Formosa Plastics mulls new ethane-based project in Louisiana, US

MOSCOW (MRC) -- Formosa Plastics Corp, the nation’s largest producer of polyvinyl chloride, said that it is considering building a factory to make 1.2 million tonnes of ethylene a year in the US state of Louisiana, using shale gas, said Taipeitimes.

The company did not disclose how much it might invest because it needs to conduct further studies to evaluate the project, Formosa Plastics chairman Lee Chih-tsuen said in a speech to the company’s employees in Greater Kaohsiung.

Lee made the statement a day after Louisiana Governor Bobby Jindal visited the company’s headquarters in Taipei.
"The governor called on us to invest not only in Texas, but also in Louisiana, because the tax rate in the state is the same as in Texas, while gas prices in Louisiana are actually lower," Lee said.

To utilize shale gas in the US, the company is planning to invest USD3 billion in Texas to set up a facility that would produce 2 million cubic meters of gas annually, 1.2 million tonnes of ethylene, 600,000 tonnes of propylene and 400,000 tonnes of high-density polyethylene, Lee said. He added that the project is expected to be completed in the first quarter of 2017.

The company plans to process ethylene and propylene in the US instead of shipping these products to Asia, because of the high cost of transporting them.

Ethylene production in the Middle East accounts for about 17% of global ethylene production, and the percentage is not likely to be more than 20% in the future because there is not a lot of cheap gas to use in the region, he added.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company"s chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) - Russia's imports of polyvinyl chloride PVC fell to 367,000 tonne in 2013 compared with 411,000 tonnes in 2012 on increased domestic production and weaker demand from profiled mouldings producers, according to MRC DataScope report.

PVC imports are expected to be cut further in the current year because of a gloomy demand for finished products made of PVC and oncoming launch of new capacities of RusVinyl in Nizhny Novgorod region.

Last year was quite difficult for the Russian PVC market. Excess imports in the first half of the year led to a serious oversupplied market, with record highs in March and April exceeding 54,000 tonnes. As a consequence, competition between importers and producers has tightened due to the weak demand.
The situation changed in the second half of the year on the back of devaluation of the rouble against the dollar. Rise of the dollar and lower PVC prices in the domestic market made many converters refrain from imports and focus only on the Russian resin. Traders also cut their purchases of imported PVC.

As a consequence, imports of resin to Russia decreased in September - December 2013 to the level of 2010. Although Russia had to reduce import duties on large volumes polymers to 6.5% by 2015 in the framework of WTO, import duties on SPVC remained at 10%, whereas import duties on other polymers, such as polyolefins, were reduced to 9.1%. The question remains open whether the duties will be reduced in September 2014.

European PV producers reduced their supplies to Russia in 2013 to 10% from the total Russia's PVC imports to 36,500 tonnes. Imports of US resin also reduced to 179,200 tonnes in 2013, from 193,400 tonnes in 2012. Only Chinese producers managed to increase its presence in the Russian market last year. Imports of Chinese acetylene PVC increased by 42% to 136,300 tonnes in 2013.

Russia's imports of PVC is expected to be cut further in 2014. Seasonally weak demand and and the volatility of the rouble against the dollar will put pressure on the market in the first half of the year. In the second half of this year PVC imports will be affected by the oncoming launch of RusVinyl - joint venture of SIBUR and Solvin with an annual SPVC capacity of 300,000 tonnes. According to unofficial information the production to be launched in July 2014. Imports volumes will be largely depend on the data of the launch of new Rusvinyl.

MRC

MOSCOW (MRC) -- Imports of titanium dioxide (TiO2) surged in 2013 by 14% compared with the same period of 2012. MRC analysts reported the capacity of Russian TiO2 market grew up to 74,800 tonnes last year, according to MRC DataScope.

The overall consumption of rutile TiO2 rose to 73,500 tonnes, while imports of anatase titanium dioxide fell by 600 tonnes to 1,300 tonnes.

MRC analyst Igor Grishchenko said Russia does not have domestic production of titanium dioxide. Thus, needs of paints and coatings market, plastics converters and paper producers are fully met by imports.

To date, the largest consumers of titanium dioxide in Russia are producers of paints and coatings. This sector accounts for over 80% of imported TiO2. The second place is occupied by producers of rigid compounds, which account for about 16% of the total consumption. The remaining 4% of the market is divided among producers of paper, building materials, household chemicals and other processing industries.

23 countries supplied titanium dioxide to Russia over the said period. Ukraine is the largest supplier of TiO2 - more than 24,000 tonnes in 2013. Crimea TiOx- 220 grade of Crimean Titan production and Sumtitan R-202 and Sumtitan R-206 grades of Sumykhimprom production enjoyed the greatest demand in the market among a wide range of Ukrainian grades. Imports of there grades accounted for 6,800 tonnes, 5,200 tonnes and 4,600 tonnes, respectively.

The five major suppliers also include the United States, China, Belgium and Finland. The most recognizable and popular grade in the Russian market is DuPont's Ti-pure grade (total imports in 2013 - 14,300 tonnes).

Pigments market should be mentioned separately. As per MRC's estimates, the capacity of pigments market in Russia totalled 17,800 tonnes in 2013.

MRC

MOSCOW (MRC) -- Polystyrene (PS) imports dropped in 2013 by 18.5% and totalled 74,000 tonnes. Lower purchases in foreign markets were registered in the Russian market for the first time during three years, according to MRC Annual Report.

MRC analyst Igor Grishchenko said falling shipments of imported general purpose polystyrene (GPPS) were mostly caused by increased production of polymer at Nizhnekamsneftekhim, as well as the increased output at "Gazprom neftekhim Salavat" and PGProf. At the same time, there was a shortage of high-impact polystyrene (HIPS) in the Russian market in 2013, which local converters compensated by imports.

The overall GPPS imports into Russia fell by 28% last year and totalled about 46,500 tonnes. The construction sector, electronics and packaging were leaders in imports of GPPS grades. These sectors accounted for 40%, 33% and 24%, respectively.

HIPS imports rose by 6% to 27,500 tonnes. The largest consumers of imported HIPS in the country were still producers of electrical engineering. These companies accounted for more than 85% of total HIPS imports last year.

Edistir ICE PDR 830D grade of Polimeri Europa production remained the most popular imported HIPS grade in Russia (8,900 tonnes in 2013). Styrolution's Polystyrol 145D was the most popular grade among the imported GPPS grades (8,500 tonnes in 2013). More detailed statistics on the market balance and the most popular PS grades can be found in MRC ScanPlast.

MRC

MOSCOW (MRC) -- Russian independent Sika has said it expects to report production up 1.9% for 2013 as efforts to arrest falling output in West Siberia and expand overseas start to bear fruit, said Upstreamonline.

Lukoil's overall production fell in 2010 and 2011, and registered a 0.5% increase in 2012. The Moscow-headquartered explorer said it increased production to around 911 million barrels in 2013, according to preliminary figures.

The output includes oil production up 0.9% to around 635 million barrels and gas production up 4.9% to 25.8 billion cubic metres. Reserve replacement for the year is expected to be 112%, Lukoil said.

Lukoil is planning exploration in Iraq, West Africa, Romania, the Baltic Sea, the Komi Republic, Samara Oblast and the northern Caspian Sea over the coming year.

It is aiming to see commercial hydrocarbon production start at Iraq’s giant West Qurna-2 field during the first half of 2014. The explorer announces its full results for 2013 in March.

As MRC wrote before, OAO Lukoil subsidiary Lukoil Neftochim Burgas AD has secured a EUR420 million line of credit from five international banks to finance the modernization of its Burgas, Bulgaria, refinery along the Black Sea.
MRC