Westlake Chemical plans ethylene IPO

MOSCOW (MRC) -- Westlake Chemical Corp., the US plastics maker controlled by the billionaire Chao family, has separated its ethylene assets into a tax-advantaged venture in which it plans to sell shares to the public, said Hydrocarbonprocessing.

The master-limited partnership (MLP) includes three US ethylene plants and a 200-mile (322-km) ethylene pipeline. Ethylene, the most common petrochemical, is used to make products from plastic bottles to autoparts and pipe.

Westlake is creating the chemical industry's first MLP after the Internal Revenue Service in October 2012 ruled that companies converting ethane and other natural gas liquids (NGL) into olefins like ethylene can classify themselves as such. The partnerships, common in the pipeline industry, generally do not pay income taxes at the corporate level.

Westlake will own 90% of the venture's operating company, leaving the remaining 10% as the MLP's sole revenue source, according to the filing. The unit will sell Westlake ethylene for making plastics at a 10 cent-per-gallon premium over production costs.

The move comes as earnings at US ethylene producers, from Westlake to Dow Chemical Co., are near record levels after a shale boom created plentiful and cheap supplies of NGL. That provides a cost advantage over producers in Asia and Europe, where oil-derived naphtha is the main feedstock.

As MRC informed before, Westlake Chemical held a dedication ceremony on Wednesday for its new chlor-alkali plant in Geismar, Louisiana. This new chlor-alkali plant has the capacity to produce 350,000 electrochemical units (ECU's) annually and utilizes state of the art membrane technology. The plant is adjacent to the existing vinyl chloride monomer (VCM) and polyvinyl chloride (PVC) facilities at the Geismar complex and has added approximately 70 full-time positions at the site.

Westlake Chemical Corporation is a manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC resin and PVC building products including pipe and specialty components, windows and fence.
MRC

MOSCOW (MRC) -- The import duty on imports of terephthalic acid (PTA) and its salts (CU HS Code 2917 36 000 0) into the countries of the Customs Union will be increased to 5% from 1 May, according to ICIS-MRC Price report.

Russian producers of polyethylene terephthalate (PET) had a preferential rate of 0% from 01.05.2013 to 30.04.2014 (inclusive). The duty growth from May 2014 will hit PET production costs. This change will primarily affect and weaken Solnechnogorskiy Senezh. In its turn, SIBUR group (Tver-PETF and Polief) has its own PTA production. Alko-Naphtha, Russia's largest consumer of imported PTA, will be also exempt from import duties because of the plant's location in the free economic zone.

According to ICIS-MRC Price report, last week's PTA prices in China dropped by USD5-6/tonne to USD880- 883/tonne CFR. Buyers (PET producers) and lower spot prices of the main feedstock (paraxylene) put pressure on prices.
MRC

MOSCOW (MRC) - Imports of polyvinyl chloride (PVC) to Kazakhstan increased by 67% and reached 11,600 tonnes in the first three months of this year, according to MRC DataScope report.
PVC imports to Kazakhstan were about 3,800 tonnes in March, compared with 3,500 tonnes in February. Total PVC imports to the local market grew to 11,600 tonnes in the first three months of the year, compared with 6,900 tonnes in the same period a year earlier.

The main suppliers of PVC to Kazakhstan were Chinese producers Xinjiang Zhongtai and Xinjiang Tianye. Their share in the local market during the first three months of this year rose to 98%. Small volumes of PVC also were delivered from Turkey and South Korea.
MRC

MOSCOW (MRC) - Imports of polyethylene (PE) into Kazakhstan decreased by 32% in the first three months of this year, compared to the same period in 2013. The main reduction in the imports occurred for high density polyethylene (HDPE), according to MRC DataScope report.

PE imports to Kazakhstan increased to 9,000 tonnes in March, compared with 6,300 tonnes in February. Such a surge in March PE imports resulted from seasonally stronger demand for finished products. Total PE imports to Kazakhstan declined to 21,500 tonnes in Q1 2014, compared with 31,500 tonnes in the same period of 2013.
The structure of PE supplies over the reported period was as follows.

March imports of HDPE to the country grew to 6,500 tonnes, compared with 4,700 tonnes in January and 4,600 in February. The increase HDPE imports in March was based on the more active purchases of Russian pipe HDPE in anticipation of a seasonal increase in demand for finished products. HDPE imports to Kazakhstan totalled 15,800 tonnes in Q1 2014, compared with 27,500 tonnes in the same period of 2013.

The main suppliers of polyethylene were Russian producers with 13,200 tonnes delivered over the reported period (10,000 tonnes in Q1 2013). HDPE imports from other countries, including Asia, declined to 2,600 tonnes in Q1 2014, from 13,600 tonnes in Q1 2013 because of 10% imports duty adopted on pipe PE from 1 January 2014.


Imports of low density polyethylene (LDPE) grew to 2,200 tonnes in March, compared with 1,400 tonnes 2.2 million tonnes in February on the back of active purchases of Russian LDPE from local producers of films. LDPE imports to Kazakhstan totalled 4,800 tonnes in the first three months of 2014, compared with 3,000 tonnes in thew same period a year earlier. Key suppliers of LDPE were Russian producers, with 90% share in total LDPE imports over the reported period.

March imports of linear low density polyethylene (LLDPE) rose to 412 tonnes, from 332 tonnes in February. Total LLDPE imports to Kazakhstan were about 920 tonnes in the first three months of the year, compared with 1,200 tonnes in the same period a year earlier. Key suppliers of LLDPE in Kazakhstan continued to be producers from Asia and Uzbekistan.


MRC

MOSCOW (MRC) -- Imports of polyethylene terephthalate (PET) into Kazakhstan dropped in the first quarter of 2014 by 13% year on year and totalled 12,700 tonnes, according to ICIS-MRC Price report.
Supplies of Korean material increased in the first quarter of 2014. The share of Korean PET rose to 65%, and its imports were 8,300 tonnes. Earlier, Kazakh converters traditionally preferred Chinese grades. Thus, Chinese PET accounted for 71.3% in 2013.
At the same time, imports of PET surged in March. Thus, March PET imports more than tripled from February to 6,300 tonnes. The increased imports were caused by companies' preparation to a spring season and growing sales in the PET preforms market in spring. However, importers said the tenge devaluation, conducted by the Central Bank of Kazakhstan in February, hit hard buying activity. Market sources said April imports would drop from March, companies would operate, using existing stocks.

MRC