Saudi SABIC Q2 net profit up 14% on lower costs

MOSCOW (MRC) -- SABIC, the world's biggest petrochemicals group by market value, posted a 13.96% rise in its second quarter net profit, but missed anlaysts' forecasts, according to Arabianindustry.

SABIC, which is 70% state owned, said its net income for the three months to June 30 was 6.04 billion Saudi riyals (USD1.61 billion) compared with 5.3 billion riyals in the same period last year.

Ten analysts surveyed by Reuters forecast SABIC would earn, on average, 6.4 billion riyals for the second-quarter.

SABIC attributed the increase in net income to a decrease in cost of sales and financial charges, despite reduced revenues due to lower sales prices for certain products, according to a statement on the Saudi bourse.

Concerns over slowing global economic growth has weighed down on SABIC's financial performance in recent quarters as demand for its main products such as petrochemicals, metals and fertilisers slows. SABIC's products are used extensively in construction, car manufacturing and other major consumer goods.

As MRC informed previously, SABIC, Saudi petrochemical major, posted fourth quarter net profits of 5.83 billion riyals (USD1.55 bln), an 11.3% increase compared to 2011. Despite the quartely increase, the company said 2012 net income had dropped by 15.5% to 24.72 billion riyals (USD6.59 billion) from 29.24 billion riyals the year before.

Sabic is ranked among the world's largest petrochemicals manufacturers. It is the largest public company in Saudi Arabia. The comany manufactures chemicals and intermediates, industrial polymers, fertilizers and metals. It is currently the second largest global ethylene glycol producer. Among its products are propylene, paraxylene, styrene, vinyl chloride monomer. Sabic's venture capital arm is looking for opportunities in the U.S., Europe and China to buy stakes in start-up companies that can turn shale gas into petrochemicals. Formed last November, the Netherlands-based business is negotiating 30 to 40 deals and is looking especially at technologies that use different feedstocks.

Fire damages production of Austrian EPS producer Hirsch Servo

MOSCOW (MRC) -- A fire broke out 21 July in one of the eight production halls at Austrian EPS specialist Hirsch Servo (Glanegg) production site at its home location in Glanegg, said Plasteurope.

The burning hall is used for some of the manufacturing processes involved in EPS tiles for heated flooring. Thus, production has been temporarily brought to a halt. Other production areas on the site were not affected by the fire.

According to local media, 160 firefighters were deployed at the scene to extinguish the fire. It has not yet been determined what caused the blaze to start. The company also has no information regarding a cost estimate of the damage from the fire.

Hirsch Servo management has stated that despite the temporary work stoppage, there should be no delays in the delivery of the EPS tiles for heated flooring. The company explained that it can shift production duties to other facilities; however, it doubts this measure will be necessary as it believes it will soon be running its production line again. The Austrian company, which also manufactures machinery, has ten production sites in Austria, Hungary, Poland, Slovakia, Romania and Italy.

As MRC wrote before, the demand for expandable polystyrene (EPS) has weakened significantly on the back of an unprecedented rise in price of styrene monomer in Asia, which made Chinese producers to increase EPS prices, according to a ICIS-MRC Price Report.

IMCD Group and Solvay sign partnership for the FKM range on a Pan-European basis

MOSCOW (MRC) -- Solvay has appointed IMCD as European distributor for its Tecnoflon FKM fluoro- and perfluoroelastomers, which are used in sealing applications in the rubber industry where there is a risk of exposure to aggressive chemicals of high heat environments, said Imcdgroup.

Marc-Antoine Ligny, business unit manager for plastics and rubbers at IMCD France, said: "The Tecnoflon FKM range seamlessly complements our current portfolio of speciality rubber products and will enable IMCD to maximise market penetration and deliver innovative solutions to our customers."

According to Solvay, its decision to appoint IMCD as its European distributor for the FKM range was based on "the necessity for comprehensive technical expertise in order to effectively promote and sell into this specialised market".

IMCD Group was therefore seen as the right partner based on its in-depth industry knowledge as well as its recruitment, development and retention of the highest calibre technical sales people, added the firm.

As MRC wrote earlier, Solvay SA signaled that a lack of recovery in Europe will hurt earnings this year amid reduced demand for soda ash and plastics and lower sales of carbon credits.

Imports of titanium dioxide to Russia rose by 46% in H1 2013

MOSCOW (MRC) -- Purchases of titanium dioxide (TiO2) by Russian companies in the first six months of 2013 increased by 46% year on year and amounted to 48,900 tonnes, according to MRC DataScope report.

Producers of paints and coatings and producers of rigid compounds have showed a significant increase in consumption. Russian traders and producers of paints imported 34,500 tonnes of special grades of titanium dioxide in January-June 2013, up 55% year on year.

Consumption in the segment of rigid compounds grew by 2.5 times. Russian producers of rigid compounds imported 12,400 tonnes over the first six months of the year, while during the same period last year, imports of TiO2 by producers of rigid compounds equalled about 5 tonnes.

The most tradable grade of titanum dioxide in Russia is DuPont's Ti-pure. In January-June 2013, 8,100 tonnes of this grade entered the market.

High demand in the market was also registered for the Ukrainian brand Sumtitan R-202 and Crimea TiOx-220 produced by Sumykhimprom and Crimean Titan. Import of these grades by Russian companies in the first half of the year totalled 3,100 tonnes and 2,900 tonnes, respectively.


EPS prices continue to hit records in Asia

MOSCOW (MRC) - The demand for expandable polystyrene (EPS) has weakened significantly on the back of an unprecedented rise in price of styrene monomer in Asia, which made Chinese producers to increase EPS prices, according to a ICIS-MRC Price Report.

July and August are traditionally the peak in the consumption of EPS in China, with exports booming and improvement in construction sector, where thermal insulation materials made of EPS are widely used.
In early July, on expectations of growth in demand for polystyrene, prices of styrene monomer (SM) also began to rise in Asia.

The situation was aggravated by the tight supply of SM in the region. As a result, SM price has reached USD1,800/tonne, which forced producers of EPS to increase the prices similarly. Thus, in the beginning of the month the price of Chinese EPS was settled at USD1,950/tonne FOB China.

Producers of EPS traditionally try to maintain the minimum margin of profit around USD150/tonne in relation to styrene monomer. Therefore, when SM prices rose to a high of USD1,830-1,850/tonne, Chinese producers have responded with increasing price of EPS to USD2,010/tonne FOB China, which is an absolute record.

Buyers of Chinese EPS from the CIS countries have suspended the purchases of material, the price of which, they believe, is too high. Russian traders who supply the material through the ports of St Petersburg and Novorossiysk, reduced or stopped buying Chinese EPS in the beginning of the month. Another price increase made the traders who supply through Vostochniy port also reduce their purchases.

Ukrainian market of EPS is going through a difficult time in 2013, accompanied by a decrease in consumption of material. A series of price rises from Chinese producers have resulted in the complete cease of purchases of Asian material.

Belarusian buyers of EPS have switched to European material, with lower logistics costs, as well as the relative stability of prices this year.