European diesel refining margins slide as coronavirus spreads

MOSCOW (MRC) -- Benchmark northwest European diesel refining margins LGOc1-LCOc1 fell by 22% to usd7.80 a barrel, their lowest since late September 2016, on the growing spread of the coronavirus in Europe, reported Reuters.

“People are trading down the virus risk,” one European trader said, in reference on the impact the virus will have on demand in Europe.

As MRC informed before, economic disruption surrounding the Wuhan coronavirus outbreak will significantly complicate petrochemical markets, not only cutting into demand globally, but also tightening access in China to feedstock and slowing capital projects, in H1 February 2020, said Dewey Johnson, vice president/base chemicals at IHS Markit. He estimates that each 1% decline in China"s GDP growth this year will translate into about 2.5 million metric tons/year (MMt/y) of lost base chemicals demand.

The coronavirus could also affect the pace of capital investment in China. "There"s significant amount of capacity being added today in China," Johnson notes. "Labor may be a key bottleneck in this period, and the question is, how does that affect the (engineering, procurement, and construction) schedules and plant start-ups?"

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) -- Borealis announces a net profit of EUR 138 million for the fourth quarter of 2019, compared to EUR 94 million in the same quarter of 2018, said the company.

While the 2018 result was impacted by a one-off impairment charge of EUR 92 million, the result in the fourth quarter of 2019 was driven by a soft polyolefins market in Asia, lowering the contribution from Borouge. At the same time, the improved performance of the Fertilizer, Melamine and Technical Nitrogen Products segment partially mitigated the negative impact of weakening integrated polyolefins margins in Europe during the last quarter of 2019.

For the full year 2019, the company recorded a net profit of EUR 872 million, compared to EUR 906 million in 2018. The 2019 result was negatively impacted by a lower polyolefins price environment in Asia, which affected the contribution from Borouge. However, the negative impact was limited due to healthy integrated polyolefins margins in Europe together with improved results in the Fertilizer, Melamine and Technical Nitrogen Products segment.

In the fourth quarter, net debt rose by EUR 212 million. Over the full year 2019, net debt increased by EUR 241 million, driven largely by the high investment level related to growth projects and the payment of a EUR 525 million dividend for 2018 and a EUR 300 million interim dividend for 2019 to Borealis shareholders. The cash inflow from the solid business result and dividends from Borouge enabled Borealis to keep its financial position strong, with a gearing of 24% at year-end 2019.

Earlier it was reported that Borealis plans to stop the production of phenol and acetone on April 12 at a site in Porvoo (Porvoo, Finland) for scheduled repairs. This enterprise with a capacity of 195 thousand tons of phenol and 120 thousand tons of acetone per year will be closed for repairs until May 27.

According to MRC's ScanPlast, Russia's HDPE production amounted to 868,500 tonnes in 2019, down 10% year on year. All manufacturers reduced operating loading, primarily due to long repair shutdowns.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals, fertilizers and melamine. With its head office in Vienna, Austria, the company currently has 6,900 employees and operates in over 120 countries. Borealis generated EUR 8.1 billion in sales revenue and a net profit of EUR 872 million in 2019.

MRC

MOSCOW (MRC) -- Overall imports of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) to Belarus rose in 2019 by 13% year on year to 38,800 tonnes, according to MRC's DataScope report.

GPPS and HIPS imports into the country were at 34,200 tonnes in 2018.

December 2019 imports of material to the Belarusian market decreased by 3% from the previous month to 3,300 tonnes. At the same time, December GPPS and HIPS shipments into the Republic of Belarus increased by 15% year on year (2,800 tonnes a year earlier).

GPPS and HIPS imports from Russia into the country accounted for 82% of the total imports in 2019 or 31,800 tonnes, up by 4,700 tonnes year on year.

December 2019 imports of Russian material into Belarus grew by 48% year on year to 2,600 tonnes from 1,800 tonnes a year earlier, November 2019 shipments were 3,000 tonnes.

MRC

MOSCOW (MRC) -- Imports of expandable polystyrene (EPS) into Belarus dropped in 2019 by 2% year on year, totalling 12,900 tonnes, according to MRC's DataScope report.

December 2019 EPS imports into the country fell by 18% from November to 900 tonnes from 1,100 tonnes. Imports of material into the Republic of Belarus were 1,000 tonnes in December 2018.

Russia is the main EPS importer to Belarus.

Imports of Russian material to the Belarusian market decreased in 2019 by 15% year on year: from 9,300 tonnes in January-December 2018 to 7,900 tonnes. The share of EPS imports from Russia in the total shipments to the country also decreased last year to 61% from 70% in 2018.

December 2019 shipments of Russian EPS to the region were 506 tonnes versus 537 tonnes in November, whereas imports of material were 459 tonnes in December 2018.

At the same time, the share of imports of Dutch material almost doubled last year: from 6% (800 tonnes) to 11% (1,500 tonnes).

MRC

MOSCOW (MRC) -- Former Saudi energy minister Khalid al-Falih has been appointed minister of a newly created investment ministry, according to a royal decree, reported Chemweek with reference to the Saudi Press Agency's statement on Tuesday.

He takes on a key new portfolio as the country tries to attract more foreign investors. The new ministry replaces the Saudi Arabian General Investment Authority (SAGIA).

Falih was removed last year from his posts as energy minister and Saudi Aramco chairman in the lead-up to Aramco’s initial public offering. Saudi Arabia's King Salman appointed his son Abdulaziz as energy minister in September to replace Falih, who had held the post since 2017.

Attracting investors to Saudi Arabia is a key part of Crown Prince Mohammad bin Salman’s (MBS) economic transformation plan, which calls for the country’s diversification from a near total reliance on crude oil and building new industries. SAGIA has struggled in the last few years to attract investors.

Other royal orders created new ministries for tourism and sports and replaced the kingdom’s minister of media with Majid Al-Qasabi, on an acting basis. Al-Qasabi is a close adviser to MBS.

As MRC informed previously, in October 2019, McDermott International announced that it had been awarded a contract by Saudi Aramco and Total Raffinage Chimie (Total) for their joint venture (JV) Amiral steam cracker project at Jubail, Saudi Arabia. Amiral is a JV in which Aramco holds 62.5% and Total the rest. The plant, designed to produce 1.5 million metric tons/year (MMt/y) of ethylene, will be one of the world's largest mixed-feed crackers.

Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.

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).

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC