PE imports into Russia increased by 8% in January-May

MOSCOW (MRC) -- Overall imports of polyethylene (PE) into the Russian market increased in the first five months of 2017 by 8% year on year to 220,000 tonnes. Imports of high density polyethylene (HDPE) and ethylene-vinyl-acetate (EVA) grew significantly, according to MRC's DataScope Report.

May PE imports into the Russian market rose to 49,000 tonnes from 45,200 tonnes a month earlier, with high density polyethylene (HDPE) and low density polyethylene (LDPE) accounting for the main increase in imports. Overall PE imports reached 220,000 tonnes in January-May 2017, compared to 203,500 tonnes a year earlier. The HDPE and EVA segments accounted for the increase in imports, whereas other PE grades accounted for the decrease in import shipments.

Structure of PE production over the reported period looked as follows.

Last month's HDPE imports rose to 21,000 tonnes from 18,400 tons in April, local companies continued to gradually increase their HDPE purchasing in Uzbekistan and Europe. Overall HDPE imports reached 81,900 tonnes in the first five months of 2017 versus 52,400 tonnes a year earlier.

May imports of linear low density polyethylene (LLDPE) were 12,600 tonnes, compared to 12,100 tonnes a month earlier, shipments of film grade PE increased, whereas demand for rotational moulding PE decreased. LLDPE imports totalled about 69,100 tonnes in the first five months of the year, compared to 82,900 tonnes a year earlier. An increase in the domestic output, particularly, by Nizhnekamskneftekhim, helped to reduce imports.

Last month's imports of low density polyethylene (LDPE) grew to 8,200 tonnes, compared to 6,900 tonnes in April, paper lamination PE shipments from Europe increased. Overall LDPE imports decreased to 37,600 tonnes in January-May 2017 from 44,400 tonnes a year earlier.

May imports of EVA amounted to about 3,300 tonnes against 3,500 tonnes a month earlier, demand from footwear producers decreased.
Imports of this ethylene copolymer grade grew by 46% over the stated period to 15,300 tonnes.

Imports of other ethylene polymers totalled 16,100 tonnes in the first five months of the year.

MOSCOW (MRC) — India's oil imports from Iran have fallen to their lowest since June 2016, shipping data shows, in possible retaliation for Tehran not awarding a gas field development to Indian companies, said Thehindu.

India, Iran's top oil client after China, shipped in 487,600 bpd in May, about 9% less compared with April and nearly 40% less than a peak registered in October, according to ship tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts.

Most Western-led sanctions against Tehran's nuclear program were lifted in January last year, and India's Iranian crude imports began climbing two months later in March. In the fiscal year to March 2018, though, India has said it plans to order about a quarter less Iranian crude due to a snub over development of Iran's Farzad B gas field.

"We stood by them in difficult times. We still buy substantial amounts of oil from them, and we expect reciprocity from Iran," Indian oil minister Dharmendra Pradhan told reporters on Wednesday when asked if India was still hopeful of getting the development rights for the Farzad B field.

Following years of seeming rapprochement over the field, Iran has likely reached an agreement on the concession with Russia's state-controlled gas giant Gazprom, Russian and Indian media have reported. Iran last month said India had not offered an acceptable proposal on the Farzad B development.

Sri Paravaikkarasu of energy consultancy FGE said India's lower Iran imports were a "reaction of Iran's decision to award the gas field to Russia and the availability of cheaper grades like those from Russia."

India was one of four countries—China, Japan and South Korea being the other three—that continued to import large amounts of Iranian oil after sanctions were toughened in 2012.

Some of the drop in imports from Iran may be due to lower demand. Overall, India imported about 4.2% less oil in May, compared with April, due to a shutdown of the 180,000-bpd Bathinda refinery for upgrades. In the first five months of 2017, India's oil imports from Iran still jumped about 64%, the data showed.

While Iran's oil exports to India are stalling, supplies to Europe and Turkey hit their highest level since the lifting of sanctions in 2016. Iraq continued to be India's biggest oil supplier for the second month in a row in May, followed by Saudi Arabia.

Middle Eastern oil in May accounted for 65% of India's overall imports, compared to 71% a year ago, while the import share of Africa and Latin America have risen, the data showed.

The shift is likely a result of an effort led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) to cut production to prop up oil prices.
MRC

MOSCOW (MRC) -- Shanghai Golden Phillips Petrochemical Co, a subsidiary of Sinopec Shangai Petrochemical Co, has restarted a high density polyethylene (HDPE) plant, as per Apic-online.

A Polymerupdate source in China informed that the company has resumed operations at the plant on June 13, 2017. The plant was shut in end-May 2017, owing to lack of feedstock availability.

Located in Shanghai, China, the HDPE plant has a production capacity of 135,000 mt/year.

As MRC informed before, in June 2016, Rosneft and China Petrochemical Corporation (Sinopec Group) signed a Framework Agreement on joint pre-feasibility study of the project related to the construction and operation of a gas processing and petrochemical complex in East Siberia. The Agreement signed in furtherance of the Memorandum of Understanding on cooperation in petrochemical projects, provides to select a technology for natural gas processing from its components to polymers.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) — Methanol, a basic chemical used to produce fuels and other traditional chemicals, is increasingly used in China to produce olefins in a process called methanol-to-olefins (MTO), said IHS in its 2016 Sustainability Report.

By 2021, nearly one in five tons of global methanol production will be utilized for MTO production to satisfy expanding Chinese chemical demand, according to new analysis from IHS Markit.

In 2010, global methanol demand reached 49 MMmt, but by 2021, according to the IHS Markit World Analysis—Methanol 2017, demand will surpass 95 MMmt, with China boasting 54% of world capacity and 46% of global production. In 2000, China represented just 12% of global methanol demand, while North America and Western Europe represented 33% and 22%, respectively. By 2021, IHS Markit said Northeast Asia (dominated by China), will account for nearly 70% of global methanol demand, followed by North America at just 9% and Western Europe at 8%.

"China has quickly become the dominant force in the global methanol market, and continues to be the focal point with its coal-based production setting the global market price," said Mike Nash, global director of syngas chemicals at IHS Markit, and one of the authors of the IHS Markit World Analysis—Methanol 2017. "The impact of Chinese demand growth for methanol cannot be overstated, since we at IHS Markit forecast that Chinese demand growth is expected to increase very rapidly at around 7% per year, such that, by 2021, without additional Chinese capacity, net imports will double in volume from their 2016 level."

Chinese demand, Nash said, has grown significantly in traditional methanol derivatives, such as acetic acid and formaldehyde, the largest single methanol derivative and a key component for the production of construction and wood products, as well as high-strength engineering resins and a multitude of insecticide applications. However, newer end-uses such as light-olefins production and energy applications, such as direct blending into gasoline and the production of biodiesel and DME (dimethyl ether), are rapidly changing the methanol palette, the IHS Markit study said.

DME is used primarily as an aerosol propellant in the West, which represents a relatively small market overall, but its primary use is in fuel applications—where it is mainly blended into liquefied petroleum gas (LPG). This application is widely used by Chinese consumers for home cooking and heating, which has helped drive methanol consumption into DME from virtually nothing in 2000, to the fifth-largest methanol derivative in 2017, IHS Markit said.

China’s direct blending of methanol into the country’s gasoline pool is estimated at 7 MMmt in 2017, and is estimated to grow to almost 10 MMmt by 2026, as China seeks ways to supplement its gasoline pool. Growth in fuel production and gasoline blending now represents the second-largest methanol demand segment.

A newer and rapidly growing demand segment for methanol (exclusively in China) is in the production of light olefins using MTO technologies. In just four years, this end-use has driven staggering growth in methanol consumption and made MTO the second largest end-use for methanol globally.

The production costs of methanol-from-coal in China and from natural gas in the US are not only competitive on a cash cost-of-production basis, but also even when we consider capital charges and a return on investment," said Don Bari, vice president of IHS Markit, and co-author of the IHS Markit Process Economics Program (PEP) Methanol Process Summary March 2017. "That said, the relative (cash) cost or production positions are dependent on the cost of coal and natural gas. Coal-based technology in China had a clear advantage most of the last decade, before the impact of shale gas feedstock was felt in the US Then in 2008, the US natural gas route moved to the most competitive position, owing to a drop in gas price in the US as well as a rise in China feedstock, utility and fixed costs, on a US dollar basis," Bari said.

Feedstock costs for methanol comprise as much as 90% of the total cash-cost and, as such, access to low-cost feedstocks is key to methanol economics. The primary feedstock for methanol has been natural gas, representing as much as 55% of installed global capacity. Regions with access to low-cost natural gas have seen a surge in methanol capacity additions, including North America, the Middle East, Africa and South America. With the growth in Chinese methanol demand and the country’s rich coal reserves, the industry has seen a sharp rise in coal-based methanol production.

Uncompetitive feedstock economics led to capacity rationalizations in North America and Europe in the early 2000s, with North American methanol capacity all but extinguished by 2008. However, recent exploitation of unconventional natural gas supplies in North America has allowed this region to regain its position as a methanol production powerhouse.

"US Gulf production economics, once the dominant driver of industry economics, are now beginning to exert significant influence once again as a significant number of new methanol units are being restarted, relocated or being built in the US Gulf Coast region,” Nash said. “Producers are taking advantage of the cheap and abundant supply of US shale gas."

The sharp rise in North American production capacities and the cost position of these units has led to an increase in exports from the Americas that now ship product to both the European and Northeast Asian methanol markets. The expected growth in North American capacities will turn the region from a net importer to a net exporter during 2019, IHS Markit said.

"Supply and demand pressures have always driven methanol pricing, but now that methanol has significant volumes of derivatives that compete as alternatives to crude-oil derived products, the picture becomes significantly more complicated, since affordability of some methanol derivatives becomes heavily dependent on crude oil-price fluctuations," Nash said.
MRC

МОSCOW (MRC) -- Sonoco Products Company SON has expanded its ClearGuard portfolio of flexible packaging to include pouches for liquid or more viscous products, said the company on its website.

This latest development will help exceed barrier and shelf-life requirements for a variety of product categories and can also endure the high pressure and high temperatures involved in the retort process.

In Apr 2017, Sonoco launched its ClearGuard packaging, which comes with a transparent look and can be used as a substitute to aluminum foil or metalized films. ClearGuard provides transparency of products to customers without compromising the quality. It offers several additional benefits to brands and consumers, including exceptional laminating with superior flex crack resistance and durability, printing, including matte and gloss finish options, and a competitive value to other clear or opaque film alternatives.

This new ClearGuard liquid pouch optionis able to withstand the rigors of hot fill and retort cooking processes. Sonoco's ClearGuard packaging will be on display at the Global Pouch Forum in Miami.

As MRC wrote before, Sonoco commenced commercial production of rigid plastic containers for personal care products at its new USD15 million plant, located in the Beauty and Home Care campus in New Albany, Ohio.

Founded in 1899, Sonoco is a global provider of a variety of consumer packaging, industrial products, protective
packaging, and displays and packaging supply chain services. With annualized net sales of approximately USD4.8 billion, the Company has 20,000 employees working in more than 300 operations in 33 countries, serving some of the world’s best known brands in some 85 nations.
MRC