LDPE prices began to grow in Ukraine

MOSCOW (MRC) -- Higher prices of low density polyethylene (LDPE) in foreign markets and tight supply in the domestic market led to a price rise in Ukraine. The situation in the LDPE market might deteriorate in the near future, according to ICIS-MRC Price report.

In March, many Ukrainian companies faced tight supply of LDPE from the major suppliers - Russian and Belarusian producers. The absence of a seasonal surge in demand and large carryover stocks of LDPE from February purchasing allowed to avoid a shortage in the market this month, but prices still increased at the end of March. Further cuts in export quoats are expected by major suppliers in April, which will trigger a further rise in prices.

In early March, deals for Russian and Belarusian LDPE were concluded in the range of UAH38,500-40,000/tonne CPT Kiev, including VAT, in the Ukrainian market. Prices of some suppliers have grown to UAH44 000/tonne CPT Kiev, including VAT, by the end of the month. Both tight supply and a major price rise in Belarus led to higher prices.

Some market participants expressed concerns about April because Russian producers do not plan to ship LDPE to Ukraine due to the upcoming shutdowns for maintenance. The Belarusian producer is also more focused on the Russian market and is unlikely to fully compensate for the lack of supplies from Russia.

European LDPE can be considered alternatively. However, its prices are significantly higher, and European producers are unlikely to significantly increase shipments to Ukraine. At the same time, LDPE prices are expected to rise in Europe by EUR50-80/tonne in April.

PetroRabigh restarts LLDPE plant in Saudi Arabia

MOSCOW (MRC) -- Rabigh Refining & Petrochemical Co. (PetroRabigh), a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has restarted its linear density polyethylene (LLDPE) plant, reported Apic-online.

A Polymerupdate source in Saudi Arabia informed that the plant was expected to be restarted last week. The plant was shut for a maintenance turnaround on March 16, 2016.

Located in Rabigh, Saudi Arabia, the LLDPE plant has a production capacity of 600,000 mt/year.

As MRC wrote previously, in April 2015, Petro Rabigh received ownership of the Rabigh Phase II project from Saudi Aramco and Sumitomo Chemical, major shareholders in Petro Rabigh, and will now integrate the project into Petro Rabigh's existing refining and petrochemical complex in Rabigh, Saudi Arabia.

The Rabigh II project, expected to cost about USD 8.1-billion, involves expanding an existing ethane cracker and adding production of ethylene propylene rubber, thermoplastic polyolefins, methyl methacrylate monomer, polymethyl methacrylate, low-density polyethylene/ethylene vinyl acetate, paraxylene/benzene, cumene and phenol/acetone. Production facilities are expected to begin operations "one after another, beginning in the first half of 2016," Sumitomo said.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.3-million t/y of ethylene and 900,000 t/y of propylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.

Americhem buys compounder Vi-Chem Corporation

MOSCOW (MRC) -- Additive and colorant supplier Americhem Group has acquired Vi-Chem Corporation, a supplier of specialty engineered compounds used in injection molding, extrusion and blow molding applications, said Canplastics.

The financial terms of the deal have not been disclosed.

The sale was completed on March 18, 2016, and the resulting company will be known as Vi-Chem, an Americhem Group company.

Vi-Chem, based in Grand Rapids, Mich., employs 85 people, and makes additives and colorants for the automotive, industrial, building and construction, medical, consumer, and electrical and electronic industries. In a statement, Americhem said that the company’s headquarters in Grand Rapids encompasses 170,000 square feet and will serve as Americhem Group’s centre of excellence for TPE and PVC compound solutions.

"The addition of Vi-Chem is strategic and further expands our automotive portfolio of products and services," John Deignan, Amerchem’s president, said in the statement. "The automotive and transportation industry is already one of the pillars of our business, and this move adds capabilities and technological innovations that will benefit Americhem Group’s customers and the industry as a whole."

As MRC informed earlier, FRX Polymers and Americhem Inc. have announced that they had entered into a multi-year exclusive distribution agreement covering Western Europe and Turkey for FRX’s new non-halogen flame retardant polymer known as FRX 100. retardant plastic.

Headquartered in Cuyahoga Falls, Ohio, Americhem employs approximately 800 people worldwide.


Sumitomo Demag reports record sales year in 2015

MOSCOW (MRC) -- Injection molding machine maker Sumitomo (SHI) Demag Plastics Machinery GmbH had a record sales year in 2015, with sales of 234 million euros (USD265 million) – an increase of 11 per cent over 2014, said Canplastics.

In a statement, Sumitomo (SHI) Demag attributed the results to "strategic changes initiated in April 2015, i.e. the focus on core competencies, the pooling of the two German production sites into one production centre, and the capacity expansion at Demag Plastics Machinery in Ningbo/China."

The company’s two German production sites are in Schwaig and Wiehe. "In 2015, we took a new – and successful – approach to our sales and customer-service strategy," said Gerd Liebig, the company’s chief sales officer. "In future, we will strive to consolidate and sustain this success."

Sumitomo (SHI) Demag recently established new subsidiaries in Hungary and Austria, and also expanded and consolidated its sales structures in Israel, Saudi Arabia, and Iran. The company cited all of these as contributing factors to its record sales year. "These measures were aimed at improving the quality of sales consultancy and speeding up the service department’s solution management," the statement said. "First results have been very encouraging and promising."

CEO Tetsuya Okamura said the company has recently made an investment in the double-digit range, and plans to create additional sales outlets going forward. Okamura said the year-end numbers for 2015 "vastly exceeded our expectations."

Finally, the Sumitomo (SHI) Demag management board expects additional growth in segments such as packaging, automotive, and medical engineering.

As MRC informed earlier, Sumitomo Chemical and Sekisui Chemical (Tokyo) are combining their respective polyolefin films business under a new joint venture, which is due to start operations in July this year.

Sumitomo (SHI) Demag is comprised of four facilities in Japan, Germany, and China with more than 3,000 employees. The product portfolio includes all-electric, hydraulic and hybrid injection molding machines.

Russia exports more oil as refineries go offline

MOSCOW (MRC) -- Russia will export more oil to Europe in April than it has in any month since 2013 -- despite Moscow's plan to sign a global agreement on freezing production in a bid to lift the price of crude, said Hydrocarbonprocessing.

The fact Russian exports are rising illustrates how hard it will be to enforce the deal, due to be finalized on April 17 in Qatar, and shows the potential for countries to use loopholes to keep exporting crude, blunting the intended impact on prices.

Russia can raise exports while keeping production flat by re-routing some oil away from refineries and into exports. Moscow says the freeze covers production, not sales abroad.

The International Energy Agency said on Wednesday the deal may be meaningless. Iran and Libya have said they will not participate, at least for now, and they plan to raise production. Nigeria, the top oil producer in Africa, has said it expects oil exporters to agree a supply freeze in Doha next month but that it plans to boost its own output.

The increase in Russian exports is mainly because of planned maintenance at refineries that reduced their capacity to process crude. It also reflects Russia's economic slump, which has reduced domestic demand for refined products.

But another factor, according to one trader, is a desire by Russian producers to protect their share of the crude oil market in Europe, where Russia's traditional dominance is under threat from newly arriving Saudi supplies.

Reports that members of the Organization of the Petroleum Exporting Countries as well as non-OPEC producers were discussing an output freeze have helped lift world oil prices from glut-induced 12-year lows hit in January.

According to the company, Russia is set to export 7 million tons from Baltic Sea ports in April, the largest volume since October 2013. That marks a 9% increase on the 6.41 million tons planned for export in March.

According to Reuters calculations based on Energy Ministry data, Russia will have as much as 4.3 million tons of idle refining capacity next month, more than twice the 1.9 million tons unused in March. Russian refineries traditionally have the largest offline capacity in April, as companies scramble to finish maintenance before consumption of oil products peaks in summer.

There is almost no spare capacity at the Black Sea port of Novorossiisk, while the Druzhba pipeline, which connects Russia to the northeast corner of the European Union, may take an additional 200,000-400,000 tons only, traders say.

As MRC informed earlier, Russia is planning to privatize state-owned oil companies Rosneft and Bashneft.