Asahi Kasei to discontinue styrene resins business

MOSCOW (MRC) -- Asahi Kasei has decided to discontinue its business for the styrenic resins SAN (Styrene-acrylonitrile resin), ABS (Acrylonitrile butadiene styrene), and ACS, according to Kemicalinfo.

According to the company, the operations of SAN plant at Kawasaki Works will be closed in March 2021.

The business to be discontinued began with the 1962 start-up of the SAN plant in Kawasaki, now part of Asahi Kasei’s Kawasaki Works, followed by the 1964 start-up of the ABS plant at the same site (function transferred to Mizushima in 1978). The ACS business began in 1995.

The ABS plant at Asahi Kasei’s Mizushima Works, which started up in 1967, was closed in 2015 due to deteriorating profitability as domestic Japanese demand decreased significantly.

As per the company, the decision for business discontinuation was based on a judgment that there were no clear prospects to establish the superiority of Asahi Kasei’s products in the expanding global ABS market and that it would be difficult to formulate a future expansion strategy.

Under its Cs+ for Tomorrow 2021 medium-term management initiative, Asahi Kasei is prioritizing and allocating management resources to develop a business portfolio of sustainable and high value-added businesses.

The company said that the resources of the discontinued business will be reallocated to other businesses of Asahi Kasei.

We remind that, as MRC informed earlier, Asahi Kasei Mitsubishi Chemical Ethylene Corp, a joint venture of Asahi Kasei Corp and Mitsubishi Chemical Corp ,delayed the restart of a naphtha cracker in Mizushima, western Japan, to Jan. 28 from Jan. 24, 2020. The delay was due to a glitch in the steam system, which is operated in case of an emergency, Asahi Kasei said in a statement. The company shut the naphtha cracker on Jan. 14 after a malfunction in the refrigerant system. The naphtha cracker has a production capacity of 567,000 tonnes a year without any turnaround and 496,000 tonnes with turnaround, the firm said.

According to MRC's ScanPlast report, January 2020 estimated consumption of polystyrene (PS) and styrene plastics in Russia dropped by 10% year on year, totalling 41,420 tonnes. Russian plants' overall output also decreased (by 3%) year on year in January 2020 to 43,260 tonnes.
MRC

MOSCOW (MRC) -- Italy, which has become a major hotspot in the COVID-19 pandemic, has given its plastics machinery making sector the green light to continue building machines, said Canplastics.

A decree of the Italian President of the Council of Ministers (DPCM) issued on March 22 gives all Italian manufacturers of plastics and rubber machinery permission to continue their activity, since they belong to a production chain defined as necessary.

But as noted by the Italian trade association Amaplast, such factories will have to comply with a protocol signed on March 24 both by Government and social parties that lists all the measures that hinder and limit the spread of COVID-19 infection inside and outside the work sites and keeping the safety and the health of people involved in the production cycle as a priority.

“Moreover, companies are asked to give a sign of discontinuity as compared to the past, thus limiting production activity only to those units which activity is really essential,” Amaplast said in a March 23 statement. “As a consequence, workshifts will also have to be re-scheduled, based on real necessities."

"“As for the supply of materials and components, a few delays are now being registered but – at the moment – they are not affecting the the standard execution of production,” Amaplast said. “Similarly, deliveries of machinery and customers’ assistance are going on as usual."

As of March 23, Italy has reported a total of 6,077 deaths from the coronavirus, with a total of 63,928 cases of infection reported across the country.

As MRC informed earlier, the COVID-19 outbreak has led Shell Chemical to temporarily suspend construction on the massive plastics and petrochemicals site it's building in Monaca, Pa.

As MRC informed earlier, in mid-February 2020, Shell confirmed coronavirus case at its Singapore refining site. Namely, a contractor working at Shell's Pulau Bukom manufacturing site in Singapore contracted the new coronavirus.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December, 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

MRC

MOSCOW (MRC) -- Prices and profit margins for motor and aviation fuels globally are under pressure from a severe loss of demand as more countries enforce lockdowns and planes are grounded, forcing more refineries to reduce output, reported Reuters.

US ultra-low sulfur diesel was the latest product refined from crude oil to take a hit in its cash market last week, after refiners boosted production in a bid to flee poorer margins for other products more affected by coronavirus fallout.

Refining margins for gasoline and jet fuel have tanked because of decreased demand for transportation fuels, as the disease outbreak has forced businesses to close and governments to push residents to avoid travel and public places.

In Asia, profit margins for jet fuel turned negative for the first time in over a decade as global airlines canceled flights.

Emirates and Singapore Airlines were the latest carriers to announce huge cuts in their passenger flights.

European jet fuel prices last week plummeted to a near 17-year low, and for the past eight trading sessions European refiners have been producing gasoline at a loss.

For most of last week, U.S. diesel margins held up relatively well, as both trucking and farming, two sectors that rely on diesel, continued operating.

But refiners’ moves to divert production capacity previously devoted to other fuels to diesel is starting to cause oversupply in some regions, leading to a drop in cash prices, market participants said.

Cash prices for diesel in Chicago ULSD-DIFF-MC slid last week to 34 cents per gallon below the heating oil futures contract HOc1, the lowest seasonally since at least 2011, early Refinitiv Eikon data showed.

Elsewhere in the Midwest ULSD-DIFF-G3 and on the Gulf Coast ULSD-DIFF-USG, prices were the lowest seasonally since 2016.

That could augur declines in diesel refining margins HOc1-CLc1, which are still seasonally strong at USD18.53 a barrel.

Meanwhile, gasoline refining margins RBc1-CLc1 are at US3.55 a barrel, the lowest for this time of year since at least 2005, Refinitiv Eikon showed.

Underscoring falling demand, Colonial Pipeline Co said on Thursday it would cut volumes on its primary lines delivering gasoline and diesel fuel to the US East Coast from the Gulf Coast.

Refiners around the world have already started cutting output or are considering such measures as the coronavirus curbs travel and driving.

Exxon Mobil Corp cut production on Saturday at its 502,500 barrel-per-day-capacity Baton Rouge, Louisiana, said sources familiar with plant operations.

Taiwan’s state-owned oil refiner CPC Corp will cut crude throughput rates in April by less than 10% from around 70%-80% currently, as the coronavirus pandemic has lowered fuel demand, two sources familiar with the matter said on Monday.

As MRC informed earlier, ExxonMobil said last Monday that it is looking to reduce spending significantly as a result of market conditions caused by the coronavirus disease 2019 (COVID-19) pandemic and commodity price decreases.

We also remind that in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

MOSCOW (MRC) -- Germany-based rigid and flexible plastic packaging supplier Klockner Pentaplast (KP) has completed what it calls a “significant expansion” for pharmaceutical packaging films at its Cotia facility in Brazil, said Canplastics.

Along with a larger and more sustainable facility, the project gives KP additional coating capacity to better support the rapidly growing South American pharmaceutical market.

The state-of-the-art coating line has increased KP’s local South American coating capacity by over 30 per cent, offering customers high quality, innovative films with shorter lead times. “The added capacity arrives at the right time, as the pharmaceutical blister market continues to grow in PVdC coated products as a cost effective high-barrier packaging solution,” the company said in a March 23 statement.

“We are excited about this latest project to better serve our customers in the region,” Tracey Peacock, president of KP’s pharmaceutical, health and specialties division. “The expansion demonstrates our commitment to delivering the best quality products and supports a growing demand for high-barrier protective packaging for pharmaceuticals."

The upgraded technology also reduces the Cotia site’s carbon footprint and overall energy consumption.

KP was founded in 1965. The company currently has 32 plants in 18 countries and employs over 5,900 workers.

As MRC informed before, Pregis has acquired Italian temporary protective films manufacturer Soprad. The financial terms of the acquisition were not disclosed. Soprad’s products will be marketed under the Pregis’ PolyMask brand, which includes temporary surface protection films and specialty films.

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) -- Brazilian state-led oil company Petrobras set a fresh daily output record at the Buzios Field last week, marking the latest production advancement at the country's second-biggest gusher, reported S&P Global with reference the company's statement late Wednesday.

Buzios, which pumped first oil in April 2018, produced 640,000 b/d of crude and a total of 790,000 b/d of oil equivalent on Tuesday, Petrobras said. The field pumped 487,264 b/d and 18.2 million cu m/d for total hydrocarbons output of 601,704 boe/d in January, according to the latest production report from Brazil's National Petroleum Agency, or ANP.

"The Buzios Field, discovered in 2010, is the biggest deep-water oil field in the world," Petrobras said. "It's a world-class asset, with substantial reserves, low risk and low extraction costs."

The field features Brazil's top-six production wells, including three that produce more than 50,000 boe/d, according to the ANP.

The record-setting performance, however, will likely be undermined in coming weeks, with Petrobras starting a massive maintenance program that will shutter each floating production, storage and offloading vessel, or FPSO, installed in the subsalt region expected to be shuttered for 15-20 days. The unprecedented program will improve efficiency and check the integrity of subsea systems in the region, which are subject to intense pressures and the corrosive effects of contaminants such as carbon dioxide and sulfuric acid.

Despite the field's relatively recent startup, Buzios will be included in the program, company officials said in February.

Production at Buzios has surged since mid-2019, when Petrobras finally resolved technical issues related to natural gas processing plants onboard the FPSOs installed at the field. The field features high pressures and volumes of associated gas, but is largely free of the high levels of contaminants seen at other subsalt reservoirs.

Petrobras installed four FPSOs capable of pumping up to 150,000 b/d and processing 6 million cu m/d each at Buzios, starting in early 2018. The FPSOs P-74, P-75, P-76 and P-77 handle output at the field. Petrobras plans to install fifth and sixth FPSOs, which will be slightly larger with installed production capacity of about 180,000 b/d, in 2022 and 2024, respectively.

The recent turmoil in global markets related to the oil-price war between Saudi Arabia and Russia as well as the coronavirus outbreak is unlikely to upset Petrobras' development plans at Buzios. Buzios and Lula, Brazil's top producing oil field, have breakeven costs at less than USD35/b, according to Petrobras. Lifting costs for the entire subsalt region were USD5.60/b in 2019, down from USD6.50/b in 2018, according to the company's 2019 earnings statement.

As MRC wrote previously, 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 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

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