China private refiner and LyondellBasell to launch new cracker in North China by mid-2020

MOSCOW (MRC) -- China’s privately owned Bora Enterprise Group has started construction of a US2.5 billion petrochemicals plant in northeast China, with the steam cracker being due for start-up by mid-2020, reported HellenicShippingNews with reference to company sources.

The steam cracker marks the biggest investment yet in petrochemicals by one of China’s private refiners as the country’s so-called "teapots" look to diversify away from the saturated local fuel market.

Bora and LyondellBasell last month signed a preliminary agreement to set up a 50-50 joint venture for petrochemical projects, and are currently in talks to finalise the deal, said two Bora sources and an official at LyondellBasell.

The 18 billion yuan USD2.5 billion) complex in the city of Panjin, Liaoning province, will produce 800,000 tonnes per year (tpy) of polyethylene and 600,000 tpy of polypropylene, used to make products ranging from pipes and plastic containers to agricultural films, the sources said.

Bora is one of more than 40 independent Chinese refiners that have grown rapidly since late 2015 to account for a fifth of China’s total crude oil imports, but which are now facing threats to their survival.

Demand for gasoline and diesel in the country is slipping, while the start-up of mammoth, more efficient refineries like Hengli Petrochemical and Zhejiang Petrochemical has led to a growing supply glut.

Many are now scrambling to enter the higher margin petrochemicals sector, where China is expected to account for around 40% of global demand growth over the next decade.

Bora, which operates a 140,000 barrels per day refinery and is also a bitumen producer, was among the first to respond.

The USD2.5 billion plant was approved in 2017 by the Liaoning provincial government as a key industrial project, while Bora in June secured a 10-year, 10.8 billion yuan (USD1.5 billion) syndicated loan from Chinese banks, two company sources with direct knowledge of the matter said.

The new facilities are slated for start-up in the second quarter next year, said the two sources.

A Bora spokesperson declined comment.

“By combining the project management and construction proficiency of Bora with LyondellBasell’s technology and commercial experience, this joint venture will leverage the expertise of both companies,” Veronica Adamcik, a Houston-based spokeswoman for LyondellBasell, told Reuters.

LyondellBasell already invests in several chemical plants in China, including a joint venture with a unit of state refiner Sinopec Corp.

The Panjin complex, which LyondellBasell said is led by a 1.1 million tpy ethylene unit, will source 1.64 million tonnes of feedstock such as naphtha from the Bora refinery, but will need to procure another 1.1 million tonnes of propane or butane from the market, Bora sources said.

As MRC wrote previously, in August 2016, LyondellBasell made the final investment decision to build a high density polyethylene (HDPE) plant on the US Gulf Coast. The plant will have an annual capacity of 1.1 billion pounds (500,000 metric tons) and will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology. The start-up of the new plant is scheduled for 2019.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

Hengli Petrochemical to shut No.2 PTA unit at Dalian for turnaround

MOSCOW (MRC) -- China's Hengli Petrochemical plans to shut its No.2 purified terephthalic acid (PTA) unit at Dalian for a turnaround on 26 October, reported S&P Global with reference to a source familiar with the matter.

The line with a production capacity of 2.2 million mt/year is expected to be off-stream for around 10-12 days of maintenance.

The company also operates two other PTA lines with the same production capacity at the site in Dalian.

As MRC wrote previously, in May 2018, INVISTA’s technology and licensing group, INVISTA Performance Technologies (IPT), and Hengli Petrochemical (Dalian) Co.,Ltd. (Hengli) reached an agreement to license INVISTA’s latest purified terephthalic acid (PTA) process technology for Hengli’s fourth PTA line. Hengli’s first three PTA lines, the first of which began operation in 2012, also utilize INVISTA’s technology and have a combined capacity of 6.6 million metric tonnes per year. The fourth line will have a design capacity of 2.5 million metric tonnes per year and will be installed at Changxing Island, Liaoning Province of China.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.
MRC

Yisheng Petrochemical shut No.4 PTA line at Ningbo because of feedstock shortage

MOSCOW (MRC) -- Yisheng Petrochemical has shut its 2.2 million mt/year No.4 unit at Ningbo over the weekend due to a paraxylene (PX) shortage for a couple of days, reported S&P Global with reference to a source close to the company's statement on Monday.

Two other sources told S&P Global Platts that the duration of the shutdown is expected to last for three to four days.

The company also operates three other lines at the same site: No 1. line with production capacty of 650,000 tonnes per year and No. 2 & 3 lines with production capacity of 2.2 mln tonnes per year each.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.

Yisheng Petrochemical is jointly owned by polyester giants Zhejiang Hengyi Group and Zhejiang RongSheng Group.
MRC

Spolana resumes PVC output, force majeure remains in place

MOSCOW (MRC) -- Czech producer Spolana resumed production at its polyvinyl chloride (PVC) plant in Neratovice, Czechia but force majeure on supplies still remains in place, reported NCT with reference to a source familiar with the matter reported.

The source reported that the 130,000 tons/year plant was restarted in the second week of October after production was brought to a halt due to issues with feedstock VCM production in late September. Force majeure was declared around the same time.

Although the producer did not disclose a date for when the force majeure on PVC might be lifted, some market sources estimate that it might be lifted in late October.

As MRC informed earlier, in 2017, Spolana from Neratovice has been granted an approval to change the integrated permit and extend the utilization of amalgam electrolysis for the production of chlorine and caustic soda.

According to MRC's DataScope report, exports of suspension polyvinyl chloride (SPVC) into Russia totalled about 142,100 tonnes in the first nine months of 2019, up by 48% year on year. Imports increased by 211% year on year to 43,100 tonnes.

Spolana a.s. is one of the largest chemical manufacturing companies in the Czech Republic and the only manufacturer of PVC and caprolactam also producing sodium hydroxide and ammonium sulphate. It currently employs over 700 people.
MRC

Ukraine reduced imports of Nizhnekamskneftekhim GPPS and HIPS in three quarters 2019 by 28%

MOSCOW (MRC) -- Imports of Nizhnekamskneftekhim's high impact polystyrene (HIPS) and general purpose polystyrene (GPPS) to Ukraine decreased in January-September 2019 by 28% year on year to 9,200 tonnes, according to MRC's DataScope report.

This figure was at 12,700 tonnes in the first nine months of 2018.

Nizhnekamskneftekhim's material accounted for 54% in the overall structure of imports to the Ukrainian market for the first three quarters of 2019, compared to 67% in January-September 2018.

Overall imports of this polystyrene grade into the country decreased in the fist nine months of 2019 by 7% year on year to 17,200 tonnes from 18,600 tonnes a year earlier.
MRC