The Ministry of Economy of Ukraine investigats import polymer materials into the country

MOSCOW (MRC) - The Interdepartmental Commission for International Trade of Ukraine considered the statement of the largest petrochemical plant in Ukraine - Karpatneftekhim about initiating and conducting a special investigation regarding imports to Ukraine regarding imports of polyethylene and polyvinyl chloride, as well as caustic soda to Ukraine, reports Uryadovy Kurjer.

The company also requests a reduction in rail transportation tariffs and asks the government to take measures to protect domestic producers.

The publication notes that in accordance with the Law of Ukraine "On the application of special measures regarding imports to Ukraine", the Commission considered the statement of Karpatneftekhim "On the initiation and conduct of a special investigation regarding the import into Ukraine of polymer products regardless of the country of origin and export."

The Commission examined the evidence provided in the statement on the growth of imports of polymer materials into Ukraine and causing significant harm to national producers as a result of such imports. And also took into account the information of the Ministry of Economic Development, Trade and Agriculture of Ukraine on the results of the consideration of the application.

Based on the results of the review, the Commission found that the statement provided sufficient evidence, based on which it can be considered that the import of polymer materials into Ukraine, regardless of the country of origin and export, grew.

In addition, the statement provides sufficient evidence that the import into Ukraine of polymeric materials, regardless of the country of origin and export, was carried out in such volumes and under such conditions that it could cause significant damage to the national producer.

In connection with the above and in accordance with Article 9 of the Law, the Commission adopted a decision dated 21.02.2020 No. SP-440/2020 / 4411-03, according to which it initiated a special investigation regarding the import of goods into Ukraine regardless of the country of origin and export, has the following description: polymeric materials, in particular polyethylene with a specific gravity of 0.94 or more and polyvinyl chloride, not mixed with other substances that can be classified according to UKT FEA according to codes 3901 20 90 00 and 3904 10 00 00.

A special investigation was entrusted to the Ministry of Economy. If the investigation concerns the interests of individuals or legal entities, such persons have the right to send information to the Ministry of Economy that may be useful for the investigation.

Commission Decision of February 21, 2020 No. SP-440/2020 / 4411-03 shall enter into force on the day of publication of this message.

Earlier it was reported that Karpatneftekhim from January 2 stopped 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.

The city council of the Ukrainian city of Kalush, where Karpatneftekhim is based, 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.

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) -- 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