Karpatneftekhim asks the state to introduce duties on imported PE, PVC and caustic

MOSCOW (MRC) -- The city council of the Ukrainian city of Kalush, where the largest petrochemical plant in Ukraine, Karpatneftekhim, is based, has reviewed and agreed on the text of an appeal to the President of Ukraine, the head of the Verkhovna Rada and the Prime Minister of Ukraine on the situation that has developed at the enterprise, Vikna reports.

It was previously noted that Karpatneftekhim from 2 January shut the production of low-pressure polyethylene (HDPE) due to the high cost of raw materials, which are not covered by the current world prices of the polymer.

In its appeal, the city council indicates that Karpatneftekhim is one of the largest taxpayers in the Ivano-Frankivsk region and in Kalush, therefore the shutdown of the enterprise, which employs 2,792 people, will have a negative impact on budgets of all levels, the labor market and lead to a social and economic explosion in the region . According to the optimistic scenario, they can reduce 20% of the workers, while the pessimistic scenario - up to 80%.

"This situation has arisen in connection with a non-competitive environment for domestic producers, caused by a sharp increase in imports to Ukraine and dumping prices for caustic soda, polyethylene and polyvinyl chloride and a high tariff for rail transportation," the statement said.

The City Council supported the statements and petition of Karpatneftekhim to initiate and conduct a special investigation into the import of caustic soda into Ukraine and the import into Ukraine of polyethylene and polyvinyl chloride and a petition to reduce rail tariffs, and asks the government to take measures to protect the domestic producer.

As the deputy general director of Karpatneftekhim LLC Yarema Rudik said at the session, the enterprise will not be able to operate without government intervention.

According to Yarema Rudik, the company has already submitted to the Ministry of Economy and Trade an application for a special investigation into the import of caustic soda, polyethylene and polyvinyl chloride into Ukraine. On February 12, the ministry launched a special investigation into caustic soda, and the application for polymers should have been considered on February 21. The special investigation procedure is lengthy - 200 days. Therefore, Karpatneftekhim LLC appealed to the Ministry with a request to introduce preventive measures (import duties) that can be applied 45 days after the start of the investigation.

As Jarema Rudik noted, meetings have already been held with representatives of ministries and the government has an understanding of the situation. In Ukraine, products, forcing out Karpatneftekhim LLC from the market, are imported from different countries, in particular from the USA and Saudi Arabia.

According to a DataScope survey by Market Report, last year, the total volume of polyethylene imports to the Ukrainian market grew by 10% compared to the year 2018 and amounted to 268.7 thousand tons. The largest increase in external supplies came from low-pressure polyethylene (HDPE). At the same time, according to the results of the first month of the current year, the total volume of imports of polyethylene (PE) on the Ukrainian market decreased by 8% compared to the indicator of 2018 and amounted to 19.4 thousand tons. The largest decline in external supplies was due to linear polyethylene (LLDPE).

Karpatneftekhim is one of the largest enterprises in the petrochemical complex of Ukraine. Currently, the company is capable of annually producing 300 thousand tons of polyvinyl chloride, 200 thousand tons of caustic soda, about 180 thousand tons of chlorine, as well as 250 thousand tons of ethylene and 100 thousand tons of polyethylene.
MRC

MOSCOW (MRC) -- Mitsubishi Chemical Corp (MCC) has agreed to acquire Swiss engineering plastics recycler Minger Group - consisting of Minger Kunststofftechnik AG and Minger Plastic AG, the Japanese chemicals major said.

Based on the Mitsubishi Chemical Holdings (MCHC) Group’s KAITEKI Vision 30, MCC makes the circular economy a key element, and plastics recycling is an important initiative within this basic policy.

The Minger Group has strong proprietary recycling technologies for engineering plastics like polyether ether ketone (PEEK), poly vinylidene difluoride (PVDF), and nylon. It possesses a material collection network that spans a wide area of Europe, a track record of recycled material transactions with over 100 customers, and an established business model for recycling engineering plastics in the region.

The acquisition will allow MCC to establish an integrated business model for engineering plastics, from manufacturing to sales, machining, collection, and reuse. Going forward, the company will continue to strengthen its capability to propose solutions to users in the engineering plastics industry and will contribute to the realisation of a recycling-based society.

Appenzell-based Minger has proprietary recycling technologies for engineering plastics like polyether ether ketone (PEEK), poly vinylidene difluoride (PVDF) and nylon, along with a material collection network that spans a wide area of Europe, MCC said.

As MRC informed earlier, Mitsubishi Chemical has a steam cracker in Kashima with an ethylene production capacity of 564,000 mt/year. It shut one steam cracker there in 2014 - which has an ethylene production capacity of 375,000 mt/year -- following a sluggish petrochemical demand in the country.

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).

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
MRC

MOSCOW (MRC) -- Royal Dutch Shell Plc shut the large crude distillation unit (CDU) at its 211,270 barrel-per-day (bpd) Convent, Louisiana, refinery for an overhaul, reported Reuters with reference to sources familiar with plant operations.

Shell shut the 130,000 bpd VPS-1 CDU for an overhaul expected to take 30 days to complete, the sources said.

As MRC wrote previously, a catalytic reformer was shut on Sunday night at Royal Dutch Shell Plc’s 211,270-barrel-per-day (bpd) refinery in Convent, Louisiana, after a brief fire.

We also remind that operations were stable on 13 September 2019 at Royal Dutch Shell Plc’s 340,000 barrel-per-day (bpd) joint-venture refinery in Deer Park, Texas, after the upper Houston Ship Channel was closed by protesters from Greenpeace USA. The Deer Park refinery is a 50-50 joint-venture between Shell and Mexico’s national oil company Petroleos Mexicanos (Pemex). Shell is the managing partner of the joint-venture. Shell has three crackers at Deer Park site with a combined ethylene capacity of 1,67 mln per year and petrochemical plants.

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).

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) -- Shipments of three liquefied natural gas cargoes from Indonesia’s Tangguh LNG Plant to Fujian province in China have been delayed because of the coronavirus outbreak, Indonesia’s upstream oil and gas regulator SKK Migas, said Hydrocarbonprocessing.

The cargoes were due to depart in the third week of February but shipments have been rescheduled to an unspecified later time, Arief Setiawan Handoko, SKK Migas’ deputy for finance and monetisation told Reuters by text.

Indonesia’s Tangguh LNG plant is operated by a unit of BP Plc.

Shipments to other destinations, such as Japan and Singapore, are so far not affected by the coronavirus outbreak in China which has now spread to other countries.

Handoko said should the shipments be cancelled, Indonesia would prefer to sell the cargoes to a domestic buyer.

As MRC informed earlier, state-owned PetroChina shut its Guangxi Petrochemical in southern Guangxi province on February 9 for scheduled 50-day maintenance. The maintenance should help the refinery to offset stock pressure after product demand slumped due to the coronavirus outbreak.

We also remind that Sichuan Petrochemical (part of PetroChina) undertook an emergency shutdown at its naphtha cracker in Sichuan province of China on July 11, 2018 owing to a gas leak at its natural gas supply pipeline. Further details on duration of the outage could not be ascertained. Located at Sichuan province of China, the cracker has an ethylene capacity of 800,000 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 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).

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- Oil prices fell for a fifth day on Thursday to their lowest since January 2019 as a growing number of new coronavirus cases outside of China fuelled fears of a pandemic which could slow the global economy and lower crude demand, reported Reuters.

Brent crude was down 60 cents, or 1.1%, at USD52.83 a barrel at 0741 GMT. The contract earlier fell to as low as $52.53, the lowest since Jan. 2, 2019.

West Texas Intermediate (WTI) futures fell by 55 cents, or 1.1%, to USD48.18 a barrel. It earlier fell to as low as $47.82, the lowest since Jan. 4, 2019.

In the five trading sessions through Thursday, Brent has dropped 10.6%, while WTI has declined 10.4%, their biggest five-day percentage losses since August 2019.

On Wednesday, for the first time ever, the number of new coronavirus infections outside China, the source of the outbreak, exceeded the number of new Chinese cases.

The spread to large economies including South Korea, Japan and Italy has caused concerns that fuel demand growth will be limited. On Wednesday, consultants Facts Global Energy forecast oil demand growth will only 60,000 barrels per day in 2020, or “practically zero”, because of the widening outbreak.

U.S. President Donald Trump assured Americans on Wednesday evening that the risk from coronavirus remained “very low”. However, Asian share markets fell on Thursday morning, as investors fear the coronavirus spread will disrupt the global economy as quarantines and other measures taken to halt its advance slow trade and industry.

“Speculations that coronavirus may spread in the United States prompted a series of fresh selling,” said Kazuhiko Saito, chief analyst at Fujitomi Co.

If an outbreak “continues to worsen in the United States, oil prices will likely decline further, especially with U.S. gasoline prices already plunging,” Saito said.

The United States is the world’s largest oil producer and consumer.

Gasoline stockpiles dropped by 2.7 million barrels in the week to Feb. 21 to 256.4 million, the Energy Information Administration (EIA) said on Wednesday, amid a decline in refinery throughput. Distillate inventories fell by 2.1 million barrels to 138.5 million.

U.S. crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels, the Energy Information Administration said, which was less than the 2-million-barrel rise analysts had expected.

The crude market was also watching for possible deeper output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, a group known as OPEC+.

“The falls this week, primarily through $55.00 on Brent crude, are likely to awaken the OPEC+ grouping from their slumber finally,” said Jeffrey Halley, senior analyst at OANDA.

OPEC+ plans to meet in Vienna over March 5-6.

As MRC informed before, state-owned PetroChina shut its Guangxi Petrochemical in southern Guangxi province on February 9 for scheduled 50-day maintenance. The maintenance should help the refinery to offset stock pressure after product demand slumped due to the coronavirus outbreak.

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