Ukrainian LDPE market faced a shortage in late March

Moscow (MRC) - A significant increase in the price of low density polyethylene (LDPE) in the Ukraine, driven by the hryvnya devaluation, led to a significant drop in demand. However, Ukrainian market experiences a significant shortage of polyethylene, according to ICIS-MRC Price Report.

Significant depreciation of the national currency against the dollar, as well tightened conditions of currency purchases made Ukrainian companies sharply reduce the volume of LDPE imports, including Russia and Azerbaijan.

LDPE prices increased proportionally to the devaluation of hryvnya, which made local converters reduce PE purchases because of such a significant price rise.

However, converters faced a shortage of LDPE in the late March even amid weak demand for it. Supply of Russian LDPE to Ukraine reduced by almost one and a half times to 4,100 tonnes in the first two months of this year, from 7,800 tonnes in the same period of 2013. Supplies of Russian LDPE to the country over the three weeks of March was about 1,800 tonnes.

The second largest supplier of LDPE to Ukraine - Belarusian Polymir shipped quite a big volumes of the material (1,300 tonnes in February and 1,400 tonnes over three weeks in March), but the shortage continued to be felt in the market.

Russian producers announced further increase in LDPE price for April delivery to Ukraine, citing higher prices in the domestic market and scheduled maintenance works at the second largest LDPE producer - Kazanorgsintez. Although, Ukrainian company are not ready to accept Russian LDPE price increase because of the ongoing hryvnya devaluation. MRC analysts expect the shortage LDPE to be felt in the Ukrainian market in April too.

Price range for the 158 LDPE for CIS countries on the back of the dollar volatility in the last week of March was big enough at Rb21,000-23,000/tonne CPT Kiev, including VAT.
MRC

MOSCOW (MRC) - Imports of expandable polystyrene (EPS) to Russia decreased by 16% in January and February 2014, compared to the same period a year earlier, according to MRC ScanPlast.

Total EPS imports to Russia was 5,400 tonnes over the reported period. Statistics showed that local companies have been decreasing purchases of imported polystyrene and increased purchases in the domestic market.

The reason for the decline of imports was the high difference in prices between Russian and imported material. Spot prices of Russian EPS from SIBUR and Plastic (Uzlovaya) in February were in the range of Rb83,000-85,500/tonne CPT Moscow, including VAT.
At the same time, February prices of imported grades of EPS ranged from Rb86,000-93,000/tonne CPT Moscow, including VAT (depending on the country of origin).

Leader in EPS imports remained China, with the share of more than 57% from the total EPS supply in January and February.
Despite the overall decline in EPS imports, shipments of Chinese grades to the Russian market increased to 3,000 tonnes , up 40% from the same period in 2013.

Market participants reported a strong demand for styrene polymers in March. SIBUR announced price increase for EPS, effective from 1 April.
MRC

MOSCOW (MRC) -- IndianOil Corporation (IOC) is likely to call off its planned acquisition of the West Bengal government’s 40% in Haldia Petrochemicals Ltd (HPL) if The Chatterjee Group (TCG) chief Purnendu Chatterjee is appointed HPL chairman, people privy to the matter told Business Standard.

IOC had emerged the sole valid bidder for the state government’s stake in HPL, the second largest maker of polyethylene in India, in which TCG is a key private promoter. TCG has been at loggerheads with the state government to secure management control in HPL.

"We came out as a valid bidder and our intent is to gain management control in HPL. If that is not achieved, it hardly makes sense to go forward with our bid," a senior IOC official said, on condition of anonymity.

Sources said giving Chatterjee the post of chairman was vital for fund infusion into the company.

HPL’s net worth has been eroded due to continuous losses. It has been struggling to secure adequate naphtha to run the plant at full capacity.

HPL is a joint venture project having the government of West Bengal, The Chatterjee Group (TCG), and IOC as major stakeholders. The West Bengal government had decided to quit its showpiece project, Haldia Petrochemicals Ltd, as a shareholder by June 30 2013. IOC already holds close to 9% stake in HPL.

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are polyethylene (PE) and polypropylene (PP).
MRC

MOSCOW (MRC) -- Sinopec Shanghai Petrochemical has shut a high density polyethylene (HDPE) plant, as per Apic-online.

A Polymerupdate source in China informed that the plant was shut on March 26, 2014 owing to feedstock issues. A restart date for the plant could not be ascertained.

Located in Shanghai, China, the plant has a production capacity of 250,000 mt/year.

As MRC informed earlier, Sinopec Shanghai Petrochemical restarted its acrylonitrile (ACN) plant on December 25, 2013. It was shut on November 20, 2013 for maintenance turnaround. Located in Shanghai, China , the plant has a production capacity of 130,000 mt/year.

Besides, top Asian refiner Sinopec Corp won initial approval in October 2013 from China's top economic planner for a plan to build a USD10-billion refinery and petrochemical complex in Shanghai. Sinopec had started formal planning for the 400,000 barrels-per-day refinery and a 1 million tonnes-per-year ethylene project in a plan to curb pollution by shifting an old plant to Shanghai's southern edge.

Sinopec Corp. is one of the largest scale integrated energy and chemical companies with upstream, midstream and downstream operations. Its refining and ethylene capacity ranks No.2 and No.4 globally. The Company has 30,000 sales and distribution networks of oil products and chemical products, its service stations are now ranked third largest in the world.
MRC

MOSCOW (MRC) -- The Keltan Elastomers business unit of specialty chemicals group Lanxess will globally raise its prices for all of its Keltan EPDM grades (ethylene propylene diene monomer), effective April 1, 2014, reported the company on its site.

The price adjustment for EPDM is USD150/tonne.

EPDM, which is offered under the brand name Keltan, is used in the automotive industry for the manufacture of door sealants, hoses, belts or anti-vibration parts. The product is also used in plastic modification, wire and cable, construction and oil additives. Its properties include very low density, good resistance to heat, oxidation, chemicals and weathering as well as good electrical insulation properties.

As MRC wrote previously, Lanxess' KEL already raised its prices for all of its Keltan EPDM grades in Europe, Middle East and Africa from 1 February, 2014. The price adjustment for EPDM is EUR125/tonne.

The Keltan elastomers business unit is part of Lanxess’ Performance Polymers segment, which recorded sales of EUR 4.49 billion in fiscal 2013.

Lanxess is a leading specialty chemicals company with sales of EUR 9.1 billion in 2012. 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. Lanxess' sales totalled EUR 8.3 billion in 2013.
MRC