Russian producers announce major rise in April PVC prices

MOSCOW (MRC) -- Negotiations over April shipments of suspension polyvinyl chloride (SPVC) to the domestic market began in the Russian market on Wednesday. On the back of the weakening rouble exchange rate and upcoming shutdowns for maintenance, domestic producers a major price increase for the next month, according to ICIS-MRC Price report.

High level of capacity utilisation and weak domestic demand did not lead to a surplus of PVC in the Russian market in the first three months of the year. On the contrary, most domestic producers had optimal stocks at their warehouses, and two shutdowns for maintenance are scheduled for April-May. In addition, the current significant weakening of the rouble against the dollar made imports much more expensive than Russian material. On the back of this, producers said they intend to achieve an increase of roubles (Rb) 5,000-10,000/tonne from March in April contract prices.

Despite the "low season", domestic producers managed to balance the domestic market in the first three months. Moreover, since February, some producers have begun to limit their customers in additional supplies of resin. This trend remained in March.

RusVinyl intends to take off-stream its production capacities for a two-week turnaround in the second half of April, the producer has not announced the exact dates of the outage. The plant's annual production capacity is 330,000 tonnes.

Kaustik Volgograd plans to shut its PVC production for maintenance from 12 to 31 May. The plant's annual production capacity is 90,000 tonnes.

This year's next and last turnaround is expected at SayanskKhimPlast's production capacities in June-July.

The March weakening of the rouble against the dollar led to higher prices of finished products from PVC because of imported additives. And many converters had already announced the need to increase April prices for finished products in the middle of this month. Converters said that the very expectations of higher prices of finished products from PVC led to an unprecedented increase in demand for these products in March.

Chinese producers constantly adjusted their export prices for acetylene PVC during March. But the collapse of the rouble against the dollar completely offset the price reduction in foreign markets and virtually deprived Russian consumers of a cheap import alternative.

Most converters understood that to avoid higher contract prices of domestic PVC would not be possible in April partially because of the absence of the alternative, although some consumers do not rule out their refraining from purchasing. But it is worth noting that these are rather rare cases.

Overall, deals for April shipments of Russian resin with K64/67 were negotiated in the range of Rb79,000-82,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes. Resin with K70 was offered by Rb1,000-2,000/tonnes higher.
MRC

MOSCOW (MRC) -- India's private-sector Haldia Petrochemicals (HPL) has shut its naphtha cracker, a person familiar with the matter said, after ports in the country declared force majeure to prevent the spread of the coronavirus, reported Reuters.

The petrochemical maker operates a 670,000 tonnes per year cracker, which on average would need more than 150,000 tonnes of naphtha feedstock a month if the unit is at full capacity, based on Reuters calculations.

Haldia Petrochemicals buys naphtha from Kuwait Petroleum Corp (KPC) and Indian Oil Corp (IOC).

The federal shipping ministry in India has issued a letter allowing ports to use the COVID-19 pandemic as valid grounds to declare force majeure.

As MRC wrote before, on 20 September 2019, a major fire broke out at Haldia Petrochemicals’ cracker in India. The company's plant restarted operations in early October, 2019, after a nearly 10-day closure caused by a September 20 fire that had claimed the lives of two employees.

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).

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are PE and PP.
MRC

MOSCOW (MRC) -- Borouge (part of Borealis) has brought on-stream its No. 1 cracker following a turnaround, according to Apic-online.

A Polymerupdate source based in the Middle East informed that the company resumed operations at its cracker in mid-March, 2020. The cracker remained under maintenance for around one month.

Located at Ruwais, Abu Dhabi in UAE, the No.1 cracker has an ethylene production capacity of 600,000 mt/year.

As MRC informed previously, Borouge restarted its No. 3 cracker in UAE in mid-March 2019, following a maintenance turnaround. The cracker was shut for maintenance on January 5, 2019. Located at Ruwais, Abu Dhabi in UAE, the No.3 cracker has a production capacity of 1.5 mmt/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).

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

MOSCOW (MRC) - Imports of injection moulding PET chips to Ukraine grew by 21% in January-February this year and amounted to 21,800 tonnes. PET imports in the country reached 18,000 tonnes in January-February 2019, according to MRC DataScope.

External supplies of material from Lithuania produced by Neo Group to the Ukrainian market quadrupled in the two months of this year and amounted to 14,700 tonnes against 3,300 tonnes in January - February 2019. The share of Lithuanian material in the total volume of deliveries during this period significantly increased and amounted to 67% against 19% at the same time last year. The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.

Imports of Chinese material to Ukraine fell sharply in January - February compared to the same period last year and amounted to 3,800 tonnes against 14,200 tonnes. The share of material in the total volume fell to 17% against 79%. Key suppliers of injection moulding PET chips to the region this year were Dragon, China Resources and Jiangsu.

February import deliveries of injection moulding PET chips to Ukraine amounted to 9,400 tonnes against 12,500 tonnes a month earlier and 8,900 tonnes in February 2019. The volume of foreign deliveries from Lithuania to Ukraine increased almost five times in comparison with the same month of 2019 and reached 7,500 tonnes against 1,500 tonnes, the January import volume amounted to 7,300 tonnes.

The supply of Chinese bottled PET to the Ukrainian market last month decreased significantly and amounted to 700 tonnes compared to 7,200 tonnes in February 2019 and 3,100 tonnes in January of this year.

MRC

MOSCOW (MRC) -- ExxonMobil Corp plans to shut the small gasoline-producing unit at its 560,500 barrels-per-day (bpd) Baytown, Texas, refinery early this week because of low demand due to efforts to halt the spread of the coronavirus pandemic, reported Reuters.

The shutdown of the 90,000 bpd gasoline-producng fluidic catalytic cracker 2 (FCC 2) could have happened as early as this weekend, sources said.

Exxon spokesman Jeremy Eikenberry said operations were continuing at the Baytown refinery, but declined to discuss the status of specific units.

The shutdown would mean all three of Exxon’s US Gulf Coast refineries have reduced production.

Crude oil intake was reduced by 60,000 bpd at the company’s 502,500 bpd Baton Rouge, Louisiana, refinery, sources familiar with operations at that plant told Reuters.

Exxon’s 369,024 barrel-per-day Beaumont, Texas, refinery began a planned overhaul with the shutdown of the 240,000 bpd crude distillation unit (CDU) last Monday.

As MRC informed earlier, ExxonMobil Corp cut production at its 502,500 barrel-per-day Baton Rouge, Louisiana, refinery as poor demand has pushed up inventories and filled storage tanks. The number of contract workers at the Baton Rouge refinery was cut by 1,800 people on Friday as Exxon begun informing service companies of planned spending cuts. The refinery’s production was cut to about 440,000 bpd on Saturday, the sources said.

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.

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