PetroChina, Sinopec to invest USD 22 bln in east Zhejiang

(Reuters) -- China's top energy companies PetroChina Co Ltd and China Petroleum & Chemical Corp (Sinopec) have signed an agreement with the eastern province of Zhejiang on six projects worth about 139.1 billion yuan (USD 22 billion), media reported.

Among the top projects signed are two refinery-petrochemical complexes.
PetroChina is tying up with Royal Dutch Shell Plc and Qatar Petroleum to build a 400,000-barrel-per-day refinery and 1.2-million-tonne-per-year ethylene plant in Taizhou, the companies have said.
The project, with an approximate cost of USD 12.6 billion, has yet to receive environmental clearance from the central government, a key step before final approval by the National Development and Reform Commission.

The China Chemical Industry News reported that Sinopec would build an integrated plant in Zhenhai at a similar cost, without giving details.
An industry executive told that Sinopec, Asia's top refiner, wanted to expand its existing refinery-petrochemical complex in Zhenhai, home to a 460,000 bpd refinery and 1 million tpy ethylene facility.
"Sinopec wants to build another 300,000 bpd refinery and a 1.3 million tpy ethylene plant, an investment that may materialise after 2015," said the official.

The agreements also included a proposed liquefied natural gas (LNG) receiving terminal Sinopec wanted to build in Wenzhou that was likely to cost 8.83 billion yuan (USD 1.4 billion), the China Chemical Industry News said, without giving details.

PetroChina Kunlun Gas Co, a PetroChina unit that specialises in the downstream natural gas business, will build a compressed LNG facility and small-scale LNG facilities in Quzhou with 500 million yuan.
Sinopec would also focus on development of a 7,373 km gas pipeline between Xinjiang and Zhejiang with a capacity of 30 billion cubic metres per year, the papers reported.

mrcplast.com

Europe styrenics players optimistic about new year

(ICIS) -- While the European styrenics market still faces some obstacles, a swathe of new derivative capacities starting up in 2012 and a robust expandable polystyrene (EPS) sector are keeping players optimistic about the new year. ⌠There is a lot of concern about the volatility of the wider economy of course, said one trader back in October. ⌠But at times it's as if people can't see the forest for the trees. We are going to see a much tighter European market next year.


Speaking at November's European Aromatics & Derivatives Conference at Amsterdam in the Netherlands, Martin Pugh - president Europe, the Middle East and Africa at Frankfurt-headquartered producer Styrolution - said styrene is undergoing a significant shift, with demand growth likely to overtake capacity additions in the next three years. This, he said, will lead to operating rates gradually returning to around 90%, from the 80% level seen since the end of 2008 as a result of the economic downturn.


And the start-up of these new polystyrene (PS) and EPS ventures in 2012 will in all likelihood prove to be a double-edged sword for the European market. Certainly, the increased output of PS from the export-driven Middle East will make next year challenging for domestic suppliers.


The emergence of a single European barge contract number seen ahead of the December settlement is also likely to be a key topic in 2012, with many players unsure of how the various parties will manage to reach a consensus each month. Many players are also carefully watching Styrolution and how its role in the market will unfold in the new year.


With 17 production plants in 10 countries, Styrolution is now the global leader in the production of styrene monomer (SM), PS and styrene-based copolymers, and number two in acrylonitrile-butadiene-styrene (ABS), chief executive Roberto Gualdoni said on the sidelines of the 45th European Petrochemical Association (EPCA) earlier this year.


The state of derivative markets fluctuates from sector to sector, with PS players somewhat concerned about 2012 because of the cheap imports expected to hit Europe from the Middle East.
The PS market, which has struggled with oversupply despite a 25% capacity reduction over the past five to six years, is forecast to grow by only 3%, while other derivative markets such as EPS and ABS may expect to see growth rates of up to 5-6% from now until 2014.


Among downstream sources, there looks set to be a cautious start to 2012, with ABS players concerned over the state of eurozone economies and the viability of the euro as a stable currency.
Buyers have been destocking and purchasing the minimum necessary throughout the fourth quarter of 2011, as the risk of recession and debt contagion filter through Europe, and several sources worry that this pessimism may continue into next year.


MRC

China's SP Chemical restarts chlor-alkali plant at Taixing

(ICIS) -- China's SP Chemical has restarted its 150,000 dry metric tonne/year (dmt/year) chlor-alkali line at Taixing in Jiangsu province on 27 December following a month-long maintenance shutdown, a company source said on Tuesday.
SP Chemical also operates a 600,000 dmt/year chlor-alkali line at Taixing.
⌠The total 750,000 dmt/year chlor-alkali project will be operated at full rate after the 150,000 dmt/year chlor-alkali line restart, the source said.

The restart of the 150,000 dmt/year line has bolstered local buyers' sentiment, with the domestic price of 32% ion-exchange membrane caustic soda falling by 10% week on week to yuan (CNY) 2,656/dmt (USD420/dmt) on 26 December, according to Chemease, an ICIS service in China.
Major chlor-alkali producers in east China include Shanghai Chlor-Alkali Chemical (Shanghai CA), Zhejiang Juhua, Jiangsu Meilan, Suzhou Fine, Jiangsu Leeman, and Yangnong Chemical.

MRC

China's PVC producers cut operating rates on poor margins

(ICIS) -- Several Chinese polyvinyl chloride (PVC) producers have lowered their plant operating rates in the second half of December on shrinking margins, as caustic soda values are on a downtrend and feedstock calcium carbide prices remain high, an industry source said on Tuesday.

Prices of 32% membrane caustic soda in Jiangsu have fallen by yuan (CNY) 100/tonne (USD16/tonne) to around CNY860/tonne EXWH (ex-warehouse) from last week, according to data from Chemease, an ICIS service in China.

At the same time, domestic calcium carbide prices are at a high, reaching CNY3,400-3,500/tonne EXW (ex-works) in northwest China, Chemease data showed.
⌠With decreased caustic soda profit and firm calcium carbide prices, we could hardly make a profit even when taking caustic soda profit into account. Thus, we have to cut PVC operating rates to a low level, a PVC producer in Inner Mongolia said in Mandarin.

Plants are running at low rates, barely enough to maintain the minimal operations needed to prevent pipes from freezing in cold weather, the source added.
⌠Taking calcium carbide prices at CNY3,500/tonne, PVC production cost should be above CNY7,000/tonne. However, now we are selling PVC at around CNY6,200/tonne EXWH, said the producer.


Carbide-based chlor-alkali producers have reduced plant operating rates in a bid to ease cost pressure, a market player said.

PVC producers are running plants at 30-50% capacity in Shandong province, 50-60% in Sichuan province and 50% in Henan province, market players said.
However, integrated carbide-based PVC producers in northwest China, such as in Inner Mongolia and Xinjiang, are maintaining operating rates above 80%.

MRC

PVC price continues to drop on oversupply in China paste market

(ICIS) -- China's PVC paste market prices have been the lowest of the entire year, industry sources said on Friday.
The delivery price of glove materials in East China is about yuan (CNY) 10,000/tonne ($1577) and the delivery price of leather materials in East China is about CNY9,500/tonne, lower by 25% and 30% respectively compared with the highest prices of 2011.

In supply, the upstream PVC paste plants face great pressure from overstocking because of poor sales in a weak market.
The total inventory of all large plants is more than 40,000 tonnes, taking up over 70% of stock capacity, according to data from ICIS China.

However, as they are still profitable, upstream producers are reluctant to cut operation rates to ease the inventory pressure, according to industry sources.
The demand for PVC paste is sluggish as the glove industry, which mostly relies on export, has difficulty with sales as it is badly affected by European debt crisis.

Product prices keep dropping due to sluggish demand and the fact that the leather and tool industries are in off season.


Some plants have shut down or turned to produce other products, according to industry sources.
The outlook for the PVC paste market is that it will remain in a situation of oversupply in the short term and the trend for prices is downward.

MRC