GCC and China to ink FTA by land 2016

MOSCOW (MRC) -- A free trade agreement between the Cooperation Council for the Arab States of the Gulf (GCC) and China could be inked by end 2016, effectively removing tariffs imposed on Middle East petrochemical products to its biggest buyer, a source close the discussions told TPS.

The GCC comprises six members: Saudi Arabia, UAE, Kuwait, Oman, Qatar, and Bahrain. Negotiations for an FTA kicked off in July 2004, and five rounds of discussions have already taken place, according to China’s Ministry of Commerce website. Negotiations were suspended in 2009, and restarted in December 2015.

Tariffs on petrochemicals, which were supposed to be lifted within five years of the China-FTA, may be lifted almost immediately after the agreement is struck.

"Both sides are now discussing to move petrochemicals from category B, where tariffs are gradually lifted within five years, to category A, where tariffs are removed immediately," the source said.

Petrochemicals such as benzene, paraxylene, styrene monomer and monoethylene glycol are top export items to China. Removal of tariffs on these products would have a profound impact on trade flows, making GCC petrochemicals much more attractive to Chinese buyers.

Case in point is paraxylene, which has a 2% import duty except for cargoes exported from Asean and Taiwan. This has led to a preference for “Asia-origin” PX which excludes products from the Middle East and India.

If the GCC is able to finalize the FTA and move petrochemicals into category A, GCC products could pose a serious threat to South Korea and Japan, which are the top exporters to China.

The GCC bloc is China's largest source of oil imports, while China is the GCC's eighth largest trading partner, according to China’s Ministry of Commerce.

We remind that, as MRC reported earlier, in 2014Oman state refiner Oman Oil Refineries and Petroleum Industries Company (Orpic) selected LyondellBasell's Spheripol polypropylene process technology for a new 300,000 tpy polypropylene (PP) plant to be built in Sohar, Sultanate of Oman. Start-up of the Liwa plastics project is planned for 2018.
MRC

MOSCOW (MRC) -- Sinopec Shanghai Petrochemical has undertaken an emergency shutdown at its low density polyethylene (LDPE) unit, as per Apic-online.

A Polymerupdate source in China informed that the unit was shut on March 8, 2016 owing to a technical glitch. It is expected to remain off-line for around 2 days.

Located at Shanghai in China, the company operates two LDPE units with a production capacity of 100,000 mt/year each.

We remind that, as MRC informed previously, Sinopec Maoming Petrochemical has recently taken off-stream its LDPE plant. The facility was shut for maintenance turnaround on February 28, 2016. It was slated to remain shut until last weekend. Located at Guangdong in China, the plant has a production capacity of 250,000 mt/year.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.
MRC

MOSCOW (MRC) -- In a bid to protect domestic manufacturers, India today imposed anti-dumping duty on polypropylene (PP) imports from Singapore, reported Plastemart with reference to Press Trust of India.

A notification of the Revenue Department said that anti-dumping duty of USD145.2/ton has been imposed on PP originating in or exported from Singapore. Directorate General of Anti-Dumping & Allied Duties had recommended imposition of the safeguard duties on an application filed by Reliance Industries alleging injury to domestic industry by imports from Singapore. Besides RIL, three other companies produce polypropylene - Haldia Petrochemicals, Indian Oil Corporation and HPCL-Mittal Energy.

Manufacturers had claimed polypropylene being dumped into India, are identical to the goods produced by the domestic industry. There were no differences either in the technical specifications, functions or end-uses of the dumped imports and the domestically produced subject goods.

The safeguard duty covers producers like Exxon Mobil Chemical Asia Pacific, Singapore and The Polyolefin Company (Singapore) Pte Ltd whose products are exported to India by traders like Itochu Plastics Pte Ltd.

"The anti-dumping duty imposed under this notification shall be effective for a period of 5 years (unless revoked, superseded or amended earlier) from the date of publication of this notification in the Official Gazette and shall be paid in Indian currency," the notification said. Originally, the government had in 2009 imposed anti-dumping duty on polypropylene imports from Oman, Saudi Arabia and Singapore. The safeguard duty on imports from Singapore was extended by one year to July 29, 2015. There was no duty thereafter.

"In the matter of review of anti-dumping duty on import of the subject goods, originating in or exported from the subject country, the designated authority in its final findings. Has come to the conclusion that injury to the domestic industry is likely to continue in the event of cessation of anti-dumping duty on imports of subject goods from the non-cooperative producers or exporters from subject country," the notification said.

We remind that, as MRC informed previously, in late July 2015, India imposed antidumping duty of USD48.39/mt and USD21.90/mt on caustic soda imports from South Korea and China, respectively. Plans to slap antidumping duty on imports from the two countries were announced in a government notification dated June 18.
MRC

MOSCOW (MRC) -- Kuwait-owned MEGlobal will be extending sales control for monoethylene glycol (MEG) to its customers into April due to continued shortages of gas feedstock at its Kuwaiti production units, a source close to the company told TPS.

The company had announced to its customers that they will only be able to supply its minimum contract requirements in January. Supply was expected to resume after Q1 2016.

MEGlobal also operates three monoethylene glycol (MEG) manufacturing plants in Alberta, Canada, with a combined nameplate capacity of 1.2 million mt/year.

The company was recently acquired by Kuwait's EQUATE Petrochemical Company in December 2015, when EQUATE assumed 100% ownership in MEGlobal, previously the 50-50% joint venture between state-owned Petrochemical Industries Company (PIC) and Dow Chemical Company. EQUATE's two MEG facilities in Shuaiba have a combined annual production capacity of 1.15 million mt/year.

As MRC wrote before, global MEG production is likely cross 28.74 mln tons by 2017. In 2011, the world production of MEG grew by over 1 mln tons, crossing the 20.65 mln ton mark.
MRC

MOSCOW (MRC) -- SABIC, one of the world’s leading petrochemical companies, has expanded its growing portfolio of innovative material solutions with the recent investment in a majority stake in Fibre Reinforced Thermoplastics B.V., with manufacturing operations in Lelystad, The Netherlands, as per the company's press release.

SABIC’s new Fibre Reinforced Thermoplastics (FRT) business specializes in the production of engineered thermoplastic, fiber-reinforced unidirectional tapes. These tapes can be used across a wide variety of industries, ranging from building and construction to transportation and energy.

"This investment will enable SABIC to develop new thermoplastic products, processes and design solutions to help our customers take full advantage of the unique light weighting opportunities offered by composites," said Ernesto Occhiello, EVP Specialties, SABIC.

"At SABIC, we engage with our customers to develop advanced products that support their specific needs and help them realize their ambitions," said Andrey Turchin, SABIC’s FRT business leader. "Our innovative UDMAX composite tapes complement SABIC’s existing range of thermoplastic solutions for customers striving to build smaller, lighter and stronger components that meet stringent industry standards," he continued.

UDMAX tapes are made using a unique proprietary HPFIT technology, which quickly and precisely enables the spread and combination of thousands of glass or carbon fibers with a thermoplastic matrix. As a result, the tapes have a high density of fibers, high quality fiber impregnation in the resin matrix, minimal void content and fewer broken fibers. They can be used to form composite materials that can in turn be used to manufacture components with superior performance to alternative materials, such as laminates and molded parts.

As MRC informed previously, in October 2015, SABIC announced a restructuring to make itself more agile and cost-efficient, following a comprehensive review of the challenges facing the Middle East’s biggest petrochemicals company. The new organizational structure had been in place by January 1. Sabic’s innovative plastics unit was broken up and reallocated to other divisions, including chemicals and polymers and a new unit called specialties.

SABIC bought General Electric's (GE) plastics unit in 2007 for USD11.6 billion. The company has access to the abundant sources of natural gas feedstock produced during oil extraction by state-owned Saudi Arabian Oil Co.
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