Middle Eastern producers rolled over September LLDPE prices for October for CIS countries

MOSCOW (MRC) -- Despite tight supply, Middle Eastern producers did not adjust their prices of linear low density polyethylene (LLDPE) for October shipments to the CIS countries. September prices were maintained for this month's shipments, according to ICIS-MRC's Price report.

Negotiations over October shipments of Middle Eastern butene LLDPE started back at the beginning of the month, and all deals have been virtually completed by now. Market participants said supply of polyethylene (PE) by some producers was tight this month because of various reasons. However, this factor did not result in the adjustment of October prices.

Deals for October deliveries of Middle Eastern LLDPE C4 from European warehouses were done in the range of EUR1,055-1,090/tonne FCA, which corresponds to the level of September deals.

For shipments by sea, deals were discussed in the range of USD1,170-1,210/tonne CFR St Petersburg and Odessa. Deals over October shipments of butene LLDPE from Iran were negotiated in the range of USD1,170-1,200/tonne CFR Astrakhan.

Pump seal source of fire in Westlake Petrochems styrene unit, all clear given

MOSCOW (MRC) --A fire in the Styrene unit at Westlake Petrochem has been contained, said Kplctv.

The fire was extinguished around 2:40 p.m. Joe Andrepont, Sr. Community Affairs Representative for Westlake Chemical Corp., said the source of the fire was a pump seal in the Styrene unit, which is located on the southeast corner of Westlake's Petrochemical manufacturing facility.

A pump seal is designed to prevent fluid from leaking from a piece of equipment. There is no outside impact, according to Kade Mclemore, with Calcasieu Parish OEP. Dick Gremillion, head of OEP, said the fire has been contained.

No injuries are reported and all employees - both Westlake and contractors - are accounted for, Andrepont said. LSP is on site, DEQ, OHSEP, and the Coast Guard have been notified.

The company is doing its own air monitoring which is part of emergency procedures, Andrepont said. Andrepont says this is not a normal occurrence.

Styrene is typically used in production of tires, styrofoam cups and installation.

As MRC informed earlier, on 31 August Westlake Chemical Corporation announced that it has completed the previously announced acquisition of Axiall Corporation for USD33.00 per share in an all-cash transaction, representing an enterprise value of approximately USD3.8 billion, including debt and certain other Axiall liabilitie.

Westlake Chemical Corporation is a U.S. manufacturer and supplier of petrochemicals and polymers, headquartered in Houston, Texas. The range of company"s products includes ethylene, polyethylene, styrene, propylene, caustics, polyvinyl chloride and plastic products. Westlake is one of the major ethylene producers in the US and its Calvert City operation is a large integrated PVC site. Westlake"s 2015 financial results showed sales of USD4.46 billion and profit of USD646 million. The sales total was up 1% vs. 2014, while the profit level was down almost 5%. Lower selling prices - particularly for polyethylene and ethylene feedstock - impacted Westlake in 2015.

Hengli Petrochemical shut PTA plant in China for turnaround

MOSCOW (MRC) -- Hengli Petrochemical has taken off-stream its No. 2 purified terephthalic acid (PTA) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in China informed that the company has halted operations at the plant early this week. The planned maintenance is likely to remain in force for a period of around 20-22 days.

Located in Dalian, northeast China, the plant has a production capacity of 2.2 million mt/year.

As MRC reported earlier, in December 2015, Hengli Petrochemical's 74 billion yuan refining and petrochemical complex started construction in Changxing Island Industrial Zone, Dalian, Liaoning Province, marking the first private company entering the oil refining industry. The project locates in petrochemical industrial park of Changxing Island and is near the company's PTA plant. The project includes 4.5 mln tpa aromatics complex and 20 mln tpa refining and petrochemical facility.

Hengli Group which was founded in 1994 now owns the largest PTA factory of monomer capacity, the largest production base of superbright polyester yarn and industrial yarn, the largest weaving enterprise in the world. It now has more than 50,000 staffs, and has been established into "Enterprise Technology Center" of our country. Its business sets foot in several industries such as petrochemical, polyester,chemical fiber, weaving, thermal power, machinery, hotel and real estate,etc. The enterprise competitiveness and brand value of the products stand first on the list among the same industry. In 2014, the sales volume of Hengli Group is RMB 163 billion, which ranks 11th in China's top 100 private enterprises.

Idemitsu Kosan postpones Showa Shell merger

MOSCOW (MRC) -- Japanese oil refiner Idemitsu Kosan Co. said Thursday it would put off a planned merger with a rival, bowing to opposition from the son of Idemitsu’s late founder, said The Wall Street Journal.

The battle has captured attention in Japan, where founding families maintain influence in various forms at many major companies including Toyota Motor Corp.

Idemitsu management has pushed hard for the merger with Showa Shell Sekiyu K.K. but repeatedly failed to persuade the company’s honorary chairman and former president, 89-year-old Shosuke Idemitsu. Mr. Idemitsu and family members control a 33.9% stake in Idemitsu, enough to block the merger.

On Thursday, Idemitsu’s president, Takashi Tsukioka, said the merger could no longer happen as planned in April 2017. He said he expected a delay of up to a year. Still, he said he believed the merger was "the best possible combination and the best possible measure for the two companies’ sustainable growth."

Mr. Tsukioka said he hasn’t met Mr. Idemitsu since July 11 but still believed the former president would eventually come around to the merger idea. Mr. Idemitsu’s lawyers said that would never happen. In a statement, the lawyers used a Japanese proverb to argue that the two companies were incompatible, saying a merger would be like "grafting a bamboo shoot onto a tree."

The backdrop to the proposed merger is a fast-shrinking domestic market, where slow economic growth and the rise of environmentally friendly cars such as Toyota’s Prius, a best-seller locally, have cut demand for gasoline. Also, the country’s largest oil refiner, JX Holdings Inc. plans to swallow up a smaller refiner in April 2017, which would give JX more than half of the domestic market.

If they merged, Idemitsu and Showa Shell Sekiyu would have a market share of about 30%.

International oil major Royal Dutch Shell PLC owns a roughly one-third stake in Showa Shell Sekiyu. Idemitsu said it planned to follow through with previously announced plans to buy that stake by next month, on the assumption that the full merger with Showa Shell Sekiyu will eventually happen.

Mr. Idemitsu, whose father founded the company, has argued that its Japanese roots and historical ties with Iran give it a different corporate culture from Showa Shell Sekiyu, where non-Japanese shareholders including Saudi Arabian Oil Co. have held the leading hand.

Showa Shell Sekiyu Chief Executive Tsuyoshi Kameoka, sitting next to his Idemitsu counterpart, rejected that view, saying Showa Shell Sekiyu’s roots in Japan go back 116 years and it has 33 affiliated gas-station operators with which it has done business for more than a century.

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.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.

Formosa shut Changhua nylon plant, may close it permanently

MOSCOW (MRC) -- Formosa Chemicals & Fiber Corp (part of Formosa Petrochemical) shut its nylon production plant in Changhua, Taiwan, on October 8, a source close to the company said Thursday, adding that the closure could be permanent, reported Apic-online.

Formosa was forced to shut the Changhua plant after failing to obtain an operating license from the government due to issues over air pollution. The plant was initially targeted to shut in early October but FCFC asked the local government for an extension of the deadline to October 8 as its appeal was pending.

Changhua can produce 5,000 mt/day of rayon staple fiber and an equivalent amount of nylon fiber.

The shutdown of one of its nylon plants would reduce the company's demand for caprolactam, a raw material used to produce nylon, amid weak demand.

As MRC wrote before, Taipei- Formosa Plastics, also a subsidiary of Formosa Petrochemical, is considering construction of a plant in Louisiana to produce 1.2-million t/y of ethylene from shale gas.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).