Petrochemicals in NWE continue to shun propane as feedstock

Platts has reported that Northwest European petrochemical companies have abandoned propane for naphtha as a feedstock.  Prices weigh heavily in this consideration, as naphtha producers are now in a purple patch in the region.

Petrochemical companies in Northwest Europe are continuing to shun propane as a feedstock, according to industry sources.

Propane can be used as an alternative feedstock to naphtha by a number of petchem companies, but the delivered price of propane usually has to be below the delivered price of naphtha.

In the first half of November CIF propane prices were below CIF naphtha and propane was being widely used as a petchems feedstock.

But in the second half of November and first decade of December CIF propane prices moved above naphtha, driven by tight supply and demand to cover trader short positions.

This resulted in propane becoming too expensive to crack and according to sources most petchems either stopped or considerably reduced their usage of propane.

With weak demand from the traditional heating market in Northwest Europe, CIF propane prices have weakened recently, reaching a last published value Tuesday of $12.25/mt below CIF naphtha, based on Platts data.

But industry sources said the propane/naphtha price spread would probably have to widen even further before petchems started to crack significant quantities of propane again.

Austria-based petrochemicals company Borealis was actually a seller of propane Tuesday, concluding a deal for a 20,600 mt CIF cargo with Totsa at $950/mt and flat to balance December quotes, which based on Platts data equated to a price level just below parity with naphtha.

By Derek Hardy and Jonathan Fox of Platts

The full article is visible via the link below – Pankaj Oswal


Article: Russian Sibur starts BOPP film production in Siberia

Russian company Sibur has now commenced producing biaxially oriented polypropylene (BOPP) films at a 38,000 mt/year facility in Tomsk, Western Siberia.  The plant is said to be the largest producer of films, which are used in flexible packaging, labels and adhesive tape, in the Commonwealth of Independent States.  The subsidiary responsible for the plant, Biaxplen, now produces 149,250 mt/year of BOPP films, and has strode ahead of its competitors through being highly responsive to market data. 

Russian petrochemical producer Sibur has launched production of biaxially oriented polypropylene films in Tomsk, Western Siberia, the company said Wednesday.

The 38,000 mt/year facility is located on the site of the Tomskneftekhim plant, which belongs to Sibur, and which will supply feedstock polypropylene to the new facility.

Biaxplen, Sibur’s subsidiary that operates the facility, will sell BOPP films from Tomsk domestically, in Siberia and the Ural district, and export them to CIS countries and Europe.

BOPP films are used for flexible packaging, labels and adhesive tape.

Sibur said consumption of BOPP films in Russia rose to 124,000 mt last year and is expected to continue a 4-5% annual growth.

The company said the plant operates the widest production line in the Commonwealth of Independent States, and allows for the production of five-layer films with treated surfaces, used for overprinting. The company added that ESOPP (France) was the main supplier of the production equipment for the new facility.

The company said total investments into the project exceeded Rb2.4 billion ($74 million).

“Sibur is investing in the development of new polymer production plants and is focused on expansion of its processing facilities. Implementation of these projects is aimed at improving our polymers sales, and SIBUR should benefit from sales of high value added products,” said the company’s chairman, Leonid Mikhelson.

Biaxplen operates similar production facilities in Balakhna, Kursk, Novokuibyshevsk and Zheleznodorozhny. In total, these sites, together with the new Tomsk plant, are able to produce 149,250 mt/year of BOPP films. However, this is set to increase further, as an expansion project is underway in Novokuibyshevsk.

Written by Maria Tsay and Daved Chohan and edited by Jonathan Fox of Platts.

The full article is visible via the link below – Pankaj Oswal