PET consumption in Ukraine decreased by 23% In the first half of 2014

MOSCOW (MRC) - Capacity of Ukrainian polyethylene terephthalate (PET) market in the first half of 2014 decreased by 23% compared to the same period a year earlier. This was indicated by the decrease in Ukraine's PET chips imports, which fell to 77,600 tonnes over the reported period, according to MRC DataScope.

The fall in PET imports in the first half of this year resulted from a weaker demand in the market of beer and soft drinks in Ukraine. Ukrainian companies lost a large market in Crimea of finished products in the high season. Producers of water were sharply affected by the loss in the sales in the Crimean peninsula this summer.
PET consumption was also significantly decreased in the Donetsk and Lugansk regions.

Converters reported an increased competition in the domestic market. At the same time, demand in Central and Western Ukraine, according to the preforms producers, continued to be normal.

The most popular brands in the first six months of the year in Ukraine were Jade CZ-302 by Jiangsu Sanfangxiang production, HY-W01 by Shanghai Hengyi Polyester production, and WK801 from Zhejiang Wankai, with imports volumes over the reported period totalled 11,000 tonnes, 10,000 tonnes and 9,7 tonnes respectively.

MRC

MOSCOW (MRC) -- Finnish chemicals company Kemira said on Tuesday it would buy rival Akzo Nobel's paper chemical business for EUR153 million (USD209 million), a move analysts welcomed as a good deal, said Reuters.

Kemira said it expected more than 15 million euros in annual synergies from the purchase of the unit. "153 million euros is a good price from Kemira's point of view, it gives good preconditions to create more shareholder value," research firm Inderes analyst Antti Viljakainen said.

Last year, Akzo's paper chemical business had revenues of 243 million euros and operating profit before interest, taxes, depreciation and amortisation (EBITDA) reached 23 million, Kemira said. The bulk of its sales came from packaging board grade chemicals. The deal is expected to close in the first quarter of next year.

As MRC wrote before, AkzoNobel has completed the sale of its Primary Amides chemicals business to PMC Group effective December 31, 2013.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

MOSCOW (MRC) -- Russian crude oil exports declined to the lowest level in at least six years as the nation’s refiners carried out less maintenance, boosting fuels output, said Hydrocarbonprocessing.

Crude shipments dropped 5.3% to 4.95 million bpd in the six months to June from a year earlier, according to CDU-TEK, part of the Energy Ministry. Production rose 1% in the same period. Russian refiners including OAO Rosneft reduced maintenance programs in the first half of the year, halting 15% less capacity than a year ago. That enabled them to process more crude as lower export duties on fuel oil and diesel incentivize the output of those products, according to KBC Energy Economics and UralSib Financial Corp., an investment bank.

"Russian refinery crude intake was growing strongly in the first half of the year as the Spring refining maintenance was very mild," David Wech, managing director at JBC Energy, said July 3 in an e-mail. "This explains the decline in crude oil exports."

Fuel oil production gained 5.8% in the year to May, reaching a five-year high despite billions of dollars in investment for government-mandated upgrades intended to boost yields of premium products such as diesel and gasoline. Fuel oil, a more polluting fuel used in shipping and power production, accounted for 39% of refinery output, ministry data show, compared with less 10% in Germany.

Russia plans to increase fuel oil export duties, aiming to reach parity with the crude levy by 2015, as it seeks to encourage oil companies to upgrade Soviet-era facilities. The government may not meet the 2015 deadline, Finance Minister Anton Siluanov said last month. Most crude exports this month are taxed at USD385.20/ton, or about USD52.55/bbl, compared to USD254.20/ton for fuel oil, according to Finance Ministry pricing data. Fuel oil duties were raised relative to crude in 2011.

Refiners will carry out more work this quarter, when a daily average of 512,000 bbl will halt, up from 279,000 bbl in the first six months of 2014, ministry data show.

As MRC wrote before, Lukoil will cut spending to reduce its dependence on international debt markets, billionaire shareholder Leonid Fedun said in an interview. It also plans to build a cash reserve of USD30 billion over the next five years to guard against the risk of further disruption to capital markets and to finance future acquisitions. To boost cash, the company will offer at least USD1 billion in shares in Hong Kong as early as next year and reduce capital spending by a quarter.

MRC

MOSCOW (MRC) -- Russian state oil producer Rosneft will shift its focus to new projects from acquisitions, at a time when the Russian economy is grappling with US and European sanctions, according to the company's chief financial officer, said Upstreamonline.

"We are number one by size, number one by growth, number one by reserve base, number one by efficiency: we don't have to buy more", the Financial times quoted Svyatoslav Slavinsky as saying. The company was looking at developing new oil resources, from east Siberia to the Arctic Sea, and intended to start drilling along with US major ExxonMobil this summer as it looked to shore up its plans of posting a 30% jump in production by 2020, the paper quoted the chief financial officer as saying.

The drilling by the two companies in the Arctic Kara Sea had been scheduled to begin in mid-August, but it could be moved forward depending on the weather, Rosneft chief executive Igor Sechin told Reuters last month. Slavinsky told the FT that Rosneft was aiming to double its total oil and gas output to 10 million barrels of oil equivalent per day in the next 20 years.

Slavinsky's optimistic comments come at a time when Russia has been hit by sanctions from the United States and European Union imposed over Ukraine, that have prompted investors to pull out of a country where leaders have used the punitive measures to call for a more self-sufficient course for the economy. Rosneft had seen "no impact whatsoever" from western sanctions, Slavinsky told the FT, adding that a safety net of cash on its balance sheet, which stood at USD20 billion as of 31 March, would allow it to overcome any volatility in the financial markets due to the sanctions. The company could not be reached for a comment outside of regular business hours.

As MRC wrote before, the head of Russia's top oil producer Rosneft asked the government to intervene and help it get access to a Gazprom's trunk gas pipeline, vital for the liquefied natural gas project it is planning with ExxonMobil. Igor Sechin, at a government meeting, said both Gazprom and Shell, which operate a gas project in the Pacific island of Sakhalin, were denying access to a trunk pipeline for its LNG project.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

MOSCOW (MRC) -- Oxea has declared force majeure for n-butanol, n-butyl acetate, n-propanol and n-propyl acetate following a malfunction in the production process at its site in Bay City, Texas, said Hydrocarbonprocessing.

Oxea Corp. has encountered a significant production issue at its facility in Bay City, Texas, the company announced on Monday. Due to a malfunction in the production process that could not be avoided, Oxea said it has been unable to resume full production.

As a result, Oxea has been forced to make a declaration of force majeure, effective immediately, for the following products: n/i Butanol, n/i Butyl Acetate, n-Propanol, n-Propyl Acetate.

Oxea says it is currently evaluating the effects of this event on its production capability and ability to supply. All inventories of oxo and ester products are extremely low throughout the supply chain, according to company officials.Customer orders are being carefully monitored in an attempt to keep delays to a minimum.

As MRC wrote before, Oxea, part of Oman Oil Group, says it is planning to increase its European capacity for its Oxsoft GPO dioctyl terephthalate (DOTP) by 50,000 metric tons by the end of 2015. DOTP is a general-purpose plasticizer used in a wide range of applications such as construction, automotive and flooring.

Oxea is a global manufacturer of Oxo intermediates and Oxo derivatives, such as alcohols, polyols, carboxylic acids, specialty esters, and amines. These products are used for the production of high-quality coatings, lubricants, cosmetics and pharmaceutical products, flavorings and fragrances, printing inks and plastics. Oxea, based in Oberhausen, Germany, 1,400 people worldwide and had annual sales of 1.5 billion euros (USD2.06 billion) last year.
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