Automotive plastics set for growth in India

MOSCOW (MRC) -- A move to lightweighting and cost reduction is motivating India’s automotive sector to increasingly look to replace metal components with plastic alternatives, reported Ein News with reference to analysts at Research and Markets.

"India is one of the major producers of automotive plastics, hence during last half a decade (sector) demand (has seen) exponential growth," said the authors of "India Automotive Plastics Market Forecast & Opportunities, 2017".

"Plastics have many benefits over traditional steal based components - the plastics in automotive sector is being accepted on a large scale in India."

According to the report, India’s automotive plastics market revenues grew at an annual rate of around 25% during 2009-12. The consumption of polypropylene (PP) and polyurethane is forecasted to double in terms of revenues in automotive plastics sector during the next five years.

The leading automotive plastics manufacturers in India are BASF, Bayer, SRF and Dow Chemicals, said Research and Markets.

As MRC reported earlier, BASF' plastic, a highly reinforced polyamide was used in the production of a front end carrier in the new Golf 7. This is one of the world's first front end carriers without metal reinforcement. Ultramid B3WG8 will replace the previous polypropylene (PP) hybrid part. The sheet steel parts that had been attached previously are now eliminated.
MRC

MOSCOW (MRC) - The capacity of the Ukrainian market of PET chips decreased 157,600 tonnes in 2013, down 3.5% from the previous year, according to MRC Annual Survey.

The decline in Ukraine's PET consumption resulted from the overstocked inventories, sluggish buying activity in the market last autumn, reduced of the preform weight (new bottles with thinner throat), and weaker production rates in the manufacturing sector amid the economic downtrend in country, said market players.

Consumption of PET in the first half of the year was quite strong. PET consumption exceeded 100,000 tonnes over the two quarters in 2013, up 13% year on year. Local converters expected the consumption rates to remain until the end of the year. The outlook for the end of the year was also positive.
But low sales in the sector of the finished product in the autumn did not allow converters to reach their goals. Many companies reported overstocked inventories in autumn, which they managed to sell only by the New Year.

According to official statistics of Ukraine, the index of the processing industry in 2013 decreased by 7.7% compared to 2012.
Ukraine does not have its own PET chips production. Demand from the packaging and processing industries are fully covered by imports, mainly from China. Ukraine's PET imports hit the record in 2007, with 248,000 tonnes delivered.
MRC

MOSCOW (MRC) -- European producers were forced to reduce February polyethylene (PE) prices by EUR20-40/tonne for the CIS countries because of lower contract ethylene prices, according to ICIS-MRC Price report.

February ethylene contract prices in Europe were agreed by EUR40/tonne lower than in January. As a result, many European producers had to reduce their PE prices for the CIS markets.

Thus, deals for February shipments of low density polyethylene (LDPE) were negotiated in the range of EUR1,250-1,350/tonne FCA last week. Offer prices of high density polyethylene (HDPE) were heard in the range of EUR1,150-1,235/tonne FCA.

At the same time, many market participants said the devaluation of the national currency in a number of the CIS countries, particularly in Russia, Belarus and Ukraine, almost completely levelled the February fall in PE prices in Europe.
MRC

MOSCOW (MRC) -- Dow Chemical, the largest US chemical maker by sales, has announced that they will repurchase USD4.5 billion worth of stock over the course of 2014 amounting to roughly 8% of the float of the stock at the current price, reported Ein News.

The vast majority of this repurchase will be done with borrowings as there will likely be very little cash left over after capital expenditures and dividends. Share repurchases of this size are generally very bullish for the near term performance of a stock but there is more than meets the eye to this repurchase.

In 2009 Dow issued a total of USD4 billion in convertible preferred shares to Berkshire Hathaway and Saudi Aramco (SA) in order to complete their acquisition of Rohm & Haas. These shares pay a preferred dividend of 8.5% and have a strike price of USD41.32. It is unlikely that Berkshire or SA will opt to convert these shares because of the hefty dividend and the value of the call options. However, this large dividend is burdensome to Dow, and Dow can force conversion if the common stock price exceeds USD53.72 per share for any 20 trading days in a consecutive 30-day window. This share repurchase is essentially a risky gambit to force conversion of these preferred shares. If this plan is successful then there will actually be more shares outstanding following the plan than before the repurchase.

As MRC informed previously, The Dow Chemical Company announced in early February 2014 that its Board of Directors had declared a 15% increase in the first quarter dividend, from USD0.32 per share to USD0.37 per share. In line with its stated priorities, the company also announced that it has expanded its authorized share buy-back program to USD4.5 billion from USD1.5 billion of common stock to be completed in 2014.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber. In 2012, Dow had annual sales of approximately USD57 billion. The сompany's more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
MRC

MOSCOW (MRC) -- Luoyang Petrochemical has restarted a polypropylene (PP) plant, according to Apic-online.

A Polymerupdate source in China informed that the plant was restarted on February 7, 2014. The plant was shut on January 27, 2014 owing to feedstock issues.

Located in Henan province, China, the plant has a production capacity of 140,000 mt/year.

As MRC reported earlier, the plant was shut down on August 19, 2013. Initially the PP plant was scheduled to resume operations on September 20, 2013.

Another Chinese petrochemical producer - Zhenhai Refining & Chemical Co (ZRCC) - is in plans to shut a polypropylene (PP) plant for maintenance turnaround in May 2014. The duration of the shutdown could not be ascertained. Located in Ningbo, Zhejiang province in China, the plant has a production capacity of 250,000 mt/year.

Besides, Oriental Energy is in plans to start a new polypropylene (PP) plant in mid 2014. Located in Zhangjiagang, China, the plant will have a production capacity of 400,000 mt/year.
MRC