Lotte Chemical Titan Holding completes mass production trial of MLLDPE

MOSCOW (MRC) -- Lotte Chemical Titan Holding Berhad (LCT) has completed a mass production trial of Metallocene linear low-density polyethylene (mLLDPE), an important component in the production of plastic items such as industrial film, food packaging, and stretch and shrink film, as per Plastemart.

Usage of mLLDPE will allow producers to achieve their output margins with a comparatively lower polymer input, leading to cost savings. mLLDPE has superior transparency and impact strength, compared with conventional LLPDE, resulting in better efficiency and competitiveness to customers.

LCT president and CEO Dr Lee Dong Woo said LCT’s breakthrough with mLLDPE comes after several trial productions since 2012. He added, "As a company dedicated to continuous innovation, LCT can now introduce to our customers, mLLDPE which is a cleaner and lighter alternative to conventional LLDPE. Commercial production of mLLDPE will effectively widen our product portfolio and we are confident that this product can meet the needs of our local and regional customers, given its excellent qualities."

As MRC wrote before, South Korean conglomerate Lotte Group plans to list its Malaysian petrochemical unit in the third quarter, company filings show, in an initial public offering that sources say could raise as much as USD1.5 billion. The listing could be one of the biggest IPOs in years in Malaysia, which has not seen any listing of USD1 billion and above since the USD1.5 billion IPO of Astro Malaysia Holdings in 2012.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.
MRC

MOSCOW (Market Report) -- Prices were going down constantly in the Russian high density polyethylene (HDPE) market since the beginning of the year, but already in July the market situation changed radically. There was even a price increase in some segments this month, according to ICIS-MRC Price report.

Oversupply of HDPE in the Russian market put a major pressure on prices amid weak demand since early 2017, with polyethylene (PE) accounting for the most dynamic price cut from April to June. The price situation was managed to be stabilized in the HDPE market in July because of a scheduled shutdown for a long turnaround at Gazprom neftekhim Salavat and Nizhnekamskneftekhim's switch-over to linear low density polyethylene (LLDPE) production. And even more, there was a shortage and a rise in prices of natural PE 100 in the pipe grade PE market.

Gazprom neftekhim Salavat, being lately the key supplier of natural pipe grade PE 100, shut down its HDPE production for almost a one-month maintenance on 1 July. The Salavat plant scheduled the resumption of its production after the turnaround for 5 August. The plant's annual production capacity is 120,000 tonnes.

Nizhnekamskneftekhim has switched to LLDPE production since late June and intends to produce this PE grade until September, said the plant's customers. The Nizhnekamsk plant's annual production capacity is 210,000 tonnes.

The fact that HDPE was not produced by two manufacturers allowed to balance supply and demand in most consumption sectors of the Russian market in July. And in the pipe grade PE market, on the contrary, there was a shortage of natural PE 100 since the beginning of the month, and by the middle of the month, prices for some grades had grown significantly and reached Rb89,000-92,500/tonne FCA, including VAT. At the same time, there was no great surge in demand for black PE 100 during the month.

The shortage of natural PE 100 led to stronger demand for general purpose 273-83 grade HDPE. By the end of the month, some traders had begun to restrict their sales of this PE grade because of limited stocks and production problems at Kazanorgsintez. Offer prices for this PE reaced Rb87,000/tonne FCA Kazan, including VAT, in the last week of July.

There was also a slight price rise in the film grade HDPE market in the second half of July. Demand for this material grew significantly in the electronic trades. Some companies considerably increased their purchasing of this HDPE grade in foreign market because of the upcoming shutdowns for maintenance at two major producers - Stavrolen and Kazanorgsintez - in September.

Prices were steady in the injection moulding HDPE market in July. Sufficient stocks of injection moulding PE allowed to meet all market needs even in the absence of production of this material by local producers.

HDPE prices are most likely to go up further in the Russian market in August due to the upcoming outages at the two key producers. Thus, Stavrolen intends to shut down its HDPE production for a long maintenance with the modernization of some facilities on 1 September. The outage will last about 2 months. The plant's annual production capacity is 300,000 tonnes.

Kazanorgsintez, Russia's largest HDPE producer, traditionally shuts down its production for a several-week turnaround in the second half of September. The plant's annual production capacity is 540,000 tonnes.
MRC

June imports of unmixed PVC to Kazakhstan grew to 6,600 tonnes under the pressure of seasonal factors from 4,500 tonnes a month earlier. Thus, overall imports of resin reached 25,200 tonnes in the first half of 2017, compared to 23,000 tonnes a year earlier.

Due to the geographical position, the main suppliers of PVC to Kazakhstan were Chinese producers, with the share of about 99% of the local market over the stated period.
MRC

June PE imports to Kazakhstan rose to 14,600 tonnes from 12,900 tonnes a month earlier, local companies significantly increased their purchasing of high density polyethylene (HDPE). Overall PE imports totalled 62,900 tonnes in January-June 2017, compared to 49,000 tonnes a year earlier. Purchasing of all PE grades rose, with HDPE accounting for the greatest increase.

The structure of PE imports by grades looked the following way over the stated period.

June HDPE imports to Kazakhstan went up to 11,700 tonnes from 10,200 a month earlier. Local companies further increased their PE purchasing in Uzbekistan. Thus, overall HDPE imports reached 48,100 tonnes in the first six months of 2017, up by 30% year on year.

Last month's purchasing of low density polyethylene (LDPE) in foreign markets by local companies remained at the level of May and were 2,200 tonnes. Overall LDPE imports to Kazakhstan totalled 11,800 tonnes in January-June 2017, up by 24% year on year.

Purchasing of linear low density polyethylene (LLDPE) by local companies was 3,100 tonnes in the first six months of 2017, compared to 2,600 tonnes a month earlier.

MRC

MOSCOW (MRC) -- China's crude oil production fell to its lowest on record in May, even as refineries in the world's top buyer of crude churned out product at their fastest pace in nearly two years, reported Reuters with reference to the latest data.

Crude output fell 3.7% in May from a year earlier to 16.26 MMt, or 3.83 MMbpd, data from the National Bureau of Statistics showed on Wednesday. The figure is the lowest since the bureau began publishing records in 2011.

The drop in China's crude oil output has slowed as major oil producers raised spending to boost production as oil prices have stabilized in a range between USD48 to USD55 per barrel. Analysts are forecasting flat or positive production growth for calendar 2017.

"Declining output this year comes as China's major oil fields Daqing and Shengli announced production cuts at the beginning of the year. The pace of decline in production will ease this year due to higher crude prices," said Gao Jian, a crude oil analyst with China Sublime Information Group.

PetroChina, the owner of China's largest oilfield Daqing, said in December that it would slash capital spending on the field this year by 20% from a year earlier.

Crude runs, meanwhile, rose in May by 5.4% from a year ago to 46.62 MMt, or 10.98 MMbpd. Overall throughput was down from a record reached in March, but May recorded the fastest rate of year-on-year growth since May 2015.

The refinery data highlights the concerns of a growing glut of gasoline and diesel in the domestic and Asian market even as demand slows. Sinopec Group, Asia's biggest refiner, is considering cutting refinery runs in the third-quarter because of the excess fuel supply in the country.

Natural gas output in May dipped to its lowest since October, dropping by one-quarter from April to 12 Bcm. However, compared to a year ago, production rose 10.5%.

We remind that, as MRC wrote before, in March 2017, China Petroleum and Chemical Corp (Sinopec) started operating a major crude oil pipeline that connects eastern Jiangsu province with refineries in south China. The pipeline, which spans 560 kilometers, runs at an annual capacity of 20 MMt, Sinopec said. "The new crude oil pipe will support crude demand from Sinopec's Jiujiang and Anqing refinery", it added.

Besides, Sinopec group, parent of Sinopec Corp, will invest USD29.05 billion to upgrade four refining bases between 2016 and 2020 to produce higher-quality fuels.
MRC