Over one third of France's propylene capacity impacted by Total's refinery strike

February 24 (plastemart) -- An already tight supply and demand balance in Europe ahs been aggravated by the refinery strikes at Frances' Total that have impacted around 36% of France's total propylene capacity, according to ICIS. The strike encompasses propylene producing fluid catalytic crackers (FCCs) at all five operational French refineries run by Total - Grandpuits, Donges, La Mede, Gonfreville and Feyzin. The sixth refinery at Dunkirk has been idled since September and has mainly contributed to the union action. Around 7,000 direct employees, suppliers and subcontractors at the refineries went on strike to demand restart of the Dunkirk site, likely to be shut down. Later the employees voted for open-ended strike, which was now threatening to engulf majority of France's propylene capacity since unions had called for solidarity from ExxonMobil and INEOS refinery employees. However, as of now, INEOS, ExxonMobil, LyondellBasell and oil refiner Petroplus are running their refineries as normal.

Market sources assume that the steam cracker linked to the Feyzin refinery has also been closed. Total is reported to have declared propylene force majeure at some of the sites, but this was not yet confirmed directly. This will further tighten the propylene supply in Europe at a time when imports also seem to be difficult because of a dearth of propylene globally. Some sources said that prices would be most definitely higher but largely theoretical since there would be no free volume. The refinery strikes are having a double effect on propylene by affecting upstream crude and naphtha prices as well as propylene availability itself.

An increase from the February's settlement at ┬875/ton was widely anticipated even before the latest constraints on supply, although the rise expected was more modest than last month's ┬85/ton. Now, some contract players were revising their ideas. Problems in France amid production problems at crackers in Germany and in the Netherlands, are expected to make contract discussions difficult.

MRC

February 24 (plastemart) -- France's Total Petrochemicals hopes to acquire a polystyrene facility in Feluy, Belgium, after current owner Polimeri announced plans to close the plant, as per European Plastics News. Total's decision to acquire the plant has been guided by concern about the ⌠social impact of Polimeri's decision. According to the proposed deal, Total would acquire the Polimeri facilities and the right to operate the production lines, with the exception of the EPS unit reactors. Total would continue to produce PS on behalf of Polimeri until the end of 2011 but would stop producing EPS by the end of September 2010.

MRC

High-density polyethylene (HDPE) imports were up 21% (to 8.24 kt). Half of HDPE imports were intended for the film extrusion sector. There was seasonal decrease in buying activity in the pipe-grade HDPE market. In January, pipe-grade feedstock imports dropped by 45% compared to December 2009.

Low-density polyethylene (LDPE) imports fell by 12% (to 7.40 kt) compared to the same period last year. At the same time, imports dropped by 21% compared to December 2009. There was a sharp decline in supply of polyethylene produced by Polymir of Belarus (by 50%).

At the beginning of the year supplies of Russian oil to Belarusian refineries were suspended, which was the reason of a serious decrease in LDPE output at Novopolotsk. The first signs of feedstock shortage emerged in mid-February in the Ukrainian market.

In January, linear low-density polyethylene (LLDPE) imports hiked by 40% (to 2.90 kt) compared to the same period last year. At the same time, imports fell by 39% compared to December 2009.

MRC

For more detailed information on the Ukrainian polyethylene market, see DataScope Report.

February 23 (yourindustrynews) -- Arkema announces a ┬ 150/ton increase for its Orevac functional polyolefins effective March 1st 2010 . This measure has been made necessary by the deterioration of margins in recent months, resulting from consecutive rises in raw material costs.

With their outstanding adhesive properties, Orevac polymers are used in the production of multilayer structures (polyethylene, polypropylene, polystyrene, polyamide, polyester, aluminium, steel, paper, etc.) primarily for packaging as well as industrial applications (pipe, pipeline, fuel tank, fuel line, etc.).

MRCMRC Reference

Arkema.

The share in the Russian market in 2008:

PVC - 0.2%;

EVA - 1.1%.

Annual sales growth in Russia, during the recent 5 years:

PVC - 69%;

PE - 121%.

Imports by polymers processing technologies:

coating;

cable extrusion

February 23 (Bloomberg) -- Total SA, the French refiner grappling with a nationwide strike, will meet with unions today in an effort to end a dispute that threatens fuel shortages.

Michael Crochet-Vourey, a spokesman for the Paris-based company, confirmed the meeting in a telephone interview yesterday. The strike started Feb. 17 in an effort to secure jobs at an idled plant near Dunkirk. Workers at Exxon Mobil Corp.'s French plants are scheduled to join the walkout today.

The Confederation Generale du Travail union said yesterday it wouldn't advise members to return to work until management resumes talks to seek a ⌠global settlement, representative Philippe Saunier said by telephone.

Total, Europe's largest refiner, has six French plants with a total capacity of 1.08 million barrels a day. Some filling stations have run dry as drivers rush to buy diesel and gasoline before shutdowns stop refinery production.

⌠We have operational reserves of seven to 10 days, Jean- Louis Schilansky, head of industry group Union Francaise des Industries Petrolieres, said on BFM radio today. ⌠Should the situation become really critical, there are still strategic reserves.

Total said it would hold a works council meeting with unions on March 8, three weeks earlier than scheduled, to discuss plans for the Flanders site as well as refining in France. The Confederation Francaise Democratique du Travail union said that advancement was a ⌠step forward, and recommended members end their six-day strike.

Today's meeting was arranged ⌠at the Elysee's request, Energy Minister Jean-Louis Borloo said on Europe1 radio, referring to the presidential palace. Greater consumption of alternative fuel meant the oil market was changing, and the ⌠change must be accommodated, he said.

Unions had called on Total management to arrange a meeting earlier to give workers more details about the future of the Flanders plant, which was idled in September amid a drop in fuel demand. Total, which has faced government pressure to maintain jobs in the run-up to March's regional elections, said Feb. 1 it was delaying a final decision on the site even as management said refining would be permanently halted.

French President Nicolas Sarkozy met with Total Chairman Thierry Desmarest yesterday to discuss the strikes, an Elysee Palace official said. Regional elections will take place on March 14 and 21.

Besides Flanders, Total's plants are at Gonfreville in Normandy, Donges, Provence, Feyzin and Grandpuits. The refineries supply about 50 percent of French fuel demand, while its 4,000 gasoline stations have about 25 percent of the market.

Total reiterated it won't close or sell any of its other French refineries and said all employees at the Flanders plant will retain jobs with the company.

⌠As we have said no refineries are under consideration as far as closures are concerned, Chief Executive Officer Christophe de Margerie said in New York yesterday. ⌠Our priority is to stop this conflict and certainly not use the fear of consumers to put pressure on workers, he said.

Ineos Group Holdings Plc's Lavera oil refinery in France ⌠continues to operate as normal, spokesman Richard Longden said today in an e-mailed statement. Workers at Petroplus Holdings AG's two French refineries have no immediate plans to join the strike by Total employees, according to a CFDT union representative.

MRC