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

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

MOSCOW (MRC) -- Russia's production of high density polyethylene (HDPE) totalled 695,200 tonnes in the first nine months of 2019, down by 5% year on year. Three producers out of four reduced their output, according to MRC's ScanPlast report.

September total HDPE production in Russia decreased to 45,900 tonnes, whereas this figure was 84,300 tonnes a month earlier. Lower output was caused by the shutdowns for maintenance at Stavrolen and Kazanorgsintez's production capacities. Thus, overall HDPE output reached 695,200 tonnes in January-September 2019, compared to 731,700 tonnes a year earlier. A slight increase in Kazanorgsintez's production could not offset the decrease in the three other producers' output.

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

Kazanorgsintez's total HDPE production fell to 32,200 tonnes in September from 50,800 tonnes a month earlier. The Kazan producer shut down its production for a turnaround from 26 September to 20 October. The Kazan plant's overall HDPE output reached 401,500 tonnes in January-September 2019, up by 1% year on year.

Stavrolen produced 3,400 tonnes last month, compared to 28,200 tonnes in August, the Budyonovsk producer shut its production capacities for maintenance from 6 September to 18 October. The plant's overall output reached 214,200 tonnes over the stated period, down by 4% year on year.

Gazprom neftekhim Salavat increased its capacity utilisation in September, the plant's total production grew to 10,200 tonnes from 5,400 tonnes a month earlier. The low output in the last month of summer was caused by the delayed completion of the maintenance works. The Bashkir plant's overall HDPE production reached 77,000 tonnes in the first nine months of 2019, down by 14% year on year. We remind that the Salavat producer did not take off-stream its production capacities for maintenance last year.

Nizhnekamskneftekhim produced exclusively linear low density polyethylene (LLDPE) over the stated period.

MRC

MOSCOW (MRC) -- The United States is extending an exemption from its sanctions on Venezuela for Nynas, a joint venture between state oil company PDVSA and Finnish biofuel producer and oil refiner Neste, reported Reuters with reference to the Treasury Department's statement.

The license, which was set to expire on Oct. 25, was extended for six months to April 14, 2020, the department said in an updated general license posted to its website.

As MRC informed before, in August 2019, a Venezuelan oil joint venture with a state-owned Chinese company has started an expansion project to boost output to 165,000 barrels per day (bpd), President Nicolas Maduro said, from a current capacity of 110,000 bpd. Sinovensa, owned by PDVSA subsidiary Venezuelan Petroleum Corp (CVP) and China National Petroleum Corp (CNPC), produces extra-heavy Orinoco crude and blends it with lighter oil to produce medium-grade Merey.
MRC

MOSCOW (MRC) -- The Trump administration, in an effort to mend fences with the powerful corn lobby, proposed a new formula to boost biofuels demand, but the proposal instead only provoked more consternation from the industry, said Hydrocarbonprocessing.

Corn and soybean farmers have been angered by the U.S. Environmental Protection Agency’s decision to greatly expand the number of exemptions given to smaller refiners from blending biofuels into the nation’s gasoline pool. They argue the expansion undercuts demand.

In response, the Trump administration has been negotiating for several months to find a way to boost demand for biofuels to satisfy farmers and rural voters. However, the proposed rule, issued in a supplemental notice by the EPA, was met with harsh criticism because it bases the biofuels volumes required for blending on U.S. Energy Department estimates - rather than actual exemptions.

"Only 11 days after President Trump’s landmark announcement, the EPA proposal reneges on the core principal of the deal,” said Iowa Renewable Fuels Association Executive Director Monte Shaw. “Instead of standing by President Trump’s transparent and accountable deal, EPA is proposing to use heretofore secret DOE recommendations that EPA doesn’t have to follow."

The refining industry is required by law to blend ethanol and other biofuels into the nation’s gasoline under the nation’s Renewable Fuel Standard (RFS). As part of the RFS, EPA can exempt small refineries if they prove compliance would cause disproportionate economic hardship. Facilities owned by oil majors Exxon Mobil Corp and Chevron Corp are among those to secure recent exemptions. Farmers who supported Trump heavily in his 2016 campaign have been frustrated with this, along with the ongoing U.S.-China trade war.

Trump promised in early October to boost demand for fuels like ethanol. During the negotiations, it appeared the biofuels industry had won a concession that would require refiners who are not exempt from the rules to blend the additional gallons of ethanol and other fuels that smaller facilities did not.

The proposed plan would calculate the volume of biofuels U.S. refiners have to blend by using a three-year average of exempted gallons as recommended by the Department of Energy, the Environmental Protection Agency said. “The supplemental notice contains a never-before-discussed proposal to estimate small refinery exemptions, with no assurance that the estimate will come close to actual exemptions,” the National Biodiesel Board said in a statement.

Oil companies were not happy either. They have consistently resisted measures to expand the biofuels market, which they view as a competitor. Refiners complain that the requirements under the RFS cost them greatly, and that having refiners make up for those who are granted exemptions would be an additional harm.

“There is simply no logic in forcing complying refineries to bear the burden of decisions outside of their control,” said Frank Macchiarola, vice president of downstream and industry operations at industry group the American Petroleum Institute.

The EPA, in its supplemental notice, acknowledged there is uncertainty in projecting exempted volumes for 2020. The plan would not change proposed volumes for 2020 and 2021, EPA said. In July, the EPA called for the refining industry to add 20.04 billion gallons of biofuels, including 15 billion gallons of ethanol, into fuel in 2020.

As MRC informed earlier, the Trump administration is close to finalizing a package of measures to adjust the policy mandating the use of biofuels, two sources familiar with the matter said and is aiming to get the final deal signed by President Donald Trump.
MRC