Occidental Petroleum intends to construct ethylene unit in Texas

MOSCOW (MRC) -- Occidental Petroleum Corp. (OXY) applied to build an ethylene plant in Texas, the latest company to propose new capacity for the region as booming shale gas supplies cut costs for U.S. chemical makers, according to Bloomberg.

The plant in Ingleside near Corpus Christi would have the capacity to produce 1.2 billion pounds a year of ethylene, as MRC reported earlier. Construction would start in December 2014 with production beginning in February 2017, according to the application on the EPA’s website.

Occidental, the largest onshore crude-oil producer in the continental U.S., is also the world’s biggest maker of vinyl chloride. It plans to use some of the ethylene from the Ingleside project to make vinyl chloride monomer, an ingredient in vinyl products, at an existing plant nearby. Vinyl is used in items such as PVC pipe and vinyl siding.

Dow Chemical Co. and Chevron Phillips Chemical Co. are among other chemical producers who have proposed plants to make ethylene from natural gas liquids such as ethane, the price of which hit a multiyear low last month. Hydraulic fracturing, also known as fracking, has increased supplies of NGLs, which are converted to ethylene used in plastics, antifreeze and hundreds of other applications.

Occidental Petroleum Corporation (Oxy) is a California-based oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America. Oxychem is Oxy"s Texas-based subsidiary which manufacture polyvinyl chloride (PVC) resins, chlorine and caustic soda used in plastics, pharmaceuticals and water treatment chemicals.
MRC

MOSCOW (MRC) -- Sasol Ltd., the world’s largest producer of motor fuel from coal, said profit for the six months through December will be affected by a writedown in the value of its Iranian unit, said Bloomberg.

Earnings per share will probably decrease by 10% to 20% compared with a year earlier after the Johannesburg- based company cut the value of its 50% stake in Arya Sasol Polymers Co. by 1.97 billion rand (USD220 million).

“We continue to actively engage with interested parties to divest from our share in Arya Sasol Polymers Company,” it said. Sasol co-owns Arya with Pars Petrochemical Co. of Iran, a unit of National Petrochemical. Arya contributes about 3% to the South African company’s operating profit.

The U.S. and European Union are pressuring Iran to curtail its nuclear program, which they say is aimed at developing an atomic weapon. Iran denies it is trying to make atomic weapons, saying its nuclear research is for civilian use.

As MRC wrote earlier, Sasol maintaintd an active presence in Iran through the Arya Sasol Polymer Company (ASPC), which operates two polyethylene plants in Iran.

Sasol Limited is an integrated energy and chemical company that began in Sasolburg, South Africa in 1950. It develops and commercialises technologies and builds and operates world-scale facilities to produce a range of product streams including liquid fuels, chemicals.

MRC

MOSCOW (ICIS-MRC) - Last week, Russian makers of PET increased the price in the domestic market by Rb250-1,000/tonne, on the deficit of spot volumes and gowing prices of Asian granulate, according MRC Price Report.

By the end of last week, price quotation of Russian PET had grown to Rb63,500-65,500/tonne, CPT Moscow, including VAT.

Price of Belarusian PET granulate for February shipments to Russia was raised to Rb63,200-63,500/tonne, CPT Moscow, including VAT (Rb52,000/tonne, FCA Mogilev, excluding VAT), which is up by Rb2,500/tonne from the export price of the Belarusian PET in January.

Amid rising prices of Asian PET, the prices of Korean and Chinese PET granulate for Russian converters, at the current rate of the national currency 1USD = 30RUB, including logistics, will be at Rb63,000-64,000/tonne, CPT Moscow, including VAT.

According to the makers, the demand from domestic converters remains high. Some plants do not offer PET granulate to the spot market as they should first of all meet contractual obligations.

Another Russian PET producer said that all the free spot volumes for February were sold in the first week of the month, so currently the plant sells the material for March shipments.

MRC

MOSCOW (ICIS-MRC) -- In January, the import volumes of high density polyethylene (HDPE) to Russia amounted to about 24,000 tonnes, down 37% month-on-months. Pipe and film HDPE accounted for the largest decline in imports, according to MRC DataScope.

Last year was a record one for the Russian market in terms of import volumes of HDPE. In 2012, 410,000 tonnes of HDPE were imported to the Russian market. In January, on a seasonal decrease in demand and stable operations of all the Russian producers, HDPE imports dropped to 24,400 tonnes, which is actually equal to the production volumes of January, 2012.

Last month, exports of HDPE fell across all sectors of consumption. Expectedly, film and pipe polyethylene accounted for the largest decline in imports. Last month, import of film HDPE made about 3,000 tonnes, while in December last year this index made 7,300 tonnes. Polyethylene from South Korea and the United States accounted for the reduction in supplies.

Imports of pipe HDPE dropped to 6,300 tonnes, down 46% from December, 2012. The reduction of imports was due to a seasonal factor, and European and Asian polyethylene accounted for it.

Imports of blow moulding and injection moulding HDPE decreased by 15% (to 3,000 tonnes) and 10% (to 4,000 tonnes), respectively, compared to December 2012.

MRC

MOSCOW (MRC) -- MRC news digest as of 11.02.13.

1. European makers to keep January PE prices for CIS countries this month.

Reduction of ethylene contract prices in Europe and weak demand from overseas markets made European makers keep prices of polyethylene (PE) for February for CIS countries at the January level, according to ICIS-MRC Price Report. Though the contract price of ethylene for February was settled at the level of January, many European makers aimed to increase the price of PE. However, amid low demand from foreign markets and the strengthening of the euro, some European producers were forced to keep the January price of polyethylene for February for the CIS markets. Negotiations on February prices of European polyethylene have just begun, but some players already reported that they managed to avoid the price increase.

2. Kazanorgsintez raised contract prices of LDPE.

Kazanorgsintez announced an increase in contract prices of low-density polyethylene (LDPE) to be shipped in February for the domestic market. Other Russian producers also announced the need for a price increase of LDPE, according to ICIS-MRC Price report. The prices for the material to be shipped in February grew by Rb300-500/tonne, excluding VAT. Other Russian producers also reported a necessity for the price increase of low-density polyethylene. At the end of last week, Gazprom neftekhim Salavat raised its LDPE price by Rb1,000/tonne, price offers for PE 158 were voiced at the level of Rb 53,500/tonne, FCA Salavat, including VAT. In January, Angarsk polymer plant raised twice the price of polyethylene for the domestic market, citing its limited amounts of material for the domestic market.Ufaorgsintez reported repeatedly the need for a price increase of LDPE for the domestic market.

3. European producers raised polypropylene prices for the CIS markets.

On Monday, negotiations on European polypropylene (PP) prices for the CIS markets began. Some European producers reported the need to increase PP prices by EUR30/tonne, according to ICIS-MRC Price report. The contract price of propylene in Europe for February was agreed by EUR10/tonne higher than the January level. Negotiations on the prices of European polypropylene for February for the CIS markets started earlier this week. Some European producers announced that they raised export prices by EUR30/tonne, converserly, other producers reduces their prices. The January level of export prices of European homopolymer of propylene (PP-homo) for the CIS countries has been agreed in the range of EUR1,210-1,250/tonne, FCA. In February, on the increase of the contract price of propylene, some producers reported the necessity to further raise PP prices.

4. PET prices to grow in February for CIS countries.

In the first week of February, the major suppliers of PET granulate in CIS countries started to raise prices, citing rising cost of feedstock and growing PET prices in the Asian markets, according to a ICIS-MRC Price Report. Despite the fact that this week buying activity in China is weak, the market players are sure that after the Chinese New Year, prices are likely to rise. Many Asian makers aim to raise prices after the holidays on growing PTA quotations. This week price quotations of Chinese PET, with delivery to Central region of Russia, have increased by USD20/tonne and was at USD1,650-1,670/tonne, DAP Moscow, excluding VAT. Mogilevkhimvolokno also increased February export prices for customers in Ukraine and Russia. Price quotations of Belarusian PET for Russian customers grow Rb53,500-54,000/tonne, DAP Moscow, excluding VAT. Given the current rate of EUR / USD = 1.347, the price of Belarusian PET for the Ukrainian customers, with delivery to Ukraine rose to USD1 ,777-1, 783/tonne, DAP Kiev, excluding VAT.

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

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.

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

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. 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.
MRC