Imports of injection moulding PET chips to Russia from China increased by 15% in January-November

MOSCOW (MRC) - Imports of injection moulding PET chips in Russia increased by 15% in the eleven months of the year compared with the same period a year ago and reached 115,400 tonnes, as per MRC DataScope.

The same indicator in January-November 2019 amounted to 100,400 tonnes. The share of bottle grade PET imports from China amounted to 88% compared to 86% for the same period last year.

The share of Chinese material was 78% (9,600 tonnes) in November versus 92% (5,800 tonnes) a month earlier.
In November last year, the share of Chinese material in total imports amounted to 94% (7,700 tonnes).

Last month, the producer Jiangsu Sanfangxiang had the largest volume of supplies to the Russian market - 5,190 tonnes of injection moulding PET chips. The top 5 Chinese suppliers this year are as follows: Jiangsu Sanfangxiang supplied 42,500 tonnes of injection moulding PET chips, Yisheng - 21,900 tonnes, Wankai - 13,800 tonnes, Sinopec - 15,800 tonnes, Indorama - 9,500 tonnes.
MRC

Asia distillates-jet fuel cash premiums drop on ample supply, weak demand

MOSCOW (MRC) -- Asia’s cash premiums for jet fuel dropped, weighed down by abundant supplies and lackluster aviation demand, while traders were skeptical seasonal heating demand for kerosene would likely remain weak due to a warmer winter this year, said Hydrocarbonprocessing.

Cash differentials for jet fuel fell to a premium of 5 cents per barrel to Singapore quotes on Tuesday, down from a 35-cents premium a day earlier.

Refining profit margins or cracks for jet fuel were at USD14.95 per barrel over Dubai crude during Asian trading hours on Tuesday, compared with USD14.76 a barrel on Monday.

Winter in the northern hemisphere typically brings peak heating demand for kerosene, which belongs to the same grade of oil products as jet fuel, with jet refining margins determining the profitability of both.

But temperatures in Tokyo are expected to stay well above normal for the next couple of weeks, while temperatures in Seoul would remain mostly higher than normal over the next 15-day period, weather forecast models on Refinitiv Eikon showed.

Meanwhile, cracks for gasoil with 10 parts per million (ppm) sulphur content rose to USD15.60 per barrel over Dubai crude on Tuesday, their highest in a month. Cracks for the benchmark gasoil grade in Singapore were at USD15.01 per barrel on Monday.

Cash premiums for 10ppm gasoil climbed to 65 cents per barrel over Singapore quotes on Tuesday, up from 60 cents per barrel in the previous session.
MRC

Chinese November oil product output rises 3.9% on year to 39.78 mil mt

MOSCOW (MRC) -- China's total production of six major oil products - LPG, naphtha, gasoline, jet/kerosene, gasoil and fuel oil - rose by an average of 3.9% on the year to 39.78 million mt in November, slower than the crude throughput growth pace of 10.1%, reported S&P Global with reference to latest data from the National Bureau of Statistics Tuesday.

The total volume of the six major oil products accounted for 70.9% of total crude throughput in November, down from 75.2% a year ago.

Analysts expect the oil product yield to remain on a downtrend as new integrated refining and petrochemical complexes start up.

Among these key products, naphtha, gasoline and gasoil were the main products which saw unchanged year-on-year production volumes, or even reductions, even as China lifted throughput to produce petrochemical products.

Output of gasoline and naphtha declined 0.5% and 2.6%, respectively, while gasoil output was steady from a year ago, the data showed.

The reduction and unchanged output figures explains the relative supply-demand balance despite high throughput levels in the domestic market even as demand was slowing down in winter.

"Gasoil sales have been doing very well and we almost have no inventory, while gasoline is also recovering," a Sinopec refiner in central China said Monday.

Crude oil throughput at China's domestic refineries jumped 10.1% on the year to 13.7 million b/d in November, NBS data showed. This is the third straight month in which China's throughput has crossed the 13 million b/d mark, after doing so for the first time in September at 13.80 million b/d, and recording 13.68 million b/d in October.

Meanwhile, fuel oil output surged 39.7% on the year to 2.39 million mt as the 400,000 b/d green field Zhejiang Petroleum & Refining has not yet started fully commissioning its secondary units, followed by jet/kerosene which gained 17% on the year to 3.85 million mt with the increment from the 400,000 b/d new Hengli Petrochemical (Dalian).

As MRC informed earlier, in H1 November 2019, Zhejiang Petrochemical Co Ltd (ZPC) started up its No. 1 cracker in Zhoushan, China, though it is reported that the company is still working to stabilize the operation rate. The cracker has an annual capacity of 1.4 million tons/year of ethylene and 900,000 tons/year of propylene. As reported earlier, the company is also aiming to bring its Phase I downstream PP and PE plants online within 2019. However, the startup schedule is very much depending on the operation of the No. 1 cracker.

The Phase I facility houses a 300,000 tons/year HDPE unit, 450,000 tons/year LLDPE line and a 900,000 tons/year PP plant. Market players are speculating that these units might only come online in Q1-2020 given the large scale of both upstream and downstream production the company is managing.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (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

Plastics Industry Program to manage and contain pellets strengthens requirements and transparency

MOSCOW (MRC) -- Participants in an industry program designed to help manage and prevent accidental release of plastic pellets into the environment this week approved a new program element that requires them to report unrecovered releases greater than 0.5 liters or 0.5 kilograms, said ACCA.

Reported releases will then be aggregated and publicly reported annually.

The new requirements apply to companies that volunteer to become part of the enhanced operation clean sweep (OCS) blue program. Following the original OCS program, two years ago the industry introduced a more stringent set of practices—OCS blue—which requires participants to conduct regular training, audits and inspections; implement prevention and management procedures; and report performance to trade associations that administer the program, among other things. The newly approved element will strengthen the stewardship program’s requirements and transparency even further.

"Companies that make plastics are deeply committed to continuous improvement in all aspects of their operations, and we’re making it a priority to enhance the rigor and transparency of our pellet stewardship program,” said Steve Russell, vice president of ACC’s Plastics Division. “In 2018, all members of ACC’s Plastics Division committed to implement OCS blue across their U.S. facilities by the end of 2020. Not only are they on track to meet these commitments, but they’re raising the bar as they go. We hope all companies that make, use, transport or handle plastic pellets join us in implementing OCS and OCS blue."

"Our members are part of the solution when it comes to eradicating plastic waste in our oceans and waterways,” said Tony Radoszewski, president and CEO of the Plastics Industry Association (PLASTICS). “Operation Clean Sweep is an important tool in achieving this goal. OCS and OCS blue provide an essential framework for companies that handle plastic pellets."

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.

OCS and OCS blue are administered by the American Chemistry Council’s Plastics Division and the Plastics Industry Association (PLASTICS). Program resources, such as a manual, checklists, and other materials can be downloaded and used or adapted at no cost by any company that handles plastic pellets, powders or flakes.
MRC

Enterprise to ship first cargo from new US ethylene export

MOSCOW (MRC) -- Enterprise Products Partners this week aims to ship out the first cargo from its new US ethylene export terminal, freeing up producers to run crackers at high rates and export surplus output when domestic downstream derivative demand is limited, reported S&P Global.

The new terminal, a joint venture with global chemical shipper Navigator Gas, will initially have 60% to 70% of its eventual 1 million mt/year capacity, depending on marketing opportunities, company executives said.

For the first phase, Enterprise has converted an ethane cavern at its natural gas liquids and petrochemical hub in Mont Belvieu east of Houston to hold up to 275,000 mt of ethylene. The company also has started up a new bidirectional pipeline connecting that cavern to the new terminal at Morgan's Point along the Houston Ship Channel, where Enterprise already operates an ethane export facility, to move ethylene from the cavern to ships.

Cavern-to-ship is already how Enterprise handles ethane, liquefied petroleum gas and propylene exports, according to company officials.

When finished in the fourth quarter next year, the terminal will have an onsite refrigerated tank - currently under construction - that can hold up to 30,000 mt of ethylene. The ethylene system also will have a six-mile pipeline extension to Bayport closer to the mouth of the waterway, where several producers operate ethylene pipelines.

The new ethylene system is expected to have eight participants by the first quarter next year and potentially 20 - including seven US producers - by Q4 2020, according to the company.

Enterprise also expects to see financial contracts tied to the new hub, with connectivity throughout the US Gulf. The company is preparing for contracts to be listed on a futures exchange after transactions begin next year.

Company officials said the new terminal is part of Enterprise's establishment as a major midstream player in the petrochemicals space rather than a producer, reminiscent of its midstream position in crude oil, natural gas liquids and refined products.

Even though Enterprise produces propylene at a 750,000 mt/year propane dehydrogenation (PDH) plant at its Mont Belvieu NGLs hub and has a second under construction, the company says those units are tolling facilities that make output contracted to buyers. LyondellBasell shelved its tentative plans to build its own PDH and signed on to be the anchor customer for Enterprise's second 750,000 mt/year PDH to start up in 2023.

S&P Global Platts Analytics senior lead for global petrochemicals Rob Stier said that in the short term, more US ethylene exports will involve a supply push from the US Gulf to help clear the long market, rather than a demand pull from Asia or Europe.

"Now ethylene exports can be thought of another way to profitably export cheap ethane at the expense of international ethylene produced from naphtha feedstocks," he said.

Stier added that the most logical US ethylene buyers will be styrene, polyvinyl chloride and monoethylene glycol producers, as ethylene makes up only 30%-60% of their feedstock requirements. They can pay higher prices than polyethylene producers because other cheap feedstocks let them maintain profitability, whereas polyethylene producers typically need cheaper ethylene relative to the other three products.

Enterprise had discussed plans for an ethylene export terminal since 2016, when the company began exporting ethane from the Morgan's Point site. Other companies have considered ethylene exports as well, but scrapped their plans.

Norwegian chemical shipper Odfjell acknowledged in August the company would not build a USD300 million, 745,000 mt/year facility at its terminal near the mouth of the ship channel and recorded a USD1.6 million writedown related to the project on its third-quarter 2019 earnings. CEO Kristian Verner Morch had already signaled in February 2018 that Odfjell likely would not move ahead on its plans if a competitor did so first.

Energy Transfer Partners and NOVA Chemicals also briefly teamed up to establish an ethylene export terminal, but NOVA said in July 2018 the companies shelved it when unable to agree on terms.

The US currently has one ethylene export terminal, operated by Targa Resources at its ship channel facility, which is contracted to Mitsubishi Chemical. The facility has a loading capacity of 1,000 mt/d, so it takes about 10 days to load a Handysize vessel.

Enterprise's terminal will be able to load 1,000 mt/hour at multiple docks. A single ship can carry both ethane and ethylene in separate compartments.

Some US producers had been skeptical of the need for more US ethylene export capacity because derivatives would soak up that output. More than 7.74 million mt/year of new ethylene capacity has started up in the US since 2017, another 2 million mt/year is slated to come online by year-end 2019 and 8.3 million mt/year more is under construction or planned for startup through the 2020s.

As MRC informed before, Enterprise Products Partners' Mont Belvieu propane dehydrogenation unit in Texas restarted from planned maintenance in the first week of December, 2019. The PDH unit went offline for maintenance on November 13. That day, the company said in a filing with the Texas Commission on Environmental Quality that the RAC "B" turbine shut down, which resulted in flaring. The flaring was estimated to last 72 hours. The unit has a capacity of 750,000 mt/year.

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

Enterprise Products Partners L.P. is an American midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas. It acquired GulfTerra in September 2004. The company ranked No. 105 in the 2018 Fortune 500 list of the largest United States corporations by total revenue
MRC