Deficit of PS might intensify in Ukrainian market in November

MOSCOW (MRC) -- The existing shortage of material, especially of high impact polystyrene (HIPS), in the Ukrainian polystyrene (PS) market, may worsen next month, according to ICIS-MRC Price report.

Thus, sentiments of participants of the domestic PS market changed last week, as the Russian plant - Nizhnekamskneftekhim - said PS quantities will either be significantly reduced or completely absent for Ukrainian buyers in November.

The updated information on import prices and available quantities of Russian material for November will only appear at the end of this week.

At the same time, the main Iranian PS supplier to the Ukrainian market - Tabriz - will also have available HIPS quantities no earlier than in a month.
MRC

MOSCOW (MRC) -- Philippine Polypropylene Inc. (PPI) restarted its polypropylene (PP) unit on October 15 after extended maintenance, reported NCT.

PPI’s unit at Mariveles in Bataan province experienced an unplanned outage in mid-September due to a technical issue.

The PP unit has an initial capacity of 160,000 tons/year which could be increased 225,000 tons/year, according to the company website.

Meanwhile, as MRC informed before, another Philippines producer - JG Summit - has started maintenance at its PP and polyethylene (PE) units at Batangas. The company produces 190,000 tons/year of PP and 325,000 tons/year of high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) at its facilities. The PP plant will be offline until early November, while PE unit - for two months from October to the end of November.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

MOSCOW (MRC) -- Philippines producer JG Summit is expected to restart its polypropylene (PP) line at the beginning of November upon completion of maintenance, reported NCT with reference to market sources.

The turnaround at this plant began on 6 October, 2019. Initially, it was planned to be shut until end-November.

Located in Batangas City, the Philippines, the plant has a production capacity of 190,000 mt/year.

As MRC informed earlier, this year, the company already conducted an unscheduled maintenance turnaround at its PP unit in Batangas from early June to 1 July.

Besides, in November 2017, JG Summit Olefins Corp. awarded an engineering, procurement and construction contract to Posco Engineering & Construction to expand an existing naphtha cracker and build a hydrogenation unit in Simlong, Batangas, Philippines.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

MOSCOW (MRC) -- The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), fell 0.4 percent in October on a three-month moving average (3MMA) basis following stable activity during the third quarter. On a year-over-year (Y/Y) basis, the barometer was off 0.5 percent (3MMA), said Americanchemistry.

The unadjusted measure of the CAB for October showed a 0.7 percent decline. The diffusion index fell to 47 percent in October – the first time since May 2016 that it was below 50 percent. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for September was revised downward by 0.44 points and that for August by 0.25 points.

“The CAB signals a pronounced slowdown in U.S. commerce through the second quarter of 2020,” said Kevin Swift, chief economist at ACC.

The CAB has four main components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators.

Production-related indicators in October were mixed. Trends in construction-related resins, pigments and related performance chemistry were slightly positive and suggest slow gains in housing activity. Plastic resins used in packaging and for consumer and institutional applications were mixed, suggesting headwinds for the consumer. Performance chemistry eased, reflecting the global manufacturing slowdown. U.S. exports were mixed, equity prices slumped and product and input prices fell. Inventory and other indicators were positive.

The CAB is a leading economic indicator derived from a composite index of chemical industry activity. Due to its early position in the supply chain, chemical industry activity has been found to consistently lead the U.S. economy’s business cycle, and this barometer can be used to determine turning points and likely trends in the broader economy. Month-to-month movements can be volatile, so a three-month moving average of the CAB reading is provided. This provides a more consistent and illustrative picture of national economic trends.

As MRC informed earlier, Russia's output of products from polymers rose in September by 5.2% year on year. However, this figure increased by 1.7% year on year in the first nine months of 2019. According to the Russian Federal State Statistics Service, September production of unreinforced and non-combined films was slightly over 107,300 tonnes, compared to 110,000 tonnes a month earlier. Output of films products grew in January-September 2019 by 9.1% year on year to 893,000 tonnes.

Last month's production of non-porous boards, sheets and films rose to 32,900 tonnes from 33,100 tonnes in August. Thus, overall output of these products reached 284,100 tonnes over the stated period, up by 11.3% year on year.
MRC

MOSCOW (MRC) - SK Innovation, the owner of South Korea's top refiner SK Energy, said that a recovery in refining margins is expected in the fourth quarter ahead of the implementation of new shipping fuel rules from 2020, said Reuters.

As the International Maritime Organization (IMO)'s global sulphur cap on marine fuels comes into force from 2020, demand for low-sulphur fuel oil and marine gas oil is expected to pick up, the company said. The IMO's new shipping fuel mandate will limit the sulphur content of fuels to 0.5%, from 3.5% currently.

"Refining margins are expected to improve led by middle distillates demand as the International Maritime Organization (IMO)'s shipping fuel rules set to take effect from 2020," the company said in an earnings statement.

Ahead of the IMO's stricter marine fuel regulation, Kim Ji-yong, a senior official at SK Energy, said in a call with analysts that the company is in talks with shippers about long-term contracts to supply low-sulphur fuel oil or marine gas oil.

Kim added that the company's vacuum residue desulfurisation unit (VRDS), which can produce 40,000 barrels per day (bpd) of low-sulphur fuel oil, would start commercial operations in March or April next year.

A week ago, S-Oil, South Korea's third-biggest refiner, also said inventory build-up ahead of the IMO 2020 and seasonal demand for heating were expected to help refining margins increase in the fourth quarter.

SK Innovation saw a 60.5% drop in operating profit for the July-September period to 330 billion won (USD284.31 million) because of inventory-related losses on a drop in oil prices, compared with 836 billion won over the same period a year earlier, according to the company statement.

SK Innovation, which has a total refining capacity of 1.115 MMbpd in Ulsan and Incheon, ran at 90% capacity on average in the third quarter, slightly down from 92% during the same period a year earlier, the statement noted.

In the fourth quarter, some of SK Energy's facilities will undergo maintenance, said Kim Jang-woo, head of finance at SK Innovation. In mid-September, SK Incheon Petrochem, a petrochemical unit of SK Innovation, suspended its production for planned maintenance and will resume operations on Nov.3.

Shares of SK Innovation edged up 0.9% by 0218 GMT, while the broader market was 0.8% higher.

As it was written earlier, SK Innovation would build a second electric vehicle (EV) battery plant at its site in Komarom, Hungary, where it already has a 7.5 GWh/year EV battery plant under construction.

As it was written earlier, SK Global Chemical (SKGC) lowered Operating rates at the plant at No 1 cracker on downstream turnaround from october to December to 85%.

Ethylene is a feedstock for producing polyethylene (PE).

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.

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