February prices for European PVC increased by EUR20-30/tonne for CIS countries

MOSCOW (MRC) -- Negotiations on prices of European polyvinyl chloride (PVC) for February shipments to the CIS markets have begun this week. Prices of raw materials in Europe remained steady, however, European producers have announced an increase in PVC export prices, according to the ICIS-MRC Price Report.

February contract price of ethylene was agreed at the level of January , which theoretically suggests the unchanged cost of production of polyvinyl chloride. Nevertheless, a balanced domestic market and good demand from key export markets allow European producers to play to increase PVC export prices.

Export prices of PVC for CIS countries are discussed at an increase of EUR20-30/tonne against the price of January.
Also, by increasing of the price of polyvinyl chloride, European producers are trying to compensate for the decrease in margins in caustic soda, which has been seen in the last few months.

The demand for PVC is not strong in the CIS countries in February due to a number of reasons, and basically reduced to the procurement of PVC K 58 and K 70.

European producers have no serious restrictions on export volumes, but most sellers try to sell PVC for export at the highest possible prices. Several producers intend to achieve an increase in export prices by EUR40/tonne compared to January, but some consumers report that they managed to limit the price increase to EUR20-30/tonne.

But in general, deals for February shipments of suspension PVC (SPVC) to the CIS markets were held in the range of EUR725-795/tonne FCA.
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MOSCOW (MRC) -- China said it would slash tariffs on USD75 billion of US imports in half as part of its efforts to implement a recently signed trade agreement with Washington, reported The Wall Street Journal.

Beginning Feb. 14, China will cut tariffs on some US goods to 5% from 10%, while levies on some other items will be reduced to 2.5% from 5%, China’s Ministry of Finance said in a statement Thursday. The tariffs were imposed in September and December during a brutal trade fight between the world’s two largest economies.

The tariff cuts come amid growing doubts about Beijing’s ability to follow through on the phase-one trade deal, in which China has pledged to boost its purchases of American merchandise and services by USD200 billion over two years.

A coronavirus outbreak that began in China in late January and has spread to more than a dozen countries has caused a near-standstill in economic activity in the country. Chinese authorities have placed many parts of the country on lockdown in an effort to contain the epidemic.

Even before the outbreak, many economists and analysts cast doubt on Beijing’s ability to meet the agreement’s purchasing targets, which cover products ranging from soybeans and poultry, oil and gas to manufactured goods. Now, with the health crisis threatening an already weakening economy, Beijing could find it more difficult to follow through on all of its pledges.

Even so, the decision to reduce tariffs indicates that the Chinese leadership remains intent on implementing the deal that has helped halt the nearly two-year trade war between the two nations.

In a statement accompanying Thursday’s announcement, the Finance Ministry said the decision was intended to "alleviate economic and trade frictions and expand economic and trade cooperation" between the two countries. "We hope to work with the United States towards the ultimate elimination of all increased tariffs," it added.

As a condition of Beijing signing the initial trade deal, inked on Jan. 15, the US agreed to cut tariffs on USD120 billion of Chinese goods by half, to 7.5%, within about 30 days, and to forgo other planned tariffs.

The biggest section of the phase-one deal covers Chinese pledges to increase US imports. Beijing agreed to buy an additional USD200 billion in goods, split across 2020 and 2021, with USD77 billion in additional trade the first year and USD123 billion the second year.

Over the two years, China agreed to boost its purchasing of US goods above 2017 levels, including an increase of about USD78 billion in manufacturing, USD32 billion in agriculture, USD52 billion in energy and USD38 billion in services. In 2017, the US exported USD186 billion of goods and services.

To fulfill the targets, US exports to China would need to climb to USD263 billion in 2020 and USD309 billion in 2021, an increase without precedent in the history of US trade.

Chinese officials have indicated that it would cut tariffs in a bid to fulfill these pledges.

As MRC informed earlier, in H2 2019, tariffs sharply reduced exports of two grades of US polyethylene (PE) amid the ongoing US-China trade dispute. As new US startups brought more high density and linear low density polyethylene production (HDPE and LLDPE) on line, flows into China, the largest global demand center, retreated since China imposed 25% tariffs on those grades in August last year. Those tariffs, like the rest China imposed on the US products, were in response to tariffs the US first imposed on Chinese products.

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.
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MOSCOW (MRC) -- Brazilian state-led oil company Petrobras put two exploration blocks in the highly prospective Para-Maranhao Basin that holds similarities to major equatorial margin discoveries off the coasts of Guyana and Suriname further to the north, Petrobras said in a sales offer sent out to potential investors Tuesday, reported S&P Global.

Petrobras plans to sell its 100% stake in the BM-PAMA-3 concession and 80% stake in the BM-PAMA-8 concession. Chinese state-run oil company Sinopec retains the remaining 20% stake in the BM-PAMA-8 concession and could exercise its preferential right to buy Petrobras' stake, according to the teaser.

The latest sales offer represents a rapid expansion of the volume of oil and natural gas exploration and production assets, with Petrobras adding four other separate assets up for sale since January 1 amid uncertainties about how much the company will raise from the sale of eight of its 13 refineries. Petrobras targeted $20 billion-$30 billion worth of asset sales over the next five years under its 2020-2024 investment plan, but company officials said that additional oil fields could be added to raise more cash if needed.

Petrobras previously put the Golfinho and Camarupim fields up for sale in January, then this week put its 62.5% operating stake in the Papa-Terra Field on the auction block. Chevron also agreed to tag along and sell its 37.5% minority stake, the company said late Monday.

The asset sales are part of a broader overhaul of Petrobras' exploration-and-production portfolio, with the company previously putting more than 100 mature onshore and shallow-water offshore fields on the auction block. Some of the areas were sold previously or remaining in the sales process, but Petrobras has now moved to include higher-quality mature assets in the deep waters of the Campos Basin that still hold some upside.

Petrobras wants to move away from many of its heavy oil legacy assets, except for massive fields such as Roncador and Marlim, to focus on development of the larger subsalt fields, where a single well can average more than 40,000 barrels of oil equivalent.

The BM-PAMA-3 concession is currently in the discovery evaluation phase, with Petrobras studying the Harpia find, the company said. Under terms of the existing concession contract, potential investors will need to commit to drilling a single well, with a formation test contingent on results of the exploration well, Petrobras said.

The BM-PAMA-8 concession, meanwhile, is divided into the PAMA-M-192 and PAMA-M-194 blocks, according to Petrobras. The concession is currently in the second exploration phase, with the winning bidders required to commit to drilling a single well in the PAMA-M-192 block, Petrobras said.

Interested bidders must be qualified or able to qualify as an A operator under criteria established by the National Petroleum Agency, Petrobras said. The deadline for submitting qualification documents and confidentiality agreements is February 28, Petrobras 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 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.

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) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price increase for all polycarbonate (PC) grades in Europe, as per the company's press release.

Effective February 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below increased as follows:

- CALIBRE PC resins - by EUR150 per metric ton.

As MRC informed earlier, Trinseo last raised its prices for all PC grades in Europe on 1 January 2020 also by EUR150 per metric ton.

According to MRC's ScanPlast report, Russia's estimated PC consumption (excluding imports and exports to/from Belarus) totalled 78,500 tonnes in 2019, up by 15% year on year (68,100 tonnes a year earlier).

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
MRC

MOSCOW (MRC) -- Brazilian state-run oil firm Petrobras expects to increase its equity value by roughly 45% by 2021, in large part by cutting costs and divesting non-core assets, it said in a presentation released, reported Reuters.

Capital expenditure from 2020 to 2024 will be concentrated in Brazil’s offshore "pre-salt" formation, with a special emphasis on its Buzios field, Petroleo Brasileiro SA, as the firm is formally known, said.

As MRC wrote earlier, Petrobras has recently announced the binding phase for the sale of three refineries in Brazil, according to a securities filing on Friday. The refineries are located in the states of Amazonas, Ceara and Parana. The largest of the three, REMAN, in Amazonas, has a 46,000 barrel a day processing capacity, according to the filing.

We also remind that 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.

Besides, 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 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.

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.
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