BASF and Petronas will not produce specialty chemicals in Malaysia

MOSCOW (MRC) -- Malaysia's state energy company Petronas and German chemical company BASF said Monday they have scrapped a proposed joint venture to develop a specialty chemicals production facility in Malaysia, reported Hydrocarbonprocessing.

The proposed partnership was terminated because both parties couldn't agree on the "terms and conditions" for the project in the southern state of Johor, the companies said in a joint statement.

As MRC informed earlier, BASF and Petronas were considering jointly investing around EUR1bn (USD1.34bn) to produce specialty chemicals in Malaysia.

However, Petronas and BASF "are committed to continuing their existing long-term partnership" at BASF Petronas Chemicals in the eastern state of Pahang, they said.

The companies have an existing joint venture in Malaysia - BASF Petronas Chemicals - which currently owns and operates an integrated complex in Gebeng, Pahang, Kuantan that produces acrylic monomers, oxo products and butanediol.
MRC

MOSCOW (MRC) -- Poland's top refiner PKN Orlen SA expects to swing to an operating loss of 700 million zlotys (USD228 million) in the fourth quarter from a PLN128 million profit a year earlier due to asset impairments and falling oil prices, the company said Foxbusiness.

As MRC wrote earlier, PKN Orlen wrote off PLN700 million in the fourth quarter, mainly for assets at its Czech Republic based unit Unipetrol and booked a PLN500 million loss on its oil inventories, which lost value due to lower oil prices.

Unipetrol, in which PKN has a 63 % share,said on Friday its 4.5-billion-crown (USD236 million) impairment
charge reflected a drop in asset values due to a tough refining environment as well as its intention to sell some assets.

Accordinig to MRC data, in 2012, Czech Unipetrol increased supplies of PP and PE to Ukraine by 34% and 23% respectively. In total Ukrainian converter delivered more than 21 tons of polyolefins by Unipetrol production.

PKN Orlen (Polish: Polski Koncern Naftowy Orlen) is a major European oil refiner, and petrol retailer. The company is Poland's and Central Europe's largest publicly traded firm with major operations in Poland, Czech Republic, Germany, and the Baltic States.


MRC

MOSCOW (MRC) -- The engineering work under this contract is for the construction of offsites and utilities facilities, according to Jacobs officials. Officials did not disclose the contract value. The new cracker complex is part of a major expansion of Reliance’s petrochemical capacities at Jamnagar and other sites in India, said Hydrocarbonprocessing.

Jacobs Engineering Group was selected Tuesday by Reliance Industries (RIL) to provide engineering and procurement assistance services for a cracker complex at the Jamnagar refining and petrochemical site in Gujarat, on the West Coast of India.

The engineering work under this contract is for the construction of offsites and utilities facilities, according to Jacobs officials.

The contract is being executed from Jacobs' offices in Mumbai, India. Officials did not disclose the contract value.

"We are delighted to be supporting Reliance and their strategic vision for this important project at Jamnagar," said Jacobs vice president Allyn Taylor. This latest award further reinforces our long term commitment to Reliance and the value we can deliver through our integrated teamwork."

The new cracker complex is part of a major expansion of Reliance’s petrochemical capacities at Jamnagar and other sites in India.

We remind that Reliance Industries together with SIBUR, Russia's largest petrochemical company, will bulild a butyl rubber plant with the capacity of 100,000 tpa, which is expected to kick off in next six months in Jamnagar, as MRC informed previously.

Reliance Industries is one of the world's largest producers of polymers. The company's polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes. Reliance Industries is one of the world's largest producers of polymers. The company's polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes.
MRC

MOSCOW (MRC) -- MRC news digest as of 22.01.13.

1. Asian manufacturers EPS increased prices for the markets of Russia and Ukraine.

Since the beginning of 2013 Asian producers of expandable polystyrene (EPS), which are major importers to Russia and Ukraine, again raised the price offer. Last week, Russian companies have reported that the price of Asian EPS was settled at USD1,950-1,960/tonne, FOB China and to USD1,980-1,990/tonne, FOB Taiwan. Korean EPS was offered at USD2,140-2,150/tonne, FOB Pusan. By the end of the week the price of Chinese EPS again increased by USD10/tonne, reaching a USD2,070-2,080/tonne, CIF in the ports of Novorossiysk and St. Petersburg and USD2,020/tonne, CIF East. Ukrainian companies reported that Asian prices were at USD2,055-2,070/tonne, CIF Odessa. This price level is too high for Ukrainian customers of EPS, so, they had to refuse to buy the material.

2. Dockers strike in the USA disrupted PVC shipments to Russia.

The conflict between dockers of the U.S. East Coast and international carriers has been partially settled. The two-week strike led to a delay in delivery dates of PVC from the USA. By mid-January, the international sea carriers and dockers managed to reach a partial agreement on new terms of payment. The final settlement of the issues is to be completed by 28 January, 2013. Dockers strike resulted in a delay of delivery dates of the goods from the East Coast of the United States to all the destinations, including Russia. As reported by some Russian companies, the delay in shipments of PVC to Russia as per January contracts will make, at least, two weeks. The first shipment will begin after 20 January and, according to the most optimistic outlook, they will take place during the first decade of February.

3. Russian PE prices remain unchanged in the first week of January.

The first working week of 2013 in the Russian polyethylene market was fairly quiet. Polyethylene prices remained unchanged in comparison with the last week of December. The converters did not replenish their inventories. Quite a big number of converters in the second half of December formed their inventories for the first half of January. The price spread in the market of low-density polyethylene (LDPE) is still quite wide. The offers for the supply of 158-LDPE was voiced on average at Rb53,500-56,000/tonne, including VAT, CPT Moscow. Buying activity is low; the offer of polyethylene is ample. The market of HDPE last week was also quite calm. The prices injection moulding HDPE declined slightly in the spot market under the pressure of low demand and excess supply. HDPE prices remained at the level of the second half of December and were at Rb71,000-73,000/tonne, including VAT, CPT Moscow, for the film grades, and Rb65,200-66,000/tonne, including VAT, CPT Moscow, for injection moulding PE.

4. Russian makers of PVC reduced their dependence on imports.

Russia’s imports of PVC in December on low season declined to 29,200 tonnes. Growing domestic production and large carry-over stocks from 2011 allowed to reduce the imports of resin to the Russian market by 9% in 2012. SayanskKhimPlast and Kaustik (Sterlitamak), which increased their capacity of PVC by 50,000 tonnes helped to reduce the dependence on external supplies. Cold February - March and large carryover stocks (over 50,000 tonnes) in 2011 also affected greatly. SayanskKhimPlast in 2012 after the planned reconstruction increased its production capacity of PVC to 270,000 tonnes. Over the eleven months of last year, the company produced about 247,000 of resin. Whereas in 2011 its total production volume was about 259,000 tonnes.Kaustik (Sterlitamak) in 2012 increased the annual capacity of 220,000 tonnes. The company aims to expand the capacity of PVC up to 600,000 tonnes per year, if key Russian producers also expand their capacity on ethylene production. The beginning of 2012 due to severe cold resulted in bad sales of finished products made from PVC, said many market participants. The demand in January increased, in February - March due to the severe cold the sales dropped to 30%. Which also slowed down the growth in demand for PVC in Russia. In December, under pressure from seasonal factors PVC imports to Russia declined to 29,200 tonnes.

5. Dependence of Russian PE market on imports strengthened in 2012.

In December, imports of polyethylene and its copolymers to Russia made 70 thousand tonnes. In 2012, Russia’s dependence on imports of PE rose by 28%. It is worth pointing out to a lengthy outage at Stavrolen due to a failure at the production and a rapidly growing demand for the polyethylene stretch film as main drivers of the growth of the dependence on imports. As a result, HDPE import rose by 3% and made about 408 thousand tonnes. The outage at Stavrolen influenced the working schedule of Nizhnekamskneftekhim. The Tatar company had to focus on HDPE production last year, while the output of linear polyethylene (LLDPE) was carried out only in two months: in May and November. Over the past two years, the LLDPE production dropped to 55 thousand tonnes in 2011 and to 29 thousand tonnes in 2012. The linear polyethylene market keeps on showing high growth dynamics. As per preliminary information, in 2012 demand for LLDPE in Russia made over 200 thousand tonnes, while a year earlier this index made about 147 thousand tonnes. The largest increase in consumption accounts for producers of polyethylene stretch films.

6. Converters in CIS countries report the rising cost of PET purchases in Korea and China.

Higher prices of feedstocks for the production of PET in Asia resulted in an increase of export prices of PET granulate by USD30-40/tonne, which led to a price rise for the material for Russian, Ukrainian and Kazakh consumers of granulate. Prices of bottle PET granulate in the foreign markets keep their upward dynamics on an increase of productions costs. The price hike for feedstocks resulted in the PET price to rise in Asia by more than USD100/tonne over the past four weeks. This week, the purchasing price of Asian bottle PET for Russian consumers, including delivery to the Central region, makes USD1,670-1,700/tonne, DAP Moscow, excluding VAT. The price of Asian PET granulate in the Ukrainian port grew to the level of USD1,660-1,690/tonne, CIF Odessa, excluding VAT. The price offer of Asian bottle PET for Kazakh buyers, including delivery, made USD1,755-1,785/tonne, DAP Almaty, excluding VAT.

7. PVC prices for CIS countries are rising in US, while in Europe and China they remain stable.

Limited supply and stable demand in the foreign markets keep pushing export prices of North American PVC upwards for the CIS countries. In the other regions of the world PVC export prices have remained stable so far. Scheduled outages for maintenance at some PVC plants in the USA in January-February amid increasing demand in the domestic market keep restricting export quotas of the local producers. At the same time demand for PVC is still stable in the markets of China, the CIS countries and Turkey. As a result, North American producers are going to raise prices for export shipments of the resin in February. Chinese makers have kept their export prices at December level so far due to large debts as per last year’s contracts. European makers had to preserve December prices for January shipments in most cases on the back of weak demand.

8. Price of Belarus PET increased in January.

Belarus Mogilevkhimvolokno on prices increase in foreign markets raised January price for the domestic market by BRb2.1 m/tonne, excluding VAT. In January, the price of the Belarus PET for the domestic market has grown on price increase of imported PET and rising trend in external markets. The material for production of PET preforms increased by BRb2.1 m/tonne, excluding VAT, compared to December price. According to converters, the price level of the plant was voiced at BRb14.7 m/tonne, FCA Mogilevkhimvolokno, excluding VAT. The plant does not raise the prices on the domestic market is sufficiently long period, despite the increase in supply of imported suppliers in recent months.

9. Imports of HDPE to Russia in 2012 increased by 35%.

Russia’s imports of high density polyethylene (HDPE) in 2012 increased by 35%,from 2011. Long stoppage of Stavrolen resulted in significant increase in the external supply of HDPE. Russia’s imports of HDPE in December 2012 rose to 38,600 tonnes. Total imports of HDPE in 2012 to Russia made about 410,000 tonnes of HDPE, up 35% year on year. The main reason for the significant growth of the external supply was outage of Stavrolen due to the accident at the gas distribution installation in the production of ethylene. The imports of HDPE grew half as much than the production volumes of Stavrolen. Stavrolen resumed the production of polypropylene in March 2012 due to external supply of propylene, HDPE production was resumed only in October 2012. In 2011, the total production of high-density polyethylene by Stavrolen made about 292,000 tonnes, while in 2012 it slightly exceeded 70,000 tonnes. The largest increase in imports was seen in the sector of film, blow moulding and pipe grades of polyethylene. External supply of film HDPE in 2012 increased by more than two times and reached 99,000 tonnes. Imports of pipe polyethylene increased by 45% to 130,000 tonnes. Supplies of blow moulding HDPE reached 50,000 tonnes.

10. Imports of PVC to Ukraine decreased by 20%.

In December, imports of PVC to Ukraine made 7,600 tonnes. In 2012 the total imports of PVC to the Ukrainian market made about 95,000 tonnes, down 20% from 2011. The reduction in imports of PVC to the Ukrainian market in the past year by 20% compared to 2011 was due to the production of local producer - Karpatneftehim (Lukoil Group). The stoppage of the Ukrainian company in September 2012 for an indefinite period will increase the dependence of imports in the market. In 2012, with the increase in production local producers managed to reduce significantly the dependence of the Ukrainian market from external supplies of PVC. According to preliminary estimates, Karaptneftehim’s supplies to the domestic market from last year amounted to about 35,000 tonnes. However, in September 2012, due to economic inefficiency Lukoil decided to stop Karpatneftehim’s production of polyvinyl chloride, polyethylene, ethylene and caustic soda. There is no information on the terms of the production resumption.

11. The cost of Nizhnekamsk polystyrene rose by Rb2,000/tonne.

Traders raised their price offers for Nizhnekamsk polystyrene by Rb1,000-2,000/tonne early this week. At the beginning of the week traders that sell Nizhnekamsk general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) have increased the price offer for the material by Rb1,000-2,000/tonne. Last week there was information that the cost of Nizhnekamsk polystyrene might grow, however, the value of the increase was not specified. A high level of the cost of European and Asian polystyrene allows Russian companies to maintain the increasing trend of the cost of the domestic material. The price offer for Nizhnekamsk GPPS was set at the level of Rb75,000-78,000/tonne, while HIPS is being sold in the range of Rb77,000-81,000/tonne. The cost of Salavat and Kirishi polystyrene remains at the previous level.
MRC

MOSCOW (MRC) -- On the prolonged economic downturn in the European market and declining demand for PVC, INEOS ChlorVinyls, the Europe's largest PVC manufacturer, has decided to stop production at three of its plants, according to the company's press release.

Last week, INEOS ChlorVinyls announced the outcome of an internal asset review in view of the influence of the unfavourable economic situation on European market demand, which contunues to be very low and, in its turns, affects the company's PVC business. As a result, INEOS ChlorVinyls has opted to discontinue production from three of its plants.

Thus, the сompany will consentrate all UK PVC production at its Newton Aycliffe Site, which will help to close its small scale PVC unit at Runcorn Site. Ineos is going to reorganize its Runcorn VCM plant to produce EDC intermediate for internal use. In Germany, the Company will bring forward the closure of its mercury chlorine cellroom at Wilhelmshaven Site.

Chris Tane, the company's CEO, comments: "We are taking these measures in light of current and expected economic conditions impacting demand across Europe. We are confident these measures, along with other ongoing improvement initiatives, will help secure our business in the long term by improving profitability and cashflow during these very difficult times."

As MRC reported earlier, Ineos is considering a further cut in production run rates at its acrylonitrile plants in Europe due to declining demand. The company operates a 300,000 tpa plant in Cologne, Germany, and a 280,000 tpa plant in Seal Sands, northeastern England.

INEOS ChlorVinyls is one of the major chlor-alkali producers in Europe, a global leader in chlorine derivatives and Europe's largest PVC manufacturer.
MRC