PET imports to Russia fell by 7%

MOSCOW (MRC) - Imports of polyethylene terephthalate (PET) to Russia fell by 7% (down by 11,400 tonnes) to 146,600 tonnes in January-October 2013 year on year, according to MRC ScanPlast.

Total imports of PET chips to Russia decreased by 9% to 140,000 tonnes in the first ten months of this year. PET imports have been increasing for the second consecutive year because of increased production in the domestic market.

Supply of domestic PET chips increased by 18,400 tonnes to 314,000 tonnes in January-September 2013, compared with the same period a year ago.
Imports fall traditionally in the fourth quarter on the back of a seasonal decline in market of drinks, beer and water. The situation is exacerbated by the significant stock inventories despite the long shutdowns of PET chips plants. That is why MRC analysts do not expect sales to change significantly this year, with the trend of import substitution remained. According to MRC estimates imports of PET chips to Russia will be about 166,000 tonnes in the end of 2013.

The consumption of recycled PET has grown in 2013. The main importers of PET flex in Russia were the producers of polyester fibers. Imports of recycled PET increased by 55% (up by 2,400 tonnes) to 6,800 tonnes in January-October 2013.

MRC

MOSCOW (MRC) -- Westlake Chemical Corporation has reported record quarterly net income of USD170.3 million, or USD2.54 per diluted share, on net sales of USD1,004.2 million for the quarter ended September 30, 2013, reported the company in its press release.

This represents an increase in net income of USD83.3 million, or USD1.24 per diluted share, compared to the quarter ended September 30, 2012 net income of USD87.0 million, or USD1.30 per diluted share, on net sales of USD821.2 million. Q3 net sales mainly increased because of higher sales volumes for styrene and caustic, higher sales prices for most of our major products and sales contributed by the company's specialty PVC pipe business, which Westlake acquired in May 2013. Styrene sales volumes for the third quarter of 2012 were negatively impacted by a turnaround of the styrene plant in Lake Charles, Louisiana.

Income from operations was USD266.6 million for the third quarter of 2013 as compared to USD142.5 million for the third quarter of 2012. Income from operations for the third quarter of 2013 benefited primarily from improved olefins and vinyls integrated product margins, largely due to higher sales prices for most of our major products and lower overall feedstock costs as compared to the prior year period.

For the nine months ended September 30, 2013, net income was USD439.5 million, or USD6.54 per diluted share, on net sales of USD2,807.9 million. This represents an increase in net income of USD149.2 million, or USD2.21 per diluted share, from the nine months ended September 30, 2012 net income of USD290.3 million, or USD4.33 per diluted share, on net sales of USD2,770.0 million.

Net sales for the nine months ended September 30, 2013 increased by USD37.9 million compared to the prior year period mainly due to higher sales volumes and sales prices for styrene, PVC resin and caustic, higher polyethylene sales prices and sales contributed by our specialty PVC pipe business, mostly offset by lower feedstock, ethylene and ethylene co-products sales volumes.

Income from operations was USD695.9 million for the nine months ended September 30, 2013 as compared to USD459.1 million for the nine months ended September 30, 2012. The increase in income from operations was primarily attributable to higher olefins and vinyls integrated product margins.

EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of USD307.0 million for the third quarter of 2013 increased by USD131.4 million compared to EBITDA of USD175.6 million for the third quarter of 2012.

We remind that, as MRC wrote previously, in October 2012 Westlake announced the expansion of its PVC plant in Calvert City, Kentucky, as well as its plans to increase the production of ethylene a this unit from 450 to 630 million pounds a year.

Westlake Chemical is a vertically integrated manufacturer and marketer of basic chemicals, vinyls (PVC), polymers (PE) and fabricated products.
MRC

MOSCOW (MRC) - The external supply of polypropylene (PP) to Russia decreased by 18% (14,100 tonnes) in October, compared with the September level - 17,100 tonnes. The greatest decrease in imports occurred for homopolymer PP, according to MRC DataScope.

PP imports to Russia have been decreasing for the second month in a row, following August record high. The launch of two new production sites in Omsk and Tobolsk with a total capacity of 680,000 tonnes resulted in the reduction of October of homopolymer PP to a record low - 2,900 tonnes.

The structure of Russia's PP imports last month looked as follows. Import of homopolymer PP in September was about 6,200 tonnes, and in October this figure dropped more than twofold. Total imports of homo the total amount of external supplies of homopolymer PP in October was 67,200 tonnes in January-October 2013, from 121,700 tonnes in the same period of 2012. The main reason of the decline in imports of homopolymer PP was the launch of Poliom and Tobolsk-Polymer.

October imports of block copolymers of propylene (PP-block) rose to 4,300 tonnes to 4,000 tonnes in September. Total imports of PP-block to Russia in the first ten months in 2013 rose to 47,300 tonnes, from 45,700 tonnes because of the stronger demand in the sector of injection moulding.


Imports of stat-propylene copolymer (PP-random) in October was about 3,700 tonnes against 3,200 tonnes in September. Total imports of PP-random to Russia decreased by 31,000 tonnes, from 41,800 tonnes in 2012 because of the weaker demand in the sectors of injection moulding and pressure pipes.

External supplies of other polymers of propylene in October fell to 3,200 tonnes, from 3,800 tonnes in the previous month.
In general, the external supply of polymers of propylene totalled 31,300 tonnes in the first ten months of the year, from 28,700 tonnes year on year.


MRC

MOSCOW (MRC) -- German Lanxess posted a drop of more than a quarter in adjusted core earnings, hurt by lower prices for its main product, synthetic rubber for tyres, and weak overseas currencies, said Reuters.

The world's largest maker of synthetic rubber said third-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 26.4% to 187 million euros (USD251 million), still beating the 179 million euro average estimate in a Reuters poll.

At its Performance Polymers rubber unit, which accounts for more than half of group sales, weak demand and lower costs for the main petrochemical raw material butadiene led to a 19 percent decrease in product prices.

"Lanxess expects the market environment to remain difficult, especially for the automotive and tyre industries," it said.

Lanxess, whose former parent Bayer invented synthetic rubber, is cutting costs, plans to shed businesses with about 500 million euros in annual sales, and is looking into diversifying away from volatile rubber markets.

French tyre maker Michelin last month warned an emerging-market currency slide would hit earnings this year, while Goodyear, the top U.S. tyre maker, said there were no signs of a significant improvement in Europe.

Lanxess, which also makes ingredients for pesticides, leather chemicals and durable plastics, said it expected EBITDA excluding one-off items of 710-760 million euros for the full year. It had previously seen a range of 700-800 million euros.

As MRC wrote before, Lanxess celebrated the opening of its first production facility in Russia. In the new plant at the Lipetsk site, Lanxess subsidiary Rhein Chemie manufactures polymer-bound rubber additives for the markets in Russia and the Commonwealth of Independent States (CIS), primarily for the automotive and tire industries. A production facility for the bladders used in tire production is to be added in 2016. The overall investment volume in euros amounts to a seven-digit figure and 40 new jobs will be created at the new plant in the medium term.

Lanxess is a leading specialty chemicals company with sales of EUR 9.1 billion in 2012 and roughly 17,400 employees in 31 countries. The company is currently represented at 50 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC

MOSCOW (MRC) -- Chevron Phillips Chemical has completed its study to expand normal alpha olefin (NAO) capacity at its Cedar Bayou plant in Baytown, Texas, said Upstreamonline.

As such, the company has received approval to proceed with detailed engineering, design and procurement of long-lead equipment. The capacity expansion is targeting a 20% minimum increase in a phased approach. Final project approval will be sought in the first quarter of 2014.

Construction would be targeted to commence in the first quarter of 2014, and the project would be completed in the second quarter of 2015.

"This is a critical milestone in meeting our goals to remain a consistent and reliable supplier to our customers and to meet their growth strategies," said Mitch Eichelberger, general manager of normal alpha olefins and polyalphaolefins for Chevron Phillips Chemical.

"We are well-positioned to take full advantage of the abundant resources from shale resource development and to support our customers as they continue to grow their businesses."

Normal alpha olefins and their derivatives are used extensively as polyethylene co-monomers, plasticizers, synthetic motor oils, lubricants, automotive additives, surfactants, paper sizing, and in a wide range of specialty applications.

As MRC wrote before, Chevron Phillips Chemical and refiner Phillips 66, has finalized the sale of its Chinese polystyrene business to Grand Astor Ltd.In the deal, Chevron Phillips is selling its affiliate company Chevron Phillips Chemical (China) Co. Ltd., which owns a polystyrene plant located in Zhangjiagang, China.

Chevron Phillips Chemica, headquartered in The Woodlands, Texas (north of Houston), US,l is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, piping, and proprietary plastics. Chevron and Phillips 66 each own 50% of Chevron Phillips Chemical.

MRC