Cabinet approves BPCL stake sale

MOSCOW (MRC) -- The union cabinet chaired by Prime Minister Narendra Modi has approved the sale of the government's entire 53.29 per cent stake in oil refiner and retailer Bharat petroleum Corporation (BPCL), reported EnergyWorld with reference to Finance Minister Nirmala Sitharaman's statement after a cabinet meeting.

"The strategic disinvestment of BPCL, of the Government of India’s shareholding of 53.29 per cent, along with transfer of certain management control to strategic buyer is approved. The entire management control will be transferred. However, this is excluding BPCL’s equity shareholding of 61 per cent it holds in Numaligarh Refinery Ltd," Sitharaman said.

She said a "carve out" has been made of NRL in Assam that shall not be disinvested and NRL will be moved out of BPCL before the disinvestment and acquired by another PSU.

Sitharaman had said in an interview last week the government would wrap up the sale of the fuel retailer by March 2020.

As MRC wrote before, in August 2019, Sumitomo Chemical signed an agreement with Bharat Petroleum Corporation Limited (BPCL) of India for licensing its propylene oxide (PO) production technology in connection with the petrochemical project which BPCL is conducting.

BPCL is one of the leading government-owned oil companies in India, with a total production capacity of approximately 840,000 barrels a day of crude oil from its four refinery complexes in India. BPCL aims to enter into the petrochemicals market by carrying out a large-scale petrochemical project adjacent to its refinery complex at Kochi in the state of Kerala. The project includes construction of new plants for PO and polyols. For PO production, a decision has been made to adopt Sumitomo Chemical's proprietary technology. From now on, BPCL will conduct front-end engineering design and detailed engineering for the new PO plant, which will have an annual production capacity of 300,000 tons upon its completion targeted in 2022.

Propylene is a feedstock for the production of polypropylene (PP)/

According to MRC's ScanPlast report, Russia's overall PP production rose to about 1,163,200 tonnes in the first ten months of 2018, up by 1.3% year on year. Three producers out of seven reduced the capacity utilisation.
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MOSCOW (MRC) -- Asian refining margins for 10-ppm gasoil climbed on Wednesday, while cash premiums for the industrial and transportation fuel inched higher amid a slight uptick in buying interests in the physical market, Reuters.

Refining margins, also known as cracks, for 10-ppm gasoil rose to USD14.80/bbl over Dubai crude during Asian trade, up from USD14.66/bbl on Tuesday.

Cracks for the benchmark gasoil grade in Singapore, which have dropped about 11% in the last four weeks, were currently about 1% lower than their seasonal average for this time of the year in the last three years, Refinitiv Eikon data showed.

The gasoil market would likely bottom out sometime soon as some refinery run cuts are underway, which would help tighten supplies to an extent, a trader said on Wednesday.

Cash premiums for gasoil with 10 ppm sulfur content were at USD0.18/bbl to Singapore quotes on Wednesday, USD0.02/bbl higher from a day earlier.

The front-month time spread for 10-ppm gasoil widened by USD0.05 to trade at a premium of USD0.20/bbl on Wednesday, Refinitiv data showed. Meanwhile, cash differentials for jet fuel were at a discount of USD0.61/bbl to Singapore quotes on Wednesday, compared with a discount of USD0.62/bbl on Tuesday.

Jet fuel cracks eased to USD14.15/bbl over Dubai crude on Wednesday, compared with USD14.21/bbl in the previous session. Fujairah stocks. Middle-distillate inventories in the Fujairah Oil Industry Zone fell 14.1% from a week earlier to 3 MMbbl in the week to Nov. 25, data via S&P Global Platts showed.

Stocks of middle distillates in the Fujairah oil hub have averaged 2.2 MMbbl so far in 2019, Reuters calculations showed. This compares with a weekly average of 2.8 MMbbl in 2018. Compared with year-ago levels, weekly Fujairah middle distillate stocks were 34.5% higher.

API inventory data. U.S. crude stocks rose last week while gasoline inventories increased and distillate stocks fell, data from industry group the American Petroleum Institute showed on Tuesday. Crude inventories rose by 3.6 MMbbl in the week to Nov. 22 to 449.6 MMbbl, compared with analysts' expectations for a decrease of 418,000 bbl.

Distillate fuels stockpiles, which include diesel and heating oil, fell by 665,000 bbl, compared with expectations for a 750,000-bbl gain, the API data showed.

As MRC informed earlier, oversupply condition in the Asian butadiene market is likely to be offset by a possible export cut from the US after a fire hit the TPC Group's Port Neches butadiene and raffinate petrochemical plant east of Houston, Texas.

Located adjacent to the Sabine Neches River, a part of the Sabine Neches Waterway, TPC's Port Neches plant can produce more than 900 million lb (426,000 mt) of butadiene and raffinate a year, according to the company's website. A source familiar with company's operations said the site has two butadiene lines with capacities of 166,000 mt/year and 260,000 mt/year.

Butadiene is one of the feedstocks for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, in Asia, the falling prices of feedstocks for ABS production have been pushing prices of material down in the Russian market. LG Chem's import prices for November quantities were as follows for Russian buyers: natural ABS - at USD1,400-1,420/tonne FOB Korea, black ABS - at USD1,610-1,630/tonne FOB Korea, white ABS - at USD1,640-1,660/tonne FOB Korea. December prices may drop by another USD30-50/tonn.
Natural grades of Korean ABS went down to Rb138,000-143,000/tonne CPT Moscow, including VAT, in the domestic market in mid-November, whereas black ABS was offered at Rb156,000-160,000/tonne and white ABS - at Rb158,000-163,000/tonne CPT Moscow , including VAT.
MRC

MOSCOW (MRC) -- PT Lotte Titan Nusantara Indonesia has restarted its No. 1 Linear Low Density Polyethylene (LLDPE) unit at Cilegon, as per Apic-online.

A Polymerupdate source in Indonesia informed that the company has resumed operations at the unit early last week. The unit was shut owing to shortage of feedstock in early-November, 2019.

Located in Cilegon, Indonesia, the No. 1 unit plant has a production capacity of 125,000 mt/year.

As MRC informed earlier, PT Lotte Titan Nusantara, Indonesia shut its LLDPE units at Cilegon from 4 to 12 August, 2019, owing to power failure. Located in Cilegon, Indonesia, the No. 1, 2 and 3 units have a production capacity of 125,000 mt/year, 125,000 mt/year and 200,000 mt/year respectively.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.
MRC

MOSCOW (MRC) -- Japan’s Sekisui Chemical Co. Ltd. has acquired carbon fibre parts manufacturer AIM Aerospace, based in Renton, Wash., for an undisclosed amount, said Canplastics.

As a result of the purchase, the company will change its name to Sekisui Aerospace.

"The acquisition of Sekisui Aerospace continues Sekisui’s commitment to investing in growth markets with high-quality and principled companies that share our corporate values,” Ian Moran, president of subsidiary Sekisui America, said in a statement. “The addition of Sekisui Aerospace creates new value for our shareholders, customers, communities and employees."

Founded in 1988, Sekisui Aerospace manufactures advanced composite structures, systems, engine components, assemblies and thermoplastic technology for the aerospace industry.

With more than 1,000 employees, the company operates manufacturing centers of excellence as well as a research and technology centre at locations in the U.S. states of Washington and Iowa. Sekisui Aerospace is a fully integrated, diversified composites supplier and includes Quatro Composites.

As MRC informed earlier, Sumitomo Chemical and Sekisui Chemical (Tokyo) said that they are combining their respective polyolefin films business under a new joint venture.

AS per MRC's ScanPlast, October total production of unmixed PVC was about 88,500 tonnes versus 89,400 tonnes a month earlier, SayanskKhimPlast and RusVinyl increased their capacity utilisation last month. Overall PVC production reached 809,000 tonnes in January-September 2019, compared to 784,900 tonnes a year earlier. All plants raised their output, except for Kaustik Volgograd.

Sekisui Specialty Chemicals is an industry leader in research and development of polyvinyl alcohol (PVOH) products.
MRC

MOSCOW (MRC) -- The explosion at TPC Group’s Port Neches, Texas, butadiene facility Wednesday morning takes a large share of US butadiene extraction capacity out action, but the effect on downstream derivative markets should be limited, owing to the availability of spare capacity, says Bill Hyde, reported Chemweek with reference to senior director/olefins and elastomers at IHS Markit.

"The US butadiene producers have not been running at maximum operating rates," says Hyde. "As a result, the loss of 17% of the capacity will not cause the same heartache in the industry as it might in another market."

The butadiene market is typically feedstock-limited, and TPC itself does not produce crude C4, the feedstock for butadiene extraction, Hyde notes. "So the question facing the industry is whether or not there is enough spare capacity and logistical flexibility to get the crude C4 that would have gone to Port Neches to another butadiene extraction unit," he says. "I think the answer to that is likely to be yes. If not, only a fairly small amount of crude C4 will not find a home. This means that for the butadiene derivative producers, this is not as significant an event as it might otherwise seem."

Downstream products include polybutadiene rubber (PBR, 29% of US butadiene demand); adiponitrile, a key nylon-6,6 feedstock (24%); styrene-butadiene rubber (SBR, 21%); styrene-butadiene latex (SB latex, 8%); and acrylonitrile-butadiene-styrene (ABS, 3%).

All 11 US butadiene extraction units are located on the US Gulf Coast (USGC). TPC’s 426,000-metric tons/year unit at Port Neches, Texas, accounts for 17% of the 2.47 million metric tons/year of butadiene capacity in the US, according to data from IHS Markit. The company also has a 417,000-metric tons/year unit at Houston, Texas.

There are five other producers operating nine butadiene extraction units on the USGC: Shell (411,000 metric tons/year), LyondellBasell (388,000 metric tons/year), ExxonMobil (411,000 metric tons/year), and Ineos (98,000 metric tons/year).

Most butadiene consumers in the US do not have their own butadiene extraction units in the region.

The largest consumer is Invista, which produces adiponitrile at Orange, and Victoria, Texas, for a total of 484,000 metric tons/year of consumption capacity, according to data from IHS Markit. Goodyear’s PBR and other derivative units at Beaumont, Texas, have capacity to consume 337,000 metric tons/year.

Arlanxeo has capacity to consume 244,000 metric tons of butadiene at sites in Orange and Houston, Texas, mainly in the production of PBR, but also solution SBR, nitrile rubber, and other products. Lion Elastomers, which produces PBR at Orange, has capacity to consume 153,000 metric tons/year.

Other major consumers include Bridgestone, at Lake Charles, Louisiana; Kraton Polymers, at Belpre, Ohio; and Trinseo, at Midland, Texas, and Dalton, Georgia. Almost 30 more US derivative producers have capacity to consume 1,000–43,000 metric tons/year of butadiene, putting total US consumption capacity at 2.03 million metric tons/year.

According to ICIS-MRC Price report, in Asia, the falling prices of feedstocks for ABS production have been pushing prices of material down in the Russian market. LG Chem's import prices for November quantities were as follows for Russian buyers: natural ABS - at USD1,400-1,420/tonne FOB Korea, black ABS - at USD1,610-1,630/tonne FOB Korea, white ABS - at USD1,640-1,660/tonne FOB Korea. December prices may drop by another USD30-50/tonn.
Natural grades of Korean ABS went down to Rb138,000-143,000/tonne CPT Moscow, including VAT, in the domestic market in mid-November, whereas black ABS was offered at Rb156,000-160,000/tonne and white ABS - at Rb158,000-163,000/tonne CPT Moscow , including VAT.

Headquartered in Houston, TPC was acquired in 2012 by private equity groups First Reserve and SK Capital.
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