October prices of European PP did not rise for CIS markets despite higher monomer prices

MOSCOW (Market Report) -- The October contract price of propylene was agreed in Europe up by EUR20/tonne from September. However, virtually all European producers announced a roll-over of September export polypropylene (PP) prices for October shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over October prices of European PP began last week. All market participants reported producers' desire to maintain their export prices of propylene polymers at the last month's level, despite the increase of EUR20/tonne in propylene prices in the region.

Deals for October shipments of propylene homopolymer (homopolymer PP) were discussed in the range of EUR1,165-1,240/tonne FCA, which virtually corresponds to September prices. Deals for block-copolymers of propylene (PP block copolymers) were done in the range of EUR1,240-1,310/tonne FCA.

Many companies reported no restrictions on this month's PP exports.
MRC

MOSCOW (MRC) - Production of unmixed polyvinyl chloride (PVC) in Russia increased to about 699,900 tonnes in the first nine months of this year, up 7% compared to the same period of 2017. All producers increased production volumes over the reported period, according to MRC ScanPlast.

September output of unmixed PVC increased to 77,400 tonnes against 70,600 tonnes a month earlier, the low indicator of August was a result of a scheduled maintenance works at SayanskKhimPlast. Overall PVC production reached 699,900 tonnes in January-September 2018, compared to 652,500 tonnes a year earlier. All plants raised their production, with Bashkir Soda Company and RusVinyl accounting for the greatest increase in the output.

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

RusVinyl (JV of SIBUR and SolVin) produced about 29,800 tonnes of PVC in September, with emulsion polyvinyl chloride (EPVC) accounting for 2,300 tonnes, compared to 30,000 tonnes a month earlier. RusVinyl's overall output of resin reached 243,300 tonnes in the first nine months of 2018, up 8% year on year.

Sayanskhimplast last month increased its capacity utilization, the final output of suspension PVC reached 24,000 tonnes, whereas in August it amounted to only 10,300 tonnes (from 15 July to 15 August, the company shut the capacities for scheduled maintenance ). The Sayansk plant managed to produce over 197,200 tonnes of resin in the first nine months of 2018, compared to 184,600 tonnes a year earlier.

Bashkir soda company (BSC) in the second half of September, due to technical problems, reduced capacity utilisation, so the total PVC production amounted to 16,400 tonnes against 22,500 tonnes a month earlier. The Bashkir plant's overall production of PVC reached 190,000 tonnes in January-September 2018, up by 8% year on year. Such a great increase in the output was largely caused by the absence of a scheduled shutdown this year, whereas last year, the plant took off-stream its production capacities in mid-July.

Kaustik (Volgograd) in September decreased SPVC production, reaching about 7,200 tonnes, compared with 7,800 tonnes in August. The plant's overall production of resin exceeded 69,500 tonnes over the stated period versus 67,700 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Amin H. Nasser, President and Chief Executive Officer of Saudi Aramco and Patrick Pouyanne, Chairman and Chief Executive Officer of Total, have signed in Dhahran the joint development agreement for the front-end engineering and design (FEED) of a giant petrochemical complex in Jubail, on Saudi Arabia’s eastern coast, as per Hydrocarbonprocessing.

Announced in April 2018, the world-class complex will be located next to the SATORP refinery, operated by Saudi Aramco (62.5%) and Total (37.5%), in order to fully exploit operational synergies. It will comprise a mixed-feed cracker (50% ethane and refinery off-gases) - the first in the Gulf region to be integrated with a refinery - with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units. The project represents an investment of around $5 billion and is scheduled to start-up in 2024.

The project will provide feedstock to other petrochemical and specialty chemical plants located in the Jubail industrial area and beyond, representing an additional USD4 billion investment by third-party investors benefitting to the Saudi economy.

The overall complex will represent an investment of approximately USD9 billion and is expected to create 8,000 local direct and indirect jobs.

Saudi Aramco Chief Executive Officer Amin H. Nasser said: "SATORP’s second-phase expansion represents a quantum leap in Saudi Aramco’s downstream strategy to maximize our hydrocarbon resources and help position the Kingdom as a chemicals manufacturing hub, thus supporting economic diversification. Today’s signing will deliver on multiple levels, from high-value fuels and petrochemical products for consumers on three continents to meaningful job creation and local content development. We’re pleased to celebrate with Total this latest milestone in the SATORP journey.

Patrick Pouyanne, Chairman and Chief Executive Officer of Total said: "We are delighted to write a new page of our joint history by launching a new giant project, building on the successful development of SATORP, our biggest and most efficient refinery in the world. This world-class complex also fits with our strategy to expand in petrochemicals by maximizing the synergies within our major platforms, leveraging low-cost feedstocks and taking advantage of the fast-growing Asian polymer market."

As MRC wrote before, in July 2017, Saudi Aramco and France's Total unveiled plans for building a mixed-feed cracker and derivatives in Jubail, near their joint refining complex. The cracker is expected to have a capacity of 1.5 MMtpy.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) - Exports of corn-based U.S. ethanol to Brazil sank to the lowest levels in nearly three years in August, U.S. Department of Agriculture data showed, as per Hydrocarbonprocessing.

A big Brazilian sugar harvest pressured domestic biofuel prices, making imported ethanol comparatively more expensive than local sugar-based supplies, according to Geoff Cooper, chief executive of the Renewable Fuels Association trade group.

The downturn in U.S. ethanol exports to Brazil, while somewhat expected, was another blow to biofuel producers reeling from low prices and near-record large stockpiles.

Only 4,395 gallons (about 105 barrels) of U.S. ethanol were exported to Brazil in August, down sharply from 24.5 million gallons (about 583,400 barrels) in the same month a year ago. The monthly imports were the smallest since Brazil brought in no U.S. supplies in October of 2015, USDA data showed.

“We were fully expecting the big drop in Brazil. This may be a little less than we were thinking,” Cooper said. Sales of Brazilian sugar-based ethanol in the second half of August hit an all-time high, cane industry group Unica said.

Brazil last year imposed a tariff on U.S. ethanol imports. China, another top global biofuel buyer, increased an existing tariff on U.S. ethanol imports as part of the Washington-Beijing trade dispute, hampering shipments.

U.S. ethanol futures have recovered from an over decade-low of USD1.21 per gallon on Aug. 30, edging up 0.2 percent to USD1.32 on Friday. In a move that U.S. biofuel makers hope will shore up demand, President Donald Trump next week in Iowa is expected to announce the lifting of a summer ban on the sale of higher ethanol blends of gasoline in the United States, sources told Reuters.

Ethanol producers have been angling for the removal of the ban. The industry has been at odds with the White House after the administration gave numerous oil refineries exemptions from the nation’s biofuels blending laws that require them to blend – or pay for credits – corn-based biofuels into the nation’s fuel stock.
MRC

MOSCOW (MRC) -- Petrochemicals are becoming the largest drivers of global oil demand, in front of cars, planes and trucks, according to a major study by the International Energy Agency, said Hydrocarbonprocessing.

Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic meters (bcm) of natural gas by 2030, and 83 bcm by 2050.

The Future of Petrochemicals is part of a new IEA series shining a light on "blind spots" of the global energy system – issues that are critical to the evolution of the energy sector but that receive less attention than they deserve. The report is among the most comprehensive reviews of the global petrochemicals sector and follows other reports in the series, including the impact of air conditioners on electricity demand, the impact of trucking on oil demand, or the role of modern bioenergy in the renewables sector.

Petrochemicals are particularly important given how prevalent they are in everyday products. They are also required to manufacture many parts of the modern energy system, including solar panels, wind turbines, batteries, thermal insulation and electric vehicles.

Demand for plastics – the key driver for petrochemicals from an energy perspective – has outpaced all other bulk materials (such as steel, aluminum, or cement), nearly doubling since 2000. Advanced economies currently use up to 20 times more plastic and up to 10 times more fertilizer than developing economies on a per capita basis, underscoring the huge potential for global growth.

The dynamism of the petrochemical industry is also driving new trends around the world. After decades of stagnation and decline, the United States has re-emerged as a low-cost location for chemicals production thanks to the shale gas revolution, and is now home to around 40% of the global ethane-based petrochemical production capacity. Meanwhile, the Middle East remains the lowest cost center for many key petrochemicals, with a host of new projects announced across the region.

Petrochemical products provide substantial benefits to society, including a growing number of applications in various cutting-edge, clean technologies critical to sustainable energy systems. However, the production, use, and disposal of petrochemical-derived products present a variety of climate, air quality and water pollution challenges that need to be addressed.
MRC