Exports bring temporary relief for Europe propylene

(ICIS) -- A combination of exports and cracker operating rate reductions over the past four months has helped to offset some of the bearish pressure on propylene, which resulted from poor demand from its derivative polypropylene (PP) and varied production problems, market sources said on Friday.

About 100,000 tonnes of propylene has been booked for export since July, primarily to the US Gulf and Americas, the sources added. This has gone a long way to rebalancing players' systems.
Weak demand and ever decreasing prices in Asia has led to little interest in exporting east. Shipowners are not keen to offer competitive freight rates to Asia, with one saying ⌠ships that end up there have nothing to take back, and rates are just too high".

But despite the slump, European players have worked to inure themselves against the demand slowdown. The propylene market is still viewed as balanced-to-long, and could lengthen further as a result of waning export potential and little sign of improvement in terms of demand.

US propylene contract prices for October settled down a significant 14 cents/lb ($309/tonne, ┬224/tonne) from September, and spot prices have followed suit. This, together with the sizeable volume already imported, will limit export options.

Sources said the ability to move volumes from the European system has been the market's saving grace, but now it would be more difficult to manage volumes.


US acrylic acid and acrylate esters October contract prices are weakening

(ICIS) -- US acrylic acid and acrylate esters October contract prices are weakening on soft demand and plentiful supply, sources said on Thursday. Declines were heard in the range of 3-5 cents/lb ($66-110/tonne, ┬48-79/tonne) on the high end of most products, but one buyer said it had received offers of 10-15 cents/lb lower for two of the esters than it had in September.

September glacial acrylic acid (GAA) contracts are in the range of $1.41-1.46/lb, as assessed by ICIS.

Producers did not confirm talk of the large decreases, but one said existing margins were unsustainable, given sharply weaker propylene pricing for October. US propylene contract prices for October settled down by 14 cents/lb from September, primarily because of weakening demand.

The settlement brought the chemical-grade propylene (CGP) contract down to 62.50 cents/lb, and the polymer-grade propylene (PGP) contract down to 64 cents/lb.

A recent build-up of refinery-grade propylene (RGP) inventories also was cited as a factor in the lower price settlements. And US propylene inventories rose by 5% in the last week of September despite slightly lower refinery operating rates, according to the Energy Information Administration (EIA).


Credit Suisse initiated coverage of Dutch-based AkzoNobel with an ⌠underperform rating

(ICIS) -- Investment bank Credit Suisse has initiated coverage of Dutch-based AkzoNobel with an ⌠underperform rating and a ┬39.50/share ($54.86/share) target price, it said on Thursday.
The specialty chemicals and paints maker's earnings before interest and tax (EBIT) for 2012 are expected to be below market forecasts, on the back of sustained end-market weakness in residential housing across Europe and the US, the analysts added.

⌠AkzoNobel is exposed to residential construction markets across Europe, Americas, and Asia. AkzoNobel volumes are therefore heavily dependent on residential activity levels in these markets, analysts said.

Credit Suisse said that European and North American residential activity is near 50-year lows.
The analysts forecast that European construction markets are likely to deteriorate further before getting better, due to above average unemployment levels, low consumer confidence and the inability to access finance, which will place ongoing pressure upon AkzoNobel's volumes.


Saudi Aramco to expand its petrochemical operations to Indonesia

(Plastemart) -- Saudi Aramco has announced plans to expand its petrochemical operations to Indonesia, Vietnam and other countries, for which it is conducting intensive studies. The Saudi major also seeks new investment opportunities in various parts of China. In 2010, the company announced plans to invest around $120 bln over the next 5-6 years in developing projects in the oil and petrochemical sectors. Half of this is to be invested in the oil sector, while the remaining investment would be for the development of petrochemical projects and foreign investments.


The Ukrainian PE production exceeded 77,000 tonnes over the nine months

(MRC) -- This year the Ukrainian producer Karpatneftechem increased the output of low-pressure polyethylene (HDPE) to 77,200 tonnes. Over August-September, the company was working with reduced capacities utilization, according to MRC ScanPlast.

In 2007, Karpatneftechem suspended HDPE production, due to economic issues. Only in last September PE production was resumed, and by this October the company had reached 100%capacity utilization. Following 2010 results, Karpatneftechem produced about 33,500 tonnes of low-pressure polyethylene.

This year, a level of loading has been also kept at a fairly high level - more than 90%. Only in August - September, due to a planned turnaround of pyrolysis furnaces Karpatneftechem reduced PE production to 6,700-6,900 tonnes. Following the 9-months results, overall volume of PE production made 77,200 tonnes.

MRC reference: in 2005-2007, overall annual production of HDPE at Karpatneftechem exceeded 100,000 tonnes.