Chemicals production in Russia rose by 6.7% in Q1 2020

MOSCOW (MRC) -- Russia's output of chemical products rose in March 2020 by 8.1% year on year. Thus, production of basic chemicals increased by 6.7% in the first three months of 2020, according to Rosstat's data.

According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-March output. Last month, ethylene production increased to 383,400 tonnes against 344,700 tonnes in February, several producers increased their monomer production at once. Overall ethylene production exceeded 1 mln tonnes in January-March 2020, compared to 793,600 tonnes a year earlier.

Production of benzene was 133,000 tonnes in March 2020, compared to 129,000 tonnes a month earlier. Overall output of this product reached 395,000 tonnes over the stated period, up by 5% year on year.

March production of sodium hydroxide (caustic soda) was 110,000 tonnes (100% of the basic substance) versus 107,000 tonnes a month earlier. Overall output of caustic soda totalled 330,000 tonnes in the first three months of 2020, up by 1.7% year on year.

2,195,000 tonnes of mineral fertilizers (in terms of 100% nutrients) were produced in March 2020 versus 1,905,000 tonnes a month earlier. Overall, Russian plants produced a little bit more than 6,000,000 tonnes of fertilizers in January-March 2020, down by 0.2% year on year.

Last month's production of polymers in primary form grew to 883,000 tonnes from 819,000 tonnes in February.
Overall output of polymers in primary form totalled 2,520,000 tonnes over the stated period, up by 20.7% year on year.
MRC

MOSCOW (MRC) -- Sahara International Petrochemical Co. (Sipchem) said that negotiations with the German chemical firm Linde Plc to set up and operate a production facility in Saudi Arabia to supply industrial gases are still going, reported Agraam with reference to a bourse statement on Sunday.

Both parties agreed to extend the initial agreement signed in December 2019 till the end of the third quarter of 2020.

The statement further explained that the companies faced some challenges in conducting visits to the manufacturing sites as part of confirmatory due diligence under current circumstances.

According to data compiled by Argaam, Sipchem signed in December 2019 a memorandum of understanding (MoU) with Linde Plc to meet growing demand from the refining and chemical industries, as well as to develop the new production facilities to supply industrial gases in Saudi Arabia.

As MRC wrote before, on 29 December, 2014, Sipchem started a new ethyl vinyl acetate (EVA) film plant. Located at Hail in Saudi Arabia, the plant has a production capacity of 4,000 mt/year.

According to MRC's DataScope report, February EVA imports to Russia rose by 9,83% year on year to 3,107 tonnes from 2,829 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation increased in January-February 2020 by 8,36% year on year to 6,194 tonnes (5,716 tonnes a year earlier).

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC

MOSCOW (MRC) -- The magnitude of how damaged the energy industry is came into full view on April 20 when the benchmark price of U.S. oil futures, which had never dropped below USD10 a barrel in its nearly 40-year history, plunged to a previously unthinkable minus USD38 a barrel, as per Hydrocarbonprocessing.

In just a few months, the coronavirus pandemic has destroyed so much fuel demand as billions of people curtail travel that it has done what financial crashes, recessions and wars had failed to ever do - leave the United States with so much oil there was nowhere to put it.

While the unusual circumstance of negative oil prices may not be repeated, many in the industry say it is a harbinger for more bleak days ahead, and that years of overinvestment will not correct in a period of weeks or even months.

“What happened in the futures contract the other day indicated things are starting to get bad earlier than expected,” said Frederick Lawrence, vice president of economics and international affairs at the Independent Petroleum Association of America.

“People are getting notices from pipeline companies that say they can’t take their crude anymore. That means you’re shutting down the well yesterday."

Evidence of the erosion of value for a product that has been a mainstay of global society since the late 19th century abounded across the world last week.

In Russia, one of the world’s top producers, the industry is considering resorting to burning its oil to take it off the market, sources told Reuters.

Norwegian oil giant Equinor slashed its quarterly dividend by two-thirds. Next week will bring earnings reports from the world’s largest oil companies including Exxon Mobil Corp, BP PLC and Royal Dutch Shell PLC. They are all expected to detail additional spending cuts, and investors will be watching closely for how those companies plan to manage dividends.

U.S. billionaire Harold Hamm’s Continental Resources Inc sent servicers out into fields in Oklahoma and North Dakota in the middle of the week to abruptly shut wells, and the company declared it could not make crude deliveries to customers due to poor economics.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- China is set to release its first-ever quotas to export very low sulfur fuel oil (VLSFO) with total volumes of 10 million tons for this year, reported Reuters with reference to six industry officials with knowledge of the matter.

The quotas, which followed Beijing’s policy in January to offer tax sweeteners to boost local production of the fuel, paves the way for Chinese refiners to almost fully cover the demand from its coastal bonded marine fuel market of 12 million tons annually.

The quotas will be issued to four state-run firms - Sinopec Group, CNPC, China National Offshore Oil Company (CNOOC) and Sinochem Group - as well as private refiner Zhejiang Petrochemical Corp.

Sources requested anonymity as the matter is not public.

China’s Ministry of Commerce did not immediately respond to a request for comment.

China announced in January to waives consumption tax and value-added tax on the fuel, to make Chinese production competitive versus rival supplies from Singapore and South Korea.

Under the allotment, Sinopec is expected to receive 4.29 million tons, CNPC 2.95 million tons, CNOOC 860,000 tons and Sinochem at 900,000 tons, the sources said.

Companies did not immediately respond to requests for comment.

Two sources at ZPC said its refinery, located in China’s top bunker port Zhoushan, will be allotted one million tons, though the refiner is required to export via state-run companies as proxies.

China’s commerce ministry will include VLSFO into its export license management scheme from May 1, it said in a statement on Tuesday.

The government may top up with another 5 million tons quotas in a second allotment later in the year if required, two of the sources said.

The global shipping industry has since start of this year shifted to cleaner, 0.5% or lower sulfur marine fuel, to comply with new emission rules by the International Maritime Organization.

As MRC informed before, China Sinochem Group is expected to start up a new crude processing unit and a petrochemical complex in southeastern China around mid-2020, marking the state firm's first foray into making petrochemicals.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- Mainetti, traditionally a manufacturer and recycler of garment hangers and packaging solutions, will begin manufacturing protective face shields for frontline medical and care services at its Scottish plant in Jedburgh, the company announced.

The company is re-engineering the business in order to be able to produce PPE equipment for healthcare workers on an industrial scale.

Initially, the aim is to produce 8,000 protective face shields a day, with 1000 being donated to the plant’s local hospital, Borders General Hospital in Melrose.

Production can then be scaled up based on demand. While the initial focus will be on meeting the needs of healthcare providers, the face shields will also be available to non-medical businesses who are looking for equipment to protect their colleagues.

All face shields will be CE certified and produced to EN 166 standard – the specification required by the NHS.

Mainetti fortunately has the capabilities to adapt its operations to produce PPE equipment, said Nick Cranston, spokesperson for Mainetti UK and EU.

“We all have a role to play in the fight against COVID-19 and we are working to respond to the surge in demand and deliver these protective face shields to those who need them most.”

Orders for the face shields are being taken now for delivery at the beginning of next month (May).

As per MRC DataScope, March PP production in Russia fell to 146,600 tonnes compared to 157,700 tonnes a month earlier. SIBUR Tobolsk shut its PP production in mid March for a turnaround. Russia"s overall PP production reached 472,900 tonnes in the first three months of 2020, compared to 346,000 tonnes a year earlier. Five out of eight producers increased capacity utilisation, while the main increase in operating hours was provided by a new producer - ZapSibNeftekhim.

MRC