Re-emerging supply, lower demand push down oil refining margins

MOSCOW (MRC) — Profits on refining fuel oil have been hammered to multi-month lows over the past two weeks on emerging signs of growing supply and faltering demand, retreating from stubbornly elevated levels at the start of the quarter, said Hydrocarbonprocessing.

By the end of October, fuel oil refining margins in Singapore were around 30% higher than the same time a year ago. They were boosted by expectations that the Organization of the Petroleum Exporting Countries would continue propping up crude oil prices by withholding supplies of fuel oil rich grades, as well as by lower output from key producers like Russia and Venezuela.

But some indications of growing supply and weaker demand conditions have recently dragged on fuel oil refining margins, four trade sources said. They all declined to be identified as they were not authorized to speak with media.

"It's not too surprising (that margins have fallen)," said one Singapore-based fuel oil trader. "Fundamentals are looking slightly weaker and (refining) margins were probably over-extended."

The discount of the Rotterdam 380-centistoke high-sulfur fuel oil to benchmark Brent crude for January settled at an eight-month low of USD9.21/bbl on Wednesday, sharply down from the USD7.51/bbl discount at the start of November.

Pakistan State Oil (PSO), a key Asian fuel oil consumer, recently cancelled a tender to import up to 565 Mt of fuel oil for January delivery and announced it would suspend imports of the fuel as the country turns to LNG to fuel its power sector.

PSO in 2017 imported an average of about 400 Mt to 650 Mt of fuel oil a month, and its lower fuel oil demand has this week driven stocks of the fuel in the Fujairah oil hub in the United Arab Emirates, where most of its imports are sourced, to a more than four-month high.

In the Singapore storage hub, fuel oil inventories also climbed to a five-week peak, the latest official data showed.

Meanwhile, fuel oil coming out of Mexico is on the rise. Exports could climb by 250 Mt to 400 Mt by January following the restart of the Salina Cruz refinery on the country's Pacific coast, two Singapore-based fuel oil traders said.

Since the start of August, Singapore fuel oil imports from Mexico have totaled 290 Mt compared to the 960-Mt imported over the same period in 2016, official data shows.
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MOSCOW (MRC) -- Ascend Performance Materials, the world’s largest fully integrated producer of nylon 6,6 resin, has announced its plans to increase production capacity across its intermediate chemicals and polymers portfolio by 10% to 15% to support the continued growth of its customers, as per the company's press release.

"The global demand for nylon 6,6 and our intermediate chemicals continues to grow at 3% to 4% per year in a range of diverse applications," said Phil McDivitt, Ascend’s president and CEO. "Ascend has cost effective expansion opportunities that allow us to bring additional capacity online as the market needs it."

Ascend will increase capacity of adiponitrile (ADN), hexamethylene diamine (HMD), adipic acid and polymers through 2018. Ascend’s unique production process allows for quick capacity additions with high capital efficiency and without disruption to operations.

"We have consistently added capacity through our entire nylon 6,6 value chain since 2015, increasing our production by 10 to 30 percent depending on the product with no impact on our customers. We are committed to a continuous, reliable supply to our customers," said McDivitt.

Unlike many other nylon 6,6 producers, Ascend sells polymers and intermediates into nearly every end use market and geography. "Our more than 60-year history of serving a wide variety of markets has given us an unparalleled understanding of the entire nylon 6,6 value chain," said Scott Rook, Ascend’s vice president of nylon. "The unique qualities of nylon 6,6 have made it the material of choice in numerous innovative applications."

"Our capital efficient expansion plans ensure that market demand is met and pricing remains competitive," continued Rook.

Earlier this year, the company consolidated nylon fiber production at its plant in Greenwood, South Carolina, and added compounding capacity at its site in Foley, Alabama, to better align its business with the market.

"Our energy and capital are focused on supporting customers throughout the nylon 6,6 value chain," said Rook. "Our recent capacity additions in Greenwood and Foley are in line with our current expansion plan and help us keep pace with market demand."

The company did not disclose the amount of capital investment related to the expanded production capacity.

As MRC wrote previously, in May 2016, Ascend Performance Materials said it had put plans to build a propane dehydrogenation (PDH) plant on hold because of market conditions. The two-train project at Chocolate Bayou, TX, with a combined capacity of more than 1 million m.t./year of propylene, was expected to become the largest such facility in the United States and cost an estimated USD1.2 billion. It has already been delayed once from the original onstream date of 2016 to mid-2019. Ascend is expected to use the UOP Oleflex PDH technology.

Ascend Performance Materials is a global leader in the production of Nylon 6,6.
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MOSCOW (MRC) -- Leading specialty acrylonitrile-butadiene-styrene (ABS) producer ELIX Polymers has developed global grades for healthcare applications, as per the company's press release.

"ELIX medical ABS grades meet the stringent requirements of the medical device industry," says Aurelie Mannella, Industry Manager Healthcare. "Our range includes two USP Class VI and ISO 19993 biocompatibility grades, which have registered device and drug master file approvals for use in medical and food-contact applications in Europe and the USA. We supply leading medical injection moulders and global pharmaceutical companies on both continents."

Applications already benefitting from ELIX medical ABS grades include infusion systems, respiratory devices, auto-injector devices, and housings for various products. The grades offer a very well balanced property profile, with a very good flow behaviour and excellent chemical resistance.

ELIX currently has a portfolio of more than 130 colours approved for use in medical device applications. It also has a strong capability to develop and produce new colours, taking responsibility for pigment compliance. "We have implemented various actions that assure the colours we use have no impact on extractables and leachables," says Mannella. "Colorants and dyes, as well as dispersants and process aids, can only be used in our recipes if they are approved in the base material; only FDA/EU pigments are used."

The company recently expanded its Healthcare portfolio with ELIX M545TF, a grade for use in products that come into contact with food and which also require extra toughness and resistance to high temperatures. It has been migration tested with different food simulants, enabling ELIX Polymers to advise its customers about migration issues and regulatory compliance during the product design phase.

In addition to injection moulding medical grades of ABS, ELIX Polymers now also offers ELIX ABS-3D FC filament for 3D printing using FFF (Fused Filament Fabrication) technology, often referred to as FDM (Fused Deposition Modelling). This grade, which is also available in numerous colours, is biocompatible according to USP Class VI. This means that it can also be used in food contact applications.

ELIX ABS-3D FC is easy to print, provides very good inter-layer adhesion, and enables production of high resolution, low-warpage parts. Compatible with most FFF 3D printers, it is part of a growing range of grades available from ELIX Polymers for the 3D printing community.

As MRC informed before, in February 2016, ELIX Polymers unveiled an upgraded version of P2MC as well as new ABS grades to complete the plating portfolio. Target applications for these electroplating grades include radiator grilles, logos, profiles, tailgate handles, and decorative interior parts.

ELIX Polymers is one of the most important manufacturers of ABS resins and derivatives in Europe, with 40 years of experience in engineering plastics and an installed capacity of 180,000/year from their plant in Tarragona (Spain) to the world. The operation starts in 1975, when the Tarragona ABS and SAN production plant was inaugurated.
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MOSCOW (MRC) -- JXTG Nippon Oil & Energy Corp. said it would close its Muroran petrochemical facility in Japan because of fal-ling demand for gasoline in the country, reported Apic-online.

The Muroran facility, which mainly produces feedstock for paraxylene, cumene and gasoline by-product, will discontinue production in March 2019 and will be converted to a terminal for storing and shipping oil products.

Muroran previously included a 180,000-b/d refinery, but was changed to a petrochemicals facility in 2014. The refinery was owned by JX Holdings, which recently merged with TonenGeneral Sekiyu to create JXTG.

Muroran produced 430,000 t/y of the paraxylene feedstock in the year through March 2017, and 160,000 t/y of cumene. The petrochemical products are ex-ported to Ulsan Aromatics in South Korea and JXTG said it will continue to supply Ulsan Aromatics from its other facilities in Japan.

As MRC wrote before, in June 2016, Petronas and JX Nippon Oil & Energy signed an agreement for the sale and purchase of equity in Petronas LNG 9 Sdn Bhd, a wholly-owned subsidiary of Petronas. Under the agreement, JX NOE will acquire a 10% in-terest in PL9SB, which owns the ninth liquefied natural gas (LNG) liquefaction train within the Petronas LNG complex in Bintulu, Sarawak, Malaysia. The 3.6-million-t/y state-of-the-art train, expected to begin commercial operations in the first quarter of 2017, will increase capacity at the Petronas LNG complex to 30-million t/y.

The Nippon Oil Corporation, or NOC or Shin-Nisseki is a Japanese petroleum company. Its businesses include the exploration, importation, and refining of crude oil; the manufacture and sale of petroleum products, including olefines (ethylene, propylene) and aromatics.
MRC

MOSCOW (MRC) — CB&I announced it has been awarded a contract for more than USD95 MM by Saudi Aramco Shell Refinery (SASREF), as per Hydrocarbonprocessing.

The scope of work includes the engineering, procurement and construction management for SASREF's modernization and expansion of its existing refinery in Al-Jubail city, Saudi Arabia.

CB&I has completed the conceptual design and FEED phases of the project, while working with SASREF to optimize investment on the new refinery configuration.

CB&I's integrated solutions will give SASREF the operating flexibility needed to generate maximum returns through sustainable fuels production, which meets Euro V regulations for cleaner emissions.
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