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MOSCOW (MRC) -- This week, negotiations on contract prices of Russian PVC for shipment in December have begun. Some converters have already managed to get a price reduction by Rb2,000/tonne from early November, according to ICIS-MRC Price report.

This week, negotiations on contract prices of Russian PVC for shipment in December have started. In November, demand for PVC dropped significantly in Russia, many converters have been shutting their units for maintenance in late November. Also, Russian producers of PVC are reducing their prices on the back of lower demand. This December will not make an exception.

Many converters report a reduction of PVC purchases next month and their plans to shut their production for maintenance in the third decade of December. Meantime, some converters are going to purchase PVC only to meet their December production needs in a move to minimize their stocks by early 2013. Companies plan to resume operations in mid-January-early February, 2013.

Still in mid-November, some Russian PVC producers started to voice their price offers for shipment in December. The prices for December deliveries were voiced on average by Rb2,000/tonne lower than in November on falling demand and slashing of export prices in the USA. Many converters refused to make early purchases hoping to get lower prices.

By late November, price offers for Russian PVC for December shipments had remained intact. The prices are being negotiated in the range of Rb45,000-46,000/tonne, CPT Moscow, including VAT. The limited volumes and a sharp price rise of North Amerian PVC for shipments in December had factually deprived Russian converters of their main argument in negotiations with producers regarding a more substantial reduction of contract prices in December.
MRC

(hydrocarbonprocessing) -- Jacobs Engineering Group has received a contract from Viru Keemia Grupp (VKG) to provide a license package and services for a sulfur recovery unit (SRU).

The SRU is part of VKG’s investment to upgrade its shale oil refinery complex in Kothla-Jarve, Estonia.

The contract value is not disclosed. Under the terms of the contract, Jacobs is licensing its proprietary EUROCLAUS technology to VKG and is also providing the basic design package, training, start up and commissioning assistance services.

VKG is a leading oil shale processor in Estonia. The company’s activities span the entire oil shale chain, from mining and processing to the marketing of chemicals.

We remind that, as MRC wrote earlier, Jacobs Engineering Group Inc. had received a contract from PETRONAS, the state-owned oil company of Malaysia, to develop a basic engineering package for three sulfur recovery units (SRUs).

Besides, Jacobs Engineering Group was awarded a contract by Lotte Chemical UK Ltd to provide construction management services for a new polyethylene terephthalate (PET) plant to be built at the Wilton International Site in Redcar, Cleveland, United Kingdom.
MRC

(plastemart) -- The West Bengal government will soon appoint an advisor for valuing its shares in Haldia Petrochemicals Ltd (HPL) with a view to offload them, as reported by Hindubusinessline. While the State Government owns around 39% equity in HPL, The Chatterjee Group (TCG) has around 36% in the company.

"At the moment, it is becoming extremely difficult to run the company. If the government wants to make an exit at this moment, it may not be able to recover the investments made in the company", the HPL source said.

The petrochemicals industry at the moment is facing a supply glut. The high price of naphtha was adding to the woes as the company was more dependent on imports.

As MRC reported earlier, the troubled Haldia Petrochemicals Ltd (HPL) plant is running at less than 50% capacity since September 26 owing to shortage of naphtha.

"We are trying to increase the supply of domestic naphtha", HPL sources said.

The HPL management has taken a decision to run the plant at a less than 50% capacity due to lack of funds amid rising naphtha prices and inventory accumulation. Besides, the Indian producer had already had financial issues earlier this year and tried to improve the situation by concluding a swapping arrangement with a foreign company, under which the bidder will be required to supply naphtha while taking back the processed products.
MRC

MOSCOW (MRC) - In October, the domestic and import supplies of PVC to the Russian market reached a record volume for one and a half year and made more than 105,000 tonnes. Despite a record level of supply, ther was not excess in the market, PVC prices continued to increase, according to MRC ScanPlast.

Last month the supplies (imports and domestic production) of SPVC to the Russian market reached record levels over the last one and a half year. Russian producers increased their production of suspension to a record 56,440 tonnes, imports increased to 48,850 tonnes.

A similar situation was seen in August last year, when the total supply of resin to the market amounted to more than 105,400 tonnes. In August 2011, a record deliveries of suspension to the Russian market led to a serious surplus and falling prices in the second half of the month. The excess of PVC remained in the market until the end of the year and resulted in serious ending inventories (we estimate more than 40,000 tonnes) in the beginning of 2012. The situation in October 2012, despite similar volumes of delivery, did not repeat the one in August 2011.

Deficit of PVC, which began in September 2012 (total shipments amounted to about 71,500 tonnes), also came over to October. Many converters amid tight supply of PVC and high demand for manufactured goods in September, had to "clean up" their inventories. In October, the delivery of resin to the market increased by 47% compared to September, but due to the high demand for finished products and critical inventories of most converters ther was still felt a little lack of resin in the market. As a result, prices of PVC in Russia in October 2012 continued to grow.

In November, the situation in the market has stabilized. Despite the approach of winter, the demand for PVC from local converters is stable, many convertes do not create inventories of feedstock. Russian producers and trading companies have no excess PVC.

In January-October 2012 the total volume of PVC supplies to the Russian market (excluding ending inventories from last year) amounted to 834,400 tonnes, down 3% than last year. At the same time, some market participants do not exclude the possibility that in 2012 the capacity of PVC market will reach 1 million tonnes.

MRC