Hungarian BorsodChem set to turn a profit in 2013

MOSCOW (MRC) -- PVC and isocyanates producer BorsodChem, acquired in 2011 by the Chinese Wanhua Industrial group, could turn a profit this year despite a lack of market recovery, said Silobreaker.

This was made clear by the Hungarian chemicals company’s CEO Jiansheng Ding who also forecast that decisions on major investment projects at the BorsodChem’s main plant in Kazincbarika, Hungary may soon be taken, reported the country’s business daily Napi Gazdasag.

In 2011, BorsodChem recorded a loss of more than EUR139m on annual sales amounting to EUR829m. Details of the firm’s 2012 results are not yet available but its revenue increased and volumes rose, Ding told the paper.

Integration of BorsodChem within the Wanhua group was almost complete at the end of 2012 and the Chinese owners have benefited from various synergies between the businesses in dealing with challenges of the region’s economic crisis.

Meanwhile, earlier this year the BorsodChem chief executive said the Hungarian firm is no longer seeking a buyer for its loss making PVC production business. In early 2009, BorsodChem put the PVC operation up for sale but did not attract a buyer.

Now, Wanhua has taken measures to improve the division’s prospects including re negotiating its long term ethylene supply contract with the Hungarian chemical company TVK.

The BorsodChem CEO said though that the overall market situation was still negative in terms of profitability, something being felt not only by the firm but by all its competitors. Wanhua had a longer term commitment to the business and there are cost benefits from being in PVC for its Hungarian offshoot.

It can use hydrochloric acid, a by-product from its production of PU intermediates isocyanates in the PVC process.

In a move to extend its global network in a key region, BorsodChem opened a new branch office in Istanbul, Turkey late last year. The firm aims to improve the service level and support growth in the Turkish polyurethanes market.

MRC

MOSCOW (MRC) -- Chevron is in advanced talks to sell most of its downstream assets in Egypt and Pakistan in a sale that could be valued at around USD300 million, said Hydracarbonprocessing.

The company is conducting separate sale processes for its assets in both countries, the sources said in the report.

"Chevron is currently conducting a review of its fuels operations in Egypt and Pakistan," Chevron spokesman Brent Tippen told Reuters in an email. "This includes our shareholding in Pakistan Refinery Ltd, as well as fuels marketing, in Egypt and Pakistan."

The company said its lubricants business in Egypt and Pakistan weren't included in the review, and added that no decision had been made to sell any assets.

Chevron has received at least three nonbinding bids for the assets from interested parties, which include regional and international energy companies, one of the sources said in the report, declining to provide details of the bidders.

As MRC informed before, Chevron Phillips Chemical mulls expansion of its normal alpha olefins (NAO) capacity by, at least, 20% at its Cedar Bayou Chemical Complex in Baytown, Texas. The company has filed the necessary environmental permit application with Texas Commission on Environmental Quality (TCEQ). The construction is scheduled to begin in early in 2014 and the project would be completed in the fourth quarter of 2015, the company said in a statement.
MRC

MOSCOW (MRC) -- Outgoing Shell chief executive Peter Voser has said that oil price manipulation goes "against everything we believe at Shell", said Upstreamonline.

Speaking to the Anglo-Dutch supermajor’s annual general meeting in The Hague, Voser said stressed that the company always strives to achieve the highest standards of corporate behaviour.

In Shell’s first high level public comment on the inquiry, Voser said that "at this stage it's just an investigation into facts and evidence and no adverse findings have been made".

European antitrust regulators raided the offices of Shell last week, as well as those of BP, Statoil and price reporting agency Platts in an investigation of suspected price manipulation and restrictive business practices.

The European Commission-led inquiry has not identified any firm or individuals as suspects in its investigation, which Statoil identified as being focused on the use of Platts' market-on-close price assessment over the past 11 years.

After the initial inspections, investigators have since contacted a number of other firms to gain information related to their inquiries.

Italy’s Eni and Finland’s Neste Oil are among those who have said publicly that they have been contacted.

A number of major trading houses have also been contacted for information, including Glencore, Vitol, Gunvor and Mercuria, according to the Financial Times.

MRC

MOSCOW (MRC) - In January - April of this year, production of rubber and plastic goods in Belarus increased by 11.4%. The production of plastic windows and window sills showed the largest increase, according to MRC DataScope.

Belarusian producers of rubber and plastics have demonstrated a positive trend in the production of finished products this year. Over the four months of this year production of all key products increased, the only exception made the production of plastic doors.

The largest increase in the output was unexpectedly recorded in the production of plastic windows and window sills.
According to the National Statistical Committee of the Republic of Belarus, April production of plastic windows and window sills increased to 38,500 square meters, up 16% from April 2012.

During the first four months of this year, the total output of these products in the Republic amounted to 136,500 square meters, up 29% year on year. Production of pipes, hoses and fittings made from polymers in the Republic of Belarus last month totalled 1,340 tonnes.

In January - April of this year, this figure has reached 4,000 tonnes, up 22% compared to the same period in 2012.
April production of boxes, crates, trays of plastic reached 64.1 million units, up 19% compared with the same period a year ago. In January - April of this year the total production of these products from polymers made ??231.1 mln., which is 15% more than in 2012.

Production of pneumatic tires for trucks and buses in April 2013 increased by 14% compared to April 2012 and reached 163,500 pcs. Over the first four months of output of pneumatic tires grew by 6% to about 573,100 pcs.
Release of polymer non-reinforced and combined films rose in April by 7.4% compared to the same period last year and amounted to about 8,000 tonnes.

In January - April of this year the total production of the films made 30,000 tonnes, which is 5% more than in January - April 2012.

Negative growth in the first four months was recorded in the manufacturing of plastic doors. The April production of plastic doors totalled 2,600 square meters, down 11% from April 2012. Over the four months in 2013 the total production of these products amounted to 10,100 square meters, which is 22% less than last year.
MRC

MOSCOW (MRC) -- MRC news digest over the past week.

1. April SPVC imports to Russia decreased by 8%.

Russia's imports of suspension polyvinylchloride (SPVC) in April 2013 decreased by 8% from March to about 53,600 tonnes. The main decrease in the supplies occured on US resin. Despite the low seasonal demand for SPVC in the beginning of the year, its imports in March hit a record of 58,000 tonnes. But in April SPVC imports were reduced by 8% compared with the March to 53,600. The imports from China was still at a high level, while the deliveries of US SPVC declined significantly because of the increase in export prices of SPVC in February - March. Thus, in April 2013, imports of SPVC from US amounted to 19,000 tonnes, down 25% from March. The SPVC deliveries were cut from all North American producers, the only exception made OxyVinyls's resin. Import of Chinese acetylene PVC in April, on the contrary, increased slightly and reached 28,800 tonnes, while in March it was 28,200 tonnes. The supplies of SPVC from Xinjiang Zhongtai in April rose to 20,600 tonnes (from 11,700 tonnes in March), while imports of resin from Xinjiang Tianye fell from 16,500 tonnes in March to 8,200 tonnes in April.

2. Ufaorgsintez shut polypropylene production.

Ufaorgsintez (part of "Bashneft"), one of the largest Russian petrochemical companies, has stopped production of polypropylene (PP) for maintenance. On Sunday, 12 May, the company shut its PP production for a scheduled turnaround. The outage is going to last two weeks. The annual PP capacity of the plant is 100,000 tonnes. As reported, at night, on 26 April, Ufaorgsintez stopped the production of high-density polyethylene (LDPE) and polypropylene. Maintenance work lasted for 2 days. A planned shutdown of the plant's LDPE production is scheduled for September 2013.

3. European producers reduced PVC prices by EUR40-50/tonne for CIS markets.

In May, European makers reduced their export polyvinyl chloride (PVC) prices for the CIS countries by EUR40-50/tonne following a major drop in the contract ethylene price. The contract ethylene price in Europe for May shipments has been agreed by EUR100/tonne lower than April's level. A significant fall in ethylene prices and decline in export prices in the US made European producers reduce proportionally their export PVC prices in May for the CIS markets. Deals for May shipments of suspension PVC from Europe to the CIS countries are being agreed in the range of EUR700-760/tonne, FCA, which is on average by EUR40-50/tonne lower from April. Some market participants report that they were able to achieve lower prices than EUR700/tonne, FCA, for May shipments. European producers are trying to limit their sales at such low prices in May, expecting a price increase in June amid rising oil quotations.

4. Price trend of US PVC changed its direction.

US export prices of polyvinylchloride (PVC) for the Russian market increased to USD1,000/tonne. Low demand in foreign markets and increased supplies of the resin from North America resulted in the rollback of export prices in March and April. But in May, the suppliers of North American PVC have announced price increases by USD30/tonne, from April, despite the expectations of many market participants of further price reductions. Over the last six months, the peak of the export prices of US PVC was in February with the offers for March shipment reaching USD1,100/tonne CFR St Petersburg. Offers for US resin for the second half of April - early May for the Russian market were heard at USD950-970/tonne CFR St Petersburg. Many Russian companies have limited the purchases of the North American PVC, waiting for the prices to be cut by USD30/tonne from April level. This week offers for North American PVC for the Russian market have been heard in the range of USD980-1000/tonne CFR St Petersburg.

5. MEG and PTA prices rose in Asia.

Spot prices of monoethylene glycol (MEG) and terephthalic acid (PTA) have grown in the Asian region on good buying activity from producers of polyethylene terephthalate (PET). Main feedstock for the production of PET granulate have reached USD1,050-1,054/tonne, CFR China. MEG prices also showed an upward trend. Thus, over the past week MEG prices at the Chinese port rose by USD18-20/tonne and amounted to USD997-1,006/tonne, CFR China. PET producers' good sales and, as a consequence, a stable high demand for raw materials from plants have boosted feedstock prices. However, according to ICIS-MRC Price report, prices of Russian MEG fell last week. The price range of the Russian feedstock was heard at Rb47,5-50,0/tonne, FCA, including VAT.

6. April import of LLDPE to Russia decreased by 8%.

Imports of linear polyethylene (LLDPE) to Russia in April decreased by 8% to about 18,000 tonnes. Earlier this year, Russian companies were actively buying linear polyethylene (LLDPE) from foreign companies because of the absence of the domestic production. In March, the imports of LLDPE reached about 20,000 tonnes. But in April, Russian companies reduced their purchases because of low demand for the material. Imports of film LLDPE in April made 15,700 tonnes (from 17,500 tonnes in March). According to MRC analysts, the producers of stretch films cut their purchases most of all. Low demand for stretch film in the domestic market and the residues from the previous purchases made Russian producers in April reduce the imports of linear polyethylene. In other sectors of consumption (rotator forming, extrusion coating, injection moulding, etc.) the imports of LLDPE in April actually stayed at the March level. In General, over the first three months of the year, the total imports of LLDPE to Russia made 68,5000 tonnes, up 45% year-on-year.

7. April imports of PP in Russia remained at the level of March.

Import of polypropylene (PP) to Russia remains still at a high level, despite the launch of new PP facilities. April imports of PP to the Russian market made 22,500 tonnes, which is comparable with March indexes - 22,300 tonnes. A new 180,000 tonne/year production of PP was launched in mid-February in Omsk by Polyom (Titan). In less than three months the new factory produced about 20,000 tonnes of homopolymer PP. April imports of homopolymer PP decreased by 28% compared with March to 8,000 tonnes. The main decrease in import of homopolymer PP fell on raffia from Turkmenistan (44% compared with March) because of high export prices and temporary problems with the quality of the production. At the same time the supplies of Asian and Middle Eastern homopolymer PP increased this year significantly. In general, over four months of this year, the total imports of PP to Russia made 83,000 tonnes, up 11% year-on-year.

8. PET imports to Russia grew by 67.5% in April.

In April, imports of PET to the Russian domestic market rose by 67.5% from March. Thus, last month import volumes of PET to Russia grew by 9,900 tonnes to 24,600 tonnes, which is the highest index in the current year. In comparison with the same period last year, import volumes increased by 12.5%. Granulate in the total PET imports accounts for 23,800 tonnes. Imports of recycled PET-flex was more than 800 tonnes. Shipments of Chinese PET granulate increased more than two-fold. Overall in April, Russia imported about 13,000 tonnes of Chinese PET, whereas in March this index made about 6,300 tonnes. Supply of Lithuanian PET accounts for the record volumes over the past two years. Overall last month, about 2,000 tonnes of bottle PET (Neopet brand) arrived from Lithuania. In January-April, the total import volumes of PET to Russia amounted to 64,500 tonnes. Over the first four months last year this index made 63,500 tonnes.

9. HDPE import to Russia dropped by 12% in April.

After the March surge, imports of high-density polyethylene (HDPE) to the Russian market began to decline. In April, the total import volumes decreased by 12% from March to 27,000 tonnes. Sufficient supply from Russian producers and low demand for finished products made Russian companies reduce HDPE imports in April. HDPE for extrusion coating for steel pipes of large diameter and for products produced by blow moulding accounted for the largest decrease in supply. The reduction was 25% and 27%, respectively, which equalls 4,700 and 3,500 tonnes. Last month, imports of HDPE for the production of pipes made 7,500 tonnes, down 15% from March. The decline in imports was due to low demand for finished products, sufficient supply of Russian polyethylene and large stocks from the previous months. In April, import of injection moulding HDPE fell by 15% to 4,500 tonnes. Shipments of film HDPE were reduced by only 1% to 5,500 tonnes. Overall, in January-April 2013, HDPE imports to Russia amounted to 107,000 tonnes, down 2% year-on-year. Over the first four months of the year, the reduction of imports were registered for HDPE for the production of films (45%) and cable insulation (12%). In other sectors of consumption, conversely, imports increased.
MRC