Axiall price target raised to USD66 at Goldman

MOSCOW (MRC) -- Goldman Sachs maintained a Buy rating on Axiall Corporation and raised its price target to USD66.00 (from USD60.00), said Streetinsider.

The change is tied to PVC margin gains. Analyst Brian Maguire said, "We see non-integrated ethylene buyers such as AXLL as the biggest beneficiary of the March ethylene contract settling down 4 cents on Friday (April 4).

Meanwhile the PVC contract price rose 3 cents in March for a net 5 cent increase in PVC margin for the month. This puts March prices up 9 cents for PVC year to-date and down 2.75 cents for ethylene.

On paper, this puts PVC margin in March up over 10 cents from December. Were this margin gain to hold for a full year, we estimate it would add roughly USD250mn to AXLL EBITDA given their 2.5bn pounds of PVC capacity.

However, we expect some of the margin gains to fade this summer as PVC supply disruptions ease. Still, we now expect 2014 PVC margin to be nearly 6 cents higher than 2013, with another 2 cent margin gain expected in 2015."

As MRC wrote before, Axiall Corp. is considering building a USD3 billion ethane cracker and chemical plant somewhere in Louisiana. The Atlanta-based chemical manufacturer says it could make a decision sometime early next year. Axiall would invest USD1 billion of its own money, while an unnamed partner would put in USD2 billion.

Axiall Corporation is a leading integrated chemicals and building products company. It is an international manufacturer of chlor-alkali and derivatives, chlorovinyls and aromatics products including chlorine, caustic soda, vinyl chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene dichloride, muriatic acid, phosgene derivatives, polyvinyl chloride, vinyl compounds, acetone, cumene and phenol. It also manufactures vinyl-based building and home improvement products, including window and door profiles, mouldings, siding, pipe and pipe fittings, and decking. Axiall, headquartered in Atlanta, Georgia, has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers.
MRC

MOSCOW (MRC) - Ufaorgsintez, owned by United Petrochemical Company, announced an increase in the contract prices of low density polyethylene (LDPE) and polypropylene (PP), effective from 15 April, according to ICIS-MRC Price Report.

Company raised contract prices for polyolefins by Rb500-4,500/tonne, compared with the level on 1 April. The most significant increase occurred for LDPE, whereas PP rose slightly.

Prices for 108 and 158 PE rose by Rb2,500/tonne and Rb4,500/tonne, respectively, compared with the level at the beginning of the month. Prices for homopolymer PP of raffia grade increased to Rb1,250/tonne, while the prices for block copolymers (PP-block) increased by Rb500/tonne. Prices for injection moulding homopolymer PP remained mostly steady.

Ufaorgsintez JSC was founded in 1956 and is based in Ufa, Russia. Ufaorgsintez JSC manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, poly vinyl chloride and polyethylene items, thinners, and dilutants. PP production capacity of the plant is 100,000 tonnes/year. Total production of polyethylene and polypropylene at the plant exceeded 23,100 tonnes and 32,600 tonnes in Q1 2014, respectively. As of January 22, 2010, Ufaorgsintez JSC operates as a subsidiary of United Petrochemical Company OAO, with 87.76% of the "Ufaorgsintez"capital.
MRC

MOSCOW (MRC) -- Jilin Petrochemical has shut a high density polyethylene (HDPE) plant for maintenance turnaround, reported Apic-online.

A Polymerupdate source in China informed that the plant was shut on April 10, 2014. The plant is likely to remain off-stream for around one month.

Located in Jilin province, China, the plant has a production capacity of 300,000 mt/year.

As MRC informed earlier, Sinopec Shanghai Petrochemical shut its HDPE plant on March 26, 2014 owing to feedstock issues. A restart date for the plant could not be ascertained. Located in Shanghai, China, the plant has a production capacity of 250,000 mt/year.

Earlier, on 3 March, Shanghai Golden Phillips Petrochemical shut its HDPE plant. The shutdown was attributed to high cost of feedstock ethylene. Located in Shanghai, China, the plant has a production capacity of 135,000 mt/year.
MRC

MOSCOW (MRC) -- Traders raised spot prices of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS), following the hryvnya devaluation, according to ICIS-MRC Price report.

The collapse of the hryvnya exchange rate leads to a constant increase in prices of imported polymers. Traders raise polystyrene (PS) prices and adjust them almost every day. The price spread of the most popular injection moulding GPPS grades of Nizhnekamskneftekhim production were heard in the range of UAH27,000-28,200/tonne CPT Kiev, including VAT, on Wednesday. The price of 525 grade rose by UAH6,500-6,900/tonne since early 2014.

The slump in prices is no less significant in the HIPS market. HIPS prices of Nizhnekamskneftekhim's 825 grade were heard at UAH28,000-29,000/tonne CPT Kiev, including VAT, up by UAH6,500-6,800/tonne compared with prices of the beginning of the year.

Traders said prices have been bound long to foreign currencies (dollar, euro or rouble depending on the country of origin of the polymer) and they are recalculated at the current foreign currency rate of the interbank market. Many companies initially calculate selling prices at a higher exchange rate, because the hryvnya has fallen almost every day in recent months. Almost all traders work now on 100% prepayment basis. Deferred payments are granted only to very disciplined customers with a good payment history, a Ukrainian trader said.

Demand is present in the PS market, despite a high rate of price increases, sellers said. At the same time, producers of finished products said buying activity dropped in the market of finished products, following the general decline in economic activity of the population, which would have a negative impact on the overall PS consumption.
MRC

MOSCOW (MRC) -- Solvay has signed an agreement to sell its polyvinyl chloride (PVC) compound business Benvic Europe to U.S. investment company OpenGate Capital, further improving the resilience of the Group’s portfolio, according to the companie's press-release.

Benvic Europe mixes PVC and additives, pigments and stabilizers to make innovative plastic compounds, which are processed to serve markets ranging from cars and aircrafts to medical applications and construction.

"This divestment is part of Solvay's transformation to achieve higher growth and greater cash returns and helps to reduce its exposure to the economic cycle," said Jacques van Rijckevorsel, member of Solvay’s Executive Committee. "OpenGate Capital’s long-term investment strategy will allow Benvic to seize growth opportunities in Europe."

The closing of this transaction is expected in the first half of 2014 and is subject to the approval of the anti-trust authorities. The deal was announced in late December of the year.

As MRC informed previously, Braskem, the largest polymer producer in the Americas and the world leader in biopolymers, has recently announced the execution of an agreement with Grupo Solvay for the acquisition of 70.59% of the total and voting capital of Solvay Indupa, which produces PVC and caustic soda and owns two integrated industrial facilities in Brazil and Argentina.

OpenGate Capital is a global private buyout firm specializing in the acquisition and operation of businesses seeking revitalization through growth and operational improvements. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California and maintains offices in Paris, France and Sao Paulo, Brazil.

Benvic generated revenues of about EUR160 million in 2013. It has about 220 employees across Europe, with three PVC compounding production sites in France, Italy and Spain. The divestment will not affect Benvic’s current headcount.


MRC