Consumption of bottle PC in Russia continues to decrease

MOSCOW (MRC) -Russia's consumption of bottle polycarbonate (PC) were 2,500 tonnes in January-November 2014, down 19% in the same period last year, according to MRC DataScope report.

As this segment of the PC market is totally dependent on imports, that is why domestic bottle PC prices have been growing on line of the rouble devaluation. At the same time, because of the strengthening of the dollar, prices for European bottle PC have been lower than Asian material. The most popular European producers in Russia are Sabic Innovative Plastics (11% from the total imports) and Styron (11%). However, most of the imported volume occurred for Asian producers: Samyang Corporation (29%), LG Chem (25%), Mitsubishi Engineering-Plastics Corp (21%).

Russian traders reported a significant decline in consumer interest in bottle PC because of the sharp rising prices, which cut their margins.
Some of they said that the reduction of production bottles number, along with an increase in their volume ( from 10 liters to 20 liters or more).
Also, one of the ways to reduce costs is to add a recycled feedstock material in the production, or switching to a recycled PC, which worsens the quality of products.
Buyers of bottles are not willing to accept price rise. In this case, in order to reduce costs, they often use the bottle more than once, delaying or reducing the purchase of new ones. For this reason, the consumption of bottle PC is expected to drop next year further. Due to the deterioration of the macroeconomic situation in the country traders are going to make discounts to buyers, taking the currency risk or the sharing it with clients.

However, these measures still can not have a significant impact on demand. Foreign producers of bottled PC avoid to increase prices for Russia significantly to not lose customers.
MRC

MOSCOW (MRC) -- Engineering plastics have gradually replaced traditional engineering materials such as wood or metal in many applications, as per Plastemart.

In the midst of unique properties such as lower weight and higher strength, engineering plastics are much easier to manufacture, especially in complicated shapes. Hence, the engineering plastics industry of India has substantial growth potential in the country, since untapped opportunities still exist for metal replacement in cars, trucks, consumer appliances as well as in other applications. Furthermore, the growth in Asian economies is likely to be driven by increasing usage of engineering plastics in segments including electrical & electronics segment, automotive and construction sector. Engineering plastics are superior to general-purpose plastics in terms of heat resistance, transparency and mechanical features.

Engineering plastic industry in India has been primarily dominated by the Polyethylene Terephthalate (PET) thermoplastic resin, which commanded a major in the overall revenues of the engineering plastic industry during FY-2014. In terms of market revenues, ABS plastic resin was the second largest market of the engineering plastic industry in India, finding extensive usage in the automotive sector, which has significantly grown over the last couple of years, determined by the surge in personal disposable incomes as well as busier lifestyles. The global demand for ABS and SAN resin is about 18 mln tons as recorded during FY-2010.

Over the years, automotive and transportation applications industry has realized the importance of engineering plastics over metals due to massive reduction in vehicle weight, supplemented with lower production costs. This has enhanced the usage of engineering plastics in the automotive industry. The competition in the engineering plastic market has been largely captured by few major players such as DSM engineering plastics, BASF India, Bhansali Engineering Polymers, Styrolution India and several others. These players have commanded a sizeable market share in the overall engineering plastic market, despite of having a number of SMEs operating under this business.
The engineering plastic market revenues in the future are expected to augment at the CAGR of 21.7% during FY’2014-FY’2019. Polyethylene Terephthalate (PET) segment is likely to sustain its dominance in India’s engineering plastic market space during the period FY-2015 to FY-2019.

As MRC wrote before, India's largest refiner and oil marketing company Indian Oil Corporation's Rs 34,555-crore 15 million tonnes per annum Paradip Refinery will be commissioned in phases from March 2015 onwards.
MRC

MOSCOW (MRC) -- About 130 mln tons of ethylene were processed worldwide in 2013, said Plastemart.

A study by Ceresana analysis the consequences of the shale gas boom in the USA until 2021. The shale gas boom in the USA has far-reaching consequences for the global ethylene market: The substantial decline of prices for ethane led to the construction of several new ethane crackers. In contrast to other feedstocks such as naphtha or propane, the cracking of ethane yields a rather high amount of ethylene.

Should the current downward slide of oil prices continue, however, the US fracking industry might lose its foothold; Ceresana analyses the long-term implications. Forced by much higher production costs in Europe, several European produces have already announced to close crackers or to change over to using imported ethane as feedstock. Ceresana expects the global supply of ethylene to increase much more quickly than demand, due to massive capacity expansions. As a result, capacity utilization will fall, increasing pricing pressure. Therefore, Ceresana forecasts revenues generated with ethylene to rise by 3.2% p.a. until 2021 and thus at much lower growth rates than in the previous eight year period. Following a growth rate of 9.1% p.a. between 2005 and 2013, the Middle East became a center of the global ethylene industry.

Production volume in this region is projected to increase by up to another 10 million tonnes until 2021. One of the main customers is China that imports large amounts of ethylene and ethylene-based plastics such as HDPE, LLDPE, and LDPE. Many producers of ethylene and polyethylene are dependent on these exports to China. The Chinese government, however, is trying to significantly increase self-sufficiency in regard to ethylene and its downstream derivatives. China intends to open additional naphtha crackers and to increase the use of coal in the production of olefins. Eastern Europe, dominated by development in Russia, and Africa are also expecting to see a high relative increase of production volume. As a response to pricing pressure, ethylene output in Western Europe will fall.

The majority of all ethylene produced is consumed in the polyethylene industry. Depending on density and rigidity of the product, polyethylene is classified as either HDPE, LDPE or LLDPE. Two thirds of global demand for ethylene in 2013 stemmed from the production of these plastics. While demand for LDPE will increase only moderate, Ceresana forecasts a notable expansion of capacities for HDPE and LLDPE, in Asia-Pacific and the Middle East in particular. Another application area of huge growth potential is the production of ethylene oxide. Ethylene oxide is mainly used to produce ethylene glycol which is a pre-product for polyester. The production of textile fibers is growing significantly, especially in Asia. Additionally, producers of ethylene oxide are profiting from the substitution of glass by PET bottles.

As MRC wrote before, about 85 million tonnes of propylene, the second most important petrochemical feedstock, were consumed worldwide last year, according to a recent study. The study by market research institute Ceresana pointed out that its direct applications include production of important chemicals such as propylene oxide, acrylonitrile, cumene, butyraldehyde and acrylic acid, besides the plastic polypropylene.
MRC

MOSCOW (MRC) - Russian producers continued to rise domestic polyethylene terephthalate (PET) prices on the back of the increased costs pf imported material. The upper end of PET price grew by Rb5,000/tonne, according to ICIS-MRC Price Report.

The price of Russian PET ranged last week at Rb64,000-71,000/tonne FCA, including VAT. Local buyers were reluctant to accept the rapid rise in prices. However, comparing prices, there is no any alternative to Russian PET at the moment.

Buying activity in the market continued to be sluggish. The reason for the increase in prices was falling rouble. The production cost of PET chips has also increased.

The rate of devaluation of the national currency has overtaken the falling prices in the foreign markets. Sources at the plants said that producers have been keeping prices steady long enough.
In the late November - early December, the market enters the Asian PET, purchased at the price of USD1,150-1,190/tonne FOB. Amid the devaluation of the national currency the delay in the payment plays against importers in Russia.

Companies that cleared up batches at the exchange rate of 52-53Rb=1USD prices of PET chips were at Rb80,500-83,000/tonne CPT Moscow, including VAT. Importers have significantly reduced purchases in foreign markets (spot) in the autumn and now the market enters only sharply needed imports and contractual volumes.

MRC

MOSCOW (MRC) -- By early December, export polyethylene (PE) prices in Uzbekistan had fallen by USD450-500/tonne from November on the back of a slump in demand, according to ICIS-MRC Price report.

Starting prices of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) were at USD1,850-1,900/tonne FCA Kengsoy in export trades in Uzbekistan in early November that did not correspond to the global trends. As a consequence, deals were not registered in the trades. Starting prices had been reduced to USD1,350-1,450/tonne by early December because of the total absence of deals.

1,100 tonnes of injection moulding HDPE, 1,450 tonnes of blow moulding HDPE, 100 tonnes of HDPE for rotational moulding of large items and about 350 tonnes of LLDPE C4 were put up for auction in the first week of December in the export trades. Injection moulding HDPE and LLDPE accounted for the strongest demand in the trades, Russian companies were actively contracting PE.

All the quantities of HDPE for December shipments were sold out at USD1,350/tonne FCA Kengsoy in the trades. Deals for LLDPE were done at USD1,450/tonne FCA Kengsoy, but not all quantities were contracted.
MRC