December prices of Russian PVC drop by Rb1,000/tonnes

MOSCOW (MRC) -- Negotiations over December shipments of suspension polyvinyl chloride (SPVC) began in the Russian market in the middle of last week. Producers further reduced their prices, according to ICIS-MRC Price report.

A seasonal decrease in demand for polyvinyl chloride (PVC) from the domestic market and large imports forced domestic producers to reduce November prices by Rb2,500-4,000/tonne from October. December was no exception, the availability of imported alternative and a further decrease in demand from Russian consumers became the main reason for the cut of Rb1,000/tonne from November in December prices.

Demand for finished products from PVC was strong in November, although it somewhat subsided under the pressure of seasonal factors. But in December, many consumers intend to significantly reduce their purchasing of resin, and, first of all, because of the upcoming shutdowns for maintenance at converters' production facilities, which will begin in the third decade of the month and will last, at the least, until mid-January.

After a surge in SPVC imports in July and August to 13,700 tonnes and 10,100 tonnes, respectively, imports fell to 6,100 tonnes and 2,900 tonnes in September and October, respectively. At the same time, despite the reduction in November PVC prices by Russian producers, imports from some destinations were still attractive for some converters. And SPVC imports exceeded 2,000 tonnes for the 24 days of November.

December deals for Russian resin with K64/67 PVC were negotiated in the range of Rb71,000-74,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes. Prices for resin with K=70 were by an average of Rb1,000/tonnes higher.
MRC

MOSCOW (MRC) -- SP Olefins, a subsidiary of SP Chemicals, has recently started up China's "first" gas-based ethylene plant at a new gas cracker facility in Taixing, China, and was able to produce on-spec olefins, according to GV with reference to Wood Mackenzie.

The new 650,000 t/y ethylene cracker will provide feedstock to the plant's 500,000 t/y vinyl chloride monomer unit and 320,000 t/y styrene facility. About 300,000 t/y of ethylene, as well as the entire 122,000 t/y of propylene production, will be supplied to the merchant market. SP Olefins' gas cracker facility is also the "first" to import U.S. ethane as a feedstock, Wood Mackenzie noted.

In 2017, Ineos entered into a long-term supply agreement with SP Chemicals to deliver ethane from US shale gas to the gas cracker facility. The agreement included construction of a Very Large Ethane Carrier with 95,000 cu m of capacity, which Ineos said would be the largest" ethane carrier in the world.

"The ethane import tariff from the U.S. is 2% plus an additional 5% generated by the trade war," said Wood Mackenzie Senior Research Manager Kelly Cui. "Despite this, SP's ethylene cost remains highly competitive compared with naphtha crackers in China."

As MRC informed earlier, in March 2016, SP Olefins let a contract to Technip SA, Paris, to provide technology licensing and process design for the company’s proposed grassroots ethylene plant to be built in Taixing in China’s Jiangsu Province.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
MRC

MOSCOW (MRC) -- Officials began visiting areas impacted by a fiery blast at a TPC Group facility on Port Neches, Texas, that injured three workers, blew locked doors off their hinges and was felt in communities far from the site, said Hydrocarbonprocessing.

The plant makes chemicals used in production of synthetic rubber, resins and an octane-boosting component of gasoline. Unified Command remains focused on mitigating the event and maintaining the safety of responders and the community.

Response measures are ongoing and the fire at TPC’s Port Neches Operations continues to be contained. Unified Command remains focused on mitigating the event and maintaining the safety of responders and the community.

An impacted distillation tower at TPC’s Port Neches Operations fell inside the fence line as a result of the ongoing event. This was an anticipated result of the fire and response teams managed the action accordingly. No one was injured and there were no offsite impacts.

Claims activities update: Claims representatives began visiting area residents to assess any impacts as a result of the recent event at TPC Group’s Port Neches Operations. Claims representatives began door-to-door visits to all homes within the area of highest impact closest to the event (zones 1, 2, 3, 4 and 5) as noted on the Impact Areas Overview Map attached.

The plant's two lines can produce a total of 426,000 tonnes/year of BD, which estimates accounts for 16.4% of US capacity and 2.7% of global capacity. TPC also stores methyl tertiary butyl ether (MTBE) at the site.

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.

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

MRC

MOSCOW (MRC) -- PT Asahimas, part of Asahi Glass, has restarted its No. 2 vinyl chloride monomer (VCM) unit following an unplanned outage, as per Apic-online.

A Polymerupdate source in Indonesia informed that the company has resumed operations at the unit in December 2, 2019. The unit remained off-line for about one week owing to technical issues.

Located at Cilegon in Banten province of Indonesia, the No. 2 unit has a production capacity of 300,000 mt/year.

As MRC informed earlier, on January 15, 2018, Asahimas, part of Asahi Glass, took its No. 2 VCM unit off-stream for maintenance along with the capacity expansion at the plant. The plant remained off-line for a period of around 7 weeks. Following the expansion at the capacity will be increased by 100,000 MT to 350,000 mt/year. Located in Anyer, Indonesia, the No.2 VCM plant currently has a production capacity of 250,000 mt/year.

VCM is a main feedstock for the production of polyvinyl chloride (PVC).

According to MRC's ScanPlast report, Russia's overall PVC production reached 809,000 tonnes in the first ten months of 2019, up by 3% year on year. At the same time, not all Russian producers raised their output.

Asahi Glass Co., Ltd., more commonly known as AGC, is a global glass manufacturing company, headquartered in Tokyo. It is one of the core Mitsubishi companies.

PT Asahimas Chemical is owned 52.5% by Asahi Glass, 11.5% by Mitsubishi Corp. and 18% each by the local Rodamas and Ableman Finance.
MRC

MOSCOW (MRC) -- BP and Bunge announced that they have completed the formation of BP Bunge Bioenergia, the Brazilian bioenergy joint venture that combines their Brazilian bioenergy and sugarcane ethanol businesses, said the company.

The continued growth of biofuels will be a key enabler to decarbonizing transportation. Brazil is one of the world’s largest and fastest growing markets for biofuels and, through this transaction, BP Bunge Bioenergia is now the second largest operator by effective crushing capacity in the Brazilian bioethanol market.

Mario Lindenhayn from BP will be the executive chairman of BP Bunge Bionergia and Geovane Consul from Bunge will be chief executive. BP and Bunge have equal representation on the board of directors of the company.

Mario Lindenhayn said: "Biofuels is an increasingly important part of a lower carbon energy system. We are proud to complete the formation of BP Bunge Bioenergia, which provides a strong foundation to build upon the capabilities of both organizations to develop ideas for growth and deliver significant operational and financial synergies."

Geovane Consul added: “BP Bunge Bioenergia is well-placed to support Brazil’s increasing demand for low carbon bioenergy. Our joint venture will enable us to leverage shared best practices to improve efficiency and sustainability, maximizing the use of technology and identifying opportunities to develop future capabilities in this crucial market."

The joint venture has 11 biofuels sites in five Brazilian states, with more than 10,000 employees. It has total crushing capacity of 32 million metric tons of sugarcane per year, capable of producing more than 1.5 billion liters of ethanol, 1.1 million tons of sugar and exporting 1,200 gigawatt hours of electricity to the national grid in Brazil.

As MRC informed earlier, in September 2018, BP Refining and Petrochemical (BPRP) has brought on-stream its No.3 cracker at Gelsenkirchen. The cracker remained off-line for repair work for around 10-12 days. Located Gelsenkirchen, Germany, the No. 3 cracker has ethylene capacity of 550,000 mt/year and propylene capacity of 335,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (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.
MRC