In January PE prices in Russia were left at rollover

Moscow (MRC) -- The first working week of the new year did not bring big changes in the Russian market of polyethylene. Price quotations stayed the same relatively with the last week of December, the only exception made pipe HDPE, according to MRC analysts.

The first working week of the new year gave no surprises for the Russian market of polyethylene. Price quotations of Russian polyethylene in the domestic market were left at rollover from the last week of December, the only exception made pipe HDPE.

Weak demand in the domestic market and sufficient supplies keep putting pressure on the prices of LDPE. Price offers of high-density polyethylene remained unchanged in comparison with the last week of December and by Wednesday they had been at Rb57.000-58.500/tonne, VAT, CPT Moscow, for the 158-LDPE, and Rb58.500-59.500/tonne, including VAT, CPT Moscow, for the 153-LDPE.

The accident at Stavrolene in mid-December resulted in a slight increase in prices of Russian HDPE, but by the end of the year the situation in the Russian market had stabilized on the back of weak demand. Traditional weak demand in the beginning of the year and suficient supplies continue to hold prices steady. By the middle of the week, the price offers of film HDPE had been at Rb63,300-64.500/tonne, VAT, CPT Moscow. By the beginning of next week, Kaazanorgsyntez and Nizhnekamskneftechem will have stopped the production of film polyethylene, however, this will not likely have caused any changes in the market by the end of the month due to the suficient supply of the material to the market.

Uncertainty about the terms of the resumption of production of blow molding HDPE in February by Kazanorgsyntez keeps prices at Rb65.000-66.500/tonne, VAT, CPT Moscow. In late December, Gazprom neftechem Salavat resumed the production of injection molding HDPE. By the middle of next week, Kazanorgsyntez will have resumed deliveries of injection molding PE to the domestic market.

The price growth of coloured pipe HDPE in January was not a surprise for the Russian market. The prices of pipe PE had been heard to grow since mid-December. From January, 10th the price of Russian black PE80 and PE100 had been increased by Rb1,000/tonne, ex VAT. The demand for pipe material is weak, due to seasonal factors. Quite a lot of companies have stopped their facilities on turnaround due to lack of demand for ready-made pipes. The price quotation of black PE100 were at Rb62.000-63.000/tonne, VAT, CPT Moscow.


SCG-DOW Group Achieves Successful Thailand HPPO Plant Start-up

(dow) --The Dow Chemical Company announced that the SCG-Dow Group, a joint venture between Dow and Siam Cement Group, has finalized the start-up of its new propylene oxide (PO) facility in Thailand by successfully completing its full capacity performance test.

Dow reached a key milestone in October 2011 when the plant achieved stable production levels in preparation for the full capacity run scheduled for the fourth quarter of 2011. The new facility met that target on time by successfully completing the full capacity run on November 22, 2011 - only two months after starting raw material feeds to this new plant. Additionally, the plant exceeded expectations for all quality and yield performance parameters.

The world-scale plant, located within the Asia Industrial Estates (AIE) site near Map Ta Phut, Thailand, has a name plate capacity of 390 kilotons per annum (KTA) of PO via the innovative hydrogen peroxide to propylene oxide (HPPO) technology.

"The successful start-up of this environmentally advanced and complex technology shows the innovation power, project execution and operational strength of Dow, said Holger Baer, global manufacturing and technology director, Dow Propylene Oxide/Propylene Glycol.

⌠Dow's investment in this new facility strategically enhances its existing position as the global capacity leader in PO and better positions its derivative businesses such as Polyurethanes and Propylene Glycol, said Steven English, global vice president, Dow Polyurethanes. ⌠As a global strategic source point, Dow can better serve customers of these life-enhancing industries in Asia and beyond.

⌠Despite some anticipated challenges, the commitment of people from various functions has delivered a successful project. This HPPO plant will add value to propylene from the joint venture cracker in Thailand, said Cholanat Yanaranop, President of SCG Chemicals Company Limited.


China's Sinopec SABIC Tianjin Petrochemical cuts Jan LLDPE output

(ICIS) -- China's Sinopec SABIC Tianjin Petrochemical expects to produce only around 26,000 tonnes of linear low density polyethylene (LLDPE) in January, about 13% lower than usual, because of current low product prices, a source close to the company said on Monday.

Its plant, located in northern China, typically produces 30,000 tonnes of the polymer each month, the source said.

The facility has a designed capacity of 300,000 tonnes/year, he said.
⌠The reason why Sinopec SABIC Tianjin Petrochemical cut down LLDPE film output may be because the prices were below cost, the source said.

Spot LLDPE prices in northern China were assessed at yuan (CNY) 9,400-9,600 (USD 1,490-1,521/tonne) on Monday, according to Chemease.

The production cut is expected to spur buying of LLDPE in the region, traders said.


PO prices less bullish on worries of weaker demand

(ICIS) -- Market participants in Asia are toning down their bullish first-quarter forecasts for propylene oxide (PO) because of the uncertain macroeconomic outlook and worries about oversupply and weaker demand from China, the region's largest PO consuming nation.

Market players originally expected total PO demand in China to grow to above 2.2m tonnes in 2012, up from around 1.85m tonnes in 2011.
However, Asia's demand for PO is expected to drop because global economies are still grappling with substantial downside risks such as laggin GDP growth momentum as well as low business and consumer confidence, while China is still maintaining a prudent monetary policy, despite a recent cut in its bank reserve requirement ratio.

In addition, the tight supply conditions seen in 2011 have eased as operations at key facilities resumed and commercial production at new PO plants, including Dow Chemical's 390,000 tonne/year PO unit in Thailand have started successfully.
As a result, total PO imports to China rose to 41,437 tonnes in November 2011. The figure is a 69% month on month increase and an almost three-fold rise from the previous quarter. A similar trend is expected for December, but customs statistics are not yet available.

The increase in supply exerted downward pressure on the spot PO market, causing prices to fall by as much as USD 400/tonne (EUR 312/tonne) within weeks in December 2011, ICIS data showed.
In December, PO prices dropped to a one-year low of USD 1,500/tonne CFR China, according to ICIS data, narrowly breaching what market players said was the breakeven level for many producers, before rebounding to USD 1,600/tonne in end-2011 on the back of pre-holiday restocking activity.

Asian PO prices are likely to remain at above USD 1,600/tonne CFR China this year, as they did in 2011, industry sources said.
However, there will be price deviations of around USD 100-300/tonne this year, corresponding with changes in market sentiment and the demand-supply balance.
Spot PO prices fluctuated at a wider USD 300-500/tonne range in 2011 because of tight supply and rose to above USD 2,000/tonne in the aftermath of the March earthquake in Japan, as market players panicked when regional supply chains were disrupted.


Styrolution targets price rise for European PS in January

(ICIS) -- Styrolution is targeting a EUR145/tonne (USD186/tonne) increase for its European January polystyrene (PS) because of higher styrene and butadiene costs, a source at the styrenics producer said on Friday. The styrene barge contract for January was settled at EUR1,214/tonne FD (free delivered) NWE (northwest Europe), up by EUR120/tonne from its December level.

Butadiene is also up, with the January contract settling at EUR1,700/tonne FD NWE, up by EUR 50/tonne from December. Butadiene is used in the manufacture of high impact polystyrene (HIPS).
US-based producer Styron has already announced that it will target a EUR135/tonne increase for January PS.

Buyers have become accustomed to PS pricing moving in line with its main feedstock styrene, and they are now expecting to be paying much higher prices when they settle later in the month.

2012 is expected to be a difficult year in the European PS arena as new capacity comes on-stream.

European producers have managed to maintain a fine supply/demand balance in the recent past, closing down capacity where necessary and cutting back production in line with dwindling demand.

Styrolution is 50:50 joint venture between BASF and INEOS, comprising the key styrenics activities of the two partners. It began trading on 1 October 2011.