PVC imports into Ukraine increased by 7% in January, exports up by 77%

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 7% in January of this year, compared to the same period in 2019 and reached about 4,100 tonnes. At the same time, sales of Ukrainian PVC to foreign markets dropped by 77% year on year, according to a MRC's DataScope report.

Last month, suspension polyvinyl chloride (SPVC) import supplies to the Ukrainian market grew to 4,100 tonnes against 3,800 tonnes in January and 4,300 tonnes in December a year earlier, a slight increase in supplies fell to European producers. Overall imports of suspension reached 49,000 tonnes in 2019, compared to 66,100 tonnes a year earlier.

Weaker demand for PVC in the domestic market made some producers to increase exports. European producers with the share of about 71% of the total imports were the key suppliers of resin to the Ukrainian market in 2019.

Producers from the USA with the share of about 29% were the second largest suppliers. A high level of capacity utilisation and a seasonal reduction in demand from Ukrainian consumers made the local producer Karpatneftekhim to significantly increase export sales.

Over 26,300 tonnes of SPVC were shipped to foreign markets last month, whereas in January and December 2019, this figure was 14,800 tonnes and 12,900 tonnes, respectively. Last year's PVC exports from the country were more than 163.300 tonnes.


MRC

MOSCOW (MRC) -- Hedge funds were heavy sellers of petroleum last week for the third time in four weeks, amid mounting anxiety about the impact of a coronavirus outbreak on oil consumption in China, reported Reuters.

Hedge funds and other money managers sold the equivalent of 131 million barrels in the six most important futures and options contracts in the week ending Feb. 4.

Portfolio managers have sold a total of 367 million barrels since Jan. 7, reversing a large amount of the 533 million barrels bought during the previous 13 weeks.

Fears about a coronavirus-driven downturn in oil consumption have replaced earlier expectations about a cyclical recovery in oil demand growth.

Selling has been concentrated in crude and the middle distillates used heavily in manufacturing and transportation, including aviation and shipping, the sectors most exposed to China’s economy and the coronavirus.

Hedge funds were heavy sellers last week of NYMEX and ICE WTI (-56 million barrels), Brent (-50 million), European gasoil (-18 million) and US heating oil (-8 million).

In response to the coronavirus, PetroChina has said that it will cut crude processing at its refineries by 320,000 barrels per day in February, around 10% of its average production rate, with even deeper cuts to come in March.

China’s state-owned refiners have now signaled production cuts totaling more than 900,000 bpd this month (“PetroChina to cut February crude runs by 320,000 bpd due to virus”, Reuters, Feb. 10).

By contrast, fund managers made no net change in their position in US gasoline last week, which is more focused on the United States and private motorists.

The economic and oil market impact of the virus outbreak is similar to a severe recession centered on China, which is currently extremely deep but of uncertain duration, and where the full impact on other countries is unclear.

Normal recessions are driven by economic processes, including inventory adjustments, consumer and business confidence, and labor market dynamics.

Even in normal times, recessions have much in common with epidemics as narratives about a deteriorating business environment and increasing risk spread among households and businesses, causing them to reduce spending.

But the coronavirus-recession in China is additionally driven by the success of primary infection control in Hubei province; the probability of secondary outbreaks in the rest of China and worldwide; and decisions by governments, businesses and individuals about the optimal trade-off between the need for infection control and the need to keep normal commercial activities operating.

If the virus can be successfully contained while business activity is normalized, the coronavirus-induced recession could be very short, albeit severe, and localized mostly in China, though with impacts on the country’s supply chain.

China’s government and businesses have started signalling a gradual normalization of commercial and transportation activities after a two-week long extended holiday intended to slow the rate of virus transmission.

However, if there are uncontained secondary outbreaks across the rest of China forcing an extended suspension of normal business activity, the recession could be much longer, with an inevitable worldwide effect.

And if the virus cannot be contained within China, governments and businesses will face an even more uncomfortable choice about how to manage the trade-off between risks to human health and the need to maintain semi-normal operations.

As MRC wrote previously, PetroChina's subsidiary refinery, Dalian Petrochemical Corp, plans to have a major turnaround in April-May of 2020, four industry sources told Reuters in January 2020. The maintenance is scheduled to start from late March or early April and will last for around one and a half months, the sources said. The 410,000 barrels-per-day (bpd) plant in the northeast Chinese port city of Dalian, PetroChina's biggest refinery, is linked to Russia's East Siberia Pacific Ocean (ESPO) pipeline and is China's largest processor of the pipeline ESPO blend crude.

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).
MRC

MOSCOW (MRC) -- Libya’s Azzawiya Oil Refining Company said it was forced to stop refining operations due to a lack of crude supplies and no inventory, reported Reuters.

A source from the company, a subsidy of Libya’s state oil firm the National Oil Corporation (NOC), said two refining units with a capacity of 60,000 barrels each had stopped.

Oil output in Libya has fallen sharply since Jan. 18 because of a blockade of ports and fields by groups loyal to eastern-based commander Khalifa Haftar.

Libya’s oil production had dropped to 181,576 barrels per day (bpd) by Thursday from about 1.2 million bpd before the stoppage.

The NOC said the losses from the blockade amount to about USD1.042 billion.

On Thursday, U.N. Libya envoy Ghassan Salame said he had talked to tribesmen behind the blockade and was awaiting their demands.

He also said the blockade would be at the top of the agenda at a meeting in Cairo on Sunday between representatives from eastern, western and southern Libya seeking to overcome economic divisions in a country with two governments.

In a sign that a reopening of ports might not be imminent, tribes and communities in oil-rich areas in eastern Libya held by Haftar’s Libyan National Army (LNA) said in a statement they opposed resuming oil exports unless Tripoli was freed of militias.
MRC

MOSCOW (MRC) - The Kaliningrad group of companies Ecopet, the largest producer of polyethylene terephthalate (PET) in Russia and Eastern Europe, has been put up for sale by the Bank of non-core assets Trust, Rugrad reports.

The preparation of the transaction is overseen by the Trust Non-core Assets Bank. As follows from the materials posted on the Trust website, the bank is looking for new owners for Ecopet LLC, which owns petrochemical production facilities on the Baltic Highway, and for the infrastructure site of Balttehprom LLC.

According to the CEO of Ecopet and Balttechprom Alexander Anikeev, two Russian and foreign investors have already shown interest in the assets. According to the head, the option with the purchase of the Civil Code by state structures is excluded. Ecopet is now for sale.

Trust Bank must sell our asset within a short time. The state, of course, will not buy. It so happened that the shareholders of Ecopet changed almost every year. The first owner took a loan to build the plant, then something went wrong, and the company transferred to MDM Bank.

After the termination of its activities, we transferred to the financial group "Discovery". When the non-core asset bank of PJSC National Bank Trust was established, it included Ecopet, the Baltic Industrial Park and the Fifth Element plant in Krasnoznamensk, the Royal Gate magazine quoted Alexander Anikeev as saying.

Last October, the chemical laboratory of Ecopet JSC passed the accreditation procedure of a new technology for the production of its products. The approved accreditation area of the Ecopet chemical laboratory includes studies of high viscosity polyethylene terephthalate of the Ekopet trademark, terephthalic acid, isophthalic acid, ethylene glycol, diethylene glycol, sewage, natural water.

According to the ICIS-MRC Price Review, on January 20, 2020, Ecopet stopped the production of PET for scheduled repairs.

The company is based on the territory of the free economic zone of the Kaliningrad region. The plant's total PET production capacities are 220,000 tonnes per year. PET chips are produced under the EcoPet trademark and is used for the production of food packaging and PET bottles.
MRC

MOSCOW (MRC) -- Braskem says its Braskem Idesa joint venture with the Mexican group Idesa has reached an important milestone with the import of its first ethane from the US, which will be used as feedstock to at the Coatzacoalcos, Mexico, petrochemical complex, as per Chemweek.

Braskem Idesa has spent $4 million on logistics infrastructure and will be able to import up to 12,800 b/d of ethane to the feed the complex. This quantity represents 19% of the company’s 1.05-million metric tons/year steam cracker’s ethane needs.

Braskem said last November that Braskem Idesa is investing in logistics infrastructure to import ethane from the US to increase capacity utilization rate of the Coatzacoalcos steam cracker. The company concluded agreements with Smart Pass, a logistics operator, and with Enestas, a company specializing in cryogenic gas transportation. Smart Pass is responsible for receiving liquid ethane at the docks of the Port of Coatzacoalcos and for unloading it from the vessels in cryogenic tanks. Enestas, meanwhile, transports the ethane by trucks to the petrochemical complex where the ethane will be stored in existing tanks and regasified for use in the production process.

Ethane volumes may eventually reach 25,400 b/d, equivalent to 38% of its annual ethane needs. Braskem Idesa is also assessing the possibility for larger-scale ethane imports and may build a terminal for importing ethane and a pipeline to transport the feedstock to its petrochemical complex.

As MRC informed before, Brazilian petrochemical producer Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia, announced the company in April, 2019. And the company has been seeking to sell the land that would have housed the cracker.

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).

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
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