Meeting with Serbian Government about HIP-Petrohemija future

MOSCOW (MRC) -- The chances of HIP-Petrohemija’s survival should be sought in integrated development of the oil refinery’s and petrochemical processing, as it was concluded Wednesday, February 12, during the meeting held with the Serbian Government which was attended by Minister of Energetics Ms Zorana Mihajlovic and Minister of Finance Mr Lazar Krstic, their collaborators, general director of HIP-Petrohemija – Mr Velimir Unkovic, and representatives of the Independent Trade Union and Engineers and Technicians Trade Union, said the producer in its press-release.

It has been agreed that HIP-Petrohemija should prepare Planning and Analyses for Profitable Opeartions of the Company, and after that the representatives of the Serbian Government and competent ministries shall have another meeting with NIS and HIP-Petrohemija where the possibilities of cooperation between these two comapanies shall be discussed.

It has been concluded that the deadline for completing the company restructuring procedure shall be prolonged, and that the issue of gas supply to HIP-Petrohemija has to be urgently solved.

We remind that, as MRC reported previously, HIP-Petrohemija had approved the investment project in late August to increase the production capacity of HDPE, for the financing of which the company will allocate EUR2.4 million from its own resources.

NIS is one of the largest integrated oil and gas companies in South-Eastern Europe, engaged in exploration, production and refining of oil and gas, and marketing petroleum products. Major shareholders are Gazprom Neft (56.15%) and the Government of the Republic of Serbia. (29.88%). The rest of the shares are owned by minority shareholders.

HIP Petrohemija owns petrochemical complexes located in Pancevo, Elemir and Crepaja. The core business is the production of HDPE, LDPE and other petrochemical products. The annual production capacity of the company is 700,000 tonnes. As per MRC information, the HIP Petrohemija"s products are not significantly represented in the Russian and Ukrainian HDPE markets.
MRC

Severe winter in US impacts petrochemical deliveries

MOSCOW (MRC) -- Harsh winter in USA has wreaked havoc on the logistics of the petrochemical business in first few weeks of 2014, said Plastemart.

Heavy snow and freezing temperatures delayed delivery times by 7-10 days of railcars, trucks and barges during one of the roughest seasons in recent memory. Along with the Northeast and Midwest, the Gulf Coast has also been hit with colder-than-usual temperatures. The Gulf Coast, producing a significant portion of US petrochemicals, has been hit with ice, sleet and freezing temperatures in January and February.

Earlier this month, Equistar Chemicals declared a force majeure event for all North American polyethylene grades, citing logistical delays due to severe weather. Equistar, an arm of LyondellBasell, told customers it was evaluating the impact on transportation facilities and carriers, and warned customers they could experience delays in receiving shipments.

Their customers are not alone. Industry sources who buy and sell products throughout the petrochemical chain have said the wintry conditions have posed a challenge. Some PVC suppliers were heard working to time truck deliveries around winter storms. Diethylene glycol spot prices have moved higher in North America, according to sources, in part because railcar traffic from Canada has been slowed, and also because of heavier demand for glycols from antifreeze makers. And suppliers who rely on barges to get chemicals to customers have often found themselves having to contend with frozen stretches of river. Multiple chemical producers in the Midwest have also been heard implementing sales allocations, due largely to weather-related production issues. A US polypropylene trader noted that the winter weather is also impacting Americans' buying appetite for goods made from chemical-based materials, and as a result upstream domestic demand could be impacted.

The National Weather Service has predicted snow, showers and freezing temperatures for much of the eastern US in the coming days.
MRC

Shale gas development in USA and China, to boost LPG demand

MOSCOW (MRC) -- Government initiatives to promote the use of LPG as an auto fuel, especially in developing regions, are expected to boost the global market, said Plastemart.

Governments of major emerging economies such as India, Thailand, Turkey, Indonesia and other countries have been taking initiatives to promote the use of LPG in domestic applications such as cooking and space heating.

In addition, the increasing number of auto gas vehicles - owing to cost benefits offered by LPG over conventional fuels such as gasoline and diesel - has led to an increase in LPG consumption globally. Various benefits such as low cost, low carbon emission and other operational benefits are expected to push the global demand. Refineries were the major source segment of LPG with 45.5% of the total demand in 2011. LPG is mainly recovered as a byproduct of crude oil refining. In Asia Pacific major demand is derived from refineries where as in North America it is sourced from non-associated gas. Development in shale gas resources, especially in the U.S. and China, is expected boost the LPG demand from non associated gas source in the near future.

As MRC reported previously, Dow Chemical, Formosa Plastics, Chevron Phillips Chemical, ExxonMobil and Nova Chemicals unveiled their expansion plans in North America on shale gas deposits in the Marcellus Shale Formation in New York, Pennsylvania, Ohio as well as a favourable gas price.

Out of various applications, the residential/commercial sector emerged as the key market segment and accounted for more than 45% of the total share in 2011. As well as being the biggest segment, residential/commercial is also expected to be the fastest growing application for LPG, followed by auto fuel application. The auto fuel segment is also expected to show substantial growth and is expected to grow at a CAGR of 4.4%, in terms of revenue from 2012 to 2018. Reducing reliance on conventional auto fuels such as gasoline and diesel is expected to boost the demand for auto gas over the forecast period. Growth in petrochemical industries is expected to push the LPG demand in future. Petrochemical industry has been expected to continue absorbing the price sensitive demand for LPG due to its oversupply in the market.

Asia Pacific dominated the LPG market and accounted for 35% of the global demand in 2011. Asia Pacific is also the fastest growing market for LPG which is expected to grow at CAGR of 4.8% from 2012 to 2018. The region was followed by North America and Europe that together accounted for 38.9% of the overall market in 2011. Growing NGL (natural gas liquids) development in the region is expected to boost the LPG production in North America. LPG consumption is also expected to increase in the Middle East and Africa owing to growth in petrochemical sector, where it is used as feed stock.
MRC

Helioplast opens new plastic packaging plant in Bosnia

MOSCOW (MRC) -- Plastic packaging producer Helioplast has opened a new plant in Graeanica, Bosnia and Herzegovina, reported Polyestertime with reference to the municipal authorities' statement.

Earlier this year, UK-based rigid plastic packaging manufacturer RPC took over control over Helioplast under a L8.4m (EUR10.2m) deal.

The Bosnia company’s management retained a 20% share in Helioplast, the statement said.

Suad Helic, managing director and co-owner of Helioplast, was quoted as saying that the manufacturer is planning to implement further investments and increase its workforce.

Helioplast supplies a wide range of buckets, boxes and other plastic packaging products to the food, chemical and paint industries. The injection moulder produces packaging ranging from 150ml to 18l with the use of PE, SBS, ABS, PA and other plastics.

We remind that, as MRC wrote before, flexible packaging giant Amcor Ltd. is looking to expand in India through another acquisition. Amcor is negotiating with Chennai, India-based Murugappa Group to buy its Tuflex division, which makes flexible packaging.
MRC

Prices of imported PET dropped for Ukrainian buyers

MOSCOW (MRC) -- Import prices of Chinese polyethylene terephthalate (PET) for Ukrainian buyers were reduced by USD10/tonne this week, but demand remained weak, according to ICIS-MRC Price report.

Companies' representatives and PET converters said prices of Chinese PET grades, including delivery to the Ukrainian port, were heard in the range of USD1,350-1,380/tonne CIF Odessa, excluding VAT. After a long week-end in China, companies were willing to make concessions to their customers in order to stimulate demand.

Ukrainian traders also said sales of imported PET were very sluggish. All importers are experiencing a dollar shortage in the country. Transactions plummeted in the commodity market because of the legal restrictions imposed by the National Bank of Ukraine (NBU's Act No. 49 dd. 07.02.2014) for purchasing of foreign currency. Converters and traders are experiencing difficulties with buying of the dollar and the withdrawal of foreign currency overseas, in order to settle dollar contracts. Some converters suspended PET chips purchasing this week and continued to use only their stocks.

Offer prices of Middle Eastern PET remained stable.

At the same time, prices of Belarusian and Lithuanian PET were heard in the domestic market at UAH17,000-17,300/tonne CPT Kiev, including VAT, following the increase in foreign exchange rates. A trader said the price rise in UAH equivalent in February was poorly received by customers. Seasonally weak demand was also one of the causes of a sales slump, the source said.
MRC