Sabic chemical profits drop 29% amid low oil

MOSCOW (MRC) -- Saudi Basic Industries Corp. (Sabic), the world’s biggest petrochemical maker by sales, reported a 29% drop in fourth-quarter profit as lower oil prices reduced returns from its own products, reported Hydrocarbonprocessing.

Net income dropped to 4.36 billion riyals (USD1.16 billion) from 6.16 billion riyals a year earlier, the Riyadh-based company said in a statement today. Sales slipped 10% to 43.4 billion riyals.

Brent crude dropped 48% last year as rising production from North America and the Organization of Petroleum Exporting Countries swelled supply. SABIC will push ahead with plans to build investments even with low oil prices, and is in the "final stages" of talks to expand in the US, CEO Mohammed Al Mady said in an interview.

"Fourth-quarter results are not a surprise for us, we have foreseen the effects of the drop in oil prices on our business," Al Mady said at a press conference in Riyadh. Petrochemicals demand is "good."

As MRC wrote before, in November 2014, KBR was awarded a front-end engineering design (FEED) contract by Saudi Basic Industries Corp. (SABIC) for the debottlenecking and expansion of its Petrokemya butadiene extraction plant in Al Jubail, Saudi Arabia.

Besides, Sabic is modifying its Wilton cracker in the UK to enable it to use ethane feedstock imported from the US. The company is aiming to complete the project by 2016.

Saudi Basic Industries Corporation (Sabic) ranks among the world’s top petrochemical companies. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Russian LDPE prices increased by Rb1,000-3,000/tonne in January

MOSCOW (MRC) -- Prices of of low density polyethylene (LDPE) in the Russian market increased by Rb1,000-3,000/tonne in January, compared to the December level. The price increase was expected, and to a greater extent resulted from to the rouble devaluation. This factor in the future can lead to a further price increases, according to ICIS-MRC Price Report.

Beginning of the year in the Russian market LDPE was traditionally quiet. Buying activity in the market was low, a lot of converters in December built up additional inventories of feedstock and plan to return to the procurement of polyethylene only in February. Some companies because of finance problems had to temporarily refrain from the purchasing. In general, at the end of the last week PE prices in the market increased by Rb3,000/tonne, from the December level.

Negotiations on January LDPE contracts began in mid-December, and last week was finished. In most cases, converters have reported a rise in prices from Rb1,000/tonne to Rb3,000/tonne, compared with the December level.

Spot prices increased proportionally to the price rise in the contract market. Buying activity last week was weak. Some market participants have reported a temporary problems with shipments from some producers. But in general, the supply of polyethylene in the market was more than sufficient. Price range in the spot market was quite big. Price offers for 158 LDPE were heard in the range of Rb77,500-81,000/tonne CPT Moscow, including VAT.

The ongoing weakening of the rouble against the dollar continues to contribute to the further price increases of LDPE prices in the domestic market because falling prices of polyethylene in foreign markets is less dynamic than the fall of the rouble. At the same time, given the current oil prices, the bottom for LDPE prices has not been reached, and as a result, companies in foreign markets limit their current purchases.

BASF mulls expansion at superabsorbent polymer plants in Antwerp and Freeport

MOSCOW (MRC) -- BASF plans to expand its existing superabsorbent polymer production capacities at its existing sites in Antwerp, Belgium and Freeport, USA, reported Plastemart.

Gradual debottlenecking and technical expansion will eventually raise capacity by 70,000 tons to a total of 470,000 ton by 2012, with each site contributing an additional 35,000 tons.

As MRC wrote previously, BASF will invest up to EUR500 million (USD625 million) over the next 2 to 3 years to establish droplet polymerization capacities worldwide by revamping existing plants. The rollout of the new technology underlines BASF’s technology leadership and leading position in the market for superabsorbent polymers.

Superabsorbent polymers are polymers that can absorb and retain extremely large amounts of liquid relative to their own mass. They are used as a main component in baby diapers, incontinence products and feminine hygiene products. BASF researchers have worked intensively in the last decade to develop a new technology and optimize the corresponding production processes. BASF will launch a new generation of highly innovative superabsorbent polymers under the trademark SAVIVATM. The launch is scheduled sequentially, starting end of 2016.

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. BASF had sales of about EUR74 billion in 2013 and over 112,000 employees as of the end of the year.

January prices of European pipe grade HDPE fell by EUR90-100/tonne for CIS markets

MOSCOW (MRC) -- European producers were forced to reduce significanlty polyethylene (PE) prices, following a major fall in ethylene prices. January prices of pipe grade high density polyethylene (HDPE) dropped by EUR90-100/tonne for the CIS countries, according to ICIS-MRC Price report.

Negotiations over January prices of European pipe grade HDPE for the CIS markets were virtually over this week. Most market participants reported they had managed to reduce prices of European polymer by EUR100/tonne from December 2014.

Deals over coloired PE 100 were done in the range of EUR1,070-1,160/tonne FCA. Deals for coloured PE 80 were negotiated in the range of EUR1,050-1,140/tonne FCA.

The record weakening of the euro against the dollar over the last nine years only enhances the effect of the January fall in European producers' export prices. The cross rate of the euro against the dollar had reached 1.164 by mid-January.

Shell opens new GTL base oil hub near Dubai

MOSCOW (MRC) -- Shell, an Anglo-Dutch multinational oil and gas company, has opened a new gas-to-liquids (GTL) base oil hub in Jebel Ali in the United Arab Emirates (UAE) and made the company’s first delivery of GTL base oil, reported Hydrocarbonprocessing with reference to the company's announcement.

Base oil is a key component in finished oils and GTL base oil specifically enables the development of premium oils for engines, as well as in specialty products, including process oils and transformer fluids.

This new facility in Jebel Ali is Shell’s fourth GTL base oil storage hub alongside its existing hubs located in Houston, Texas; Hamburg, Germany; and Hong Kong.

The hub will facilitate the distribution of GTL base oil to be manufactured into finished products nearer to the end customer.

These products will be used in Shell Helix Ultra with PurePlus Technology, Shell Risella X and Shell Diala X for customers in the Middle East, Egypt, India, Pakistan and South Africa.

The GTL base oil is made in the Middle East at the Pearl GTL plant in Qatar, a partnership between Qatar Petroleum and Shell. The plant is the world’s largest source of GTL products.

As MRC informed previously, in late December 2014, BASF, the German chemicals giant, and Shell reached an agreement for BASF to sell its share in the 50-50 joint venture Ellba Eastern, Jurong Island, Singapore to Shell.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.