PP production in Russia grew by 9% in January-July 2017

MOSCOW (MRC) - Production of polypropylene (PP) in Russia grew to about 837,800 tonne in first seven months of this year, up 9% year on year, compared to the same period of 2016. All Russian producers have increased their PP production volumes, the exception made Neftekhimiya, according to MRC ScanPlast.

July PP production in the country decreased to 122,000 tonnes, compared with 124,100 tonnes in June; Ufaorgsintez and SIBUR Tobolsk decreased their capacity utilisation. In general, in January-July PP production in the Russian Federation approached the level of 837,800 tonnes against 772,000 tonnes a year earlier, the greatest increase in production showed SIBUR Tobolsk, while Neftekhimiya lowered production indicators due to a long scheduled maintenance works.

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

The largest producer of PP in Russia - SIBUR Tobolsk in July produced about 40,300 tonnes against 44,000 tonnes a month earlier. SIBUR Tobolsk's PP production reached 304,800 tonnes in January-July 2017, up 25% year on year.
Such a serious increase in production was a result of the absence of a shutdown for scheduled maintenance.


Poliom (Titan Group) last month produced about 17,900 tonnes of polypropylene, which practically the same as in June. Total PP production at the plant over the reported period was about 124,400 tonnes, up 3% year on year.

July PP production at Ufaorgsintez decreased to about 10,700 tonnes from 11,000 tonnes a month earlier. The producer's PP output at Ufaorgsintez increased to 73,900 tonnes in January-July 2017 compared with 68,600 tonnes year on year.

Stavrolen (LUKOIL) in July kept the June capacity utilisation, the total production was about 10,900 tonnes of propylene polymers. Overall PP production at the plant exceeded 70,700 tonnes in January-July, up 7% year on year.

Tomskneftekhim increased production volumes in July, and the final production of propylene polymers was 12,200 tonnes against 11,800 tonnes in June. Total PP production at Tomskneftekhim over the reported period reached 82,800 tonnes, compared with 71,000 tonnes year on year.

July PP production at Nizhnekamskneftekhim reached 18,800 tonnes from 17,800 tonnes a month earlier. The producer's PP production in January-July grew by 1% from last year's level to 127,300 tonnes.

Neftekhimia (Kapotnya) has been actively increasing capacity utilisation since May following the turnaround in March-April. July PP production at the plant grew to 11,200 tonnes against 10,800 tonnes in June. The producer's PP output in the first seven months of the year reached 53,700 tonnes, up 28% year on year.


MRC

PE imports to Ukraine down by 3% in January-July 2017

MOSCOW (MRC) -- Overall imports of polyethylene (PE) into the Ukrainian market dropped in the first seven months of 2017 by 3% year on year to 144,400 tonnes. The greatest increase in supply occurred for high density polyethylene (HDPE), according to MRC DataScope.

July imports of polyethylene decreased to 21,700 tonnes compared with 22,000 tonnes in June. Local companies have reduced purchases of HDPE on the back of the resumption of the local production. Overall PE imports reached 144,400 tonnes in January-July 2017, compared to 149,300 tonnes a year earlier, imports of all PE grades increased, while HDPE delivery decreased.

Structure of PE imports over the reported period was as follows.

HDPE imports to the Ukrainian market fell last month, oversupply of polymer in the market and expectations of resumption of Karpatneftekhim's launch were the main reasons for lower purchasing in foreign markets. July HDPE imports into the country were about 7,900 tonnes, compared with 9,900 tonnes in June. Overall HDPE imports reached 60,600 tonnes in the first seven months of 2017 versus 72,100 tonnes a year earlier, shipments of film grade HDPE fell by almost a quarter, demand for pipe PE subsided by 12%.

June LDPE imports rose to 6,800 tonnes from 5,700 tonnes a month earlier, with Russian producers accounting for the main increase in shipments. Overall LDPE imports exceeded 37,800 tonnes over the stated period, up by 1% year on year.

Last month's LLDPE imports were 5,900 tonnes, compared to 5,700 tonnes in June, with films producers accounting for a slight decrease in demand. Overall LLDPE imports grew to 37,100 tonnes in January-July 2017 from 32,700 tonnes a year earlier. Producers of film products, particularly, of stretch films, accounted for the main increase in demand.

Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 8,900 tonnes over the stated period, compared to 6,900 tonnes a year earlier.


mrcplast.com

Reliance to boost profit, naphtha exports by using ethane

MOSCOW (MRC) — India's Reliance Industries Ltd expects to increase operating profit and naphtha exports as it switches to cheaper ethane at its petrochemical projects, a company executive said on Wednesday, as per Hydrocarbonprocessing.

Reliance's annual naphtha exports will rise by 500,000 t this fiscal year, said Vipul Shah, chief operating officer for petrochemicals at Reliance.

Asia is structurally short of naphtha and relies on the West and Middle East to fill most of the gaps. Reliance, owner of the world's biggest refining complex and also a leading petrochemicals player, on average exports more than 200,000 t of naphtha in a month.

Reliance aims to import 1.4 MMt of ethane from North America in 2017–2018, rising to 1.6 MMt from the next fiscal year, said Shah at a conference.

The conglomerate will use ethane at its crackers at Dahej, Hazira and Nagothane in western India. Previously, the Dahej and Nagothane plants were running on gas, while Hazira was using naphtha as feedstock.

"Since we will be able to bring in 1.4 MMt of ethane our operating profit can go up by USD300 MMthis fiscal year," Shah said.

Billionaire Mukesh Ambani-backed Reliance has been posting robust petchem operating profit margins. They hit at an all-time high of 15.8% in the June quarter, it said last month. Shah expects the company's operating profit to rise by up to USD400 MM in the 2018-19 fiscal year if market dynamics do not change significantly.

To cut its operating costs, Reliance has bought six very large ethane carriers. Reliance has no plans to convert its naphtha-based cracker at Vadodra in western Gujarat state to ethane, Shah added.

Additional naphtha exports from Reliance are expected to have little impact on the market, trade sources said, although it depends on cargoes arriving in Asia from the Middle East and the West, including Europe.

"The impact should not be that bad. It works out to an addition of one to two medium range (MR) size tankers of naphtha more (in a month)," said a Singapore-based trader. One MR cargo is about 30,000 t. South Korea alone, which is Asia's top naphtha importer by country, imports more than 1.2 MMt of naphtha a month.

Naphtha prices have been recovering due to strong demand, as the high cost of liquefied petroleum gas (LPG) prices prompted buyers to use more naphtha. LPG can replace at least 5% of naphtha in some Asian crackers.
MRC

North American exodus at PetroChina sparks speculation of company shift

MOSCOW (MRC) — A flurry of departures across the US and Canadian units of Chinese state energy firm PetroChina Co Ltd have sparked speculation that the oil trader is reducing its presence in North America, even though the company says it is committed to the region, said Hydrocarbonprocessing.

More than 30 people in its Houston and Calgary offices have left PetroChina since 2016, including heads of desks in crude, financial, natural gas and chemical trading, the company confirmed to Reuters. Sources say that PetroChina had approximately 150 to 200 people at its peak two to three years ago, and now has between 100 and 150.

Nearly a dozen sources in New York, Calgary, Houston and Singapore, including current and former employees, told Reuters the departures suggest a shift in mindset among firm management, and there are concerns about a broad pullback from its presence in North America.

The sources interviewed, which also includes several who do business with the firm, said North American offices may have expanded too quickly. Mark Jensen, spokesman for PetroChina International America, said the company is committed to business throughout the Americas. He previously said the company and its subsidiaries have restructured the organization where necessary over the last several months, and that the departures do not represent a change in strategy in the region.

A Beijing-based company executive, who has direct knowledge of the firm's global operations, said "poor performances or missing profit targets" was the main reason behind the staff departures. The official, who asked not to be named as he not authorized to speak to the press, said there will be some restructuring in some of the business divisions, particularly natural gas.

"The company believes natural gas shall have good potential to expand, both in terms of scale and profit targets," he said. The restructuring could start after Petrochina's new chairman, a fuel marketing veteran who took over the top job last April, tours North American offices, likely later this year, added the source.

In the last several years, PetroChina built itself into one of the largest oil traders in North America, hiring top talent with the goal to compete with trading giants Vitol SA, Trafigura and Mercuria Energy Group, industry participants said.

The departures have been notable ones, including John Mee, director of financial crude trading; Jie Wang, president in Calgary; and Eric Dixon, domestic head of physical crude onshore, among others. The company has also lost a number of key staff in other departments, including in legal and accounting. One source said that the company is not currently looking to replace the majority of those positions.

Sources interviewed said management's mindset over the last year has shifted toward tightening credit limits and shifting away from sources of activity common among oil traders operating in North America. For instance, PetroChina appears to be shifting away from trading volumes on pipelines—which accounts for the lion's share of crude trading in the United States—and favoring more vessel-based cargo trading, two sources familiar with PetroChina said.

In Houston, there are no longer any proprietary traders, according to two of the sources Reuters interviewed. The company did not respond to a specific request for comment regarding the shift to waterborne trading or proprietary trading.

The departures come after major losses in commodities markets in the first half of 2017, as hedge funds and banks saw some of their worst results in years due to a lack of overall volatility and an unexpected sell-off in crude. The firm has gotten rid of individual bonuses and is now using a team bonus plan across Canada, the United States and China, according to two of the sources spoken to by Reuters. The company did not respond to a request for comment on this.

PetroChina is not set for a full retreat from the region, sources say. The company has certain commitments in the region, including a long-term contract on Royal Dutch Shell Plc's Zydeco pipeline through 2019. In addition, PetroChina's parent, China National Petroleum Corp, will need to keep its options open to import US crude oil, sources said.
MRC

Unplanned outage reported at HDPE plant of Thai Polyethylene

MOSCOW (MRC) -- Thai Polyethylene Co a subsidiary of Siam Cement Group has undertaken an emergency shutdown at its No.2 high density polyethylene (HDPE) plant at Map Ta Phut, said Apic-online.

A Polymerupdate source in Thailand informed that the company has halted operations at the plant last week. The unplanned shutdown is expected to remain in place until end-September 2017.

Located in Map Ta Phut, Thailand, the No. 2 HDPE plant has a production capacity of 180,000 mt/year.
MRC