BP Zhuhai shuts No. 3 PTA plant in China for turnaround

MOSCOW (MRC) -- BP Zhuhai, part of BP PLC, has taken off-stream its No. 3 purified terephthalic acid (PTA) plant for a maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed that, the company halted operations at the plant on March 14, 2020. The plant is slated to remain off-line for around two weeks.

Located at Zhuhai in China, the No.3 PTA plant has a production capacity of 1.25 million mt/year.

As MRC wrote previously, on July 3, 2015, BP celebrated the official start-up of the Phase 3 PTA plant of Zhuhai Chemical Co., enhancing its position in the PTA market and its long-term commitment in China. BP Zhuhai, in which BP and Zhuhai Port Co. hold an 85% and 15% stake respectively, is the leading Sino-foreign joint venture producing and marketing PTA in China. The completed Phase 3 plant, with a design production capacity of 1.25 million tonnes per year, is the world’s largest single train PTA unit, according to BP.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items
MRC

MOSCOW (MRC) -- As the coronavirus pandemic intensifies across Europe, resulting in factory closures by major car makers and affecting other PVC consumer segments as well as logistics networks, market sources expressed concerns over demand in the coming weeks and months, which are typically regarded as peak season for the commodity, reported S&P Global.

German car maker BMW group, which has been affected by this week's closures, said global demand in the car market is expected to drop, and the company is responding by adjusting its production well in advance and using a broad spectrum of flexibility tools.

"Today, we will start to shut down production by the end of the week at our car plants in Europe and at plant Rosslyn," a BMW spokeswoman told S&P Global Platts on Wednesday.

"The shutdowns are initially scheduled to last until 19 April 2020 and after that, we will continue as the situation requires."

Fellow German car maker Volkswagen and French Groupe PSA (Peugeot, Citroen, Vauxhall, DS Automobiles) were also among the major automotive producers, having announced temporarily shut downs of most of their European plants beginning this week, in wake of the coronavirus pandemic, market sources said.

The companies were not available to comment on Wednesday.

Adding to growing supply chain disruptions, one PVC producer said, they began to see more difficulties with moving product through borders and ports of the affected countries in Europe, as well as issues with truck transport.

"Minor impact so far: in Italy some customers decided partial closure, Sweden was looking for additional PVC, after Poland closed borders. (However), we are trying to prepare for the deeper impact of course for the coronavirus," the source said.

A converter source meanwhile said although March demand was normal, demand for PVC would definitely be affected in April and due to the virus some of his customers in France were closing operations, and hence they had to reduce production there.

"Plant in Italy is running normally, but in April we will likely see impact there as well," he added.

A trader said, "Potential impact on demand side is not looking like we are reaching a peak in the demand season."

Meanwhile, overall PVC converter demand in Europe is estimated at around 10.2%, according to the latest Plastics Europe data, with overall European converter demand for all plastics distributed at 19.8% in the construction segment, 10.1% in the automotive and 6.2% in the electrical and electronic applications.

Main applications for PVC plastic in the segments above are for pipes, window frames, profiles, floor and wall covering, cable insulation, garden hoses, inflatable pools and other leisure, sports applications.

After stable domestic demand in February, March due to the warmer winter weather, also helped with favorable conditions in the exports market.

But market sources said that from April onwards demand picture was more of a question mark.

While supply of PVC in Europe is still seen balanced due to various planned and unplanned production outages, the recent plunge in crude oil prices and its effect on the PVC feedstocks ethylene could add pressure.

According to MRC's ScanPlast report, contrary to the seasonal factor, Russian producers of unmixed PVC have kept a high level of capacity utilisation during two months. Overall PVC output totalled 177,100 tonnes in January-February 2020, up by 5% year on year. February production of unmixed PVC in Russia was 85,400 tonnes from 91,700 tonnes a month earlier, producers Bashkir Soda Company and RusVinyl decreased capacity utilisation. Nevertheless, despite the decline in production last month, the total polymer production in January-February increased to 177,100 tonnes against 169,500 tonnes a year earlier.
MRC

MOSCOW (MRC) --- A contract worker tested positive for COVID-19 after working at a Dow facility in Plaquemine earlier this month, according to The Advocate.

That worker and the worker's team will be quarantined, according to a statement from Dow Louisiana Operations. The team will also be tested for COVID-19.

The employee worked on site in Plaquemine from March 2 to March 11. They worked exclusively in the LHC unit.

Dow said all plant personnel has been notified. Workers outside of the direct work team are considered "low-risk of exposure," Dow said.

"Recognizing that not all of our employees can do their jobs remotely, our manufacturing sites are continuously evaluating our staffing plans as well as on-site health and safety actions to manage through this period," Dow said in a statement.

As MRC reported earlier, Dow plans to install a new furnace in its steam cracker at Fort Saskatchewan, Alberta, Canada, increasing its ethylene capacity, currently 1.42 million metric tons/year (MMt/y), by 130,000 metric tons/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 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.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- ExxonMobil said late 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, reported Chemweek.

"Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term," said Darren Woods, ExxonMobil chairman and CEO. "We will outline plans when they are finalized."

ExxonMobil had previously said that it expected capital and exploration expenditures of up to USD33 billion in 2020, compared with capital and exploration spending of USD31.1 billion last year. ExxonMobil’s chemical capital expenditures were USD3.3 billion in 2019. It has not disclosed a 2020 capex forecast for chemicals.

Woods said that ExxonMobil has faced numerous market downturns throughout its long history and has experience operating in a sustained low-price environment. "We remain focused on being a safe, low-cost operator and creating long-term value for shareholders," Woods said.

The company said it is closely monitoring the COVID-19 pandemic and has adjusted work arrangements to ensure a healthy work environment and support communities where it operates.

As MRC informed before, 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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- U.S. gasoline refining margins fell a whopping 95% on Monday - even briefly turning negative - with the cost of gasoline plunging faster than crude oil in anticipation that the coronavirus will keep people off the road and in their homes, said Hydrocarbonprocessing.

The coronavirus pandemic has infected 180,000 people worldwide and caused over 7,000 deaths, prompting governments to order travel restrictions and business closures.

U.S. gasoline demand is plunging as businesses shut and state and local governments advise people to stay home. U.S. gasoline refining margins RBc1-CLc1 settled at 28 cents per barrel on Monday, their lowest since December 2008, another signal that economic activity appears to be contracting.

“Oil prices have been dropping hard enough. For product prices to outpace them signals a huge shift in demand expectations,” said Matthew Smith, director of commodity research at ClipperData. Refiners process crude oil into a number of products, chiefly motor gasoline, heating oil and diesel fuel. Normally, gasoline margins rise as driving season approaches, and distillate margins - for making heating oil and diesel - rise in the winter months.

The United States consumes about 9 million barrels per day of motor gasoline, but fuel demand is now expected to fall by roughly 2 million to 2.5 million bpd in the next three to four weeks, said Per Magnus Nysveen, senior partner at Oslo-based energy research firm Rystad Energy.

Congestion in major cities worldwide has been dropping sharply, according to TomTom, which makes navigation technology. Headed into the evening rush hour on Monday, congestion in New York City was down by 37% from last year’s average. In Chicago, it was down 24%.

Such declines have not yet shown up in U.S. official data. As of March 6, the four-week average for motor gasoline supplied by refiners - a proxy for demand - was up 1.7% from the year-ago period, according to U.S. Energy Department figures.

The margin to produce distillate products is at USD14.95 a gallon, a relatively healthy margin. Heavy-duty tractor-trailers use diesel, a sign that traders believe demand for shipped goods will be less affected as people take deliveries at their homes.

As MRC informed earlier, Saudi Arabia has stepped up efforts to squeeze Russia’s Urals oil grade out of its main markets by offering its own cheap barrels instead after their long-standing deal to support global oil prices fell apart, reported Reuters with reference to seven oil sources. Cooperation between Moscow and Riyadh dramatically collapsed last week after Russia refused to support deeper oil output cuts desired by Saudi Arabia to fight falling oil demand as a result of the spread of the coronavirus outbreak.

As MRC informed before, in October 2018, Saudi Aramco and Total launched engineering studies to build a giant petrochemical complex in Jubail. Announced in April 2018, the world-class complex will be located next to the SATORP refinery, operated by Saudi Aramco (62.5%) and Total (37.5%), in order to fully exploit operational synergies. It will comprise a mixed-feed cracker (50% ethane and refinery off-gases) - the first in the Gulf region to be integrated with a refinery - with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units. The project represents an investment of around USD5 billion and is scheduled to start-up in 2024.

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