Argentina bets on European biodiesel market after US imposes duties

MOSCOW (MRC) - Argentina is betting on the reopening of the European market to maintain demand for its biodiesel exports after the United States imposed steep duties on imports, the leader of an industry group said on Wednesday, as per Hydrocarbonprocessing.

A day earlier Argentine producers said they would halt exports to the US as a result of the U.S. Commerce Department's decision to slap countervailing duties of up to 64.17% on the imports from the South American country.

The World Trade Organization last year ruled in favor of Argentina in a dispute over anti-dumping tariffs the European Union had applied to Argentine biodiesel, but the European Commission has not yet removed the tariffs.

Luis Zubizarreta, president of Argentina's Carbio biodiesel industry group which includes companies like Bunge and Cargill, told Reuters a decision should be imminent.

"We are confident that in a few weeks we will have this market open. It could compensate," he said in an interview. The European Union was once Argentina's biggest biodiesel market but that shifted to the US after the EU set duties in November 2013 of between 22% and 25.7% for Argentina producers.

In 2016, 90% of the 1.6 MMt of biodiesel Argentina exported went to the US, Argentine government data shows. The US imposition of even harsher tariffs surprised Argentina's producers, Carbio said in a Tuesday statement, after US Vice President Mike Pence pledged to boost two-way trade in a visit to Buenos Aires last week.

Another industry group, the Argentine Chamber of Oil Industry (Ciara), said that the recovery of the European market would prevent oversupply and falling prices of soybean oil-the input used to produce biodiesel in Argentina.

Argentina is the world's top soy oil exporter. Zubizarreta, of Carbio, said he hoped the US Department of Commerce would reverse its preliminary decision on the tariffs, insisting Argentina does not subsidize biodiesel exports.

Carbio referenced the "established precedent" of the WTO as evidence Argentina was not dumping biodiesel in a Tuesday statement.

Peru, the second-largest export market for Argentine biodiesel, also placed anti-dumping tariffs on biodiesel imports last October.
MRC

Saudi Aramco to sign China Yunnan refinery deal in 6 months

MOSCOW (MRC) -- Saudi Aramco is expected to sign a final deal with PetroChina, China's second-largest state-run refiner, within six months to invest in its Yunnan refinery, Saudi Arabia's Energy Minister Khalid al-Falih told Reuters on Wednesday, as per Hydrocarbonprocessing.

The world's top oil exporter aims to push ahead with its oil investments in China to become the country's biggest source of crude supply and a major player, Falih said. "Yunnan (talks) have reached advanced stages ... We aim to finalise Yunnan within six months," Falih, who is also the chairman of Aramco, said.

Aramco will own a "big stake" in the 260,000-bpd Anning plant in Yunnan province, he added. Aramco is looking to invest USD1 B–USD1.5 B in the refinery as well as the retail assets of PetroChina, sources told Reuters in 2015.

PetroChina aims to start operating the new refinery in the in October after several delays, boosting the nation's already-surging crude imports. PetroChina will also will consider taking part in Aramco's initial public offering (IPO) set for next year based on market conditions, the Chinese oil major said in March.

A PetroChina official told Reuters in March that if the refinery deal was finalized with Aramco, the Saudi state oil giant would supply at least part of the refinery's crude oil requirements.

Saudi Arabia has lost out to Russia as the top crude supplier to China. Falih said Saudi Arabia aims to break the slow pace in the progress of Saudi projects in China and push for more investments between the two nations.

"The goal is that not only the Kingdom will be China's largest crude exporter but the largest in-market investor," Falih said, one day ahead of a Chinese-Saudi investment forum to be held in Jeddah on Thursday.

In May, Chinese defense conglomerate China North Industries Group Corp (Norinco) signed a framework agreement with Aramco to build a refinery and chemicals complex in northeast China.

That investment would boost Aramco's presence in China's massive refining industry, adding to its 25% stake in the Fujian refinery in southeast China operated by state refiner Sinopec Corp.
MRC

PVC prices are expected to rise significantly in Russia in September

MOSCOW (MRC) - Russian market of suspension polyvinyl chloride (SPVC) became deficient in August following several months of surplus, reduction in imports and the planned and unplanned shutdowns of some plants. Amid a significant shortage of material Russian producers intend to achieve significant price increase in September, according to ICIS-MRC price Report.

Since the beginning of the month, the demand for SPVC in the Russian market has been rather low, and the producers had to seriously increase the volumes of exports in order to balance the domestic market. Demand for resin improved in summer, but a serious increase in imports from China has kept the excess supply in the market.

The situation in the market has changed dramatically in August due to the shutdown of several productions. PVC supply has tightened significantly, while demand was strong. Some producers in the middle of the week began to raise prices for PVC; the price rise is expected to be also in September.

Peak volumes of SPVC imports accounted for May and amounted to about 11,800 tonnes, after which external supplies began to decline gradually. For 20 days of August, resin imports amounted to about 4,600 tonnes.

Key suppliers - producers from China have begun to dynamically increase the export prices of acetylene PVC since July on the back of the deficit in the domestic market, and Russian companies have begun to refuse to purchase resin in China.

Prices from some producers have risen by mid August to USD995/tonne, DAP Moscow, for container shipments by rail (the cost with customs clearance for the consumer will be about Rb76,000/tonne).

Bashkir Soda Company shut its PVC capacities for scheduled maintenances from mid-July to the early of August.
However, production of PVC was suspended from 16 August due to the stopping of ethylene supply. The next start of production is scheduled for the end of this week. The plant's annual production capacity is 240,000 tonnes.

SayanskKhimPlast shut its PVC capacities for a month long turnaround on 24 July. The start-up of production is also scheduled by the end of this week. The plant's annual production capacity is 280,000 tonnes.

Kaustik Volgograd had to stop the production of PVC in the end of last week for a couple of days. According to unconfirmed information, in September, RusVinyl also intends to reduce the capacity utilisation for preventive works.
Thus, the shutdown of productions in line with the import reduction led to a serious shortage of PVC supply in the market.

Some producers reported that by the current week they had sold off all their stocks. At the same time, converters had to contract additional volumes by Rb2,000-2,500/tonne more expensive than at the beginning of the month.

Given strong demand and limited supply, Russian producers intend to achieve further price increases in September.
Some producers have begun to discuss prices for K645/67 PVC in the range of Rb69,000-70,000/tonne CPT Moscow, including VAT.
MRC

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

MOSCOW (MRC) - Supply of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 3% in the first seven months of this year, compared to the same period in 2016 and reached about 60,700 tonnes, according to MRC DataScope.

July SPVC imports into Ukraine seasonally increased to 12,700 tonnes, compared with 8,600 tonnes in June 2017. Local producers of window profile and plastic products have seriously increased the volume of purchases in the USA. Overall SPVC imports were about 60,700 tonnes in January-July 2017, compared to 62,800 tonnes a year earlier. Demand for suspension subsided from local producers of profile-moulded products, whereas demand for resin increased from producers of plasticized PVC.

Structure of PVC imports into Ukraine over the reported period was as follows.

Last month's SPVC imports from the United States grew to 7,700 tonnes from 4,300 tonnes in June, local companies had switched to the purchasing of North American resin despite the expectations of Karpatneftekhim's launch. Imports of North American resin totalled 25,100 tonnes in January-July 2017 versus 38,800 tonnes a year earlier.

July shipments of European PVC to the Ukrainian market remained practically at the level of June and were 2,800 tonnes. Overall imports of European PVC rose to 23,700 tonnes over the stated period, compared to 20,000 tonnes a year earlier.

Last month's imports of Russian SPVC grew to 1,700 tonnes from 1,300 tonnes in June. Russia's imports of resin into Ukraine grew to 10,700 tonnes in Jan-July 2017, compared with 3,800 tonnes year on year.


MRC

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