Phosagro Q1 net income up one third

(Reuters) -- Russian fertiliser group Phosagro reported on Monday a 29 percent increase in the first-quarter net income, year-on-year.

"Results were driven by our production flexibility in phosphate-based fertilisers, which enabled us to adapt quickly to changes in the structure of demand that began in late 2011," Chief Executive Maxim Volkov said in a statement on Monday.

Net profit at the world's second-largest phosphate producer -- after Minnesota-based Mosaic Co -- rose to USD266 million in January-March, year-on-year, from USD213 million. Sales, at USD856 million, were up 6 percent.

The company, which raised USD538 million in a London IPO in 2011, plans to increase fertiliser production and sales in 2012.

Its global depository receipts (GDRs) were down 1.4 percent at USd10.23 by 0821 GMT, compared with an IPO price of USD14 per share.
MRC

East China MEG falls 11% in two weeks on poor demand

(news.szenergy) -- Monoethylene glycol (MEG) prices in east China have declined by 11% over the past two weeks, tracking falls in crude oil prices and amid weak demand from downstream polyester sector, industry sources said on Friday.

MEG spot prices declined to yuan (CNY) 6,330-6,380/tonne (USD994-1,001/tonne) ex-tank east China on 14 June, compared with CNY7,150-7,200/tonne on 1 June, according to Chemease, an ICIS service in China.

Panic-selling in the MEG market ensued following sharp falls in crude prices. Some traders have been dumping cargoes to prevent further losses, while others are staying out of the market.

MEG buyers, on the other hand, are not too keen to procure cargoes. On Friday, crude prices were trading at above USD84/bbl, down by about USD2/bbl from the start June.

“Though prices decreased to the low level from 2011, I am still hesitating to purchase lots of cargoes considering the uncertain economic environment,” a trader said.

Downstream polyester producers in China are being forced to cut product prices to boost sales, but their overall sales-to-output ratio this week has worsened to 50-70%, from 70-80% a month earlier, as downstream textile manufacturers are getting limited orders within China and from abroad.
MRC

Russia's PP output has decreased by 8%


MOSCOW (Market Report) -- Russian producers increased the output of PP up to 60,500 tonnes in May. Following the year-to-date results, the total production volume of PP in Russia decreased by 8% year-on-year, according to MRC analysts.


Last month Russia’s total PP output grew by 14% compared to April index and made about 60,500 tonnes.
Almost all Russian producers showed an increase in production of PP in May, except for Nizhnekamskneftekhim, which had to suspend its production for several days in mid-May due to low voltage networks.

Despite imported PP feedstock, Stavrolen (Lukoil group) increased significantly its output over the past two months. In April-May the plant produced 8,300 and 9,400 tonnes of PP, respectively. Neftekhimia has increased its production by more than one third of its total output, which made 10,000 tonnes. In May Ufaorgsintez output grew considerably to 11,000 tonnes.

The structure of grades has undergone minor changes last month. The output of injection moulding PP-homo surged by 28% in comparison to April. The production of raffia grew only by 5% compared to the previous month. The rise of PP-homo output was due to the reduction of PP-impact production.

In general, the year-to-date output of PP in Russia amounted to 262,900 tonnes, 8% down year-on-year.


MRC

Basf eyes on doubling China sales by 2020

(chinaeconomicreview) -- German chemical giant Basf said on Thursday it expects sales in China to more than double within eight years thanks to fast urbanization in the world's second largest economy, Global Times reported.

The largest chemical firm in the world aims to achieve sales of 29 billion euros (USD36 billion) in Asia by 2020 and "roughly half of that in China," said Martin Brudermueller, vice chairman of the board of executive directors. That will be more than double the company's 6.5-billion-euro sales last year in China - the world's top chemical market.

He said the upbeat prediction was underpinned by fast urbanization in China, where increasing consumption of goods is creating a huge demand for chemicals that are crucial in manufacturing, the newspaper reported.
MRC

Eni buys controlling stake in major Ukrainian player WestGasInvest

(upstreamonline) -- Italian giant Eni has raised its game in Ukraine’s shale gas play with the acquisition of a controlling stake in major local player WestGasInvest.
Eni acquired shares in a deal with state-owned Nadra Ukrayny and UK independent Cadogan Petroleum to acquire a 50.1% stake in WestGasInvest.

The acquisition gives the Italian company access to WestGasInvest’s subsoil rights in nine shale gas licence areas in Ukraine’s prospective Lviv basin covering about 3800 square kilometres.

The deal comes after Eni, along with other players, was reported to have been outbid by Shell and Chevron for coveted acreage in the Yuzivska and Olesska areas of the basin.

“This transaction, which strengthens the company’s presence in Ukraine, represents a major step forward for the development of Eni's global unconventional portfolio,” Eni said in a statement.

The company entered the country’s unconventionals play last year under a partnership with Cadogan in the Zagoryanska and Pokroskoe licences in the Dniepr-Donetz basin.

Ukraine has Europe's third-largest shale gas reserves at 42 trillion cubic feet, according to the US Energy Information Administration.
MRC