PP imports to Belarus rise by 10% in Q1 2020

MOSCOW (MRC) -- Imports of polypropylene (PP) into Belarus increased in first three months of 2020 by 10% year on year to about 27,100 tonnes. All grades of propylene polymers accounted for the increase in demand, according to a MRC's DataScope report.

March PP imports to the Republic of Belarus reached about 9,600 tonnes, which corresponded to the same figure a month earlier. Overall imports of propylene polymers reached 27,100 tonnes in January-March 2020, compared to 24,600 tonnes a year earlier, demand for all PP grades increased, with homopolymer of propylene (homopolymer PP) accounting for the greatest growth.

The structure of PP imports by grades looked the following way over the stated period.

March imports of homopolymer PP reached 6,900 tonnes versus 6,700 tonnes a month earlier, purchasing of homopolymer PP rose in Russia under the pressure of seasonal factors. Overall imports of homopolymer PP reached 19,400 tonnes in the first three months of 2020, up by 11.6% year on year.

March imports of propylene copolymers to Belarus were 2,600 tonnes versus 3,000 tonnes a month earlier, local companies reduced their procurement of injection moulding block-copolymers of propylene (PP block copolymer) from Russian producers. Thus, overall imports of propylene copolymers reached 7,600 tonnes over the stated period, up by 6% year on year.

MRC

MOSCOW (MRC) -- Imports of unmixed polyvinyl chloride (PVC) into Belarus grew in the first quarter of 2020 by 24.5% year on year to 10,300 tonnes, according to MRC's DataScope report.

According to the statistics committee of the Republic of Belarus, local converters kept a high level of PVC purchasing in March 2020, imports were 3,500 tonnes, which corresponded to the figure a month earlier.

Thus, imports of unmixed PVC reached 10,300 tonnes in January-March 2020, compared to 8,300 tonnes a year earlier, with local windows and siding producers accounting for an increase in demand.

Russian producers with the share of about 80% of the Belarusian market were the key suppliers of resin to Belarus over the stated period. Producers from Ukraine and Germany with the share of 9% and 7%, respectively, were the second and third largest suppliers.

MRC

MOSCOW (MRC) -- LyondellBasell, the world’s largest licensor of polyolefin technologies, has announced that Advanced Global Investment Company (AGIC) has selected LyondellBasell’s PP technology for a new world-scale facility in Jubail Industrial City, Saudi Arabia, according to NCT with reference to the company's press release.

AGIC’s proposed project includes two polypropyelene (PP) plants with capacity of 400,000 tons/year each.

As MRC informed before, LyondellBasell has recently announced that Hyosung Vina Chemicals Co., Ltd. will use the LyondellBasell Spheripol technology for a new facility. The process technology will be used for a 300 KTA PP plant to be built in Cai Mep Industrial Zone, Vung Tau Province, Vietnam.

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.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) -- Gazprom (Moscow) and its partners are moving ahead with a multibillion-dollar, export-oriented gas-chemical project at Ust Luga, near St Petersburg, Russia, according to Chemweek.

Gazprom is building the upstream natural gas processing and liquefaction complex, which will process ethane-containing gas and will be the anchor project of the major gas processing and chemical cluster being established in the region. Gazprom says that basic design has been agreed on and design documentation is being drawn up. Site clearing is in progress and project financing is being arranged with Russian and international credit institutions.

The complex will process 45 billion cubic meters/year of gas and produce around 13 million metric tons/year (MMt/y) of liquefied natural gas (LNG), 3.8 MMt/y of ethane, 2.4 MMt/y of liquefied petroleum gas (LPG), and 0.2 MMt/y of pentane-hexane fraction. The 19 billion cubic meters/year of gas remaining after processing will be directed into Gazprom's gas transmission system. The ethane produced by the complex will be processed by the gas-chemical facility to produce up to 3 MMt/y of several grades of polyethylene (PE). The first trains of the new complex will come onstream in the fourth quarter of 2023 to be followed by the remaining trains in the fourth quarter of 2024.

The partners plan to submit the design documentation to the government this year for review, place orders for long-lead equipment items, and select an engineering, procurement, and construction (EPC) contractor for the gas processing units and off-site facilities, as well as an EPCM contractor for project management.

The plan for the export-oriented gas-chemical project was first unveiled at last year’s St Petersburg International Economic Forum by Gazprom and partners. The operator of the complex is RusKhimAlyans, a special-purpose company owned equally by Gazprom and RusGazDobycha (Moscow). The gas-chemical facility is being set up by the Baltic Chemical Co, a subsidiary of RusGazDobycha, another special-purpose company.

The chemical complex will comprise two ethane crackers, each with capacity for 1.4 MMt/y of ethylene, and downstream units including six PE lines with combined capacity for 3 MMt/y. The complex will also have capacity for 274,000 metric tons/year of linear alpha-olefins (LAO), 75,000 metric tons/year of hexene-1, and 10,000 metric tons/year of butene-1. On completion, Baltic Chemical Co. will become a major producer of PE in Russia, close to the country’s leader, Sibur (Moscow).

Most of the technology and engineering contracts covering the downstream project have already been placed. Lummus Technology will provide the process design package, engineering, and the license for the olefin production and recovery units. China National Chemical Engineering Co. (CNCEC; Beijing) is the main contractor. CNCEC’s scope of work includes front-end engineering design and an EPC contract for the crackers, PE and LAO units, and off-site facilities.

As MRC reported previously, in early January, 2020, Gazprom Export and Gazprom Armenia signed an additional agreement to the contract for Russian gas supplies to the Republic of Armenia. In accordance with the agreement, the price of natural gas at the border between Georgia and Armenia will not change starting from January 1, 2020, and will remain at the level of 2019. Gazprom Armenia, a wholly-owned subsidiary of Gazprom, is focused on natural gas supplies to the Armenian market. In addition, the company transports, stores, distributes and sells natural gas, as well as upgrades and expands the gas transmission system and underground gas storage facilities in the Republic of Armenia. The contract between Gazprom Export and Gazprom Armenia for the supplies of up to 2.5 billion cubic meters of Russian gas per year will be in effect until the end of 2020.

Ethylene is the main feedstock for the production of polyethylene (PE).

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.
MRC

MOSCOW (MRC) -- Oil prices rose to their highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand as governments ease restrictions on people’s movements imposed due to the coronavirus crisis, reported Reuters.

Crude prices have slumped in 2020, with global benchmark Brent hitting a 21-year low below USD16 a barrel in April as demand collapsed. With fuel use rising and more signs that the supply glut is being tackled, Brent has since more than doubled.

Brent crude for July rose USD1.17, or 3.3%, to USD36.92 per barrel by 1340 GMT. U.S. West Texas Intermediate crude climbed 96 cents, or 2.9%, to USD34.45. Both benchmarks are at their highest since March 11.

“Global supply has been curtailed to a great degree,” said Rystad Energy analyst Paola Rodriguez Masiu. “We are on a clear path to a gradual recovery now.”

In the latest sign the supply glut is easing, U.S. crude inventories fell by 5 million barrels last week. Analysts had expected an increase.

At the same time, there is evidence of recovering fuel use. British airline easyJet plans to restart some flights on June 15, pointing to higher jet fuel demand.

Physical crude markets, at historic lows just weeks ago, are also rising.

“It is now abundantly clear that the market is tightening and crude prices are rebounding as demand returns,” said analysts at JBC Energy.

The Organization of the Petroleum Exporting Countries, Russia and other allies, known as OPEC+, agreed to cut supply by a record 9.7 million barrels per day (bpd) from May 1 to support the market.

So far in May, OPEC+ has cut oil exports by about 6 million bpd, according to companies that track the flows, suggesting a strong start in complying with the deal. OPEC says the market has responded well.

As MRC informed previously, global oil consumption cut by up to a third. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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.
MRC