Corrected: Romania's Oltchim to restart PVC production in January

22 November 2011 14:22  [Source: ICIS news]

Correction: In the ICIS story headlined "Romania's Oltchim to restart PVC production in January" dated 22 November 2011, please read in the second paragraph ...a 125,000 tonne/year unit and a 325,000 tonne/year plant... instead of ...an 82,000 tonne/year unit and a 120,000 tonne/year plant. A corrected story follows.

LONDON (ICIS)--Romanian chemicals group Oltchim expects to restart production at its polyvinyl chloride (PVC) plant in Rimnicu Valcea in January, a company source said on Tuesday.

Difficulties in securing a supply of feedstock vinyl chloride monomer (VCM) led to the shutdown of the company’s two PVC facilities – a 125,000 tonne/year unit and a 325,000 tonne/year plant, both at Rimnicu Valcea - in October.

“The [VCM] market is confronted with shortage and we haven’t managed to buy any quantities,” the source said. “We expect to find a supplier from which to buy the necessary quantities by January,” the source added.

Trading activity in the spot market for VCM, 99% of which is used in the production of PVC and co-polymers, has depended on the outcome of PVC price negotiations, which have been largely unsuccessful as ample availability, slow demand and limited export opportunities continue to cap potential increases.

PVC producers reiterate VCM prices do not provide enough netback once converted into PVC, while sellers are not tempted to produce any additional material with the intention of offering into the merchant market at such prices, given the high costs of ethylene and energy.

The VCM market has therefore become illiquid, as material is largely used captively and bids and offers drift further apart.

Majority state-owned Oltchim has also faced a continued shortage of working capital. The company announced a reduction of output to 30% of installed capacity and cuts of 1,025 of the company’s 3,454 employees in August because of lack of funds.

The measures, which were expected to last for the month of August only, were extended to three months because of a continued shortage of working capital and raw materials.

Oltchim’s main products are PVC, polyols, dioctyl phthalate (DOP) and caustic soda.

($1 = €0.74)

For more on PVC visit ICIS chemical intelligence  

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By: Abache Abreu
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