MRC news digest as of 27.11.12.

MOSCOW (MRC) - MRC news digest as of 27.11.12.

1. Ukrainian importers increased PET purchasing volumes by 22%.

In October, Ukrainian companies significantly increased purchasing volumes of PET in the foreign markets on reduction of stock residues last month. About 12,500 tonnes of PET granulate arrived in the Ukrainian domestic market, up 22% from September, according to MRC DataScope. Russian companies explained an increase in purchasing volumes by the necessity to replenish stock residues. The increase in consumer activity of converters in the foreign markets in September resulted in a growth of PET imports almost three-fold in October year-on-year and made 12,500 tonnes last month. Over the past ten month, about 136,600 tonnes of the material arrived in the market. There were also significant changes in the structure of supply. According to the customs statistics, there were no shipments of Korean and Pakistani PET in October. Ukrainian companies preferred Chinese analogues.

2. Asian makers rolled over prices for December for CIS countries.

The producers of polyolefins in Asia keep export prices for markets of the CIS countries in December from November level, according to a Price report ICIS-MRC. The negotiations on export prices of Asian polyolefins for December to CIS markets started this week. Some South Korean makers reported that despite the weakening demand for polyethylene and polypropylene on high prices of oil and naphtha they are forced to keep high prices. Asian makers are planning to keep process for December shipments to CIS countries at the level of November, moreover some makers aim to raise their export offer. HDPE prices for shipments in December this week were discussed at USD1,370-1,420/tonne, FOB. Some makers on limited quotas voiced their prices at USD1,500-1,540/t, FOB.

3. North American PVC had grown in value by USD20-30/tonne by mid-November.

Export prices of North American PVC had rose by USD20-30/tonne by mid-month after drop in early November. Price offers for January shipments are expected to appear next week, according to ICIS-MRC Price report. On the back of a negative outlook regarding PVC sales for December shipments from the USA to the foreign markets (Russia, Turkey and some Asian countries), suppliers of North American resin slashed export prices to stimulate the demand from buyers. PVC price offers for December shipments for the CIS countries were voiced in the range of USD900-920/tonne, CFR St Petersburg and CIF Odessa. However, despite the late delivery dates of PVC (December), a number of enquiries for purchasing was quite large.

4. Korean PET producers reduced price offers by USD10/tonne.

Korean PET makers decreased the price offer for the material for export deliveries by USD10/tonne following a price cut in China and pressure from customers, according to MRC Price report. In mid-November, the range of spot prices of Korean PET was reduced to the level of USD1,390-1,400/tonne, FOB Busan. A more competitive price offer from Chinese suppliers made Korean sellers reduce PET prices. Thus, Chinese material was offered at the price of USD1,350-1,370/tonne, FOB China. Asian producers keep reporting a decline in demand. At present, Russian importers prefer Chinese PET due to more attractive price offers. According to MRC price report, Chinese PET in the Central region of Russia, including logistics, made USD1,440-1,460/tonne, DAP Moscow.

5. HDPE output doubled in Russia in October.

In October, Russian producers increased HDPE production to 70,000 tonnes, which is almost two times higher from September.. Over the past ten months, HDPE production volume in Russia made about 572,200 tonnes, according to MRC ScanPlast. It is worth noting that such a low index of September output was due to a scheduled outage for maintenance at Kazanorgsintez HDPE production line. In early October, Stavrolen had resumed operations at its HDPE production and by the end of the month operational rates had reached 100%. In October, HDPE output made about 22,000 tonnes. In the first decade of October, Kazanorgsintez resumed HDPE production after a scheduled turnaround. The total output for the incomplete working month made about 25,800 tonnes. Last month, Gasprom neftekhim Salavat increased production volume of HDPE by 90%. In October, the level of capacity utilization at Nizhnekamskneftekhim remained at September level. In October, there were no major changes in the structure of high-density polyethylene production according to consumption sectors. The resumption of production at Stavrolen allowed to increase the supply of film and blow moulding HDPE in the Russian market.

6. The output of products from polymers in Russia rose by 20,3% in October.

In October, the production volume of finished goods from polymers in Russia grew by 20,3% year-on-year. The largest increase in the output was recorded in the sector of plastic pipes production, report MRC analysts. Meantime, the production volume of plastic products grew by 3,3% from September. In October, decrease in production was registered only in the sector of plates, films and non-combining sheets production. In other sectors, there was still a positive dynamics of growth in output. In October, the volume of production of plastic pipes, hoses and fittings made about 82,000 tonnes, while in September this index made 78,900 tonnes. In general, over the past ten months, the total production volume of pipes, hoses and fittings from polymers rose by 31% year-on-year and made over 610,400 tonnes. In the sector of PVC windows and sills production there was also an increase in output.

7. In October imports of linear polyethylene to Russia grew by 39%.

In October, Russian companies increased their imports of linear polyethylene to 16,900 tonnes, up 39% from September. The ten months’ imports of LLDPE to Russia amounted to 137,400 tonnes, as per MRC DataScope. In October, Russian companies increased imports of linear polyethylene to 16,900 tonnes (excluding the re-imports of Middle Eastern LLDPE from Belarus to Russia), up 39% from September. The main increase in imports of linear polyethylene last month provided by the producers of the films. Imports of film LLDPE to Russia in October amounted to about 14,500 tonnes, while in September it hardly reached 9,300 tonnes. The low imports in September resulted from the limited quotas for exports from Middle Eastern producers of LLDPE. In October the quotas were increased, and as a result, imports of Middle Eastern polyethylene grew almost twofold.

8. October olefin production in Russia increased by 82%.

In October, the production of ethylene and propylene in Russia grew by 82% compared to September 2012. This significant increase in production resulted from the planned turnarounds of pyrolysis furnaces in September, as well as the resumption of ethylene production by Stavrolen, according to MRC analysts. In October, Russian producers increased capacity utilization of pyrolysis furnaces. Last month’s total production of ethylene and propylene made 205,000 tonnes and 108,000 tonnes, respectively, up 77% and 90% from September. Such a serious increase in the olefins output was due the planned shutdowns of pyrolysis furnaces in September, and the resumption of ethylene production by Stavrolen in October. Kazanorgsintez, Nizhnekamskneftekhim and Angarsk Plant of Polymers stopped their ethylene capacities on turnarounds in September, which affected the volume of ethylene and propylene production.

9. Import of EPS to Ukraine rose by 18%.

In January-October, 2012, 23,600 tonnes of EPS were imported to the Ukrainian market, up 18% year-on-year, according to MRC DataScope. In October, 2012, almost 3,700 tonnes of the material were imported to the Ukrainian EPS market, up 27% from September. Since early 2012 the supply volume has risen to the level of 23,600 tonnes of EPS, up 18% year-on-year. In the structure of supply, 80% of October shipments account for Perm Alphapor. In absolute terms, the supply of Russian EPS reached the volume of 2,960 tonnes, which is a record value and up 40% from September. Alphapor accounts for 54% of all imports since the beginning of the year, while the share of Loyal dropped from 47% in 2011 to 22% in 2012.
MRC

(Taiwan news) -- The output value of Taiwan's petrochemical sector is expected to rise about 7.6% in the fourth quarter from a quarter earlier on expectations that stimulus measures by major economies will boost demand, a government report said Wednesday.

The output value of the sector for all of 2012, however, is expected to fall 4.7% from 2011 because of the uncertainty that has prevailed over the global economy this year, the Industry and Technology Intelligence Services (ITIS) report said.

The ITIS, a research institute under the Ministry of Economic Affairs, estimated output of the local petrochemical sector in the fourth quarter at NTD462.2 billion (USD15.83 billion), up from NTD429.5 billion a year earlier. But for 2012 as a whole, the production value of the sector will likely fall to NTD1.83 trillion, from NTD1.92 trillion in 2011.

The institute's estimate of higher output in the fourth quarter largely reflected optimism over the stimulus packages put in place recently by major economies, such as China's move to pump funds into the market, and the U.S. Federal Reserve's third round of quantitative easing.

Another factor is the stabilizing of international crude oil prices in the fourth quarter, generating higher margins for petrochemical manufacturers and encouraging them to raise shipments, the ITIS said. CPC Corp., Taiwan's residue fluidized catalytic cracking plant has started boosting the state-owned oil supplier's production of propylene, which should also help raise Taiwan's total petrochemical output in the current quarter, the ITIS said. As MRC informed earlier this year, the company had had plans to commission a new 700,000 tpa cracker by end 2012 or early 2013.
MRC

(plastemart) -- The Petrochemical Manufacturing industry plays an important role in the US economy. Many of the goods produced by petrochemical manufacturers are the fundamental building blocks used to produce a variety of consumer and industrial products like detergents and pharmaceuticals.

While petrochemicals are essential to many kinds of chemical manufacturing, the industry is still susceptible to economic shifts. As per IBISWorld, over the five years to 2012, revenue is expected to decline at an average annual rate of 1.8% to USD80.8 billion. However, this decline has not been constant. Although the recession caused this industry to suffer in 2008 and 2009, revenue has been on the rise since 2010.

Revenue is expected to grow 2.2% over 2012 because of higher demand, higher prices and stabilized capacity. From 2012 to 2017, industry revenue is projected to grow; similar to the previous five years, industry revenue will be volatile.

Although demand from key buying industries will remain relatively constant, changing raw-material costs will affect prices and cause revenue to fluctuate. While revenue is anticipated to increase over the next five years, the industry will likely consolidate.

The Petrochemical Manufacturing industry has a low level of concentration, with the top four players accounting for an estimated 10.8% of industry revenue. In addition, over half (55.0%) of establishments employ fewer than 100 workers, although industry concentration has gradually increased. This trend has continued in line with various mergers and acquisitions, with the remaining players seeking to strengthen their position in the increasingly competitive market.

According to Amari, industry consolidation among integrated companies such as Exxon Mobil Corporation and Dow Chemical Company has also resulted in the development of larger and stronger petrochemical players. Moreover, the departure of smaller players that cannot adapt to the changing operating environment has further aided this concentration process. Further consolidation is expected as players shut down excess capacity over the five years to 2017.
MRC

(cens) -- The largest supplier of plastics in Taiwan, Formosa Plastics Group, will resume its large-scope investment in construction of manufacturing base of ethylene in Ningbo, eastern China following the decision of the Chinese government to ease restrictions on foreign investment in naphtha cracking in the mainland.

According to the company, the group will resume the investment project by spending USD5 billion to set up the petroleum complex encompassing an ethylene plant with annual output of 1.2 million tonnes and factories of plastics in Ningbo. Under the amended rules and regulations, the group won’t have to share the complex with any single Chinese enterprises as ordered in the past, but run it with the stock partly owned by Ningbo City Government.

Besides, the new regulations grant the group full ownership of ethylene derived from naphtha cracking in the complex, so the group will be able to secure ample supply of the material to produce PVC, ABS, PTA, PP, AE, etc. locally at its other factories in Ningbo, instead of relying on shipment from Taiwan.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC