South Korean refining margins boosted by exports

MOSCOW (MRC) -- South Korean refining margins are expected to recover in January-March on increase in global oil prices amid expanding demand for heating oil and an "upswing in the chemical business," reported hydrocarbonprocessing with the reference to Hyundai Securities's research note.

Refining margins will likely stay firm for South Korean refineries in 2013, traders and analysts said, while European refineries will continue to operate at low capacities this year, as they are aging and economically unviable facilities will continue to close due to financing difficulties, analyst Yeon-ju Park of Daewoo Securities said in its 2013 outlook.
He expects global supply of oil products to increase by 700,000 bpd in 2013 but demand to expand more, by 800,000 bpd.

Despite a slump in the global refining sector due to the economic downturn, supply has been tight due to both permanent and maintenance-related shutdowns in the US, Europe and Japan.

"As such, the export market for Korean refiners should grow," Korea Investment & Securities said in a note.

South Korean refineries saw their margins contract in the October-December period due to a supply glut as India boosted refining capacity. Thus, as MRC wrote earlier, Reliance Industries plans to expand capacity at its refineries in the western state of Gujarat. Earlier last year, Reliance unveiled an USD18 billion investment plan for India over the next five years.

South Korean refiners maintained high output. SK Energy, Hyundai Oilbank Corp, GS Caltex and S-Oil Corp. continue to operate at almost full refining capacity and may not cut refinery throughput until the spring maintenance season. The four South Korean refiners will process around 2.67 million bpd of crude in January, according to a Dow Jones Newswires survey. They processed around 2.58 million bpd of oil in November, roughly flat compared with 2.61 million bbl a year earlier, data from Korea National Oil Corp. showed.
MRC

MOSCOW (MRC) -- Saudi Kayan Petrochemical Company posted a net loss of SR194.45 million for the fourth quarter of 2012, compared with SR190.75 million for the same quarter last year, an increase of 1.9% and compared to SR178.37 million for the previous quarter, or an increase of 9%, said company in its Statement.

The gross profit for the fourth quarter 2012 was SR38.99 million compared to SR32.44 million for the same quarter last year, with an increase of 20.2 %.

Operating loss was SR67.49 million compared to SR56.16 million for the same quarter last year, or an increase of 20.2 %.

The net loss for the 12-month period ended Dec. 31, 2012 was SR772.27 million compared to SR250.25 million for the same period last year, with an increase of 208.6%.

The per share loss for the 12-month period was SR0.515 compared to SR0.167 for the same period last year. The gross profit for the 12-month period was SR151.61 million compared to SR32.44 million for the same period last year, with an increase of 367 %.

Operating loss for the 12-month period was SR178.84 million compared to SR56.16 million for the same period last year, or an increase of 218.4 %.

The increase in losses in the fourth quarter 2012 compared to the same quarter last year is due to increase in cost of sales, increase in selling, general & administrative expenses and financial expenses.

The increase in losses in the fourth quarter 2012 compared to the previous quarter is due to increase in cost of sale as a result of increase in feedstock cost. Increase in selling, general and administrative expenses also contributed to losses.

As MRC wrote earlier, Saudi Kayan has a 400,000 tonne/year HDPE plant, a 350,000 tonne/year PP plant in Al-Jubail and a 650,000 tonne/year EG plant at the site.

The company also has an ethylene capacity of 1.48m tonnes/year at the site. Saudi Kayan is 35%-owned by Saudi petrochemical giant SABIC.

MOSCOW (MRC) -- BASF, the largest diversified chemical company in the world, has increased its capacity for Ultramid B film product materials at its Ludwigshafen Verbund site by 21,000 tonnes per year, reported Plastech.

High performance Ultramid B products is used for the film production and in the monofilament industry.

"This capacity increase reflects our customers’ growing demand for sophisticated polymer applications in the area of flexible film food packaging," explains Hermann Althoff, head of the Polyamide and Intermediates global business unit at BASF. "With this new capacity for high-end polyamides we are able to support the application innovations and film production efficiency of our customers even better".

BASF is the world’s leading supplier of high quality polyamide and polyamide intermediates for the film and monofilament industry. The line of products include Ultramid B (polyamide 6), Ultramid C (polyamide 6/6.6 copolymer) and Ultramid A (polyamide 6.6).

The Ultramid film and monofilament products are optimized for high performance in a wide variety of applications through polymer modifications and additivation and is used for the production of flexible food packaging and technical films. BASF operates Ultramid B (polyamide 6) polymerization plants in Ludwigshafen (Germany), Antwerp (Belgium), Freeport (USA) and Sao Paulo (Brazil). We remind that as part of BASF's major innovation investment in China, the company opened the first Innovation Campus Asia Pacific and its new Greater China headquarters at its site in Pudong, Shanghai. The investment amounts to EUR 55 million, as MRC informed previously. With this expansion the company's site will be one of BASF's largest outside of Germany.
MRC

MOSCOW (ICIS-MRC) -- The growth of purchasing prices of Korean and Chinese PET let Russian producers increase their price offer in the Russian domestic market by Rb1,000-2,000/tonne, according to ICIS-MRC Price report.

The systematic growth of quotations in the Asian markets, started in the first half of December, went on in January. Last week, the price of imported Asian PET, including delivery to Russia, rose by USD1,640-1,660/tonne, DAP Moscow, excluding VAT. On the rise in prices for the imported material and absence of large stocks residues, Russian PET granulate makers raised prices by Rb1,000-2,000/tonne from the level of the last week of December.

In January, the price offer for bottle PET for the Russian domestic market might continue its upward trend. The national exchange rate will play an important part. Strengthening of the rouble against the dollar in December-the first half of January allowed to somehow neutralize the rise of PET quotations in Asia. If the exchange rate of the Russian rouble weakens and the price for the material in South Korea and China does not go down, it will inevitably lead to a further increase in prices in the country.

It is worth noting that in December the price of Russian PET for the domestic market of the country rose by Rb1,500/tonne. During last month of the year, consumer activity was high in the spot market, which allowed the plants to finish the year without substantial stocks at their warehouses (the opposite situation was observed at the end of 2011). The absence of over stocks in 2013 will also have a positive effect on increase in prices in Russia.
MRC

MOSCOW (MRC) -- Bayer MaterialScience has opened its first Polymer Development & Technology Center in South Korea, with a goal of developing new polycarbonate applications for Korean firms, said company in its Statement.

Located in Yongin, near Seoul, the new center adds to Bayer's global network of research and development hubs, and is supported by its network of major production sites in the Asia Pacific region.

"Over the past decade, Korea has emerged as a center for cutting-edge, high-tech products," noted Michael Koenig, executive committee member and head of Bayer's polycarbonate business unit. "Large Korean companies are offering their latest technology worldwide, but their development and research mainly happens in Korea. With our new tech center, we can be closer to them, better engage in long-term R&D partnerships and fulfill their needs with greater effi-ciency and speed."

The center, which Koenig believes will become a driving force in the further development of innovative products in Korea, will provide technical advice for Korean customers regarding high-tech polycarbonate applications.

As MRC wrote earlier, in late December 2012 MRC released the first version of a new report - DataScope "Polycarbonate in Russia."

The new report provides the latest information on Russian imports and exports in the context of the production, customers, polymer grades and consumption sectors. A similar report will be released on Ukraine in the near future.


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