Oil edges further above USD62, helped by expected fall in US stocks

MOSCOW (MRC) — Oil edged further above USD62/bbl on Tuesday, supported by strong demand, expectations of a drop in US crude inventories and an OPEC-led deal to extend oil output cuts, said Reuters.

Concerns that the OPEC-led producer group's Nov. 30 decision to prolong their supply-cutting deal through 2018 could bolster US shale drilling limited gains, however. US production climbed to nearly 9.5 MMbpd in September. Brent crude, the global benchmark, was up 25 cents at USD62.70/bbl by 1443 GMT. US crude, known as West Texas Intermediate, rose 3 cents at USD57.50.

"Demand remains firm which is the main reason for us to still see oil at above $60/bbl," said Georgi Slavov, head of research at Marex Spectron. The Organization of the Petroleum Exporting Countries, Russia and other non-OPEC producers last week extended the deal to cut output by 1.8 MMbpd until the end of 2018 to get rid of excess oil in storage.

Faster-than-expected growth in demand this year has given tailwind to OPEC's efforts to clear the glut and the latest US inventory reports are likely to show a third straight weekly drop in crude stocks. Analysts expect the reports from industry group American Petroleum Institute (API) and the government's Energy Information Administration (EIA) to show crude stocks fell by 3.5 MMbbl.

The API report is out at 2130 GMT on Tuesday, followed by the government supply report on Wednesday. OPEC has shown strong compliance with the supply cut pledge and in November output fell by 300,000 bpd to its lowest since May, according to a Reuters survey.

However, rising US oil production presents a headwind for OPEC's efforts and data last week showed US crude output rose to nearly 9.5 MMbpd in September, approaching the high of 9.63 MMbpd seen in 2015. "US output will play the most significant role on the supply front in 2018," said Tamas Varga of oil broker PVM.

"A jump above USD60 in WTI could easily push US production over the 10 MMbpd mark, increasing the non-OPEC forecast and capping further attempts to push prices higher."
MRC

MOSOCW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for December shipments to the CIS countries began this week. Weak demand made European producers further reduce their export PVC prices, according to ICIS-MRC Price report.

The December contract price of ethylene was agreed up by EUR32/tonne from November, which presupposes a EUR16/tonne increase in PVC production costs. However, weaker demand from export markets forced European producers to reduce their export prices, despite the trends in the feedstocks markets. Some European producers announced a price decrease of EUR15-20/tonne from the second half of November.

In the second half of November, some manufacturers were already forced to reduce export prices, offer prices had fallen to EUR740-800/tonne FCA by the end of the month, whereas deals were done in the range of EUR765-820/tonne FCA at the beginning of the month.

Negotiations over December shipments of suspension PVC (SPVC) to the CIS markets were held in the range of EUR720-785/tonne FCA. Some market participants were slow to conclude deals, expecting further price cuts, as it was in November.
MRC

Moscow (MRC) - Prices for polypropylene (PP) increased in the Russian market in November, contrary to the experience of the past. The average price increase was about roubles (Rb) 3,000/tonne, depending on the supplier, according to the ICIS-MRC Price Report.

In previous years Russia's PP prices decreased in November under the pressure of the seasonal factor. The demand for polymer had weakened, while the supply of material in the market increased after the end of the period of scheduled maintenance works of key producers.

The situation in the market has changed this year, lower prices in the first half of the month changed to growth in the second half of November. Demand for polypropylene in the first half of November declined, and this factor began to put pressure on prices.

Price offers for the supply of the Central Asian homopolymer PP raffia reached a level of Rb84,000/tonne FCA, including VAT; the Russian parity was on average by Rb1,000/tonne more expensive. The largest supplier of polypropylene in Russia - SIBUR announced an increase in prices for homopolymer PP by Rb3,000/tonne. Other suppliers reacted moderately to such a tangible price increase, raising prices on average by Rb1,000/tonne before the end of the month.

The market for propylene copolymers was more complicated. Supply of extrusion PP block copolymers and injection moulding PP random copolymers was tight in November. Prices for injection moulding PP random copolymers in some cases reached 120,000/tonne FCA, including VAT.

Prices for injection moulding PP block copolymers and extrusion PP random copolymers were steady in November, as weaker demand and sufficient supply did not allow prices to rise.
MRC

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) is expected to shut its high density polyethylene (HDPE) plant, according to Apic-online.

A Polymerupdate source in Thailand informed that the company is likely to shut the plant in February/March 2018, for a maintenance turnaround. The plant is expected to remain offline for around 2 weeks.

Located at Map Ta Phut in Thailand, the HDPE plant has a production capacity of 250,000 mt/year.

As MRC informed before, PTT is on track to start commercial operations at its new 400,000 mt/year metallocene C6 linear low density polyethylene (MLLDPE) plant at Map Ta Phut, Thailand, in the first quarter of 2018. PTT will start up the plant by the end of this year.

PTT currently has a total capacity of 800,000 mt/year of HDPE, 300,000 mt/year of low density polyethylene (LDPE) and 400,000 mt/year of LLDPE at the same site.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- JGC Corporation, in partnership with JGC Indonesia, a subsidiary of JGC Corporation, and PT Rekayasa Industri of Indonesia, has received an order for engineering, procurement and construction (EPC) work for the construction of a gas processing plant in Bojonegoro, East Java Province, Indonesia, said Refiningandpetrochemicals.

The lump-sum turn key contract, valued at approximately100 billion Japanese Yen, of which the JGC Group share is approximately 40 billion Japanese Yen, was awarded by PT Pertamina EP Cepu (PEPC), a subsidiary of PT Pertamina (Persero) (Pertamina), Indonesia’s state-owned energy company.

The project contract calls for the design and construction of a plant to process 330 mmscfd natural gas (with 1% H2S and 34% CO2 content) for the production of 172 mmscfd sales gas, condensate and so on, from natural gas produced by the unitized Jambaran - Tiung Biru gas field in the Bojonegoro area developed by PEPC and its partners.

The Indonesian government has decided, as one of its important policies, to develop a domestic gas supply network to respond to the increasing energy demand in the country, and the project is listed as a strategic program following that policy. Plan is for the produced sales gas to be used principally by a gas-fired power plant of Indonesia’s state-owned electric power company in East Java Province.

Since the 1970s, JGC has carried out numerous projects for Pertamina. JGC understands that the contract has been awarded to JGC on the basis of its experience in Indonesia and the high evaluation accorded to its project execution capabilities, in addtion to its cost-competitive proposal.

In Indonesia, some additional big projects, such as brown and green field refinery projects planned by Pertamina, are under consideration. Through successful completion of this projeject and active sales activity as an engineering company which is able to respond to the various needs of clients in Indonecia, JGC intends to contribute further to the development of industries and improvement of living conditions in Indonesia.
MRC