MOSCOW (MRC) -- MRC news digest as of 8 August, 2013.
1. Asiaт PET price fell again in the last week of March.
In the last week of March, quotations of Asian bottle PET for export shipments dropped again amid falling feedstocks prices and weak demand from producers of polyester fibers. This week spot quotations of bottle PET again showed a downward trend in China and Korea. Sluggish consumer activity and pressure by lower feedstocks prices forced Asian makers to make major discounts in price in order to maintain the current level of sales. According to Ukrainian converters, the price of Chinese PET, including delivery to Ukraine, was voiced at the level of USD1,443-1,475/tonne, CIF Odessa, excluding VAT, at the end of the week. Russian converters of the material reported that, given the current prices in the foreign markets, the selfcost of the material in Russia will amount to USD1,475-1,515/tonne, DAP Moscow, excluding VAT.
2. Polymir shuts LDPE production for maintenance.
The Belarusian producer Polymir shuts one of its two reactors for the production of high-density polyethylene (LDPE) for a two-week maintenace from 30 of March. The outage will affect the production of the following grades: 10803-020, 10204-003 and 12203-250. The shutdown of the second reactor for maintenance (15803-020 and 17703-010 grades) is scheduled for early September. As it was reported earlier, initially the outage for maintenance of the first reactor at Polimir was planned to start from 7 March, but the company postponed it for late March due to the frosts.
3. Domestic price of EPS in Ukraine to decline in April.
The price of the Asian and Russian EPS in Ukrainian market is expected to decline in April, while the price of Ukrainian material will remain unchanged. Market participants said that the price of Russian EPS of Alfapor grade for April will be reduced to USD2,000-2,030/tonne, FCA Perm, down USD30-60/tonne from March. The sources of the company, the largest Russian producer, also confirmed the possible cuts of export prices of EPS in future. At the moment Ukrainian, Russian and Asian EPS are offered in the market. In early March, Chinese makers due to high stock inventories reduced the price on average by USD50/tonne to USD1,950-1,980/tonne, CIF Odessa. The price of Ukrainian polystyrene in March were at UAH19,500-19,800/tonne (USD1,990-2,020/tonne, excluding VAT). Market participants agree that in April the price remain the same. According to preliminary information, Synthos, Polish supplier of EPS, also aims to reduce the price for the Ukrainian market in April. Synthos's price for March was at EUR1,570/tonne, FCA.
4. The last large-size equipment was installed at POLIEF as part of PET expansion project.
The last large-size equipment has been built up at Bashkir POLIEF (SIBUR group), one of the major PET producers and the only producer of terephthalic acid (PTA) in Russia, as part of the investment project "PETF-210". The installed unit is a crystallizer, which is part of the key equipment of the project for the expansion of PET production from 120,000 to 210,000 tonnes per year. The 40-tonne crystallizer became the last large-size equipment delivered to the facility as part of "PETF-210" project. The unit is one of the most important equipment that the licensor supplies. It is aimed for the process of solid state polycondensation of PET.
5. Imports of PET to Kazakhstan dropped by 5% in February.
In February, imports of PET granulate to Kazakhstan decreased by 5% from January. In absolute terms, the import volumes of PET fell by 300 tonnes. Overall, in February, the total import of PET to the Kazakh market made about 5,400 tonnes, while in January Kazakh companies imported about 5,700 tonnes of PET. Last month, Chinese granulate accounted for the bulk of bottle PET imports. The share of Chinese grades in the total import made more than 78%. Totally, in February, 4,260 tonnes of Chinese PET entered the Kazakh market. In January, the situation was different. South Korean PET accounted for the lion's share of imports, while the share of the Chinese material accounted for only about 49%. February volumes of PET imports from South Korea dropped significantly, which allowed to increase imports of Chinese PET. Market sources attributed this to China's favourable price level and logistical factor. Overall, imports of Korean PET made 1,100 tonnes in February, down by 2,5 times from January.
6. European producers to limit the decline in prices of polyolefins for April.
European makers plan to reduce April export prices of polyethylene (PE) and polypropylene (PP) for for the CIS countries only by EUR20-30/tonne, while European contract prices of ethylene and propylene for April were agreed by EUR50-60/tonne below the March level. European PE and PP prices are falling for the second month in a row. Due to the low demand in foreign and domestic markets European makers of PE and PP were forced to cut prices in March, despite the significant increase in prices of feedstock. By the second half of March the prices of European high density polyethylene (HDPE) had been cut to EUR1,200-1,290/tonne, FCA; homopolymer propylene prices fell to EUR1,140-1,220/tonne, FCA.
7. Russian DOP for April increased by 3,000/tonne.
Prices of DOP plasticizer for April grew in the Russian market on the back of increased feedstock costs. The oncoming turnaround of Gazprom neftekhim Salavat and a seasonal increase in demand give grounds to think that DOP prices will grow further. The cost of the main feedstock of dioctyl phthalate plasticizer (DOP) - diethylenglycol (DEG) and phthalic anhydride has grown in April, which resulted in increase of Russian DOP prices on average by Rb3,000/tonne to Rb70,000-72,000/tonne, including VAT, with delivery. The exception made DOP plasticizer by Gazprom neftekhim Salavat production, which was left at the rollover from March: Rb65,000-66,000/tonne, FCA Salavat, including VAT. The company plans to stop its capacities for DOP production on the turnaround from 20, April.
8. European PVC fell in value for CIS countries by EUR30/tonne.
Slash in ethylene contract prices in Europe and export PVC prices in the USA forces European producers to reduce April PVC prices for the CIS markets. The contract ethylene price in Europe for April shipments was agreed by EUR60/tonne lower than the March level, which is equivalent to a cut in the cost of PVC production by EUR30/tonne. North American makers have lowered their export PVC prices for April shipments on average by USD60-70/tonne. These factors make European producers proportionally decrease their April export prices for the CIS markets. Negotiations on European export PVC prices for April shipments started on Tuesday. Some market participants report that they managed to get a reduction of export prices by EUR30/tonne from March. Deals for April shipments of European PVC to the CIS countries were discussed in the range of EUR750-800/tonne, FCA.
MRC