Russian Company Acron to start up ammonia unit in Veliky Novgorod in 2014

(Acron) -- JSC Acron (Russia) plans to start up a new ammonia unit in late 2014.

The company concluded an agreement with Haldor Topsoe (Denmark) on the design of the facility.

The ammonia unit is projected to have the capacity of around 2,060 metric tons per day. It will be fit mainly with the equipment from two other units currently operated by JSC Acron.

The facility will be situated in Veliky Novgorod (Russia) at the site of an unfinished ammonia plant the construction of which was postponed in 1990's.

Acron Group is a world's leading mineral fertiliser producer with a high level of vertical integration, including potash and phosphate asset development. The Group's key business segments include ammonia, nitrogen and complex mineral fertilisers, as well as organic and non-organic compounds.


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.

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.

A source from one major styrene net producer said that the start-up of new downstream facilities in Egypt, Saudi Arabia and Turkey next year will mean that an additional 10% of demand for the monomer would be created, calling it a ⌠good sign.

However, the producer remains ⌠conservative about the outlook for European styrenics as a whole, citing concerns about the Chinese economy and its potential impact on the global landscape.
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.

⌠I suspect it will push the overall number each month up by 2-3% when compared to the monthly average we've seen throughout 2011, said one trader. 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 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.


Europe aromatics to remain unstable

(ICIS) -- Following on from an erratic 12 months, 2012 is expected to contain more uncertainty for European aromatics players.

With many unwilling to commit to building stocks in a precarious economic environment, the sharp pricing peaks and troughs seen in 2011 look set to be an ongoing feature of the landscape next year.

Looking back at benzene price developments across 2011, the key trend appears to have been unforeseen production issues or even capsized vessels in the Rhine pushing up numbers, quickly followed by upstream volatility and wavering demand driving the market back down.

⌠In this market it is either feast or famine, said one source earlier this year.
And while January looks to be a firmer month for both benzene and styrene - the former in particular - many sources are guarded about predictions for anything beyond that.

With benzene currently trading at more than USD 100/tonne above the December contract price, a number many felt was unusually low, a sharp correction is expected in the new year as the market begins to replenish empty tanks.

Despite this, many observers remain less than sanguine about how the market will shape up as the first quarter progresses.
An earlier-than-usual Lunar New Year in 2012 will see the Asian markets slow down as February approaches, and beyond that will largely depend on external factors.
While benzene has always been closely linked to the health of the wider global economy, next year this will be even more pronounced than usual.

There are mixed opinions about how crude prices will develop, with some pundits suggesting a sharp drop from the current USD 100-plus/bbl levels seen, while others expect that volatility in the Middle East may push prices up even further.

Most market sources believe that paraxylene (PX) will be structurally short in 2012, and say demand will strengthen after the start-up of Artlant's new 700,000 tonne/year purified terephthalic acid (PTA) plant in Sines, Portugal, early in the year.

However, with concerns that the economy might dampen demand, players have adopted a wait-and-see stance.
Regarding the strength of the PX market in Europe next year, one trader said: "It will be better, but all will depend on the economic situation in good old Europe."


China PVC rebound to be slow despite tight supply

(ICIS) -- China's polyvinyl chloride (PVC) import prices are likely to rebound next year on the back of tight supply, but the gains may be undermined by weak downstream demand and a bearish global economy, industry sources said.

PVC prices in China began declining in mid-August and fell to an all-year low of USD 840-860/tonne (EUR 647-662/tonne) CFR CMP on 4 November. That is 31% lower as compared with the 2011 peak of USD 1,220-1,250/tonne CFR CMP seen in late May.

The downtrend in prices was due to the high interest rate in China and the tightening of its monetary policy, which restricted end-users' cash flow and weakened buying sentiment.

However, prices rose following an explosion at Japan's Tosoh Corp's 550,000 tonne/year No 2 vinyl chloride monomer (VCM) line at Nanyo in Yamagata prefecture on 13 November, to settle at to USD 940-950/tonne CFR CMP on 23 December
VCM is the key feedstock for the production of PVC.

Market players said the recent rise in PVC prices was largely because of the tightened supply as well as high feedstock VCM prices, instead of actual demand as downstream consumption in China has been persistently weak.
VCM prices have been hovering at USD 750-800/tonne CFR NE Asia since mid-November.

⌠The PVC price increase is because of tight supply and a cost push because of high feedstock VCM prices, a Japan-based producer said.

Looking ahead, market participants have different opinions on the outlook for the PVC market next year.
Some market participants are optimistic about an improvement in demand after the Lunar New Year holiday in late January and said that will bode well for prices.

However, other market participants are doubtful about the likelihood of a strong rebound in PVC prices next year.
A trader in China said the tight supply stemming from Tosoh's outage is not expected to have a major impact on PVC prices because demand is unlikely to recover next year, judging from the weak Chinese construction sector.

Moreover, there are serious concerns about the eurozone debt crisis as well as weak US economy, which are expected to persist in the coming year.
The bearish global economy may dampen the buying interest for PVC as the US and Europe are big re-export markets for downstream Chinese manufacturers, industry sources said.
⌠In general, prices should be on an uptrend, but not so strong, because the economic situation is not stable, said a trader in Japan.


Iran threats to stop the flow of oil from the Gulf

(Reuters) -- Iran's threat to stop the flow of oil from the Gulf supported crude prices on Wednesday and put world shares on the back foot.

Tehran said on Tuesday it would stop oil transiting through the Strait of Hormuz if sanctions were imposed on its crude exports over its nuclear ambitions, a move that could conceivably trigger military conflict with economies dependent on Gulf oil.

Brent crude oil steadied above USD 109 a barrel after climbing more than a dollar in the previous session. Prices have surged over 5 percent since December 16.

"The only way Iran would actually close Hormuz is when it is attacked and war breaks, but such a possibility appears low as no country would want to take the risk when growth worldwide was likely to slow down," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.

But he added the tensions would be a major source of volatility in 2012 along with the euro zone debt crisis. He expected Brent to trade between USD 105-110 in 2012.