Total, Borealis and NOVA Chemicals close their Joint Venture in petrochemicals

MOSCOW (MRC) – Total S.A., Borealis AG and NOVA Chemicals Corporation announced they have closed a joint venture in petrochemicals on the U.S. Gulf Coast after receiving all required regulatory approvals, as per Hydrocarbonprocessing.

The company named Bayport Polymers LLC (“Bay-Pol”) is 50% owned by Total and 50% owned by Novealis Holdings LLC, a joint venture between Borealis and NOVA Chemicals. Diane Chamberlain is appointed President of the new entity. The Bay-Pol Joint venture includes: the under-construction 1Mt/y ethane steam cracker in Port Arthur, Texas.

Total’s existing polyethylene 400 kt/y facility in Bayport, Texas. A new 625 kt/y Borstar® polyethylene unit at Total’s Bayport, Texas, site, subject to further approvals.

"We’re excited for the future of our new company. The partnership between Total, Borealis and NOVA Chemicals will create a major player in the U.S. polyethylene market,” said Diane Chamberlain. “We have a great opportunity to take advantage of low-cost feedstocks in the United States and deliver quality products that respond to the growing global demand for plastics."
MRC

PE imports into Belarus decreased by 0.7% in Q1

MOSCOW (MRC) - The total volume polyethylene (PE) imports to Belarus declined by 0.7% in the first three months of this year compared to a year earlier and reached 31,300 tonnes. Local companies have increased the volume of purchases only of high density polyethylene (HDPE), according to MRC's DateScope.

According to the National Bureau of Statistics of the Republic of Belarus, external deliveries of polyethylene in the Republic of Belarus rose to 11,100 tonnes in March 2018 against 9,300 tonnes a month earlier. Local companies have increased the volume of purchases of all types of polyethylene. In general, for the first quarter of this year the total volume of imports of PE reached the level of 31,300 tonnes against 31,600 tonnes a year earlier. The demand for HDPE has increased, whereas the demand for linear low density polyethylene (LLDPE) has declined.

The structure of imports of PE to Belarus for the period under review is as follows.


The total volume of imports of LDPE grew to 3,300 tonnes in March 2018 against 3,000 tonnes a month earlier. Local companies increased the volume of purchases of polyethylene in Russia. In general, the total volume of imports of this type of polyethylene in the Republic of Belarus was about 9,100 tonnes in January - March , which practically corresponds to the level a year earlier.

March LLDPE imports in the country were about 2,600 tonnes against 1,900 tonnes in February, local companies seriously increased the volume of purchases of Middle Eastern butene polyethylene. Thus, during the reporting period, the total volume of imports of linear polyethylene reached the level of 7,000 tonnes, while a year earlier this figure was about 12,000 tonnes.

March imports of HDPE grew to 5,200 tonnes against 4,400 tonnes a month earlier. Local companies have increased their purchases of polyethylene from Russian producers. Thus, the first three months of the external supply of HDPE amounted to about 15,300 tonnes, which is 44% more than the same indicator in 2017.

MRC

Chinese independent refiners embrace old friend fuel oil as taxes, rising crude, bite margins

MOSCOW (MRC) -- China's independent oil refiners are once again using fuel oil to feed their plants as stricter tax enforcement and rising crude oil prices have squeezed their margins, reported Reuters.

These independent refiners, nicknamed teapots, buy nearly one-fifth of China's crude imports and any reduction in their crude purchases would cap demand in what is now the world's biggest oil importer.

Two independent refiners based in the eastern province of Shandong, home to most of China's teapots, have each bought an 80,000-tonne cargo of straight-run fuel oil (SRFO) cargo, together totaling about 1.02 million barrels, for April and May delivery, according to three traders with knowledge of the deals.

One cargo is arriving from Abu Dhabi and the other from Singapore, said one of the sources, an executive with a western trader involved in the supply talks.

The independents had primarily used straight-run fuel oil, the residue left after crude oil has been initially distilled in a refinery, as a feedstock for their plants since it cost less than crude oil and was taxed less. However, in 2014, the Chinese government raised taxes on fuel oil imports. But, that was followed in 2015 by teapots winning licenses to import crude.

Straight-run fuel oil consumption slumped as the refiners bought crude oil, which yielded a higher volume of higher-value products such as gasoline and diesel than the SRFO when processed and boosted profit margins for the teapots. China remained a large buyer of so-called cracked fuel oil as fuel for ships.

However, starting on March 1, Beijing enacted new tax rules that more rigidly enforced on the teapots the collection of a USD38 per barrel gasoline consumption tax and USD29 per barrel tax on diesel.

Combined with a recent surge in crude oil prices to their highest since 2014, the higher tax collection has crushed the independent's margins. That has prompted the renewed interest in lower-priced fuel oil.

"Buying SRFO may not necessarily save tax cost as the buyer needs to pay up-front the (fuel oil) consumption tax, but obviously plants are exploring the old trade as the government's tax stick is really a hard one this time," said the oil trading executive.

Processing the SRFO does have an added tax benefit, however. The independents can deduct the tax of about $31 per barrel paid on their fuel oil imports from the consumption tax they are required to collect on their gasoline and diesel sales, said an official with an independent plant seeking fuel oil.

"Processing fuel oil gives better margins than (refining) crude oil as plants can get tax deducted (when selling refined fuel) later," the official said.

The source, who declined to be named as he is not authorized to talk to the press, added that his plant expected margins to be negative if they only processed crude oil.

The lower margins have resulted in the teapots cutting their run rates.

In early May, the independent refiners operated at only 63 percent of their processing capacity, the lowest since February during the Lunar New Year break, according to a weekly survey of 38 plants by Shandong-based consultancy Sublime China Information. Planned maintenance was also a factor, said Gao Lei, an analyst with Sublime.

"We've seen less impact (from the tax measures) on import volumes as state-run plants increase runs, but more on teapot margins," said Seng-Yick Tee, of consultancy SIA Energy,

"They are definitely making less money now than before."
MRC

PP production in Russia rose by 7% in Jan-Apr 2018

MOSCOW (MRC) -- Russia's overall production of polypropylene (PP) grew in January-April 2018 by 7% year on year, slightly exceeding 496,100 tonne. At the same time, not all Russian producers increased their PP output, according to MRC ScanPlast report.


Some producers increased their capacity utilisation in April, overall PP production in Russia exceeded 130,000 tonnes, compared to 120,900 tonnes a month earlier. Overall PP production exceeded 496,1000 tonnes in the Russian Federation in the first four months of 2018 versus 464,900 tonnes a year earlier, Neftekhimiya, Stavrolen and Ufaorgsintez accounted for the greatest increase in the output, whereas Nizhnekamskneftekhim and SIBUR Tobolsk did not raise their production.

The structure of PP production by plants looked the following way over the stated period.


SIBUR Tobolsk, Russia's largest PP producer, manufactured 46,800 tonnes last month, compared to 39,800 tonnes in March. Overall PP output at the Tobolsk plant exceeded 173,300 tonnes in the first four months of 2018, which equalled the last year's figure.

Poliom (part of Titan Group) produced 18,500 tonnes of PP in April, compared to 19,100 tonnes a month earlier. Overall, the Omsk plant produced 73,200 tonnes of PP over the stated period, up by 5% year on year.

Tomskneftekhim produced 12,600 tonnes of propylene polymers in April versus 12,500 tonnes a month earlier. The Tomsk plant's PP output reached 49,000 tonnes in the first four months of 2018, compared to 46,500 tonnes a year earlier.

Ufaorgsintez's production was 11,200 tonnes last month versus 11,800 tonnes in March. Overall output of polymer at the Ufa plant rose to 44,800 tonnes in January-April 2018, compared to 41,200 tonnes a year earlier.

Neftekhimiya (Kapotnya) increased its capacity utilisation in April, the plant's total production exceeded 12,000 tonnes versus 9,900 tonnes a month earlier. Its PP output reached 45,200 tonnes over the stated period, up by 2% year on year. The last year's low figure was caused by a long scheduled maintenance in March-April.

Stavrolen (part of Lukoil) produced 10,800 tonnes last month versus 10,500 tonnes in March. Overall production of propylene polymers at the Budenovsk plant reached 41,000 tonnes in the first four months of 2018, up by 7% year on year.

Nizhnekamskneftekhim also increased its capacity utilisation in April, the total production of propylene polymers was 18,200 tonnes versus 17,300 tonnes a month earlier. Overall output of polymer at the Nizhnekamsk plant decreased in January-April 2018 by 4% year on year to 69,600 tonnes.

MRC

AkzoNobel to expand organic peroxide capacity in India

MOSCOW (MRC) -- The EUR4 million investment will increase capacity by 80 percent, and will provide a platform to meet growing demand from customers in India and the Middle East, said Dutch AkzoNobel in its press release.

In addition, a new waste water management system will make the process more environmentally sustainable. The expansion is expected to be completed by the end of 2018.

"This is the latest in a series of organic peroxide investments to better serve our customers by upgrading technologies and increasing production capacity," says Johan Landfors, Member of the Executive Committee responsible for Polymer Chemicals. "This expansion will allow us to build on our strong presence in numerous organic peroxide market segments, particularly in PVC, acrylics and thermoset resins."

Over the last three years, the Polymer Chemistry business has invested more than EUR100 million to better serve its customers in the polymer industry, upgrading technologies, increasing capacity, and repositioning its global manufacturing footprint at sites in Mexico, the Netherlands, Belgium, China, Italy, Brazil, and the US.

Werner Fuhrmann, CEO of AkzoNobel Specialty Chemicals, added that the latest project also demonstrates the company’s commitment to the Indian market and supports the country’s efforts to strengthen its manufacturing sector through increased investment from global organizations. The company is also investing in a monochloroacetic acid project in a joint arrangement with Atul in Gujarat, due to start production in 2019.

MRC