Formosa Plastics new Texas cracker starts operating

MOSCOW (MRC) -- Formosa Plastics' new 1.5 million mt/year cracker in Point Comfort, Texas, has come online and was seen ramping up through January, reported S&P Global with reference to sources familiar with the company operations.

"Formosa cracker is running, and is shown to be ramping up to full rates by the end of January," one of the sources said.

"The new unit was up last week and has been running smooth," a second source said.

The company's new 400,000 low density polyethylene (LDPE) plant at Point Comfort "should be ready in February for now," the second source added.

A company spokesman did not provide any update on the status of the plants Wednesday.

Formosa had initially planned to start up the new cracker and LDPE plant by end-2019, but spokesman Fred Neske said days before Christmas that the units encountered unexpected delays. At the time, he said Formosa had no timeline on when the startup process would resume.

As MRC informed earlier, Formosa Plastics Corp. Louisiana, a subsidiary of Formosa Plastics Corp. USA, is investing USD332 million to expand its production of polyvinyl chloride (PVC) resin and add production equipment in two other units at the company’s industrial manufacturing site in Baton Rouge, La., on the east bank of the Mississippi River. The project will include installation of new machinery and equipment for the expansion of the PVC resin production unit, expected to result in a 20% increase in production capacity and sales; installation of new machinery and equipment for a halogenated acid production unit for internal use in the production of vinyl chloride monomer; and installation of utilities equipment needed for operations, the Louisiana Economic Development (LED) said. Launch of the new operations is scheduled for late 2021 or early 2022.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) -- Saudi Arabian General Investment Authority has recently signed five memoranda of understanding (MOUs), with a combined value of 7.5 billion Saudi riyals (USD2 billion), with a number of major petrochemical companies at a ceremony in Riyadh in the presence of Saudi Deputy Minister of Industry Osama al-Zamil, reported Chemweek.

Agreements signed include a SAGIA and BASF deal to study the feasibility to build a petrochemicals plant at Jubail Industrial City; a deal with SNF to evaluate the establishment of a polyacrylamide plant; a deal with Mitsui & Co., for a 1-million metric tons/year ammonia plant at Jubail, in addition to building a new petrochemical plant and an agreement with Shell Overseas Services to build a new plant at Jubail Industrial City to produce value-added catalysts. The fifth MOU is with Shell and Advanced Metallurgical Group to build a residue upgrading catalyst manufacturing facility (see separate story).

Ibrahim al-Omar, governor of SAGIA, said, "Our country is undergoing a significant economic transformation. The petrochemicals sector provides exciting opportunities for international investors as we look to draw on the expertise and experience of the private sector in transforming the industry."

As MRC informed before, BASF, the world's petrochemical major, restarted its No. 1 steam cracker on September 30, 2019, following a maintenance turnaorund. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 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 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of around EUR63 billion in 2018.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- The US and China signed what they billed as the first phase of a broader trade pact on Wednesday amid persistent questions over whether President Donald Trump’s efforts to rewrite the economic relationship with Beijing will ever go any further, reported Bloomberg.

The deal commits China to do more to crack down on the theft of American technology and corporate secrets by its companies and state entities, while outlining a USD200 billion spending spree to try to close its trade imbalance with the US. It also binds Beijing to avoiding currency manipulation to gain an advantage and includes an enforcement system to ensure promises are kept.

The ceremony in a packed East Room at the White House included Trump, dozens of American business people and US lawmakers and Chinese officials and marked a rare moment of friendship lately between the world’s two largest economies. Acrimonious talks stretching back almost three years have roiled financial markets, cast a cloud of uncertainty over investment decisions and hurt growth in both nations.

"This is a very important and remarkable occasion," Trump said. Fixing what he sees as the injustices of past trade deals is "probably the biggest reason why I ran for president," he added. "Together we are righting the wrongs of the past."

In a letter to Trump read out at the ceremony, Chinese leader Xi Jinping said the deal proved the two sides could work together to bridge their differences and declared it “good for China, the US and the whole world."
President Trump Holds Signing Ceremony Of Trade Agreement Between US And China Phase One

The benchmark S&P 500 set an intraday record for the sixth consecutive trading session, finishing short of an earlier all-time intraday high. Stocks in Asia were mixed Thursday, with shares in Hong Kong largely flat.
Economic Dialogues

The deal, sealed on the same day the House voted to refer articles of Trump’s impeachment to the Senate, seems most focused on arriving at peace in the trade war. Among its requirements is a resumption of the economic dialogues that past administrations have held with China.

But the new pact has already been criticized for what is missing. It does nothing to address areas like what U.S. authorities have long claimed is China’s state-backed hacking of American companies and government institutions. Nor does it require the Asian power to reform the vast web of state subsidies that form the spine of its model of state capitalism and have helped fuel the rapid growth of Chinese companies internationally.

The administration says many of those issues will be covered in a second phase of a deal, though when those talks will begin and how long they will take remains uncertain. In the meantime, the US is also set to maintain tariffs on roughly two-thirds of imports from China, something that Trump on Wednesday said was essential as leverage over the country until it agreed to further reforms.

As MRC informed before, after weeks of high-level discussions, the US and China agreed to simultaneously lift existing trade tariffs on each other’s goods in phases in November 2019.
MRC

MOSCOW (MRC) -- Exports of suspension polyvinyl chloride (SPVC) from Russia totalled 193,700 tonnes in 2019, up by 11% year on year. Imports increased more significantly - by 217% year on year - to 50,900 tonnes, according to MRC's DataScope report.

Last month's exports of Russian suspension (excluding shipments to the countries of the Customs Union) were 15,200 tonnes, compared to 13,900 tonnes in November. Some producers increased their exports in the past three months of 2019 due to a seasonal decrease in demand for resin from the domestic market. Thus, overall exports of resin from Russia totalled 193,700 tonnes in 2019 versus 174,000 tonnes a year earlier.

Indian buyers were the main foreign importers of Russian resin in 2019. Overall sales of resin exceeded 105,000 tonnes over the stated period. Belarus and Poland with shipments of 26,700 tonnes and 15,500 tonnes, respectively, occupied the second and third positions.

July accounted for the peak of imports of resin, which totalled 13,700 tonnes, because of scheduled shutdowns for maintenance at SayanskKhimPlast and Bashkir Soda Company' production capacities. After the planned outages, imports of polyvinyl chloride has gradually declined since September. Last month's SPVC imports were 2,400 tonnes, which is comparable to November.

Overall imports of material totalled 50,900 tonnes over the stated period versus 16,100 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Firefighters put out a fire at China’s Zhuhai Changlian Petrochemical Co Ltd in southern China’s Zhuhai city, an independent producer that has recently won government quotas to import naphtha, reported Hydrocarbonprocessing.

A fire broke out at 1:40 pm local time (0540 GMT) at the company’s hydrogenation unit. Video broadcast by state television showed flames and dense smoke rising from the plant.

No casualties were reported, local government said on its microblog, without saying if any of the production facilities have been shut.

The company declined to comment when contacted by Reuters.

Zhuhai Changlian, a subsidiary of Guangdong-based private firm Shenzhen Esson New Energy Group, is one of the four independent petrochemical firms granted quotas to import naphtha for 2020, a feedstock to make petrochemicals.

Zhuhai Changlian Petrochemical operates a plant at this sitme, which can produce 40,000 tonnes/year of benzene; 280,000 tonnes/year of mixed xylene; and 150,000 tonnes/year of toluene at the site.

Benzene is the main feedstock for the production of styrene monomer (SM), which, in its turn, is used in the production of polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 458,770 tonnes in the first eleven months of 2019, which corresponds to the level of 2018. November estimated consumption of PS and styrene plastics rose by 2% year on year, totalling 49,210 tonnes. PS production remained in January-November 2019 the same as a year earlier. Russian producers manufactured 471,390 tonnes of material in the first eleven months of 2019.

Zhuhai Changlian Petrochemical Equipment Co., Ltd. is an enterprise in China, with the main office in Zhuhai. It operates in the Basic Chemical Manufacturing sector. The company was established on August 20, 2003. There are currently 240 (2018) people employed by Zhuhai Changlian Petrochemical Equipment Co., Ltd.. In its most recent financial highlights, the company reported a net sales revenue increase of 15.41% in 2018. There was a total negative growth of 1.57% in Zhuhai Changlian Petrochemical Equipment Co., Ltd.’s total assets over the same period. In, 2018, the company’s net profit margin decreased by 0.67%.
MRC