Europe : Issue 119 06-04-2009
NYMEX CRUDE PRICES FALL MARGINALLY AHEAD OF THE WEEKEND START
Nymex crude oil prices retreated slightly on Friday as a report indicated that unemployment rates in the USA increased to a 25 year high in March.

Nymex crude prices turned slightly bearish as a report released by the US labor Department stated that a net total of 663,000 jobs were reduced by employers in March, in contrast to expectations of a reduction of 654,000 jobs. The unemployment rate in the world’s highest energy consuming country surged to 8.5 percent in March, the highest since late 1983. As per a report by the Institute of Supply Management, its non manufacturing index declined from 41.6 in February to 40.8 in March.

Brent prices rose as the US dollar recorded a fall against the euro. The US greenback traded USD 1.3470 against the euro from USD 1.3440 before the US unemployment data was released. A fall in US dollar prompts investors holding stronger non dollar currencies to invest in dollar denominated commodities like crude, sending prices upwards.

Nymex crude futures increased to trade at USD 52.51/barrel while Dated Brent spot prices rose to trade at USD 54.00/barrel. WTI Cushing spot prices turned upwards to trade at USD 52.51/barrel.

PolyethyleneHigh Density Polyethylene - HDPE
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 890 890 810 1300
Germany EUR 890 890 810 1300
Italy EUR 880 880 820 1290
Spain EUR 880 880 820 1290
UK GBP 780 780 670 970
Low Density Polyethylene - LDPE
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 880 880 750 1280
Germany EUR 880 880 750 1280
Italy EUR 870 870 730 1280
Spain EUR 870 870 730 1280
UK GBP 800 800 675 975
Low Linear Density Polyethylene - LLDPE
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 860 860 710 1230
Germany EUR 860 860 710 1230
Italy EUR 850 850 710 1230
Spain EUR 850 850 710 1230
UK GBP 790 790 665 955

SPOT AND CONTRACT PRICES OF LLDPE QUOTE UNCHANGED IN EUROPE
In Europe, LLDPE contract and spot prices ended last week unchanged from the week before. While contract prices were assessed at the Euro 860/mt FD North West Europe mark, butane grade spot LLDPE prices were assessed at the Euro 770/mt FD North West Europe levels.

Buying in LLDPE is subdued in Europe as many processors are believed to have sufficient stock to see them through the next fortnight. Hence sellers are testing opportunities to sell LLDPE to Asia where demand is currently robust and prices are rapidly rising. In Europe meanwhile, there is some likelihood of the buying trend in LLDPE improving post the Easter holidays.

In plant news, Polimeri Europe has shutdown a 140 kt/annum LLDPE plant located at Dunkirk due to some technical problem. The outage is likely to last until April 10th. Ineos has also suffered some technical problem at its plants located at Cologne (200 tk/annum) and Grangemouth 9250kt/annum).

LDPE CONTRACT AND SPOT PRICES FINISH FLAT IN EUROPE LAST WEEK
LDPE contract and spot prices in Europe last week were assessed flat. General purpose contract prices were assessed at the Euro 880/mt FD North West Europe levels while in the spot markets, LDPE prices were assessed at the Euro 790/mt to Euro 800/mt FD North West Europe levels.

In Europe, buying interest in LDPE remained thin. Producers were seeking hikes for April, however buyers were prepared to resist these.

The buying mood in LDPE in Europe is subdued but this is not of any immediate concern to sellers as there is good demand for European spot LDPE cargoes in Asia where the pricing trends are currently very bullish. Sellers refuse to reduce LDPE rates and believe that post the Easter holidays, could see a buying revival in Europe.

LYONDELLBASELL PREPARING TO REDUCE LDPE PRODUCTION IN FRANCE
LyondellBasell Industries on Thursday announced a project to cease the production of low density polyethylene (LDPE) at Fos-sur-Mer, France. The unit has been partially idled since March and the company has started the employee consultation process regarding a project to shut down the unit permanently. The plant currently has approximately 80 permanent employees.

“Taking into account the current market environment and our future projections our conclusion is that this plant is no longer economically viable. We are able to meet projected customer demand for LDPE with product supplied from our other LDPE facilities,” said Richard Roudeix, LyondellBasell’s Vice President for Polyethylene in Europe.

LyondellBasell said that LDPE production activities in France will be focused on the company’s world-scale plant located at Berre, France. “Market conditions require economies of scale and low conversion costs,” Roudeix said. “With more than 300 KT of capacity, our Berre plant represents a dramatic step-change in the production of LDPE, with superior investment and operational economics.”

The Fos plant has a nameplate capacity of 110 KT per year and is the company’s smallest LDPE unit. In conjunction with the project of shutdown, LyondellBasell has started consultation with representatives of the works council to determine the appropriate path forward for the employees at the LDPE site.

LyondellBasell Industries is one of the world’s largest polymers, petrochemicals and fuels companies and are the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world

SABIC’S NEW HIGH DENSITY POLYETHYLENE PLANT MEETS HIGH EXPECTATIONS
SABIC’s new High Density Polyethylene (HDPE) bi-modal slurry plant – the LD6 in Gelsenkirchen, Germany - is up and running and meets the high expectations; the first produced SABIC® Vestolen A pipe grades are commercially available up from now.

The SABIC® Vestolen A family is well-known for its high quality; offering properties such as easy processability as well as excellent pipe performance with regards to reliability and safety. With the LD6 SABIC is ready for the future HDPE market: The LD6 secures future product supply, enables high-end product innovations and ensures a more environmental friendly production process.

Sustainability is in terms of products as well as production processes an important business focus of SABIC. ”Particularly in this turbulent time of economical crisis sustainability has a high priority on our agenda,” said Dieter Hollmann Business Unit Director HDPE. ”The increasingly more challenging global environment demands us to look for practical solutions that optimize the business benefits of sustainable manufacturing. Our LD6 is the living proof that SABIC is committed to explore the opportunities.” The new plant reduces operating costs, improves operational effectiveness and increases resource utilization. In comparison to a traditional HDPE plant SABIC’s LD6 reduces for example the electricity usage with 8%, air emissions with 85% and sewage with 50%.

SABIC’s LD6 is equipped with a leading production technology that secures a reliable and high quality product supply. The new plant will cover a production of 250kt per annum. ”We’ve modified the basic licensed technology in order to obtain a larger production capability window and higher production flexibility,” explains Jean Engels Business Manager HDPE. ”Moreover SABIC is using its own proprietary catalyst technology, securing consistent high product quality.”

The production technology is furthermore designed to enable high-end product developments. ”In the near future we’ll expand our portfolio with a new grade family pushing the sustainability borders even further,” said Engels. The new SABIC® HDPE family will cover market segments that require improved sagging performance during pipe extrusion and better slow crack growth performance for advanced pipe line installation technologies like sand-less embedding, re-lining, burst lining and directional drilling.

PolypropylenePolypropylene - PP
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 800 800 740 1250
Germany EUR 800 800 740 1250
Italy EUR 800 800 740 1220
Spain EUR 800 800 740 1220
UK GBP 750 750 690 925

PP PRICES IN EUROPE QUOTE STABLE
Although demand for PP in Europe remained sluggish last week, prices were assessed flat both in the contract and spot markets.

Homopolymer injection grade PP contract prices were assessed last week at the Euro 800/mt FD North West Europe levels while PP copolymer prices were assessed at the Euro 840/mt FD North West Europe levels.

In the spot markets PP homopolymer injection moulding prices were assessed at the Euro 700/mt FD North West Europe levels while PP copolymer prices were assessed at the Euro 750/mt FD North West Europe levels.

European sellers of PP were successful in defending their prices stable despite subdued domestic demand as their efforts were focused on Asia where buying activity was robust and PP prices were galloping higher at a very brisk pace. Buying interest for European PP was also good in Africa.

A PP seller in Europe when contacted said, “ active buying interest for PP from China for now is compensating for the low purchase activity in Europe. Most of our sales volume are owed to some plastic mesh manufacturers. We have been successful in selling to Asia last week and have more to offer this week. There however are restrictions beyond this week as regional production volumes of PP are not ample. We are hoping to keep our prices steady for now.”

PolystyrenePolystyrene - PS
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 950 940 1000 1360
Germany EUR 950 940 1000 1360
Italy EUR 940 930 1000 1330
Spain EUR 940 930 1000 1330
UK GBP 850 840 875 1090

HIPS AND GPPS PRICES EDGE HIGHER IN EUROPE
Polystyrene (PS) prices in Europe last week firmed. While GPPS contract prices were assessed up at the Euro 950/mt FD North West Europe levels, HIPS contract prices were assessed at the Euro 980/mt FD North West Europe levels.

In the spot markets, GPPS prices were assessed at the Euro 740/mt FD North West Europe levels while HIPS prices were assessed at the Euro 785/mt FD North West Europe levels.

Higher prices of benzene and Styrene Monomer feedstock supported strength in PS as did reports of bullish PS prices in the Asian markets. For the month of April, prominent PS producers like BASF were heard targeting hikes of Euro 100/mt in their PS contracts. Buyers polled however brushed off these ambitious targets and labeled them as irrational in light of relatively light demand in the region.

Poly Vinyl ChloridePoly Vinyl Chloride - PVC
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 690 690 780 990
Germany EUR 690 690 780 990
Italy EUR 680 680 790 980
Spain EUR 680 680 790 980
UK GBP 600 600 740 745

PVC PRICES IN EUROPE ROLL OVER
With ethylene contract prices in April settled at a rollover from March, pressure on European producers of PVC to rollover their contract prices for the month, intensified.

A handful of European PVC producers are reported to have announced contract price hikes for April ranging from Euro 20/mt to Euro 50/mt, but these producers according to industry players polled, were unlikely to find success in increasing their PVC contract prices. Instead, a majority of players expected contracts to be rolled over for the month.

PVC suspension grade prices last week in Europe were assessed unchanged from the week before at the Euro 690/mt FD North West Europe levels. In the spot markets, FD North West Europe prices of PVC were also assessed flat at the Euro 530/mt to Euro 560/mt levels. Buyer bids were heard at levels as low as Euro 500/mt for spot PVC cargoes.

In market news, Ineos Vinyls Italia’s PVC and VCM plants were sold off last week to Safi SpA. The plants are located in Porto Marghera, Porto Torres and Ravenna. Safi belongs to Italian businessman Fiorenzo Sartor.

Acrylonitrile Butadiene StyreneAcrylonitrile Butadiene Styrene - ABS
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 1505 1495 1780 2020
Germany EUR 1505 1495 1780 2020
Italy EUR 1505 1495 1780 1980
Spain EUR 1505 1495 1780 1980
UK GBP 1360 1350 1615 1510

SEVERAL BULLISH TRIGGERS PUSH SPOT AND CONTRACT ABS PRICES IN EUROPE HIGHER
ABS prices bolstered higher in Europe’s spot markets last week. Prices gained in the contract markets too, with ABS general purpose and ABS natural grade prices assessed up at the Euro 1175/mt to Euro 1185/mt FD North West Europe levels.

In the spot markets, prices of ABS were assessed up at the Euro 1165/mt to Euro 1175/mt FD North West Europe levels, a steep gain of over Euro 100/mt from last weeks assessed levels of Euro 1055/mt to Euro 1065/mt FD North West Europe levels.

Gains in ABS prices were supported by strength in ACN, butadiene and SM feedstock costs a well as reports of good regional product demand. Bullish ABS prices in Asia further supported strength in Europe’s ABS markets.

Polyethylene TerephthalatePolyethylene Terephthalate - PET
Currency 06-04-2009 30-03-2009 05-01-2009 07-04-2008
France EUR 1040 1040 970 1260
Germany EUR 1040 1040 970 1260
Italy EUR 1050 1050 970 1230
Spain EUR 1050 1050 970 1210
UK GBP 960 960 860 955
Other NewsSOLVENT MX PRICS IN EUROPE BOLT HIGHER
Solvent MX prices in Europe rallied last week. Prices gained as buyer sentiments were seen robust. Also supporting higher prices were reports of low inventories, fuelled by plant shutdowns for maintenance.

A trader in the region reported, “ spot avails of solvent MX in the open markets remain very tight. FOB Rotterdam prices of solvent MX have been assessed at the USD 665/mt levels, however offers in Europe are being heard up at the USD 700/mt FOB levels.”

He added, “ cues are strong from Asia and the US too. Prices of solvent MX have firmed in both regions. Also seen supporting higher solvent MX prices are gains in Isomer MX rates in Europe coupled with strength in prices of PX.”

MERGER CONTROL AUTHORITIES APPROVE ACQUISITION OF CIBA BY BASF
The U.S. Federal Trade Commission (FTC) and the Chinese merger control authority MOFCOM approved the acquisition of Ciba Holding AG by BASF on April 2, 2009. No conditions were imposed beyond those required by the European Commission in its decision of March 12, 2009.

Furthermore, the condition imposed by the European Commission to reach a sales agreement for Ciba’s business with the light stabilizer CHIMASSORB 119 FL (HALS) before closing has been fulfilled. The buyer is the Italian company Sabo S.r.l.

As a result, the conditions for the settlement of the tender offer are now fulfilled (closing): The offer price of CHF 50.00 per tendered share can be paid and the Ciba shares transferred to BASF.

The planned settlement date is April 9. As of this date, BASF will hold approximately 95.8 percent of Ciba shares. Ciba shares tendered to BASF can be traded on the second line of the SIX Swiss Exchange until April 3, 2009. Ciba shares that have not been tendered can be traded on the SIX Swiss Exchange until further notice.

INEOS AND BASF PLAN TURNAROUNDS FOR THEIR MEG PLANTS IN APRIL AND MAY
Output for the Northwest MEG markets will be reduced through April and May as major MEG producers, INEOS and BASF are planning turnarounds at two of their sites.

Located at Dormagen in south Germany, INEOS runs a 200,000 mt/yr MEG plant. The plant is slated to be taken offstream at the beginning of April for a scheduled turnaround. The period of turnaround will be of five weeks. BASF is also planning a turnaround outage at its plant in May. Its 315,000 mt/yr MEG plant at Antwerp, Belgium is slated to be taken offstream for a turnaround which will last about two weeks.

As demand is currently not high, the impact of the planned turnarounds on the market is unlikely.

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