China to launch polypropylene futures

MOSCOW (MRC) -- China's top securities regulator said on Friday it has approved trade of polypropylene (PP) futures contracts at the Dalian Commodity Exchange (DCE), said Globaltimes.

The exact date of the launch of the futures will be decided by the DCE, said Zhang Xiaojun, spokesman of the China Securities Regulatory Commission.

China is the largest PP consumer in the world with an average annual growth rate of more than 10%. In 2012, PP consumption was close to15 million tonnes, with applications in packaging, household appliances, textiles, automobiles and construction.

Domestic PP users have been pushing for PP futures to reduce market volatility and strengthen China's pricing power on the international market.

Currently, two plastic products LLDPE and PVC are traded on the DCE.

As MRC wrote before, global production of polypropylene exceeds 65 million metric tons annually; UAE is one of the world's largest producers of polypropylene - the most common plastic product used in manufacturing and packaging.

Saudi Sipchem Q4 profit rises 25%, misses forecasts

MOSCOW (MRC) -- Saudi International Petrochemical Company's (Sipchem's) interim financial results for the period ended Dec. 31, 2013, shows its net profit during fourth quarter of 2013 amounted to SR196.8 million compared to SR157.7 million for the same quarter in 2012, with an increase of 24.8% and compared to SR185.2 million for the previous quarter with an increase of 6.3%, said the producer in its press release.

Net profit during 12 months amounted to SR620.5 million compared to SR601.2 million for the same period last year with an increase of 3.2%. Gross profit during 12 months amounted to SR1.30 billion compared to SR1.27 billion for the same period last year with an increase of 2.3%.

Operational profit during the 12-month period amounted to SR1.17 billion compared to SR1.14 billion for the same period last year with an increase of 2.9%.

Earnings Per Share (EPS) during the 12-month period was SR1.69 compared to SR1.64 for the same period last year.
Reasons for increase in the quarter compared with same quarter last year is due to the increase in some of the company products' prices, especially methanol, and accordingly increase in profit margins in addition to decrease in financing costs.

Reasons for increase for the period compared with same period last year is also caused by the slight increase in the profits due to improvements in some of the company products' prices, especially methanol, taking into consideration the decrease in production and sales quantities as a result of the shutdown of company plants during Q1 for planned turnaround activities.

Reasons for increase for the quarter compared with previous quarter is as well due to the increase in most of the company’s products prices in addition to decrease in financing costs. Certain prior period amounts have been reclassified to conform with the presentation of the current period.

As MRC wrote before, Sipchem Chemicals Company (SCC) signed on July 22, 2013 an incorporation agreement with Hanwha Chemicals Corporation to form a new company, under name of "Saudi Specialty Products Company" for establishing conversion projects in Saudi Arabia.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.

Russian PC market increased by 5% in 2013

MOSCOW (MRC) - Russia's consumption of PC-granulate increased to 97,700 tonnes in 2013, up 5% compared to the level in 2012, according to MRC ScanPlast.

Exports of PC-granulate from Russia decreased to 19,000 tonnes in 2013, down 35% year on year. The largest share of Russia's exports occurred for injection moulding grades of PC to China. PC imports to Russia totalled 45,000 tonnes in 2013, down 21% year on year.
The largest share in last year's imports occurred for European injection moulding and extrusion PC-granulate.
Kazanorgsintez produced about 72,000 tonnes polycarbonate in 2013, up 11% year on year, with main volumes occurred for injection moulding and extrusion grades.

It is interesting to note that Russia's PC production in 2013 increased in line with the reduction in imports and exports, reflecting increased interest of Russian consumers to domestic PC granulate.

Suffice it to say that average monthly capacity utilisation at Kazanorgsintez was 105% in 2013. Kazanorgsintez plans to begin production of blow moulding polycarbonate to the domestic market in 2014.


HDPE production in Russia grew by 38% in 2013

MOSCOW (MRC) -- Production of high density polyethylene (HDPE) in Russia rose by 38% last year. All five plants showed the growth in production, with exception of Nizhnekamskneftekhim, according to MRC ScanPlast.

The overall HDPE output by Russian producers increased to about 1 million tonnes, while the figure was about 733,000 tonnes a year earlier. Such a low figure of HDPE production in 2012 was caused by the prolonged outage at Stavrolen.

The HDPE production structure in 2013 looks the following way.

Kazanorgsintez (part of TAIF group), the largest polyethylene (PE) producer in Russia, raised its HDPE production by 6% in 2013 from 468,000 tonnes in 2012.

Stavrolen (part of LUKOIL) increased its HDPE production to 309,000 tonnes last year, while this figure was about 70,400 tonnes in 2012, because of a long outage after a failure in December 2011 (the plant resumed HDPE production only in October 2012).

The third largest Russian HDPE producer - Nizhnekamskneftekhim (part of TAIF group) reduced production to 171,000 tonnes in 2013, down by 5% from 2012. Technical issues at the end of the year (October-December) caused cuts in production.

"Gazprom neftekhim Salavat" (part of Gazprom) managed to significantly increase its HDPE capacity utilisation last year. The plant's HDPE output in 2013 rose by almost half compared with 2012 and totalled about 73,400 tonnes.


PC imports to Russia fell by 21%

MOSCOW (MRC) -- The overall imports of polycarbonate (PC) chips to the Russian domestic market fell in 2013 by 21% from the previous year and totalled 45,000 tonnes, according to MRC DataScope.

At the moment, production of injection moulding goods for automotive industry and in electrical engineering, is the main sector of PC consumption in the Russian market. Overall, about 33,000 tonnes of injection moulding PC grades were imported to Russia in 2013, which accounted for 73% of the total imports. It should be noted that European material was the most poplular in this sector. Sabic, with its share of 71%, occupied the leading position among foreign producers last year. Consequently, Lexan 103R was the most popular grade in the market in 2013. About 15,000 tonnes of this grade entered the Russian market in 2013, which was 45% of the total imported injection moulding grades. The overall imports of injection moulding PC chips fell in 2013 by 22% from the previous year.

The sector of extrusion PC chips is the second largest sector. It reached 4,300 tonnes last year, accounting for almost 10% of all supplies to the national market. Production of cellular PC sheets and profiles for their installation is the main target market of processing of this material. The most popular producers in this segment were also Sabic and Bayer, with shares of 52% and 33%, respectively. Bayer's Makrolon ET3117 was the most popular grade in 2013. 1,600 tonnes of this grade arrived in the market last year, which accounted for 19% of the total imports of extrusion grades in 2013. Thus, European PC was the most popular imported material in the extrusion sector, as well as, in the injection moulding one. Such converters as Plastik Alliance, Carboglass, SafPlast preferred to use this material in their production. Imports of extrusion PC grades to the Russian market fell last year by 27% from 2012. However, this market has been constantly growing. A substantial part of the demand was met by the domestic producer - Kazanorgsintez.

The segment of blow moulding PC accounted for the remaining 17% of imports and totalled 3,300 tonnes. Bottles blowing (over 10 liters) is the main target market for this material in Russia. Unlike in the previous sectors, Asian producers occupied the leading position in this segment: Samyang (31%) and Mitsubishi (23%). Samyang's Trirex 3026 BL can be called the most popular imported blow moulding grade in Russia. It accounted for 31% of this segment's imports or more than 1,000 tonne. Imports of blow moulding material dropped in 2013 by 2% from the year earier. It should be mentioned that Kazanorgsintez's operated at full capacity in 2013 and its output exceeded 65,000 tonnes, while imports decreased. The plant produced injection moulding and extrusion grades, which were divided between export and domestic supplies, depending on market demand.

To date, the segment of extrusion PC grades is the most interesting for Russia, because it is connected with a considerable number of domestic converters - producers of cellular polycarbonate. The segment of the PC sheets and profiles has been constantly expanding not only in Russia, but also in the CIS countries. Therefore, products from Russian material may well take its niche there and compete with European material due to its lower cost.