PVC exports from Russia remained high in the past four months

MOSCOW (MRC) -- Exports of suspension polyvinyl chloride (SPVC) from Russia totalled about 18,000 tonnes last month, compared to 15,600 tonnes a year earlier. Imports were still scarce, according to MRC's DataScope report.
Russian producers have maintained fairly high exports since last October amid weak demand for SPVC from the domestic market. Exports of Russian suspension were about 18,000 tonnes in the first month of the year, compared to 15,600 tonnes a year earlier and 19,300 tonnes last December. Overall exports of resin from Russia totalled 146,300 tonnes in 2018 versus 100,700 tonnes a year earlier. The increased output and the continuing decline in demand from the domestic market forced Russian producers to export more and more PVC for export.


Indian buyers with a volume of over 66,000 tonnes became the key foreign importers of Russian resin. Belarusian customers with a volume of over 28,000 tonnes were the second largest buyers of SPVC in Russia.

Sufficient supply of PVC from Russian producers led to a multiple decrease in imports. There were almost no foreign SPVC shipments last month. Overall imports totalled 16,100 tonnes in the entire year of 2018 versus 48,900 tonnes a year earlier.

MRC

Russian producers kept a high level of capacity utilisation in January 2019

MOSCOW (MRC) - Contrary to the seasonal factor, Russian producers of unmixed polyvinyl chloride (PVC) maintain a high level of capacity utilisation. Average January capacity utilisation exceeded 93%, and the total volume of production amounted to 87,760 tonnes, according to MRC' ScanPlast.

January production of unmixed PVC in Russia decreased to 87,760 tonnes, compared with 89,800 tonnes in January 2018 and 87,600 tonnes in December 2018. Thus, despite the relatively low level of demand for PVC from the domestic market, the average capacity loading last month exceeded 93%. Overall PVC production reached 958,600 tonnes in January-December 2018, compared to 906,200 tonnes a year earlier.

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

RusVinyl (joint venture of SIBUR and SolVin) produced about 29,500 tonnes of PVC in January, with about 2,500 tonnes of which accounted for emulsion polyvinyl chloride (EPVC), compared to 31,300 tonnes in January 2018 and 29,000 tonnes a month earlier. Total PVC production at RusVinyl in 2018 reached 334,300 tonnes.

SayanskKhimPlast in January 2019 produced 27,700 tonnes of SPVC, while in January and December last year it was 27,100 tonnes and 27,300 tonnes respectively. Total PVC production at SayanskKhimPlast in 2018 was 278,8500 tonnes.

Bashkir Soda Company (BSC) in January produced about 23,000 tonnes of SPVC, compared to 23,300 tonnes in January and 23,700 tonnes in December a year earlier. Total SPVC production at Bashkir Soda Company in 2018 was 253,400 tonnes.

Kaustik Volgograd in January 2019 produced about 7,600 tonnes of SPVC, while in January and December last year it was 8,200 tonnes and 7,700 tonnes respectively. Total PVC production at Kaustik in 2019 reached about 92,200 tonnes.


MRC

Curacao resumes refinery operator search after top bidder withdraws

MOSCOW (MRC) -- The government of Curacao is resuming talks with two candidates to operate the nation’s 335,000-barrel-per-day Isla refinery after its preferred bidder withdrew from consideration, reported Reuters with reference to the refinery's statement.

The government-owned refinery has operated under a contract with Venezuelan state-run oil firm PDVSA that lasts through December, but it began a search for a replacement last year after a dispute between PDVSA and US oil producer ConocoPhillips kept the plant idled.

Selection of a new operator has been delayed by an investigation into corruption allegations related to the evaluation process. In its statement, the refinery said that delay and a review of other opportunities led its preferred bidder to withdraw.

"The team in charge of the process is already working together with international experts to quickly take the necessary steps," the Refineria di Korsou, as it is known formally, said in its statement.

Curacao did not identify the preferred bidder in its statement, but local media said it was Motiva Enterprises, the US-based arm of Saudi Aramco.

A spokesperson for Motiva declined to comment.

Motiva last year said it was "actively exploring a number of opportunities and locations" to boost its North American oil refining capacity to as much as 1.5 million barrels per day (bpd). Its plant in Port Arthur, Texas, is the largest US refinery by capacity, processing 603,000 bpd.

A memorandum of understanding with PDVSA’s replacement was expected to be signed and disclosed in the middle of January, a refinery executive had said late last year.

The Isla refinery is committed to keeping the facility open, and in its statement on Tuesday said that PDVSA has expressed interest in continuing at the site. It did not identify the two remaining candidates in the evaluation of a new operator.

As MRC wrote before, in December 2018, Motiva Enterprises was preliminarily chosen by the government of Curacao to operate the 335,000-barrel-per-day Isla refinery, replacing Venezuela’s state-run PDVSA. The refinery has been idle since May 2018 when a legal dispute between PDVSA and US producer ConocoPhillips forced its closure.
MRC

Traders expect Cushing builds as refinery issues add to swelling supply

MOSCOW (MRC) - U.S. crude traders are bracing for increasing supplies at Cushing, Oklahoma, the delivery point for benchmark crude futures, as unexpected refinery issues add to inventories that are already at the highest in more than a year, said Reuters.

Inventories at Cushing rose to 42.6 million barrels in the week to Feb. 1, the highest level since early January 2018, the U.S. Energy Information Administration said. Problems at a key Midwest refinery, along with upcoming seasonal maintenance, have traders believing supplies will rise more than expected at Cushing in coming weeks.

A fire at Phillips 66’s 330,000 barrel-per-day (bpd) joint-venture Wood River, Illinois, refinery and a unit closure at the Ponca City, Oklahoma, plant added to the bearish outlook for prices, traders said.

The discount for front-month U.S. crude for delivery in March and futures for delivery in April widened to as much as 39 cents a barrel on Monday, the most in nearly a year and a half, reflecting expectations of supply increases at the storage hub. Increased supply makes traders less inclined to pay higher prices for near-term oil.

The weakness in U.S. crude futures pushed the discount for U.S. West Texas Intermediate (WTI) versus international benchmark Brent to the widest level in nearly two months, at USD9.52 a barrel.

“The outages, whether they’re unplanned, or even more importantly the planned ones, are going to be mounting here, and that’s going to engender a significant rise at Cushing,” said John Kilduff, a partner at Again Capital Management in New York.

The second largest crude distillation unit (CDU) was shut by a fire on Sunday at Phillips 66’s joint-venture Wood River refinery, a source familiar with plant operations said. Phillips 66 also shut the second-largest CDU at its Ponca City refinery for a planned overhaul, a source said.

"It’s a perfect storm of bearish information this morning for WTI,” said Scott Shelton, a broker at ICAP in Durham. “Fears of tank tops will only worsen for the second quarter on this information."

U.S. refiners were estimated to have about 1.8 million bpd of capacity offline in the week ending Feb. 8, increasing offline capacity by 629,000 bpd from a week earlier, research company IIR Energy said on Friday. Moreover, traders said some barrels headed for Patoka, Illinois, have been diverted to Cushing following an outage on a section of TransCanada’s Keystone pipeline. "You’re getting some additional flow into Cushing. That’ll put pressure on WTI," one crude trader said.
MRC

SK Innovation expects refining margins to rebound on diesel demand

MOSCOW (MRC) -- SK Innovation, owner of South Korea’s top refiner SK Energy, said it sees a rebound in refining margins in 2019 supported by firm diesel demand in the second half of the year, reported Reuters.

SK Innovation posted an operating loss of 279 billion won (USD250.81 million) in the October-December period, dented by low refining margins, compared with an operating profit of 841 billion won a year earlier, the company said in a statement.

Weak gasoline margins have weighed on overall refining margins, profits of refining a barrel of crude into refined products, dragged down by increased global gasoline volumes. Asian gasoline cracks in Singapore are close to the lowest since 2011.

“Despite concerns about global refinery capacity addition and a global economic slowdown, favorable market conditions are expected in the second half of the year, supported by diesel (demand) ahead of sulfur regulations by the International Marine Organization from 2020,” Lee Myung-young, head of finance division, SK Innovation, said on a call with analysts.

S-Oil, South Korea’s third-biggest refiner, said on Monday refining margins were expected to improve, helped by rising diesel demand growth in the second half of the year ahead of the implementation of tougher sulfur cap for marine fuel from 2020.

Kim Ji-yong, head of corporate planning office at SK Energy, said gasoline margins are seen to recover in 2019 as Chinese export volumes are expected to be reduced on lower import quotas than last year.

For 2019, China issued its first batch of crude oil import quotas at 89.84 million tonnes, lower than for the same batch last year, reflecting slowing crude demand growth for the first half of 2019 in China, according to the documents and Reuters data.

As MRC reported earlier, South Korea’s leading LPG supplier SK Gas Ltd. (part of SK Corporation) will spend KRW 2.02 trillion (~ USD 1.8 billion) to build a combined-cycle power plant and polypropylene (PP) plant in the southeastern industrial city of Ulsan, South Korea.

SK Global Chemical is a pioneering petrochemical company in Korea, being the first in the country to build a naphtha cracking facility in 1972. Through continuous facility investment, R&D and technological improvement, the company has maintained its position as the leader of the petrochemical industry in Korea.
MRC