European May PP dropped by EUR40-70/tonne for CIS markets

MOSCOW (MRC) -- The European May contract price of propylene was settled down by EUR80/tonne from the previous month. Nevertheless, for the second month in a row, European producers are not going to cut export PP price proportionally for shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over May prices of European PP began at the end of last week. All market participants said that European producers have made a significant reduction in the export prices of propylene polymers for shipments in the current month, but the price reduction does not exceed EUR70/tonne, while propylene fell by EUR80/tonne in the current month in Europe.

Deals for May shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR800 - 860/tonne FCA, down by EUR40/tonne from April. Deals for block copolymers of propylene (PP block copolymers) were negotiated in the range of EUR880-920/tonne FCA, down by EUR60-70/tonne from the previous month.
According to market participants, European producers do not have any significant restrictions on May shipments of polypropylene.

Conversely, due to quarantine restrictions in a number of countries, the demand for polypropylene significantly decreased in April - May.

MRC

Honeywell Technology selected for Enterprise Products propane dehydrogenation plant in Texas

MOSCOW (MRC) -- Honeywell announced that Enterprise Products Partners L.P. will use Honeywell UOP’s C3 Oleflex technology in its second propane dehydrogenation plant, called "PDH 2", reported Hydrocarbonprocessing.

Located near Mont Belvieu, Texas, PDH 2 will produce 750,000 metric tons per year of polymer-grade propylene as part of Enterprise’s expansion of propylene manufacturing capacity.

Honeywell UOP, a leading provider of technology, services and equipment for the oil and gas industry, will provide licensing for the Oleflex technology, in addition to engineering, catalysts, adsorbents, services, and equipment for the plant. Enterprise has operated a UOP C4 Oleflex unit, which converts isobutane to isobutylene, since 1993 and currently is building a second C4 Oleflex unit at Mont Belvieu.

Globally, most new dehydrogenation projects since 2011 have been based on UOP technology, including projects for propane (C3), isobutane (iC4) and mixed C3/ iC4 service. Global production capacity of propylene from Oleflex technology currently stands at approximately 7.8 million metric tons per year.

"Due to the demonstrated economics and reliability of the Oleflex process, Enterprise determined this technology provides the best option to expand its propylene production capacity," said Bryan Glover, vice president and general manager, Honeywell UOP’s Petrochemicals and Refining Technologies business. "It will help Enterprise take advantage of low-cost propane and meet the rising demand for on-purpose propylene."

The new propane dehydrogenation unit will have capacity to produce up to 1.65 billion pounds per year of polymer grade propylene. The unit is scheduled to begin service in the first half of 2023.

Honeywell UOP’s C3 Oleflex technology uses catalytic dehydrogenation to convert propane to propylene and is designed to have a lower cash cost of production and higher return on investment compared to competing dehydrogenation technologies. In addition, the Oleflex technology’s low energy consumption, low emissions, minimal water use, and fully recyclable, platinum-alumina-based catalyst system helps minimize its impact on the environment. The independent reactor and regeneration design of the Oleflex technology helps maintain stable operations with high onstream reliability.

As MRC informed previously, in August 2019, Honeywell announced that PetroChina Guangdong Petrochemical Company will adopt advanced heavy oil processing technology from Honeywell UOP for its integrated petrochemical complex in China. The new facility will have an annual crude processing capacity of 20 million tons, helping to meet a national energy security strategy while transforming PetroChina Guangdong into a more fully integrated petrochemicals supplier.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
MRC

Sinopec puts the largest petrochemical port in China into operation

MOSCOW (MRC) -- Sinopec Corp, China's leading energy and chemical company, has put China's largest petrochemical port into operation with the successful docking and unloading of the New Renown, Crude Oil Tanker (VLCC) from the Middle East, according to CISION.

The tanker was welcomed at the new 300,000-ton crude oil terminal of Sinopec Zhongke Refinery Port, which forms part of the company's industry-leading "front terminal, rear plant" production model.

Housed 1,100 meters from Sinopec's refinery plant, the petrochemical port features eight terminals including a 300,000-ton crude oil berth, 100,000-ton oil berth and supporting facilities - providing a total capacity of 34 million tons per year. To date, the 100,000-ton berth is the largest domestic refined oil terminal with a loading and unloading capacity of 5.61 million tons per year. The terminal provides convenient access to refined oil and chemical products for Sinopec's core domestic market, while also offering direct opportunities for global exports and enhancing Sinopec's competitiveness within the industry.

Situated on the east coast of Zhanjiang, Guangdong Province, the Sinopec Zhongke Refinery Port is part of Zhanjiang Integrated Refinery and Petrochemical Complex - the biggest project of its kind under construction by Sinopec Corp, and a key component of the Guangdong Province's 13th Five-Year Plan. The total investment of the first phase of the project totals more than 40 billion CNY and will add over 10 million tons of refined crude oil capacity and 800,000 tons of ethylene units per year, in addition to auxiliary supporting facilities.

Following its completion, it's estimated that the output of the refinery will exceed 60 billion CNY. Additional output will aid the development of the downstream industrial chain of the refining and chemical industry, while injecting new momentum for the economic development of the Greater Bay Area.

At present, there are more than 18,000 builders currently working on-site as part of the project, and 28 of the 30 major production facilities have been delivered. The final project is expected to be fully completed and put into production by the end of July.

As MRC wrote earlier, in mid-September 2019, SIBUR Holding (SIBUR) and China Petroleum & Chemical Corporation (Sinopec) signed a framework cooperation agreement to produce SEBS (styrene, ethylene and butylene-based block copolymers). SEBS is a pelletised modifier for thermoplastics used to impart elasticity to plastic materials or as a primary polymer to produce elastic components. SEBS boasts excellent durability and is leveraged across a variety of industries such as plastics and bitumen modification, adhesives, modification compounds, and toys. Under the agreement, SIBUR and Sinopec will establish a 50/50 joint venture (JV) in Russia to produce at least 20 ktpa of SEBS.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001.
MRC

Saudi Aramco Q1 net income falls amid lower oil prices

MOSCOW (MRC) -- Saudi Aramco's net income fell in the first quarter on the back of lower crude oil prices and production volumes, coupled with declining refining and chemical margins, said the company.

"The first quarter of 2020 was impacted by declining global crude oil demand resulting from Covid-19 and its impact on worldwide economic activity. This led to lower crude oil prices and continued pressure on refining and chemicals margins," the company said in a statement.

Downstream earnings before interest and taxes (EBIT) fell in the first quarter, primarily due to inventory re-measurement losses as a result of lower crude and refined product prices.

The company's downstream EBIT swung to a loss of Saudi riyal (SR) 19bn in the first quarter, compared with a profit of SR5.12bn in the same period last year.

Refining and chemicals margins were weakened by slower global economic growth caused by the global impact of the coronavirus pandemic.

As MRC wrote before, Saudi Aramco’s plan to buy USD15-billion stake in Reliance Industries hydrocarbon business may not go through due to the rising risk of collapsing oil prices, US-based brokerage Bernstein has warned.

Apart from Reliances oil to chemicals business, Aramco also agreed last year to buy the controlling stake in SABIC from the kingdom’s wealth fund for USD69.1bn, sealing one of the biggest-ever deals in the global chemical industry.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

Thailand IVL Q1 net profit falls

MOSCOW (MRC) --Thailand-listed producer Indorama Ventures Ltd (IVL) on Tuesday reported a sharp drop in its first-quarter net profit, weighed by negative foreign exchange effects and higher inventory losses, said the company.

- Foreign exchange loss of baht (Bt) 362m in Q1 2020 versus gain of Bt99m in the same period last year.
- Inventory loss widened to Bt3.44bn in the first quarter from Bt1.21bn in the same period in 2019.
- Production volumes rose by 12% year on year to 3.31m tonnes in the first quarter.

As MRC wrote before, in May 2019, IVL announced that its indirect subsidiary Indorama Ventures Olefins in Westlake, LA, a manufacturer of Ethylene from Ethane with an annual capacity of 440,000 MT, achieved mechanical completion and was undergoing trial runs. IVOL then stabilized the production of on-spec ethylene and its byproducts at 5 of its 7 furnaces and ramped up gradually during the course of 2Q19. This project is the most ambitious project of its kind in IVL history and creates an exciting new platform of growth as well as affording stability and supply chain advantages to the EO/EG business by its pipeline integration. At normalized production, IVL will secure ~75% ethylene for internal consumption for EO/EG production and merchant the remaining output.

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.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 15,000 employees worldwide and consolidated revenue of USD 8.4 billion in 2017. The company is listed in the Dow Jones Sustainability Index (DJSI).

(USD1 = Bt22.7)

MRC