July prices of Russian PVC rose by Rb1,000-2,000/tonne for domestic market

MOSCOW (MRC) -- Negotiations over July shipments of suspension polyvinyl chloride (SPVC) began in the Russian market last Wednesday. Local producers announced a further price increase of Rb1,000-2,000/tonne for July shipments to the domestic market, according to ICIS-MRC Price report.

Strong seasonal demand and scheduled shutdowns for maintenance simultaneously at two plants led to a shortage of SPVC in the market. On the back of this, domestic producers announced a further rise in contract SPVC prices for July deliveries. At the same time, the increase in contract prices was less significant than in June, when the growth reached Rb4,000/tonne from May.

Some producers have reduced their exports since May in favour of shipments to the domestic market. The shutdown for a turnaround at Kaustik's (Volgograd) production capacities from mid-May to mid-June also led to lower sales of Russian polymer. However, lower exports did not allow to fully meet the growing seasonal demand for resin in the domestic market. And already in June, many consumers faced a shortage of SPVC, with the PVC segment with K=70 accounting for the acutest deficit.

Back in April, several consumers began to contract PVC in China and the USA, in order to provide themselves with material during the summer period, but the volume of purchases was small, if compared to the needs in the "high season". Amid the current shortage, other consumers are not able to promptly increase purchasing of resin in foreign markets at the moment, since the delivery times, as a rule, exceed one month.

Two producers will simultaneously shut down their production capacities for maintenance works in July. SayanskKhimPlast intends to take off-stream its production for a scheduled turnaround on 5 July, the outage will last for 30 days. The Bashkir soda company will shut its production on 14 July, the outage will last for two weeks. Thus, production capacities with a total capacity of just under 600,000 tonnes per year will be shut for maintenance this month, which is quite critical, especially in a period of stronger summer demand.

The shortage of SPVC intensified in the Russian market in July, and some consumers were forced to reduce their capacity utilisation.

July deals for Russian resin with K64/67 PVC were negotiated in the range of Rb80,500-84,000/tonne CPT Moscow, including VAT, for lots of less than 500 tonnes. Some producers' prices of SPVC with K=70, which is in short supply, reached Rb87,000/tonne CPT Moscow, including VAT, this week.
MRC

MOSCOW (MRC) -- Borealis, a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers, has announced the introduction of a new plastics recycling technology, Borcycle, according to Hydrocarbonprocessing.

This evolving technology will be used to produce high-quality compounds made of recycled polyolefins (rPO) such as the newly-launched Borcycle MF1981SY, an rPO with over 80% recycled content intended for use in visible appliance parts.

Borealis also announced a series of significant material improvements to existing recyclates in the established Purpolen brand portfolio. These market launches and product improvements are important technology advancements and thus accelerate the transformation to a circular economy of plastics. Borealis and its wholly-owned subsidiary, mtm plastics, will showcase the new Borcycle technology and recyclate innovations at the K 2019 in October.

Borealis is leading the industry by applying its Visioneering Philosophy to the development and implementation of novel polyolefins-based solutions that enable plastics reuse, recycling, and recovery, and by designing for circularity. These wide-ranging activities are gathered under the symbolic roof of EverMinds , the Borealis platform dedicated to promoting a more circular mind-set in the industry. By capitalising on its profound expertise in virgin polyolefins and collaborating with value chain partners, Borealis keeps discovering new opportunities for business growth within the circular economy.

The new technology, Borcycle, transforms polyolefin-based waste streams into recyclate material such as pellets. As a transformative technology, it complements the existing Borealis virgin polyolefins portfolio with a range of pioneering, circular solutions. It unites state-of-the-art technology with the profound Borealis polymer expertise gained over decades.

As a scalable and modular technology, Borcycle has been developed to meet growing market demand for high-quality recyclate. Leading appliance brand owners, for one, have pledged to increase the amount of recycled plastics in their goods. Yet until recently, producers have not been able to rely on a consistent supply of high-quality recyclate. The Borcycle technology will help address this challenge. Compounds made using the Borcycle technology deliver high performance, add value and offer versatility. Producers and brand owners in a range of industries will profit from the availability of high-quality recyclate that helps them meet environmental and regulatory challenges.

"Advancing technology is crucial if our aim is to implement value-creating solutions in the circular sphere," claims Maurits van Tol, Borealis Senior Vice President, Innovation, Technology & Circular Economy Solutions. "'Building tomorrow together' means innovating, collaborating, focussing on the customer, and above all taking action. The launch of our new recycling technology Borcycle is tangible proof of our commitment to achieving plastics circularity."

Borcycle MF1981SY is the first of several upcoming launches of rPO solutions made under the umbrella of the Borcycle technology. Borcycle MF1981SY will be available to Borealis customers in Europe. The compound is an exciting addition to the rPO portfolio because it is a 10% talc-filled compound that contains over 80% recycled material. It offers an ideal balance between stiffness and impact. The compound is especially suited for use in visible black parts, for example in small appliances.

Like its relatives in the mtm plastics family of recyclate materials, Borcycle MF1981SY is a truly sustainable offering. Recyclates from mtm save approximately 30% of CO2 emissions compared to virgin materials.

As MRC wrote previously, in March 2018, Borealis and United Chemical Company LLP (UCC) signed a Joint Development Agreement (JDA) for the development of a world-scale polyethylene project, integrated with an ethane cracker, in the Republic of Kazakhstan.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

MOSCOW (MRC) -- From January 1, 2018, to January 1, 2019, U.S. operable atmospheric crude oil distillation capacity increased 1.1%, reaching a record high of 18.8 million barrels per calendar day (b/cd), according to the U.S. Energy Information Administration’s (EIA) annual Refinery Capacity Report, said Hydrocarbonprocessing.

The previous peak for the first day of the year came in 1981, when operable capacity reached 18.6 million b/cd, just slightly higher than on January 1, 2018. U.S. operable crude oil distillation unit (CDU) capacity has increased slightly in six of the past seven years. Operable capacity includes both idle and operating capacity.

EIA measures refinery capacity in two ways: barrels per calendar day and barrels per stream day (b/sd). Calendar-day capacity is the operator’s estimate of the input that a distillation unit can process in a 24-hour period under usual operating conditions, recognizing the effects of both planned and unplanned maintenance. Stream-day capacity, on the other hand, reflects the maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal crude oil and product slate conditions with no allowance for downtime. Stream-day capacity is typically about 6% higher than calendar-day capacity.

The number of operable U.S. refineries remained at 135 from January 1, 2018, to January 1, 2019, because 2 refineries combined operations and another split its reporting between 2 plants. Tesoro Refining and Marketing’s Carson and Wilmington plants (now owned by Marathon) combined operations, as did the Par Hawaii and Island Energy Services plants in Kapolei, Hawaii. Since the beginning of 2019, Targa Resources started up a new condensate splitter in Channelview, Texas, that began operating during the first quarter of this year. Suncor Energy split its reporting between the East and West plants in Commerce City, Colorado.

Marathon Petroleum Corporation acquired Andeavor and its 10 U.S. refineries in 2018, making it the largest refiner in the United States, with an operable CDU capacity of a little more than 3 million b/cd. Marathon now has about 800 thousand b/cd more CDU capacity than Valero Energy Corporation, which has a CDU capacity of 2.2 million b/cd and had previously been the largest refiner in the United States based on operable CDU capacity.

Gross inputs to U.S. petroleum refineries—also referred to as refinery runs—and crude oil production both established new volumetric records in 2018 (Figure 2). U.S. crude oil production, which averaged 11.0 million barrels per day (b/d) in 2018, has more than doubled since 2009. Crude oil inputs to U.S. refineries averaged 17.0 million b/d in 2018, compared with 14.3 million b/d in 2009. During that period, operable refinery CDU capacity increased 1.2 million b/cd, and utilization rose from 83% in 2009 to 93% in 2018, resulting in a 2.6 million b/d increase in crude oil inputs. During the same period, U.S. crude oil imports decreased by 1.3 million b/d and U.S. crude oil exports increased by 2.0 million b/d.

The quality of crude oil inputs to U.S. refineries has also evolved during the past decade. As the United States has increased crude oil production, the average density of U.S. crude oil has become lighter. Because U.S. refineries imported less of their crude oil inputs as they replaced imports with domestically produced crude oil, the average API gravity—a measure of a crude oil’s density where higher numbers mean lower density—of crude oil inputs to refineries increased. For example, the U.S. Gulf Coast, which is home to about half of U.S. refining capacity, imported only 31% of its crude oil inputs to refineries during the first quarter of 2019, down from 68% in 2009 (Figure 3). During this time, the weighted average API of crude oil inputs into Gulf Coast refineries increased from 29.6 degrees for the full year in 2009 to 33.4 degrees in the first quarter of 2019.

U.S. refineries have adapted to this changing crude oil slate by slightly increasing their yields of petroleum products that are derived from lighter crude oil, such as jet fuel, gasoline, and distillate (Figure 4). They have also increased their use of secondary refining units, which are downstream refinery units that process the products coming from the atmospheric crude oil distillation unit into lighter petroleum products. The lighter products often have higher refining margins, a measure that represents the difference between the prices of the petroleum products and the crude oil prices.

EIA’s 2019 Refinery Capacity Report indicates that secondary refining capacity—including but not limited to thermal cracking (coking), catalytic hydrocracking, and hydrotreating and desulfurization—increased by about 8% from 2009 to 2019. These downstream capacity increases enable refineries to produce larger amounts of lighter petroleum products and to meet the required specifications for these products.
MRC

MOSCOW (MRC) -- Harris County in Texas plans to sue Valero Energy Corp for pollution from its Houston refinery, the head of the county’s environmental law department said, as per Reuters.

The suit will be brought under a provision of the U.S. Clean Air Act that allows citizens to sue over pollution, said Rock Owens, managing attorney of the environmental practice group in the Harris County Attorney’s Office.

In recent years, environmental groups like the Sierra Club and Environment Texas have filed citizen lawsuits against refineries and chemical plants, but it is rare for governments to do so, Owens said. “It’s been extremely unusual in Texas,” he said. “I can’t speak to the rest of the nation.”

The lawsuit, which would be filed in federal court must be preceded by a 60-day notice to Valero, the nation’s second largest refiner, the Texas Commission on Environmental Quality and the U.S. Environmental Protection Agency. Owens expects that notice will be issued this summer.

The Valero refinery is bordered on one side by the Manchester neighborhood in east Houston along the Houston Ship Channel. Residents of the largely Hispanic neighborhood have repeatedly blamed pollution from area refineries and chemical plants for health problems.

“This is an area where people have been crying for relief for years,” Owens said. In 2017, a federal judge ordered Exxon Mobil Corp to pay a USD20-million fine for pollution from the company’s giant Baytown, Texas, refinery and chemical plant complex as part of a citizen lawsuit brought by the Sierra Club’s Lone Star Chapter and Environment Texas.

The same organizations have notified Valero of plans to sue the company over pollution from its refinery in Port Arthur, Texas, 90 miles (145 km) east of Houston.

Other lawsuits brought by the Sierra Club and Environment Texas have resulted in multimillion-dollar settlements with companies like Royal Dutch Shell Plc

Five major refineries, accounting for 7.5% of national refining capacity, are located in Harris County, including the 205,000 barrel-per-day (bpd) Valero Houston refinery and the 560,500 bpd Exxon Baytown refinery.
MRC

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp will operate its Mailiao refinery at about 90% capacity, down by about 6 percentage point from June but fully restore throughput at its naphtha crackers, company spokesman K.Y. Lin said, as per Hydrocarbonprocessing.

Formosa operates a 540,000 barrels-per-day (bpd) refinery at Mailiao, making that one of Asia’s ten largest refineries by capacity.

Weak gasoline margins have prompted the refiner to trim gasoline supplies this month and this would affect its overall average refining throughput as a result, Lin said.

Formosa, Asia’s top naphtha importer, also operates three naphtha crackers which have a total capacity of 2.93 million tonnes per year of ethylene, a building block for plastics.

But it reduced the average throughput of the naphtha crackers to about 95% of total capacity in June because of weaker demand for ethylene caused by maintenance at downstream units, he said.

“The plan is to restore the cracker runs to 100% this month but this is subjected to downstream demand,” said he said.

As MRC informed earlier, Formosa Petrochemical Corp will raise the throughput at its crude oil refinery during the second-half of April after finishing maintenance at a crude unit. Formosa’s Mailiao refinery, which can process 540,000 barrels per day (bpd) of crude, will raise its throughput to over 82 percent from 70 percent currently, K.Y. Lin, a company spokesman said.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC