February prices of Russian PVC not to rise in domestic market

MOSCOW (MRC) -- Negotiations over February shipments of suspension polyvinyl chloride (SPVC) began in the Russian market last Wednesday. Most producers announced a roll-over of January prices for next month because of a number of reasons, according to ICIS-MRC Price report.

Traditionally, many converters announced a slight increase in PVC purchasing in February partially because of low purchase volumes last month. At the same time, Russian producers had stocks of material at an optimal level. However, Russian manufacturers do not intend to raise next month's PVC prices, in most cases, a roll-over of January prices for February deliveries has been discussed in the contract market.

The Russian rouble weakened noticeably against the dollar and the euro in the second half of January. Prices also went up in some foreign markets in January. And these factors made imported PVC unattractive for purchasing by Russian companies in February, although some converters still did not refuse from purchasing resin in foreign markets if reasonable prices were obtained.

Some Russian producers have seriously increased their export sales of PVC since September. In December, some deals were also agreed with large converters for shipments of several thousand tonnes of resin, the so-called winter programs. Due to these factors, some Russian producers entered February with optimal stocks of suspension, and there was no price pressure on them.

Negotiations over February shipments of Russian resin to the domestic market began in the middle of last week. Demand for resin increased from local converters, although not from all consumers. Some small converters said they had PVC stocks from January purchases and did not intend to increase their purchasing in February. Some major converters also said they had made large purchases of resin in December and they did not intend to replenish their inventories, at least, until March.

Overall, deals for February shipments of Russian resin with K=64/67 PVC were negotiated in the range of Rb71,000-74,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes. Resin with K=70 was offered by Rb1,000-2,000/tonnes higher.
MRC

MOSCOW (MRC) -- Lotte Chemical Titan, has resumed production at its No. 3 linear low density polyethylene (LLDPE) unit, according to Apic-online.

A Polymerupdate source in Indonesia informed that, the company restarted the unit on January 22, 2020. The unit was shut on December 20, 2020 owing to economic fundamentals.

Located at Cilegon, Indonesia, the No. 3 unit has a production capacity of 200,000 mt/year.

As MRC informed before, 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.

Besides, PT Lotte Titan Nusantara Indonesia restarted its No. 1 LLDPE unit at Cilegon in early December, 2019. The unit was shut owing to shortage of feedstock in early-November, 2019.

According to MRC's ScanPlast report, LLDPE shipments to the Russian market grew in 2019 by 13% year on year to 398,000 tonnes. Domestic producers increased their output by 32%, thereby reducing dependence on imports by 6%.

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) -- Brazilian oil workers remained on the picket line for a third consecutive day Monday in a limited strike protesting the closure of a fertilizer plant and ongoing asset sales at state-owned Petrobras, but the work action left output from refineries and offshore platforms unaffected, reported S&P Global with reference to union and company officials' statement.

"Our units are operating within normal safety parameters, with contingency teams activated when necessary," Petrobras told S&P Global Platts in an email. The strike started at 12:01 am local time (0301 GMT) Saturday, according to umbrella union the Oil Workers Federation (FUP).

The latest strike came amid an ongoing standoff between Petrobras and unions representing oil workers, which have lost negotiating power as Petrobras shed contract workers under cost-cutting measures and outsourced much of the subsalt production to third-party service companies such as SBM Offshore and Modec in recent years.

Oil workers want Petrobras to curtail an asset-sales program that will see the company slash about USD20 billion-USD30 billion worth of assets from its balance sheet over the next five years. That followed the sale of stakes in several major offshore oil fields, natural gas distribution companies and gas pipeline networks after Petrobras in 2019 won a Supreme Court case that ended lawsuits brought by oil workers aimed at disrupting the sales.

The industrial action, however, has followed similar recent action that union officials refer to as a "warning strike." Warning strikes typically include a refusal to report for shift changes at refineries, terminals and platforms as well as work-to-rule actions at other sites that maintain operational security. The warning strikes do not target production cuts at oil platforms or refineries, according to the union.

The unions, however, have faced increased legal challenges to walkouts from Petrobras under the leadership of CEO Roberto Castello Branco. A similar five-day strike in November was halted early after Petrobras won an injunction blocking the walkout. According to Petrobras, the latest action is illegal because oil workers agreed to a new collective bargaining agreement in November.

"Petrobras reiterates that it considers the actual strike movement at some of our units unjustified, give that the collective bargaining agreement was signed by all unions in November 2019 and scheduled talks are following their normal course," the company said.

Oil workers have refused to change shifts at all 13 of Petrobras' 100% owned and operated refineries since early Saturday, FUP said. In addition, 21 floating production units in the Campos Basin were working to rule, according to the union. Workers at oil and refined product terminals as well as administrative centers have also taken part in the action, FUP said.

A FUP negotiating team also has occupied a meeting room at Petrobras' iconic Rio de Janeiro headquarters building since Friday, with the company cutting water and electricity service to the room over the weekend, union officials said. Service was eventually restored, the union said.

The union wants Petrobras to suspend layoffs related to the closure of the FAFEN-PR nitrogen fertilizer plant in Parana state and other measures it argues were unilaterally imposed by company management during the most recent collective bargaining negotiations.

The strike will continue for an undetermined amount of time, FUP said.

As MRC wrote earlier, the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- China's Hanbang Petrochemical shut down its No. 1 purified terephthalic acid (PTA) line at Jiangyin, Jiangsu Monday, reported S&P Global with reference to market sources' statement Tuesday.

The production capacity of this plant is 700,000 mt/year.

At present, there are not clear restart timelines. The shutdown could not be directly and immediately confirmed with the company.

As MRC informed previously, in March 2016, Hanbang Petrochemical successfully started up its second PTA at Jiangyin, Jiangsu. The plant has two production lines, each with an annual capacity of 1.1 million mt/year.

PX is a feedstock for the production of purified terephthalic acid (PTA). PTA is used to produce polyethylene terephthalate (PET), which, in its turn, is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia decreased by 16% year on year in December 2019. Russia's overall estimated PET consumption totalled 696,810 tonnes in 2019, up by 1% year on year (690,130 tonnes in 2018).

Hanbang Petrochemical, also known as China Prosperity Jiangyin Petrochemical, is situated in Jiangyin city within China's Jiangsu province.
MRC

MOSCOW (MRC) -- China’s Zhejiang Petroleum & Chemical Co Ltd has started test-run at a 2-million-ton-per-year No. 2 paraxylene (PX) unit in east China before the Lunar New Year break, reported S&P Global.

The No. 1 and No. 2 PX lines each have a nameplate capacity of 2 million mt/year.

As MRC wrote before, in December 2019, the company launched a 3.8-million-ton-per-year reformer unit, a key processing facility at its new mega refinery and petrochemical complex in east China. The reformer unit, which processes naphtha into aromatics, is the world’s single-largest facility of its kind, the company claimed.

Zhejiang Petrochemical,based in Zhoushan of Zhejiang province, started test runs at a 200,000-barrels-per-day crude oil refinery in May, the company said.

The complex also includes a second 200,000-bpd crude unit and a 1.4 million-tpy ethylene plant.

We also remind that, 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 and is a part of the Phase I project.

The Phase I facility also houses a 300,000 tons/year HDPE unit, 450,000 tons/year LLDPE line and a 900,000 tons/year PP plant.

PX is a feedstock for the production of purified terephthalic acid (PTA). PTA is used to produce polyethylene terephthalate (PET), which, in its turn, is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia decreased by 16% year on year in December 2019. Russia's overall estimated PET consumption totalled 696,810 tonnes in 2019, up by 1% year on year (690,130 tonnes in 2018).
MRC