WACKER launches production at its new EVA dispersions plant in South Korea

MOSCOW (MRC) -- Wacker Chemie AG has officially launched its new production plant for ethylene-vinyl-acetate copolymer (EVA) dispersions at its Ulsan site in South Korea, according to the company's press release.

The additional 40,000 tonnes from the second reactor line increases the site’s EVA-dispersion capacity to a total of 90,000 tonnes per year. As MRC reported previously, the production capacity of the site has, thus, almost doubled, making the plant complex one of the biggest of its kind in South Korea.

The expansion is WACKER’s response to the rising demand for high-quality EVA dispersions, especially in Southeast Asia’s emerging markets. The project goal is to ensure sufficient capacities of VINNAPAS EVA dispersions now
and in the years ahead.

As a result, WACKER will be able to offer its customers in the region consistently high product quality and supply security over the long term. Having invested around EUR10 million in the expansion project, WACKER is strengthening its position as one of the world’s major suppliers of EVA dispersions.

According to MRC DataScope, in 2012, import volumes of Wacker's Vinnapas to the Russian market decreased by 16% year-on-year and amounted to 874 tonnes.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.


Samsung wins Iraq GSP contract from Gazprom

MOSCOW (MRC) -- Russia-based oil and gas company Gazprom's subsidiary Gazprom Neft has awarded an USD879m engineering, procurement and construction (EPC) contract to South Korea-based Samsung Engineering for its gas separation plant (GSP) in Badra, Wasit, Iraq, said Chemicals-technology.

As part of the contract, Samsung will build the central processing complex, including the GSP (200MMSCFD) and the utilities and offsites (U&O) facility.

The plant will produce 170,000 barrels of oil per day by 2017, as part of the oil development plan by the Iraqi Ministry of Oil, according to South Korean engineering company.

Construction of the plant is expected to be completed within the next 35 months.

Samsung Engineering marketing senior executive vice president Steve Fludder said: "We are thrilled to be a partner of Gazprom for the first time and to be a part of ambitious oil project of Iraqi government."

Samsung said other companies participating in the Iraqi oil project include South Korea's KOGAS, Malaysian oil and gas firm Petronas and Turkey's energy company TPAO.

As MRC wrote earlier, Gazprom's sales are likely to fall further in 2013 as weak economic conditions lead to continued low demand in Europe, the company"s key market for natural gas.

Gazprom is an open joint stock company, established in 1989 as a successor to the state run gas company. It explores and develops natural gas fields and extracts, processes, transports, stores and refines natural gas. It also supplies energy to domestic and foreign customers.


European PE prices for the CIS countries remain at the level of January

MOSCOW (ICIS-MRC) - In February, European producers kept export polyethylene prices for the CIS countries at the level of January, according to ICIS-MRC Price report.

The contract price of ethylene in Europe has remained at the same level for three consecutive months. Despite this, in January, European makers increased export PE prices for the CIS markets by EUR30-50/tonne, citing the lower margin of production. They also intended to raise prices for February, but low demand in the foreign markets did not allow them to implement their plans. In addition, the market situation is aggravated by the strong euro.

This week, negotiations on European polyethylene prices for the CIS markets for February went on. Many market participants report that they managed to keep PE prices for February at the level of January. Deals for high-density polyethylene (HDPE) were discussed in the range of EUR1,250-1,330/tonne, FCA. Price offers for low-density polyethylene (LDPE) were negotiated in the range of EUR1,320-1,380/tonne, FCA.

Yet, some market participants are still going to get PE price reduction for February, citing the stronger euro against the dollar. Since early January, the European currency has risen against the dollar by 4%.

Also, they cite prices of the producers from Asia and the U.S., as an argument. Price offers of Asian HDPE for February are voiced in the range of USD1,520-1,600/tonne, FOB. North American HDPE is offered on average at USD1,500-1,560/tonne, FAS Houston.

In March Russian imports of PVC to reduce significantly - MRC analysts

MOSCOW (MRC) -- In February, Russia's imports of PVC will grow, but in March, it will be cut significantly, because Russian companies reduce the purchases of PVC in the USA and China due to rising prices and disruptions of contractual terms of delivery, according to MRC DataScope.

Last year, the share of the North American PVC in total imports amounted to about 46%, its share started to increase in recent months most notably due to the stop of Karpatneftehim's production. In January 2013, the share of the North American PVC in total external deliveries increased to 68%.

Strong external demand in November and January, 2012, and limited export quotas amid planned turnarounds of plants led to a serious rise in prices. In February the US prices of PVC for the Russian market increased to USD1 ,075-1, 100/tonne, CFR St. Petersburg.

As a result, many Russian companies have completely refused from purchases of North American PVC in February. The volumes of purchases in January were already reduced several times due to limited export quotas. Due to disruptions of contractual terms of delivery (about two weeks), and a serious decline in purchases in January and February, MRC analysts expect in March a serious decline in imports of PVC from the US.

Delivery of acetylene PVC from China, the second biggest importer for Russia, have been falling from October. In December 2012, Chinese imports of PVC was about 6,500 tonnes in January 2013, this figure had dropped to 5,000 tonnes. Market players say that last year, many buyers faced supply disruptions of Chinese PVC. And if in the middle of the year there were problems due to the limited railway wagons in China, but from November - December the re were problems with Kazakh railway wagons.

In January - early February 2013 the volumes mainly contracted in 2012 entered the Russian market. Last month, some Russian companies because of low demand and problems in the supply had to limit their purchases of PVC in China. On 8, February, China will celebrate the Lunar New Year, which will also cuts the shipments and contracts over the next two weeks.

As MRC wrote earlier, in January 2013, the imports of suspension PVC (SPVC) to Russia amounted to about 25,400 tonnes, which down 7% from December 2012, according to MRC DataScope. About 86% of total imports were provided by the producers from the US and China.


Saudi petchem sector revenue exceeds SAR 310 billion

MOSCOW (MRC) -- According to the Gulf Petrochemicals and Chemicals Association, Saudi Arabia is producing more than two third of the total GCC petrochemical capacity, Steelguru.

Strong infrastructure, substantial reserves of cheaply extractable feedstock and supportive government policies help domestic producers to enjoy competitive advantage globally.

Despite challenging market conditions, the Saudi petrochemicals sector is continuing to show strong growth. At the end of 2012, the sector accounted for more than 31.% of the total market capitalization on the Saudi Stock Exchange, reaching at the level of SAR 440 billion roughly.

SABIC is the flagship company among 14 listed companies, representing 61.2 of the total value of petrochemical sector. SABIC is also the biggest petrochemicals company in the GCC region reflecting 19.2% of the total market capitalization on the Saudi stock exchange. The total market capitalization of Tadawul (market) stands at SAR 1.4 trillion at end of December 2012.

The Kingdom's 14 petrochemical companies all generated around SAR 310.5 billion as revenue during 2012, reflects an increase of 5.19% compared with revenue of FY2011. Out of which, SSS 189 billion was earned by SABIC, which equates nearly 61 percent of the aggregate value.

During 2012, Saudi Kayan commenced and expanded operational capacity of many commercial operations including olefins ethylene glycol, polypropylene, high density polyethylene and Amines etc. The company remained at top in terms of percentage growth. It's revenue increased by 295 % to record SAR 9.5 billion.

Alujain Corporation and Saudi Industrial Investment Group are other significant advancers, growing 43% and 27% respectively. Core operating profitability of petrochemical sector declined significantly, mainly due to decrease in overall product prices.

Alujain Corporation's operating income also increased by 127% during 2012. The petrochemical sector managed to earn an adequate margin of 10.9 percent, generating SAR 33.85 billion as net Income during fiscal year 2012. SABIC dominated the profitability, contributing SAR 24.7 or 73% of the consolidated value.

Unfortunately, its bottom line decreased by 15.47% which is attributed to the decrease in sales prices for certain products despite higher sales and production volumes. Furthermore, the heavyweight Saudi Arabian Fertilizers Company showed a maximum net profit margin of 77.6%.

As MRC wrote earlier, SABIC, one of the largest petrochemical producers in the world, has announced that a labor strike at one of its plants in Europe resulted in a decline in its output.