Cognis swings to H1 net profit of ┬109m as sales volumes rise

26 August 2010 11:20 [Source: ICIS news]

LONDON (ICIS)--Cognis swung to a net profit of ┬109m ($138m) in the first half of 2010, compared with a loss of ┬20m reported in the same period of last year, due to a steady improvement in sales volumes, the specialty chemicals producer said on Thursday.

Sales for the first six months of 2010 rose by 16.3% year on year to ┬1.51bn as volumes increased by 12.6% on higher demand, particularly in the Asia-Pacific region, the company added.

Cognis said the half-year results were the best in the company's history.

⌠The development we are experiencing indicates not just a recovery, but real growth in consumer and industrial markets, said CEO Antonio Trius.

⌠We strengthened our market position and maintained our margins despite higher raw material costs. The excellent performance was again largely driven by our improved product mix, along with higher sales volumes, higher capacity utilisation and stable operating costs, Trius added.

Cognis' care chemicals unit saw sales rise 16.0% year on year to ┬845m during the first six months of 2010, with demand increasing in nearly all regions and across the entire product portfolio of its home and personal care markets.

The group's nutrition and health segment reported a 6.3% increase in sales year on year to ┬178m, while its functional products division reported sales growth of 21.4% to ┬483m, driven by strong demand in all market segments, including automotive, housing and mechanical engineering.

Looking to the remainder of the year, Cognis expected to achieve a record full-year result.

⌠However, the economic situation remains highly uncertain and trading conditions are difficult to predict. We expect that markets will remain volatile and that the recovery will continue at a more moderate pace in the second half of 2010, Trius added.

Chemical major BASF in June reached an agreement to acquire Cognis for ┬3.1bn.

BASF at the time said that the closing of the transaction was expected in November 2010 at the latest, and that Cognis would be integrated into the German chemical group's performance products segment following the necessary approvals.

($1 = ┬0.79, ?1 = ┬0.82)

26 August 2010 11:34 [Source: ICIS news]

LONDON (ICIS)--Total Petrochemicals and INEOS's 300,000 tonne/year joint venture polypropylene (PP) plant at Lavera, France, is expected to come back online next week, after failing during the second half of July, a company source said on Thursday.

The company had called force majeure on supplies from the plant.

The PP market was balanced, according to buyers, while some suppliers continued to report a tight stock position.

⌠We have never had to stop any of our machines, even during the period when it was supposed to be super tight, said one buyer. ⌠I even suspect PP might be getting long now.

PP prices had eased back in line with the ┬38/tonne ($48/tonne) drop in the monthly monomer contract price in August.

Homopolymer injection from European selling sources was reported to be trading around ┬1,220-1,250/tonne FD (free delivered) NWE (northwest Europe) on a net basis.

The market was now waiting for the new September propylene contract to settle before committing to September business.

European PP buyers had been consistently frustrated by attempts to buy significant volumes of imported material, which they had expected to arrive from new Middle Eastern plants by mid-2010. Buyers had been forced to accept increases throughout the year and still did not envisage large quantities of imported material before the end of 2010.

New plants had been delayed, and producers preferred to send material eastwards rather than to Europe wherever possible.

⌠I can't see this [strong market conditions] coming to an end before well into October, said a major producer.

PP producers in Europe include LyondellBasell, Borealis, SABIC, Total Petrochemicals, Dow Chemical, Repsol, INEOS Olefins and Polymers, Polychim and Domo.

25 August 2010 23:59 [Source: ICIS news]

LONDON (ICIS)--South African domestic polyethylene (PE) spot values slipped by rand (R) 500-1,000/tonne ($68-136/tonne) this week for September business as at least one major local producer dropped its prices, sources said on Wednesday.

According to data from ICIS, the largest reductions were noted in the linear low density PE (LLDPE) spot market, where prices fell by R800-1,000/tonne to leave values at R11,000-12,000/tonne FD (free delivered) South Africa.

Low density PE (LDPE), widely considered the tightest of the three grades, and high density PE (HDPE) fell by ZAR500-700/tonne to ZAR11,800-12,500/tonne and ZAR11,200-12,200/tonne FD South Africa respectively.

Many local resellers lamented that these decreases would make it extremely difficult to conclude business in South Africa, as imports, which were currently on an uptrend, were becoming unworkable in the region.

⌠We are waiting for the new offers, but import prices are unworkable in South Africa now as the market is dominated by one producer, said a large trader, before adding: ⌠We can make money moving [import cargoes] into the southern Africa, but we can't make any money in South Africa any more.

While there was no comment available from the producer in question, a number of other players noted that a similar picture was emerging in local markets throughout Africa.

A large Middle Eastern seller said: ⌠Local prices have decreased for the second consecutive week because demand is very slow and availability is good, especially in Egypt. Buyers expect some increase in the import market but the current situation does not support a hefty increase.

In South Africa, several sources outlined that the intention to reduce local prices had been announced in mid-July, when the PE markets in some of the region's biggest importing areas were on a significant downward trajectory, with Chinese PE values losing $220-310/tonne from April to July.

However, just six weeks since prices hit their bottom value, Chinese PE values have gained some $100-170/tonne, as higher crude and upstream ethylene costs drew buyers back into the market.

This, in turn, has begun to shore up import pricing in the African market - which is heavily reliant on imported volumes - reversing the recent downward trend, sources said.

Despite ongoing slow demand, prices of imported material into Africa were expected to continue to rise in September, with indications from suppliers and traders ranging between $40-80/tonne depending on the grade and buyer location.

Indeed, LDPE spot prices have already climbed $20-50/tonne this week, as prices across Africa breached $1,500/tonne CFR (cost and freight) on limited supply and the threat of further increases, which brought buyers back into the market, sources said.

However, several players in the South African market were anxious that the large domestic producer in question would remain below the market level into the traditionally stronger summer season in the fourth quarter, as the producer was already said to have announced its intention to roll current prices into October.

($1 = ┬0.79, $1 = ZAR7.36)

26 August 2010 11:31 [Source: ICIS news]

SINGAPORE (ICIS)--Iran Petrochemical Commercial Co (IPCC) shut its 700,000 tonne/year No 4 paraxylene (PX) unit on Monday due to mechanical problems, a company source said on Thursday.

The plant was expected to be down for two weeks, said the source.

The company's 70,000 tonne/year No 1 PX plant and 420,000 tonne/year No 3 PX unit, meanwhile, were operating at full tilt, the source added.

26 August 2010 14:05 [Source: ICIS news]

LONDON (ICIS)--South African chemical producer Sasol will halt production at its chlor-alkali complex at Sasolburg for two weeks of planned maintenance in early September, a company source said on Thursday.

The outage was expected to last from 1 September until 14 September, the source added.

The complex produces caustic soda, chlorine, polyvinyl chloride (PVC) and vinyl chloride monomer (VCM). The source could not confirm the nameplate capacities for these products.