Imports of polystyrene and styrene plastics in Ukraine grew by 11%

MOSCOW (MRC) -- Polystyrene (PS) and styrene plastics imports into Ukraine increased to 29,900 tonnes in January-June 2016, up 11% year on year. Imports of expandable polystyrene (EPS), general purpose polystyrene (GPPS) and acrylonitrile-butadiene-styrene (ABS) have grown over the reported period. Imports of high-impact grades was stable, as per MRC DataScope report.

The share of imported expandable polystyrene (EPS) over the reported period accounted for more than 48% from the total consumption of the material in Ukraine. Total imports of EPS into the country reached 14,500 tonnes in Jan-June 2016, compared with about 13,000 tonnes year on year.

The key supplier of EPS to Ukraine was Russia. Russian producer SIBUR shipped 8,000 tonnes of EPS, up 45% year on year.

At the same time, imports of Chinese EPS increased to 5,350 tonnes over the reported period, up 22.6% year on year. Imports of Polish EPS fell significantly to 200 tonnes in Jan-June, compared with 1,300 tonnes year on year.

Ukraine's general purpose polystyrene (GPPS) imports grew to 6,110 tonnes over the reported period, up 12% year on year. At the same time the share of Russian suppliers in the market has decreased on the back of the stronger purchasing in Iran, Poland and China.

Import volumes of high impact polystyrene (HIPS) into the country remained steady. Ukraine's imports of HIPS totalled 4,400 tonnes in the first six months of the year, compared to 4,430 tonnes a year earlier. Imports of Russian HIPS decreased to 2,900 tonnes over the reported period from 3,700 tonnes in the same period a year earlier. The displacement of Russian grades was a result of increased purchases of Iranian, Chinese and Polish polystyrene.

Imports of acrylonitrile-butadiene-styrene (ABS) into Ukraine grew to 1,900 tonnes in the first six months of the year, up 16% year on year.
The growth in imports was provided by South Korean producers, traditional leaders in this segment.


MRC

Stavrolen resumed PP production

MOSCOW (MRC) - Stavrolen, a major producer of polyolefins in Russia, resumed production of polypropylene (PP) after scheduled maintenance works; shipments of the polymer started on Tuesday, said the producer's customers to MRC.

Stavrolen resumed its PP production on Monday, 18 July following a short turnaround. The shutdown of PP production was carried out on 11 July and lasted for about a week.

Stavrolen has no plans to shut its polypropylene (PP) and high density polyethylene (HDPE) production for long time scheduled maintenance works this year.

June production of HDPE and PP at the plant was 24,200 and 10,000 tonnes respectively. Producer's output of HDPE and PP in the first six months of the year reached 131,200 and 57,500 tonnes respectively.

"Stavrolen" (subsidiary of LUKOIL) is the second largest Russian producer of high density polyethylene (HDPE) after Kazanorgsintez and the fifth in terms of production of polypropylene. Stavrolen's production capacities for HDPE and PP are 300,000 tonnes/year and 120,000 tonnes/year, respectively.

LUKOIL - is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. LUKOIL is the second largest private oil company worldwide by proven hydrocarbon reserves. LUKOIL structure includes two of the largest Russian and Ukrainian petrochemical companies - Stavrolen and Karpatneftekhim.
MRC

Britain facing higher winter gas imports due to Rough outage

MOSCOW (MRC) -- Even if Britain's main natural gas storage site manages to resume some withdrawals, the country will need to import up to 1.75 Bcm of additional gas this winter, according to Hydrocarbonprocessing.

Centrica, the operator of the Rough storage site, warned on Friday that a shutdown for tests there would last until March or April, although it held out hope that withdrawals could restart from four wells in November. "With the UK likely to have a 1.20-1.75 Bcm shortfall of gas in storage compared to last year's use (potentially an average supply shortfall of 11 Mcmd), the UK gas balance will likely have to replace that volume from other sources," said Trevor Sikorski, an analyst at UK-based consultancy Energy Aspects.

Britain depends on stored reserves to help manage winter demand spikes and to ensure security of supply. The Rough site accounts for more than 70% of the UK's storage capacity, National Grid data shows. "It is expected that four wells (of 24 operated typically) will be opened to allow withdrawal from November. Working gas at Rough for the winter will now not exceed 1.3 Bcm ...this is 1.2 Bcm less than last winter's withdrawal," Sikorski said.

This leaves Britain going into winter with record low storage levels and raises questions about the ageing site's long-term future. "(The Rough outage) will no doubt increase the UK's dependency on gas imports and increase its exposure to European and global fundamentals," said analysts at S&P Global Platts.

Britain may have to pay a premium to get the gas it needs to cover winter demand, especially if there is a very cold winter like 2012/2013, as it competes with other European countries for supply.

The winter gas contract is already near a one-year high. Sources of additional supply include imports of LNG, of Norwegian gas, and of gas from Europe via the InterconnectorUK (IUK) pipeline, which has a capacity of 10.6 Bcm or 70 Mcmd.

Last winter, Britain's imports averaged 75 Mcmd from November to March. LNG import terminals have excess capacity and around 15 Bcm more LNG could be available to come to Europe this winter, Sikorski said.

In the event of a really cold winter, UK prices will have to rise to attract the gas from Norway, continental Europe or LNG suppliers. British gas prices could rise above Asian LNG prices to attract supply to UK terminals, said Oliver Sanderson, gas analyst at Thomson Reuters.

Asian LNG prices for September delivery are currently trading around 43.60 pence per therm, below British gas prices for winter delivery of 46.75 pence per therm. "This is a far smaller likelihood than the need for more imports from the Continent, but (this) cannot be discounted at present," Sanderson said.


MRC

Arkema acquires sealants producer Den Braven for EUR485 million

MOSCOW (MRC) -- Arkema announced that it has agreed to acquire the sealants producer Den Braven (Oosterhout, Netherlands) from the Dutch private equity firm Egeria in a deal valued at EUR485 million (USD533 million), said Chemweek.

The price equals 11x 2016 Ebitda estimate and Arkema envisages synergies leading to annualized cost reductions of EUR30 million, to be achieved within five years. The acquisition is subject to consultations with the works council of the Arkema BV subsidiary and to antitrust approvals. Closing is expected in the last quarter of 2016.

Den Braven, a leading player in high-performance sealants in Europe with estimated sales of EUR350 million this year, will reinforce Bostik, Arkema’s adhesives and sealants business. The deal is in line with Arkema’s plans for bolt-on acquisitions in selected areas, including adhesives.

Den Braven employs about 1,000 people and operates eight plants, including two each in Germany and the Netherlands, as well as plants in France, Romania, Turkey, and in the United States. Den Braven offers an extensive range of sealing, bonding, and foam products and services for construction professionals as well as industry, and it reinforces Bostik’s offering in the insulation and construction markets. The geographic and technological fit will help create a world leader in the high-performance sealants market, which is growing at 3-4% per year, Arkema says.

As MRC informed earlier, Bostik, the specialty adhesives business line of Arkema, has expanded its cementitious products manufacturing capacities, based on its world-class Polymer Modified Binder (PMB) technology, at its Seremban plant in Malaysia.

Bostik, although a leading player, has a share of only 3-4% of the worldwide adhesives and sealants market, which is very fragmented. The overall market is estimated at about EUR50 billion per year, of which sealants account for EUR9 billion. The acquisition is in line with Arkema’s plan to increase the revenue share of its high-performance materials (HPM) segment, which should account for 50% of group sales by 2020. In addition to Bostik, Arkema's HPM includes technical polymers, filtration and adsorption, and organic peroxides.
MRC

Ineos Nitriles declares force majeure on ACN out of Texas plant

MOSCOW (MRC) -- Ineos Nitriles has declared force majeure on acrylonitrile (ACN) from its Green Lake plant in Port Lavaca, Texas, because the pipeline supplying over 90% of its propylene feedstock has been shut down, said Chemweek.

The duration of the force majeure was pegged at between three and six months, sources added. The sources added that the event stemmed from the shutdown of a nearby chemical-grade propylene pipeline that was the primary source of feedstock for the plant.

ExxonMobil Chemical, the supplier of CGP to the plant, confirmed the pipeline outage. Further information on the reason for the shutdown was not immediately available.

As MRC informed earlier, in 2015, Ineos Nitriles has today announced that it is to re-establish production on its 4th reactor at its Green Lake facility (Texas, USA), re-instating 100kt of capacity. Despite extremely tough market conditions, INEOS Nitriles is convinced that a combination of long term advantaged US propylene, world leading technology and economies of scale will ensure that Green Lake will be able to compete globally.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC