Asian export EPS prices fell by USD150/tonne for the CIS countries

MOSCOW (MRC) -- Export prices of Asian expandable polystyrene (EPS) suppliers for customers in the CIS markets have fallen by USD150/tonne since early December, according to ICIS-MRC Price report.
EPS importers in Russia, Ukraine and Kazakhstan reported lower purchase prices. Chinese producers made concessions to buyers and reduced spot prices, following a slump in styrene monomer (SM) prices. In their turn, SM prices have been falling, following cuts in oil prices.

However, local importers were not in a hurry to make new purchasing amid a sharp decline in demand in the domestic market on the back of the onset of cold weather and slowdown in the construction sector.

Despite the downward trend of Asian prices in Russia and Ukraine in 2014, EPS prices showed an upward trend in the domestic market because of the collapse of the national currency against the US dollar and the euro. Only the strengthening of the national currencies in the region will lead to a break-down of the upward price trend in the domestic CIS markets.

EPS prices in Asia have fallen by USD455/tonne since early 2014, down by 24.5%.

MRC

MOSCOW (MRC) -- Prices of dioctyl phthalate (DOP) plasticizer rose in the Russian market by more than Rb10,000/tonne in December. The main reason for such a major price increase was the rouble devaluation, reported MRC analysts.

Russian producers announced December prices of DOP plasticizer late. The reason was the lengthy negotiations over feedstocks prices, particularly, over 2-ethylhexanol. This material is exported from Russia in rather large quantities, and the rouble devaluation led to a major rise in 2-ethylhexanol prices for local producers of DOP plasticizer. As a result, Russian plasticizer producers were forced to raise significantly DOP prices for the domestic market.

Supply of DOP was temporarily tight in the spot market because of producers' fulfillment of contractual obligations before large consumers. However, this factor did not affect the market greatly. Quite a large number of companies decided to suspend their purchasing, following a sharp rise in DOP prices. Small deals were done in the range of Rb92,000-93,000/tonne FCA, including VAT, in the spot market.

A Russian DOP plasticizer producer said he did not rule out a shutdown of production in January 2015. This move is largerly due to the sharp increase in feedstocks prices, which made DOP production non-profitable.

Dioctyl phthalate (DOP) is used as a plasticizer of vinyl polymers, rubbers, cellulose esters.
MRC

MOSCOW (MRC) - The emergency shutdown of emulsion polyvinyl chloride (EPVC) production at Khimprom Volgograd resulted in a shortage in the Russian market. Local companies had to buy expensive European resin, according to ICIS-MRC Price Report.

Khimprom (Volgograd) has been for quite a long time on the verge of shutting down because of economic inefficiency, but continued to produce products, including emulsion PVC. However, in late November, the company had to stop production of the emulsion, and according to unofficial sources, forever.

The second Russian producer of emulsion PVC RusVinyl, has not begun commercial EPVC production yet. As a consequence, the supply of cheaper Russian EPVC disappeared in the beginning of December, only imported material left in the market, but supply is tight.

Many suppliers of imported EPVC announced their price offers in foreing currency. Price offers for European EPVC were heard in the spot market in the range of EUR1,300-1,550/tonne FCA, including VAT.

November deals for EPVC were done in the range of Rb71,000-75,000/tonne FCA, including VAT. December deals for small volumes of Asian resin were agreed on average at Rb80,000/tonne FCA, including VAT.

Many consumers were not ready for such situation, especially small productions. Companies had to temporarily suspend their purchases of feedstock.
MRC

MOSCOW (MRC) - Imports of unfilled polycarbonate (PC) in the Russian market declined to 33,500 tonnes in the last eleven months, down 8% year on year, according to MRC DataScope.

Players of PC market reported the general trend of weakening interest in imported PC because of the rouble devaluation and the decrease in purchasing capacity of consumers. Margins has decreased in all sectors of processing; demand for finished products has also weakened.

Converters had to use recycled material, the purchase of Russian-made PC, or to look for other polymers for more affordable price than PC granules. Another solution could be to imports of finished products. These measures are more typical for injection moulding and blowmoulding sectors.

PC consumption in the blowmoulding sector, which depends on supply from Asia, decreased to 2,500 tonnes in the first eleven months of the year, down 19% year on year. Demand for imported injection moulding PC granules for general purpose also fell by 19% over the reported period to 4,000 tonnes. In this sector is the subject import substitution, as the only Russian producer, Kazanorgsintez produces both injection moulding and extrusion PC grades for the domestic market.

However, in the extrusion segment demand for imported PC did not fall because of prices rise for domestic consumers, and even have slightly increased to 3%. Russia's imports of PC granules for sheet extrusion were 25,300 tonnes in the first eleven months of the year. Extrusion PC occupies 76% of the total imports of the PC granules.

Because of the increasing prices of Russian PC, the price delta between it and imported polymers is reduced. In the case of stabilising of the exchange rate of Asian and European material may be close in price to the Russian material, or, at least, will lead to increased competition in the extrusion segment with the approach of spring.


MRC

MOSCOW (MRC) -- Bharat Petroleum (BPCL) plans to invest Rs 4,588 crore (USD741.44 mln) to diversify into the petrochemicals business, a move that will help boost margins by expanding beyond refining and retailing, as per Plastemart.

BPCL plans to boost capacity at its Kochi refinery to 310,000 bpd from the current 190,000 bpd by May 2016. The project proposal will now be submitted for obtaining environmental clearance and the petrochemical unit is expected to come on stream during financial year 2018-2019, BPCL said.

As MRC wrote before, BPCL Kochi’s integrated refinery expansion project (IREP), which will see the refining capacity increasing by 60% from the present 9.5 mln tpa to 15.5 mln tons. The project would produce 0.5 mln tpa of propylene.

Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, India. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12 and 9.5 million metric tonnes per year.