China's domestic LDPE film supply reduced, prices firm up

(ICIS) -- China's domestic low density polyethylene (LDPE) film supply decreased this week because of a shutdown at one plant and switching to another product by a second plant resulting in its prices to firm up, industry sources said on Friday.

China Maoming Petrochemical's 250,000tonne/year LDPE unit in Guangdong shut down on 11 January because of equipment failure. The company plans to restart it on 15 January.

On the other hand Yanshan Petrochemical's a 200,000tonne/year LDPE plant in Beijing switched to producing special material for the production of wire and cable insulation sheath on 4 January resulting in reduced supply of LDPE film in the domestic market.


The supply tightening has come at a time when many downstream manufacturers such as the film packaging industry are planning to purchase LDPE to shore up inventory ahead of the Lunar New Year holidays that start from 22 January.

As a result China's domestic LDPE film offering price rose by Chinese yuan CNY50-100/tonne (USD 8-16/tonne) to CNY10,600-11,000/tonne EXWH (ex-warehouse) on 13 January from CNY10,500-10,950/tonne EXWH on 11 January.

MRC

Initial Europe January MEG up by EUR 54/tonne

LONDON (ICIS) -- The initial European monoethylene glycol (MEG) contract for January has settled at EUR 1,024/tonne (USD 1,296/tonne), an increase of EUR 54/tonne, a producer said on Thursday.

⌠It is not good but it's not a disaster, a customer said.

The buyer involved in the settlement was not available for comment.

The contract was agreed on a free delivered (FD) northwest Europe (NWE) basis.


MRC

Europe styrene off to a sluggish start in 2012 amid weak demand

(ICIS) -- The European styrene market has seen a slow start to the year so far as lacklustre demand from key derivative sectors and some ongoing length is keeping activity muted and prices stagnant, sources said on Thursday.

While benzene prices are gradually creeping up on good demand and upward pressure from crude oil due to supply concerns in light of the tensions in both Iran and Nigeria, slow demand for styrene and polystyrene is keeping the market ⌠uninspiring, according to one source.

January styrene deals were at USD 1,280-1,295/tonne (EUR 1,011-1,024/tonne) FOB (free on board) Rotterdam last week, and bids and offers this week have for the most part stayed within this range.
⌠If benzene keeps pushing, the February styrene contract will have to jump up a fair bit or else [operating] rates will have to be cut, said one player.

The January styrene barge contract was confirmed at EUR 1,214/tonne on an ex-works basis last week, up EUR 120/tonne from the previous month in line with higher raw material costs.

There is also good availability for January styrene in Europe, which is keeping any price rises at bay.
⌠There is some length in the market now that all the plants are running, explained one trader.
Another source said that when the market is long, this has a negative impact on overall liquidity.

However, a robust Asian market is keeping prices from falling significantly. February numbers in the region are currently at USD 1,370-1,390/tonne FOB Korea.

With the arbitrage window to Asia open, any further price drops would lead to material being shipped out of Europe. As a result, January prices have hovered just below the $1,300/tonne mark since last week.

Despite the slow start to 2012, other players remain upbeat.
⌠I think were are going to see a nice contango into March, said one trader.


MRC

Reduction of polymer import duties in Russia will be carried out in two steps

MOSCOW (MRC) -- On December 16, Russia signed an agreement on joining the WTO, and before June 15 the documents on entry to the World Trade Organization (WTO) must be ratified. For the polymer industry in Russia the reduction of import duties will be carried out in two steps, the latter of which will be completed in 2014.

On December 16, 2011 at the WTO Ministerial Conference in Geneva, Russia signed an agreement on joining the trade organization. It was signed by the Minister of Economic Development and Trade of the Russian Federation, Elvira Nabiullina. During the 220 days prior to June 15, 2012 the Russian side should ratify a package of documents on accession to the World Trade Organization, and within 30 days after notification of WTO about the completion of the ratification procedures, Russia will be a full-fledged member.

In accordance with the reached agreements, the average tariff on imports to Russia will be reduced to 7.8%, compared with 10% in 2011 for all products. For polymer industry the reduction of import duties to be held in two stages for the majority of large volume polymers, the exception will make only PET granulate. Import duties on polyethylene terephthalate will be reduced from current 5% to 4% immediately after the entry into force of the WTO rules.

The reduction of import duties on polyolefins (polyethylene and polypropylene), is planned in two steps, the latter of which will be completed in 2014, and import duty will be reduced to 6.5%. Intermediate stage will be held in 2013, with the import duty to be reduced to 8.3-9.1%, depending on the grade of polyolefin. The exception will be only for a linear polyethylene, which import duty, by the contrary, will be increased to 6.5% from the current zero rate.



The reduction of import duty on high impact polystyrene and ABS is also planned in two steps, so that in 2014, import duty will be gradually reduced from the current 10% to 6.5%, as per suggestions of the regulations of WTO. The duties on general purpose polystyrene and expanded polystyrene, by contrary, are expected to be risen from zero rate to 6.5% until 2014.
Import duties for masterbatches (colours) and calcium carbonate are scheduled to decrease to 6.5% immediately after the entry into force of the WTO rules. Import duties on PET performs and BOPP film will be reduced in two stages by 2014 and reach 6.5%.

The exact dates of duties changes on polymers and polymer products will be known only after the full ratification.


MRC

BASF invest in equity ownership position in Sion Power

(basf) -- BASF has invested USD 50 million to acquire an equity ownership position in privately held Sion Power, the global leader in the development of lithium-sulfur (Li-S) batteries, based in Tucson, Arizona.


This equity partnership expands upon an existing joint development agreement that BASF Future Business GmbH established with Sion Power in 2009 to accelerate the commercialization of Sion's proprietary Li-S battery technology for electric and plug-in electric vehicles and other high-energy applications over the next decade.

The agreement with Sion Power provides a long-term complement to BASF's current activities in the areas of electrolyte formulations and lithium-ion cathode materials development, including its start-up of an advanced cathode materials manufacturing plant in Elyria, Ohio, later this year. These initiatives are being managed under BASF's new global business unit ⌠Battery Materials, which was launched on January 1, 2012, to integrate the company's current and future battery materials-related activities within a single operating unit managed by its Catalysts division, based in Iselin, New Jersey.

BASF had previously announced its intention to invest a three-digit million euro sum in researching, developing and producing advanced battery materials through 2016. The company is also exploring next-generation battery materials concepts, including the lithium-sulfur technologies now in early stage development with Sion Power.


MRC