MRC news digest as of. 10.12.12.

MOSCOW (MRC) -- MRC news digest as of 10.12.12.

1. Gazprom Neft to increase its share in HIP Petrohemija.

Gazprom Neft will increase the share of its Serbian subsidiary Naftna Industrija Srbije (NIS) in the Serbia's largest petrochemical company - HIP Petrohemija. The decision was made by Gazprom Neft's Board of Directors. The increase could be just over EUR67.4 million to 34% of the legal capital of HIP-Petrohemija by converting Petrohemija's debt to NIS into the legal capital according to the agreement on strategic cooperation with NIS signed in November 2011. Thus, the present agreement is aimed at stabilizing the financial situation of Petrohemija and increasing its performance. NIS currently owns 12.72% of Petrohemija. The largest shareholder is the Republic of Serbia - 68.52%.

2. Asian EPS makers increased prices for Russian and Ukrainian markets.

Amid growing costs of styrene monomer Asian makers of expandable polystyrene (EPS) had to raise the price of the material, which made Russian and Ukrainian customers stop buying Asian EPS, as per MRC analysts. Last week, Russian and Ukrainian participants of EPS market reported a significant increase in the price of expandable polystyrene in Asia. Traditionally, most Asian producers voiced their price quotation at the beginning of week, so, the latest Thursday and Friday’s quotation surprised all the market players. Russian traders reported the price of polystyrene from Xingda Group series of ZKF grade was increased to USD1,880-1,890/tonne, FOB Shanghai. The price from other PS makers was at USD1,920-1,980/tonne, CIF St. Petersburg/Novorossiysk, with price of material Loyal being at low bound, and Taita at upper bound. Ukrainian companies also reported an increase in prices of Asian EPS. Thus, the price of Asian EPS increased on average by USD50-60/tonne, from the second half of November on the back of increasing production costs. The price of styrene monomer in Asia increased from USD1,590/tonne, CFR China at the end of November to USD1,650-1,680/tonne, CFR China in early December.

3. The global market of plastic pipes is gaining momentum.

By 2019, the capacity of the world market of plastic pipes will reach USD80 billion, according to the research made by the marketing company Ceresana. In 2011, the share of plastic pipes made of PVC accounted for more than 55%. The second most popular material for pipes production is polyethylene, in particularly, HDPE, which was used for the production of 28 to 45% of the total amount of pipes. But despite the popularity of the traditional materials, the proportion of such materials used in production of pipes, as ABS plastic, polybutylene, polyamide, will increase in the near future, according to experts. North America and Western Europe have given up their positions as for the sales of plastic pipes to the Asia Pacific region, which occupies the first place and accounts for 50% of the global demand for plastic pipes. According to Ceresana's outlook, the Asia Pacific region will further increase the consumption of plastic pipes in 2019 - to more than 60%.

4. Ineos ChlorVinyls announced prices of pipe SPVC for December.

INEOS ChlorVinyls announced prices of suspension PVC (SPVC) for December 2012, effective from 1st of December 2012. The prices of pipe grade SPVC delivered in bulk in Europe makes EUR950/ metric tonne. The prices of pipe grade SPVC delivered in bulk in UK/Ireland makes GBR880/metric tonne.

5. Russian PS makers keep prices intact.

Unlike rising PS quotations in Europe and Asia, Russian producers kept the cost of the material in December at the same level, report MRC analysts. Russian GPPS and HIPS makers kept their price offers for the material unchanged. The cost of Nizhnekamsk HIPS remains in the range of Rb77,000-81,000/tonne. GPPS is being sold at the level of Rb74,000-77,000/tonne. Gazprom neftekhim Salavat did not change the cost of the material either. Traders that sell Salavat material offer natural HIPS at the price of Rb75,000-78,000/tonne, while the cost of GPPS is in the range of Rb70,500-72,000/tonne. Meantime, the cost of polystyrene in the European and Asian markets might increase. In Europe, the contract price of styrene monomer rose by EUR15/tonne and made EUR1,428/tonne, FD NWE. PS producers report that they have to adjust prices due to low margins. In Asia, prices of styrene monomer grew from USD1,580-1,600/tonne, CFR China, to USD1,640-1,660/tonne, CFR China. More detailed information can be found in ICIS-MRC Price report.

6. Formosa plans temporary reduce its ethylene output on global price fall.

Formosa Petrochemical mulls to suspend its ethylene production in case global petrochemical prices keep falling and drop below cost, according Dow Jones Newswires. The reduction of the company's capacity utilization might take place if spot ethylene prices slash below USD1160/tonne. In order to meet customers' requirements, Formosa is going to purchase ethylene from the spot market. We remind that, as MRC reported earlier, 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.
MRC

(plastemart) -- US demand for post-consumer recycled plastics is forecast to rise 5.9% pa to 3.4 bln lbs in 2016.

Continued support by federal, state, and local governments for recycling efforts will provide a significant boost to recycled plastic collection, processing, and demand. Besides, growing emphasis on sustainability among packaging and consumer product manufacturers, advancements in processing and sorting technologies, allowing a wider variety of plastic to be recycled, will also contribute greatly to the process, as per Reportlinker.

However, the overall rate of plastic recycling in the US will remain relatively low -- 6.5% of total plastic demand in 2016 -- as the industry faces a number of challenges. Recycling is minimal in several major plastic markets, including construction products, motor vehicles (other than batteries), and packaging film, due to a lack of collection capability or economical processing.

Bottles will remain the leading source of plastic for recycling, accounting for about half of all plastic collected in 2016. More rapid gains, however, are forecast for other sources, particularly rigid plastics, film, and carpet.

The recycling industry has put significant efforts into increasing the collection of rigid plastic, including thermoformed packaging and bulk containers, particularly at the commercial level. Bag and film recycling will also be bolstered by private industry collection initiatives, as these are a key source of raw materials for plastic bag and woodplastic composite producers.

Polyethylene terephthalate (PET) and high density polyethylene (HDPE) were the two leading resins used in recycled plastic products in 2011, accounting for over 70% of demand. While PET will see above average gains in demand, fueled by rising recycled content in beverage bottles and thermoformed containers, subpar increases in HDPE collection will limit demand for recycled resin. The most rapid growth is forecast for low density polyethylene, which will benefit from a rebound in the construction market, as well as smaller volume resins such as polypropylene and nylon. Packaging will continue to be the leading market for recycled plastic in 2016, with strongest gains expected for food and beverage bottles and clamshell containers, fueled by rising production of recycled resins suitable for food contact uses.

As it was reported earlier by MRC, Ukraine was also taking a step forward in boosting its plastic recycling industry. A state-owned plant "Ukrekoresyrsy" had launched a technological line for recycling PET-bottles. It will produce PET-flakes of "A" class in Khmelnitskaya region. Besides, the company has recently launched a new production line for recycling wastes from LDPE, HDPE and polypropylene (PP) into granules in Poltava, Ukraine.
MRC

MOSCOW (MRC) -- Stirol Group, Gorlovka, Ukraine in November produced 1,450 tonnes of expandable polystyrene (EPS) and 670 tonnes of general purpose polystyrene (GPPS), , according to MRC ScanPlast.

In November 2012, the output of EPS in Gorlovka made 1,450 tonnes, up by 800 tonnes from October 2012.

Year-to-date Stirol’s production of EPS made 10,450 tonnes, down 19% from January-November, 2011.

Production of GPPS in November increased to 670 tonnes. Generally, over January-November, 2012 Stirol Group produced 7,000 tonnes of material, up 41% year on year.

MRC

(upstreamonline) -- Austria’s OMV has said it is in talks with Germany’s RWE Dea about buying the German explorer’s 16.7% stake in the Nabucco gas pipeline project.

Rumours of a possible deal have swirled in recent weeks, but Roiss’s remarks are the first to confirm that sale talks are underway.

“We are in talks with RWE about taking over their shares but not for the long term," Roiss told journalists in Vienna, Reuters reported.

RWE said in May it was reviewing strategic requirements regarding the Nabucco project. The other shareholders in the consortium - each with 16.7% - are Hungary’s MOL, Turkey’s Botas, BEH of Bulgaria and Transgaz of Romania.

The BP-led consortium developing Azerbaijan’s Shah Deniz 2 is due to decide early next year whether Nabucco or the Trans Adriatic Pipeline (TAP) will carry its gas to Europe.

MRC

(wbbjtv) -- LyondellBassell Industries announced the expansion of its facility in Jackson at a news conference, Thursday. This is the second expansion for the company's Jackson site in the past six years.

The facility, which manufactures car parts and other products, is adding another production line to their automotive sector. The expansion of the facility means new jobs for Jackson.

Board Chairman of the Jackson Chamber said Lyondell Bassell expanding here in Jackson is a great sign for the community. "It means eight more jobs and a hope for more jobs in the future every job that's created has an economic trickle down effect so it means a lot for Jackson," he says.

Officials expect that the expansion will create eight permanent jobs in Jackson and thirty indirect jobs in surrounding areas.
MRC