U.S. Specialty Chemical markets soft at start of fourth quarter

MOSCOW (MRC) – The American Chemistry Council (ACC) reported that U.S. specialty chemicals market volumes started the fourth quarter on mixed note, with no change in October, said Americanchemistry.

Of the 28 specialty chemical segments ACC monitors, 14 expanded in October, 10 declined and four were flat. During October, large market volume gains (1.0 percent and over) occurred only in electronic chemicals and rubber processing chemicals. On a sequential basis, diffusion was 57 percent, up from 52 percent in September and a recent low of 38 percent in July. All changes in the data are reported on a three-month moving average (3MMA) basis.

During October, the overall specialty chemicals volume index was up only 0.2 percent on a year-over-year (Y/Y) 3MMA basis. Year-earlier comparisons have eased after the third quarter of 2018. In October, the index stood at 113.1 percent of its average 2012 levels. This is equivalent to 7.71 billion pounds (3.50 million metric tons). On a Y/Y basis, there were gains in 11 market and functional specialty chemical segments. Compared with last year, volumes were down in 17 segments. On a year-earlier basis, diffusion was 39 percent, a worsening comparison.

The unadjusted data before the 3MMA fell 0.7 percent during October following a 0.6 percent decline in September. On this basis, market volumes were off 0.7 percent Y/Y. Performance chemistry reflects trends in manufacturing and activity is off from fourth quarter 2018 levels.

Specialty chemicals are materials manufactured on the basis of the unique performance or function and provide a wide variety of effects on which many other sectors and end-use products rely. They can be individual molecules or mixtures of molecules, known as formulations. The physical and chemical characteristics of the single molecule or mixtures along with the composition of the mixtures influence the performance end product. Market sectors that rely on such products include automobiles, aerospace, agriculture, cosmetics and food, among others.

Specialty chemicals differ from commodity chemicals. They may only have one or two uses, whereas commodity chemicals may have multiple or different applications for each chemical. Commodity chemicals make up most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time and are relatively high value, with greater market growth rates.

This data set is the only timely source of market trends for 28 market and functional specialty chemical segments. Chemistry directly touches over 96 percent of all manufactured goods, and trends in these specialty chemical segments provide a detailed view of trends in manufacturing. The data also shed light on how various consumer end-use markets are performing compared with others in the marketplace.

We remind that, Russia's output of chemical products rose in October 2019 by 5.4% month on month.
However, production of basic chemicals increased by 3.9% in the first ten months of 2019. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Thus, 210 ,000 tonnes of ethylene were produced in October, compared to 200,000 tonnes a month earlier. Limited production was a result of scheduled shutdowns of several large producers in September-October.
MRC

Kazakhstan Kashagan oil field producing at reduced rates

MOSCOW (MRC) -- Kazakhstan's Kashagan oil field, one of the mainstays of the CPC Blend crude grade, is producing at a reduced rate due to an issue with gas compressors, the operator, reported S&P Global with reference to North Caspian Operating Company's statement Tuesday, adding that such a reduction was "not unusual."

The disruption appears to put in doubt expectations of record-high loadings of CPC crude at Novorossiisk in November and December - schedules had suggested loadings would reach 1.5 million b/d in both months.

In a statement, NCOC said it "continues to produce safely at a reduced rate. We are safely working on correcting a technical issue with the gas compressors. It is not unusual for daily production to be reduced for various reasons, including maintenance and this is factored into production planning."

"Our company is focused on safely returning the unit to normal operation as soon as possible," it added.

Gas compressors play a vital role at Kazakhstan's largest oil fields due to the large amounts of gas produced in the course of oil production, much of which is reinjected to maintain pressure levels.

The Kashagan field came on stream in 2016 after long delays and cost over-runs. Production levels have generally been increasing and it is now the second largest contributor to CPC Blend after the Tengiz field.

Kashagan crude oil production hit a record-high 400,000 b/d on September 4 and overall liquids production from the field averaged 422,000 b/d in the third quarter, NCOC has said. The operator has been focused on improving the reliability of the facilities, according to company executives.

The crude is sent across southern Russia via a dedicated pipeline to Novorossiisk, on the Black Sea coast.

NCOC is a seven-company consortium comprising China's CNPC, Italy's Eni, ExxonMobil, Japan's Inpex, state-owned KazMunaiGaz, Shell and Total.

As MRC wrote previously, in January 2016, South Korea's LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene (PE) plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

Ethylene is a feedstock for producing PE.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased.
MRC

Refinery to import 8-10 M barrels of WTI, Bonny Light crude oil in 2020

MOSCOW (MRC) -- Vietnam’s Binh Son Refining and Petrochemical will import 8-10 million barrels of West Texas Intermediate (WTI) and Bonny Light crude oil in 2020 for its Dung Quat refinery, reported Reuters with reference to the producer's parent company PetroVietnam.

The company will have imported 4 million barrels of the crude oil by the end of this year, PetroVietnam said.

As MRC informed previously, in the first half of November 2019, the Vietnamese Finance Ministry received several petitions from local companies to adjust the import duties imposed on propane and polypropylene (PP). The Ministry thereafter proposed its plans for the import duties on the mentioned products. For propane, with HS code 2711.12.00, the petition called for a reduction from the current 2% to 0%. However, the Ministry informed that the existing local supply can fulfill up to 45% of the domestic demand and that the duties have been adjusted from 5% to 2% on 1 January 2018, therefore, no changes would be made for the time being.

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

EPS prices in Russian market continue to go down following lower prices in Asia

MOSCOW (MRC) -- The on-going price reduction in the Asian market has been putting a downward pressure on the future prices of Russian expandable polystyrene (EPS) market not only in December but also in January, according to ICIS-MRC Price report.

Russian EPS producers said prices would be adjusted substantially.

At the same time, according to some market participants' preliminary estimates, the capacity of the Russian EPS market will decrease by 1-2% this year.

As reported earlier, SIBUR-Khimprom reduced its EPS prices for November shipments to the Russian market. Thus, the decrease was Rb2,000/tonne. Also, Plastik (Uzlovaya), the Russian producer of ABS plastics and suspension polystyrenes (PS), also reduced its November selling EPS prices for the Russian market to Rb100,500-105,000/tonne CPT Moscow, including VAT.
MRC

PC imports to Belarus up 14% in Jan-Sep 2019

MOSCOW (MRC) -- Overall imports of polycarbonate (PC) granules into Belarus grew in the first nine months of 2019 by 14% year on year to 9,200 tonnes, according to MRC's DataScope report.

This figure was at 8,000 tonnes in January-September 2018.

Spain (33%), the Netherlands (24%) and Lithuania (15%) are the main countries-importers of PC into Belarus.

September PC imports to Belarus fell by 39% year on year to 300 tonnes. This figure was at 500 tonnes in September 2018. At the same time, imports of material into the country were 700 tonnes in August 2019.
MRC