Clariant confirms outlook on solid Q2 results

MOSCOW (MRC) -- Speciality chemicals producer Clariant (Muttenz / Switzerland) has reported operating profit (EBITDA) of CHF 214m (EUR 176m) in the second quarter of 2014, up from CHF 211m in Q2 2013, as per the companie's report.

However, in local currencies, EBITDA increased by 9% year-on-year in the quarter. Operating margin in the period rose to 14% from 13.7% in the second quarter of 2013, thanks to higher gross margin and reduced selling, general and administrative costs, which more than compensated for a 1.5% point negative impact from exchange rate developments, the company said.

Sales in the quarter were CHF 1.53 bn, compared to CHF 1.54 bn in Q2 2013, but grew by 6% year-on-year in local currencies. Unfavourable development of the US dollar and Japanese yen, and emerging market currencies including the Brazilian real and Indian rupee, translated into the 1% reduction in sales in Swiss francs.

In the second quarter of 2014, EBITDA margin before exceptional items in the plastics and coatings business area of 14.0% was lower than the second quarter of 2013, as higher volumes could not compensate for unfavourable currency developments. Sales in the business increased 6% in local currencies and were flat in Swiss francs compared to Q2 2013.

All three businesses in the plastics and coatings area – pigments, masterbatches, and additives – contributed to growth, the company said. Pigments achieved strong sales gains in local currencies in most regions, with particularly strong demand in Asia/Pacific, Latin America, and North America. Masterbatches experienced good sales growth in local currencies, thanks to strong demand in emerging markets, while sales in mature markets decreased. Additives achieved strong sales growth in flame retardants and polymer additives, while waxes grew moderately, Clariant said, with growth in local currencies highest in North America and Europe.

As MRC wrote before, CB&I and Clariant announced that their new Ziegler-Natta (ZN) polypropylene catalyst plant in Louisville, Kentucky, is on schedule to begin production in 2015. The plant is part of a long-term strategic partnership between Clariant’s catalysts business and CB&I’s Lummus Novolen Technology business. Based at Clariant’s largest US production hub, the new facility will combine innovative catalysts jointly developed by both companies with high-capacity output.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

MOSCOW (MRC) -- Gazprom neftekhim Salavat resumed production of low density polyethylene (LDPE) after a scheduled 30-day turnaround, according to ICIS-MRC Price report.

Gazprom neftekhim Salavat resumed its LDPE production after a scheduled outage for maintenance on 1 August 2014. The shutdown took place on 1 July and lasted about one month. The plant's annual LDPE production capacity is 45,000 tonnes.

At the same time, the Bashkir plant's high density polyethylene (HDPE) production is still idle. The shutdown of the plant's HDPE production for a turnaround took place on 15 July and is scheduled for 30 days. The plant's annual HDPE production capacity is 120,000 tonnes.
MRC

MOSCOW (MRC) -- Styron (Hong Kong) Limited, an affiliate of Styron, the global materials company and manufacturer of plastics, latex and rubber, and its affiliate companies in Asia Pacific have announced price increases for all polystyrene (PS) grades, reported the company on its site.

Effective immediately, or as existing contract terms allow, the prices for the products listed below will increase as follows:

- STYRON general purpose polystyrene grades (GPPS) - by USD30/tonne;
- STYRON and STYRON A-TECH high-impact polystyrene grades (HIPS) - by USD30/tonne.

"The price increase responds to the rising costs associated with the manufacturing of polystyrene grades in Asia Pacific," said Samer Al Jabi, Global Product Manager for Polystyrene.

As MRC wrote before, in July, Styron (Hong Kong) Limited and its affiliate companies in Asia Pacific increased prices for all polystyrene (PS) grades, as follows:

- STYRON general purpose polystyrene grades (GPPS) - by USD20tonne;
- STYRON and STYRON A-TECH high-impact polystyrene grades (HIPS) - by USD20/tonne.

Styron is a leading global materials company and manufacturer of plastics, latex and rubber, dedicated to collaborating with customers to deliver innovative and sustainable solutions. Styron's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Styron had approximately USD5.3 billion in revenue in 2013, with 19 manufacturing sites around the world.
MRC

MOSCOW (MRC) -- Ineos Compounds and Doeflex Compounding have received the green light for the merger of their polyvinyl chloride (PVC) compounding businesses from the European Commission, reported Ineos on its site.

The combined business, once completed, will create a leading PVC compound manufacturer, with a turnover in excess of EUR200m and production sites in the UK, Sweden and Switzerland.

The deal was first announced in May 2014 and represents a "strategic opportunity" and likely to support the growth of both companies, they said.

The combined business will be run by an integrated management team from both parties and will be known as Ineos Compounds.

The companies will, however, continue to run their businesses separately until the completion of the merger, which is expected to take place on 1 September 2014.

As MRC informed previuosly, in May 2014, Ineos Group Holdings Ltd. and Solvay SA (SOLB), Europe’s two biggest makers of polyvinyl chloride, won European Union approval for a 4.3 billion-euro (USD6 billion) joint venture of their PVC units after agreeing to sell plants. Ineos and Solvay won’t close their deal until they have a binding agreement with a purchaser approved by EU regulators.

The venture, announced last year, would allow the companies to cut costs in areas from transport to marketing and raise profitability amid a European industry suffering from inflated raw material and energy costs. The PVC market is facing overcapacity and weak demand in Europe, prompting companies in the labor-intensive industry to explore deals. Solvay has said it plans to exit the PVC venture at a later stage.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) - Scheduled maintenance works and a serious reduction in imports, particularly from the United States allowed the Russian producers to increase contract prices of polyvinyl chloride (PVC) significantly, according to ICIS-MRC Price Report.

SayanskKhimPlast, Russia's largest suspension PVC (SPVC) producer, shut its capacities on almost monthly turnaround in the end of last week. Bashkir Soda Company and Kaustik Volgograd will shut their capacities for the turnaround in September - October.

A high level of export prices in the USA led to a drop in import volumes several times. All of these factors allowed the Russian producers to achieve increase in August contract prices on average by Rb4,000/tonne. Contracts for August delivery of Russian PVC were done in the range of Rb53,000-56,000/tonne CPT Moscow, including VAT. Deals were mainly done for the supply of resin by Bashkir Soda Company and Kaustik Volgograd, while August contracts for SayanskKhimPlast resin were few because of scheduled maintenances.

At the same time, some converters said they had managed to agree contracts for July-September last month at the level of July contract prices. Significant hike in contract prices did not lead to buying activity improvement last week.
Local converters were in no hurry to buy PVC in the spot market.

Deals for August delivery of Chinese acetylene K65 PVC were mainly done in the range of Rb48,500-49,000/tonne CPT Moscow, including VAT. Supply of Chinese acetylene K70 PVC has been tight since the second half of July, with price offers in the spot market reach Rb52,000-52,500/tonne CPT Moscow, including VAT.

Contract prices for Russian PVC for September will be affected by the reduced rate of import duty. As it was previously reported, Sochi Eurasian Economic Commission on 23, June adopted a decision to reduce the import duty for SPVC from current 10% to 6.5%, effective from 1, September.
MRC