Advanced Petrochemical Company signs long-term off-take PP agreements

MOSCOW (MRC) -- Advanced Petrochemical Company is pleased to announce the signing of long-term off-take agreements on January 29, 2015 for the sale of Polypropylene with Mitsubishi Corporation of Japan (150,000 metric ton per annum) and Domo Investment Group of Belgium (100,000 metric ton per annum), to be effective from January 1, 2019 for a period of ten years after the expiry of existing off-take agreements, said Mubasher.

The company also signed on the same date short-term off-take agreements with Mitsubishi Corporation and Domo Chemicals Asia Ltd. (subsidiary of Domo Investment Group) for the sale of additional 50,000 metric ton per annum of Polypropylene for each, to be effective from February 1, 2015 for a period of four years. Such additional Polypropylene will be produced from outsourced Propylene (intermediate product) purchased from a local supplier.

The signing of these off-take agreements will impact the financial results for these years based on prevailing market prices.

Advanced Chairman, Mr. Khalifa Al-Mulhem, commented that securing a long-term off-take commitment from these renowned and experienced off-takers will help to achieve the Company's long term strategic plans and will also improve the profitability of the Company due to improved marketing fee and better terms and conditions.

As MRC wrote before, Saudi Arabia's Advanced Petrochemical Company will raise the production capacity of its polypropylene plant in Jubail to more than 500,000 mt/year, from the current 450,000 mt/year, by mid-2105.

Advanced Petrochemical Company (before Advanced Polypropylene) is a Saudi Joint Stock Company, established in October 2005. The company was initially launched by National Polypropylene Limited, jointly owned by Mr. Khalifa Al Mulhim, the chief executive officer of Advanced, and Mr. Monther Laheeq, who negotiated all the main deals related to the project, either before or after the establishment of Advanced Petrochemical. Currently, National Polypropylene Limited controls 7.9% of Advanced Petrochemical. Advanced Petrochemical started the construction of its plants in May 2005. The company produces 455,000 tons per year of propylene and 450,000 tons per year of polypropylene from its production facility located in Jubail Industrial City, in the Eastern coast of the Kingdom of Saudi Arabia.

PET imports to Russia rose by 7.5% in 2014

MOSCOW (MRC) -- Imports of polyethylene terephthalate (PET) to the Russian market increased in 2014 by 7.5% year on year and totalled 184,500 tonnes, according to MRC DataScope.

Russian companies were increasing PET imports, despite the rouble devaluation (which led to higher prices of PET grades in roubles) and expansion of PET production capacity in Russia (the launch of the second line at the Ufa plant - Polief). Imports of PET chips grew by 9% to more than 178,000 tonnes.

At the same time, imports of recycled PET from foreign markets fell by 27% to about 6,000 tonnes.

Imports are still expected to fall in 2015. Prices of imported PET are still higher than prices of Russian material, which will affect the preference in procurement this year. At the same time, the eastern regions of the country remained dependant on imports. Converters in the east of the country traditionally use imported Asian PET. In addition, companies prefer to diversify the suppliers by countries in order to reduce the risks of shipments disruption. Therefore, it will be impossible to completely displace imports.

China continues to increase its presence in the Russian market. The share of Chinese grades in the total imports grew to 74% in 2014, whereas Chinese grades accounted for only 55% of the total imports to Russia a year ago.


PE imports to Kazakhstan dropped by 10% in 2014

MOSCOW (MRC) -- Last year's imports of polyethylene (PE) into Kazakhstan decreased by 10%. High density polyethylene (HDPE) accounted for a fall in demand, while demand for other PE grades surged, reported MRC analytsts.

December PE imports to Kazakhstan were 10,400 tonnes versus 10,200 tonnes a month earlier because of a significant growth in shipments from Russia. The overall imports of ethylene polymers to the local market dropped to 111,700 tonnes in 2014 from 123,400 tonnes in 2013. Demand for HDPE subsided by 18%, particularly, from local pipes producers, whereas demand for high density polyethylene (LDPE) and linear low density polyethylene (LLDPE) increased.

The PE supply structure by grades looks the following way over the stated period.

December HDPE imports reached 8,400 tonnes versus 7,900 tonnes in November. At the same time, imports from Russia exceeded 7,000 tonnes, whereas shipments from other countries fell to 1,400 tonnes. The overall HDPE imports to Kazakhstan fell to 86,000 tonnes in 2014 from 104,400 tonnes over the same period a year earlier.

December LDPE imports virtually remained at the level of November and totalled 1,700 tonnes. July and August accounted for the peak of supply. The overall LDPE imports into Kazakhstan increased to 20,300 tonnes over the said period from 14,300 tonnes in 2013. Russian producers with a 95% share of total shipments remained the key LDPE suppliers.

December LLDPE imports fell to 324 tonnes from 544 tonnes in November. The overall LLDPE imports to Kazakhstan reached 5,400 tonnes over the stated period, up by 13% year on year. Producers from South Korea and Uzbekistan remained the key PE suppliers to the republic.

Nizhnekamskneftekhim increased contract HDPE prices

MOSCOW (MRC) - Nizhnekamskneftekhim announced an increase in contract prices of high density polyethylene (HDPE) for February delivery of roubles (Rb) 2,500/tonne, compared with the level of January, according to ICIS-MRC Price Report.

The company's customers said Nizhnekamskneftekhim raised the February HDPE contract prices for several reasons, including because of the continuing devaluation of the rouble. Other Russian producers of HDPE on the morning of Monday, 2, February did not announced their contract prices. However, it is possible that they will also increase HDPE price.

OAO Nizhnekamskneftekhim is a major petrochemical company, a leader in production of synthetic rubbers and plastics in the Russian Federation and is part of TAIF Group. The Company was established in 1967 and its main manufacturing facilities are located in Nizhnekamsk, Republic of Tatarstan. The company's annual HDPE production capacity is 210,000/tonnes/year. The producer's HDPE production exceeded 203,000 tonnes in 2014.


Samsung Total to shut down BD unit for maintenance

MOSCOW (MRC) -- Samsung Total is in plans to shut its butadiene (BD) unit for maintenance turnaround, according to Apic-online.

A Polymerupdate source in South Korea informed that the unit is likely to be shut in mid-April 2015. It is likely to remain off-stream for around one month.

Located at Daesan in South Korea, the plant has a production capacity of 120,000 mt/year.

As MRC reported previously, the board of directors of Samsung Total Petrochemicals approved an investment outlay of Won 1.66 trillion (USD1.44 bln) to build a new 1 mln tpa paraxylene plant at its Daesan complex.The company’s paraxylene capacity will increase to 1.6 mln tpa when the new plant comes on line.

Samsung Total is a 50-50 joint venture between South Korea's Samsung Group and the French chemical group Total.