LLDPE prices rising in Russia

MOSCOW (MRC) -- Prices in the Russian LLDPE market had moved at the level of RUB57.000-60.000/mt by the middle of the current week - according to MRC Price Report.

Nizhnekamskneftekhim resumed LLDPE production in mid-February; however, due to technical problems, shipments to the domestic market were limited. Lack of butene-based LLDPE in Europe resulted in a serious decrease in imports of European material in the Russian market. In view of the domestic demand sales of Shurtan Gas-Chemical Plant's feedstock at the exchange were nearly stopped.

The tight Russian PE market and high feedstock prices in Europe and Asia preconditioned growth of prices in Russia.

The price for Nizhenkamskneftekhim's PE5118Q LLDPE grade climbed at RUB60.000/mt; prices for Uzbek polyethylene moved at RUB57.000/mt, including VAT, FCA. European producers raised March LLDPE prices on average by EUR30-40/mt, to EUR1.080-1.100.


For more detailed information on the Russian polyethylene market, see Price Report.

Cost reductions at Arkema limit fall in 2009 operating profit

March 12 (plasteurope) -- Arkema has reported a 38% year-on-year fall in operating profit (EBITDA) to EUR 310m in 2009. The company said that it had limited the impact of falling volumes by accelerating cost reductions while generating high cash flow.

Sales in the year fell by 21% to EUR 4.44 bn, with volumes showing a 14% decline over 2008 due to the effect falling demand combined with customer destocking in the first six months of the year. Prices fell over the year, reflecting lower raw material costs, in particular ethylene and propylene and a fall in caustic soda prices.


MRC Reference


Russia's planned large-scale petrochemical to target the Chinese market

March 12 (plastemart) -- Based on Russia's plentiful feedstock resources, petrochemical major Sibur is studying the construction of large-scale petrochemical and polymer production as per ICIS. Since domestic demand is limited, the projects would be export-oriented, targeting China primarily.

But building the necessary pipelines to transport the feedstock across huge distances to the cracker locations will be a mammoth task. Russia has the feedstock and capabilities to convert this feedstock into polyolefins at a competitive cost. Transvalgaz is exploring the feasibility of necessary gas processing and feedstock transportation from Western Siberia to North-West Russia.

Sibur is also discussing with Gazprom a cracker project in Russia's Far East region, either in Vladivostok or Khabarovsk. Vladivostok is the preferred location because the port is ice-free.

MRCMRC Reference

Sibur Holding is the largest Russian petrochemical group.

Gazprombank (70% minus 1 share);
Gazfond (25% plus 1 share);
5% reserved for option program.

The share in the Russian market in 2008:

polyethylene - 11.1%;

polypropylene - 16% (including PP-random - 11.2%);
ABS - 5.2%;
PVC - 8.1%.

Mitsui Chemicals to restart 553,000 tpa Chiba naphtha cracker end of month

March 12 (plastemart) -- Japan's Mitsui Chemicals Inc expects to restart its 553,000 tpa naphtha cracker in Chiba around late March after repairs.

The cracker was originally shut on Feb. 28 due to a problem and has failed to restart earlier this month, resulting in a loss of about US$33 mln.

Repsol plans indefinite shutdown of unit at Puertollano refinery

March 12 (plastemart) -- Spain's Repsol is to shut down its petrochemical units producing styrene, propylene oxide and glycols at the refinery indefinitely. It has also halted the hydrocracker at its Puertollano refinery for 3 months due to low refining margins.

Since the cracker was operating at minimum levels and production at the petrochemical units had already stopped, the effect on output will be very limited. Repsol does not plan to lay off any of the 90 workers affected by the stoppages.