to three months.

MRC

(Arabian Oil and Gas) -- Saudi Basic Industries Corporation (SABIC) has slashed Asian Contract Prices (ACP) of mono ethylene glycol (MEG) for May to USD 1.300 per tonne, a USD 100 decrease compared to April prices, according to online portal Argaam.

MEG prices in the spot market have hovered around USD 1.135 per tonne. MEG prices are generally set by three major players in the industry, which include SABIC, MEGlobal and Shell Chemicals.

Shell Chemical ACP prices for May are set at around USD 1.280 per tonne (down USD 120 from April), while MEGlobal ACP prices for May are at USD 1.250 per tonne ( down USD 100 from April).

SABIC is the largest MEG producer in the world, with a production capacity exceeding 5.345 million tonnes per year through its production facilities in Yanbu and Jubail.

MRC