SABIC shut its LDPE plant for maintenance in UK

MOSCOW (MRC) -- SABIC has shut a low density polyethylene (LDPE) plant for maintenance turnaround, reported Apic-online.

A Polymerupdate source in the UK informed that the plant was shut early last week. It is planned to remain shut for around one month.

Located in Wilton, UK, the plant has a production capacity of 865,000 mt/year.

As MRC wrote previously, SABIC is studying investment opportunities in the US. SABIC's plan for US investments comes as the economic slowdown in Europe and China ebbed demand from clients and affected earnings at the company and its affiliates. SABIC would be joining companies including Dow Chemical Co. and Exxon Mobil Corp. in seeking to take advantage of the US shale boom that has helped drive down natural-gas prices.

Saudi Basic Industries Corporation (SABIC) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers. SABIC manufactures on a global scale in Saudi Arabia, the Americas, Europe and Asia Pacific.
MRC

MOSCOW (MRC) -- Westlake Chemical Corporation, the US plastics maker controlled by the billionaire Chao family, has reported net income for the quarter ended March 31, 2014 of USD158.0 million - a 28% increase year on year - on net sales of USD1,027.7 million, as per the company's report.

This represents an increase in net income of USD34.7 million compared to first quarter 2013 net income of USD123.3 million on net sales of USD864.6 million.

Net sales for the first quarter of 2014 increased by USD163.1 million compared to net sales for the first quarter of 2013, mainly attributable to higher sales volumes for polyethylene and ethylene, higher sales prices for most of our major products and sales contributed by the company's specialty PVC pipe business, which Westlake Chemical acquired in May 2013.

Income from operations was USD248.1 million for the first quarter of 2014 as compared to USD194.1 million for the first quarter of 2013. Income from operations for the first quarter of 2014 benefited primarily from higher olefins volumes and improved integrated product margins, as higher sales prices more than offset the increase in feedstock and energy costs as compared to the prior year period. The increase in first quarter 2014 income from operations was partially offset by the lost sales, lower production rates, unabsorbed fixed manufacturing costs and other costs associated with the planned maintenance turnaround of our Calvert City production facilities for the ethylene plant's feedstock conversion and expansion project and other planned maintenance activities.

Albert Chao, President and Chief Executive Officer, said "We are pleased to report a 28% increase in first quarter net income as compared to the first quarter of last year despite the negative impact on earnings related to elevated propane costs, severe winter weather and the Calvert City planned maintenance turnaround. We also successfully completed the Calvert City ethylene plant conversion to ethane feedstock and its expansion by 180 million pounds a year in capacity in early April which allows our Vinyls segment to capture the advantageous ethylene cost position our Olefins segment has been benefitting from over the past several years and that we expect will continue into the foreseeable future."

The Olefins segment reported income from operations of USD272.3 million in the first quarter of 2014, an increase of USD111.2 million compared to USD161.1 million reported in the first quarter of 2013. The increase was primarily due to higher olefins integrated product margins as compared to the prior year period, as the increase in sales prices outpaced increases in feedstock and energy costs. In addition, first quarter 2014 income from operations benefited from higher polyethylene and ethylene sales volumes and improved production rates for most of our major products. Income from operations in the first quarter of 2013 was negatively impacted as a result of the lost production, unabsorbed fixed manufacturing costs and other costs associated with the turnaround and expansion of the Lake Charles Petro 2 ethylene unit.

Income from operations for the first quarter of 2014 for the Olefins segment of USD272.3 million increased by USD25.0 million from the USD247.3 million reported in the fourth quarter of 2013. The increase in first quarter income from operations was primarily due to higher polyethylene sales prices and volumes, which were partially offset by higher ethane prices than in the fourth quarter of 2013.

The Vinyls segment reported an operating loss of USD21.1 million in the first quarter of 2014 compared to income from operations of USD43.7 million in the first quarter of 2013, a decrease of USD64.8 million. This decrease was primarily driven by the lost sales, lower production rates and the expensing of USD16.9 million related to unabsorbed fixed manufacturing costs and other costs associated with the planned maintenance turnaround of our Calvert City production facilities for the ethylene plant's feedstock conversion and expansion and other planned maintenance activities. In addition, the Vinyls segment's first quarter 2014 operating results were negatively impacted by the severe winter weather and significantly higher propane costs, as average industry prices for propane increased by 50.2% as compared to the prior year period.

The Vinyls segment reported an operating loss of USD21.1 million in the first quarter of 2014, a decrease of USD39.7 million compared to income from operations of USD18.6 million in the fourth quarter of 2013. The results for the first quarter of 2014 were negatively impacted by higher propane costs as compared to the fourth quarter of 2013 and the lost sales and costs associated with the planned maintenance turnaround of our Calvert City facilities.

As MRC informed before, Westlake Chemical Corp. has recently separated its ethylene assets into a tax-advantaged venture in which it plans to sell shares to the public. The master-limited partnership (MLP) includes three US ethylene plants and a 200-mile (322-km) ethylene pipeline.

Westlake Chemical Corporation is a manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC resin and PVC building products including pipe and specialty components, windows and fence.
MRC

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC) expects its planned oil-to-chemicals plant to start operations by the end of 2020, said Reuters.

SABIC, one of the world's largest petrochemical groups, said it expects to use around 10 million tonnes of crude oil annually as feedstock for the plant. That is equivalent to 200,000 barrels per day, or an average-sized oil refinery.

Development of the Saudi petrochemical sector is part of Riyadh's strategy for diversifying the economy away from heavy dependence on crude export revenues.

In its first public announcement on the project, SABIC did not say where the complex would be located, how much it would pay for the oil or if the crude would be subsidised. It did not specify which type of the crude it would use either.

In a statement to the stock exchange, SABIC said it was in the final stages of preliminary studies for the industrial complex in Saudi Arabia which will help provide around 100,000 direct and indirect jobs for Saudis.

Oil Minister Ali al-Naimi said in March the kingdom would build its first plant able to turn crude oil directly into chemicals without having to refine it first. He said the plant would be located in Yanbu, Saudi Arabia's second-largest industrial hub on the West coast.

It is not clear if the development of such a project is linked to finding alternative liquid feedstock to help meet a shortage of gas supplies, which SABIC blamed last month for limiting its expansion plans within Saudi Arabia.

Chemical companies usually process gas or refined oil products into petrochemicals, such as ethylene and propylene, that are then used to make plastics and other products. Using oil as a feedstock is also more expensive than cracking gas.

As MRC wrote before, ExxonMobil started up the world's first plant that processes crude oil into chemicals in Singapore last year.

State-run oil giant Saudi Aramco has been researching ways to make ethylene and propylene directly from oil for years to grow its petrochemicals business.

MOSCOW (MRC) -- Ufaorgsintez, owned by "United Petrochemical Company" (UPC), has announced an increase in contract prices of low density polyethylene (LDPE) and polypropylene (PP) for shipments starting from 15 May 2014, according to ICIS-MRC Price report.

Thus, the company raised contract LDPE prices by Rb1,000/tonne from 1 May. PP prices (raffia grade of homopolymer of propylene) rose less substantially - by Rb250/tonne.

Ufaorgsintez OAO manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, polyvinyl chloride and polyethylene items, thinners, and dilutants. The plant's annual polypropylene (PP) production capacity is 100,000 tonnes. Ufaorgsintez's overall output of polyethylene (PE) and PP totalled 23,100 tonnes and 32,600 tonnes, respectively, over the first three months of 2014. The company exports its products to Belarus, Kazakhstan, Finland, Germany, France, and Brazil.

Ufaorgsintez OAO was founded in 1956 and is based in Ufa, Russia. As of January 22, 2010, Ufaorgsintez OAO operates as a subsidiary of Bashneft Joint Stock Oil Company. "United Petrochemical Company" (UPC) owns 87.76% of Ufaorgsintez's registered capital. Bashneft sold Ufaorgsintez's stake to UPC in May 2013.
MRC

MOSCOW (MRC) -- Wacker Chemie AG generated both year-on-year and quarter-on-quarter sales growth from January through March 2014, thanks especially to higher volumes, as per the company's report.

In Q1 2014, the Munich-based chemical company generated sales of EUR1,157.4 million after EUR1,076.3 million in the prior-year period. This is almost 8% more than in the prior-year period and 6% up from the preceding quarter (EUR1,086.9 million). All five business divisions contributed to this growth. Overall, Wacker therefore more than compensated for price pressure in some product segments and for unfavorable exchange-rate effects due to the weaker US dollar and Japanese yen.

The increase in Wacker’s first-quarter 2014 earnings before interest, taxes, depreciation and amortization (EBITDA) clearly outpaced sales growth, rising to EUR285.2 million (Q1 2013: EUR164.5 million). That is a good 73% up from a year ago and about 80% more than in Q4 2013 (EUR158.1 million).

WACKER’s full-year 2014 forecast remains unchanged. The company expects group sales in 2014 to increase by a mid-single-digit percentage (2013: EUR4.48 billion). Fiscal 2014’s EBITDA is expected to be at least 10% higher than in 2013 (EUR679 million). Group net income should also rise compared to the previous year.

"WACKER had a good start to the new fiscal year in Q1 2014," said CEO Rudolf Staudigl. "Customer demand for our products rose noticeably throughout all divisions in the first quarter. At the same time, price pressures have eased in a number of segments. Our sales and earnings trend in Q1 and our current order level are supporting our optimistic view on the coming months."

The Wacker Group invested EUR89.3 million in the first quarter of 2014 (Q1 2013: EUR121.2 million). This decline of some 26% was due to project-related factors. Relative to Q4 2013 (EUR153.0 million), investment spending was down by nearly 42%.

Having successfully added capacity for vinyl acetate-ethylene copolymer dispersions at the Nanjing site in China, Wacker is now expanding its production facilities for dispersible polymer powders at the same site. A series of individual measures has been planned to eliminate bottlenecks in the production process and consequently enhance productivity. Once these measures are completed, Wacker expects to be able to produce up to 60,000 metric tons of dispersible polymer powder at Nanjing annually.

As MRC informed before, las year, Wacker Chemie AG officially launched its new production plant for ethylene-vinyl-acetate copolymer (EVA) dispersions at its Ulsan site in South Korea. The additional 40,000 tonnes from the second reactor line increases the site's EVA-dispersion capacity to a total of 90,000 tonnes per year. The production capacity of the site has, thus, almost doubled, making the plant complex one of the biggest of its kind in South Korea.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.
MRC