Russia overtakes Saudi Arabia to become Chinas top crude supplier in April

MOSCOW (MRC) -- China's crude oil imports from Russia rose 17.7% year on year to 7.2 million mt or 1.76 million b/d in April, resulting in Russia overtaking Saudi Arabia to become the country's top supplier in the month, latest data from China's General Administration of Customs showed, as per S&P Global.

Crude imports from Norway jumped to 1.58 million mt in April from zero a year earlier, the data showed.

The increase in inflow from the two countries gave Europe a 22.3% market share of China's imports over January-April at 37.44 million mt (2.27 million b/d), up from 17.9% a year earlier.

In contrast, China's imports from Saudi Arabia, fell 18% on year to 5.16 million mt or 1.26 million b/d in April.

That decline reduced the total supply from OPEC members by 9.7% on year to 87.52 million mt (5.3 million b/d) over January-April, despite an increase in cargo arrivals from Iraq, Kuwait and UAE of 11%-54% over the same period.

As MRC informed earlier,global oil demand may struggle to fully bounce back from the COVID-19 pandemic any time soon but will likely be constrained more by the pace of economic recovery than a sudden slide in the world's dependence on fossil fuels.

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

Iran to halt condensates exports to make more gasoline, petchem feedstocks at home

MOSCOW (MRC) -- Iran plans to stop exporting gas condensates and instead refine the volumes domestically to produce gasoline and naphtha, oil minister Bijan Zanganeh said, as per S&P Global.

Speaking on the state-run radio, Zanganeh said the plan is to add value to the light hydrocarbons and that the exports would halt during the current Iranian year that ends in March 2021.

"All these gas condensates will be refined in the Persian Gulf Star and Siraf refineries ... to gasoline and petrochemical units feedstock," Zanganeh said.

The minister did not reveal how much Iran has been exporting. The country has struggled to find buyers for its oil due to harsh US sanctions reimposed in 2018. The Persian Gulf Star refinery currently receives 420,000 b/d of gas condensates.

The Siraf project, first announced in 2014 but yet to be built, encompasses six plants with total refining capacity of 360,000 b/d of gas condensates. It will be located at the Persian Gulf complex, which is adjacent to petrochemical plants in the region. Naphtha can be used in olefin plants to produce plastic, among other products.

The giant South Pars gas field, which stretches offshore Iran into Qatar's waters, where it is named the North Field, is Iran's foremost condensates producer.

Zanganeh said South Pars and other nearby fields can produce up to 1 million b/d of gas condensates. In early February, the minister said that about 130,000 b/d of the country's gas condensates feed its petrochemical plants and 80,000 b/d goes to domestic refineries, apart from Persian Gulf Star.

As MRC informed earlier, Iran's petrochemical products will reach 100 million tons by the end of 2021.

Ethylene and propylene are feedstocks for producing PE and 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

Coronavirus pandemic is upending US energy markets heading into summer: FERC

MOSCOW (MRC) -- The Federal Energy Regulatory Commission said in a summer outlook that it expects weak energy market conditions to continue due to the coronavirus pandemic, reported S&P Global.

Oil markets are being hit hardest, but power markets also are experiencing lower loads and prices, and natural gas markets are likely to see even lower prices this summer than last.

"The most impacted market so far has been the oil market," FERC staff member Alec Stirling said in a podcast released May 21 that summarizes the results of the Summer Energy Market and Reliability Assessment.
"West Texas Intermediate, or WTI crude spot prices decreased 56% through March alone, then hit a record low of negative USD37.63/b on April 20," Stirling noted.

Oil markets are being significantly disrupted due to global market dynamics and the coronavirus pandemic, according to the report, which said the oil price crash was "causing financial and credit challenges, including oil company bankruptcies."

In total, the US Energy Information Administration forecasts that global consumption of petroleum and other liquids will decrease 5.2 million b/d, or roughly 5%, in 2020 compared to average 2019 consumption.

As of April 21, WTI NYMEX futures contracts for June and July were priced at USD11.57/b and $18.69/b, respectively. On May 21, those contracts were significantly higher but remained relatively weak at USD34.14 and $33.92, respectively. Continued low prices are likely to result in decreased oil production and reduced gas output in the Permian and North Dakota, where oil recovery is accompanied by associated shale gas plays, FERC noted.

More than 2.2 million b/d of US oil production has been shut in response to low prices and weak demand, US Energy Secretary Dan Brouillette said during a teleconference meeting of the Secretary of Energy Advisory Board May 21.

Summer 2020 natural gas prices are expected to be lower across the US, with Henry Hub futures prices at averaging USD1.832/MMBtu for June through August, USD0.52/MMBtu lower than 2019 settled futures prices.

However, "gas demand has remained relatively strong so far," with monthly total US demand increasing about 7% from the same period last year, Stirling said.

"Gas demand from the electric generation, LNG feedgas, and residential and commercial sectors have all increased year-over-year, despite the effects of COVID-19," he said, adding that the only sector to see a real decline in gas demand has been the industrial sector where estimated industrial demand this April was down roughly 8%.

S&P Global Platts estimates that industrial demand averaged 1.7 Bcf/d lower in April 2020 compared to 2019, the report noted.

"In late April, S&P Global Platts lowered its June gas production estimate by 10.5 Bcf/d compared to their forecasts in March," Stirling said, adding "that lost supply could certainly raise prices."

There is also "significant downside risk to LNG feedgas demand for summer 2020," due to global LNG market disruption associated with the coronavirus pandemic. Natural gas futures prices in Europe and Asia suggest that US LNG "will be only marginally profitable or even unprofitable through summer 2020," according to the report.

US power markets are expected to be impacted by higher summer temperatures than last year across most of the country, while data from the North American Electric Reliability Corporation and ISOs/RTOs indicate that planning reserve margins for all regions, except the Electric Reliability Council of Texas, will be adequate this summer, the report said.

Wholesale power prices are generally lower than last year at this time, due to reduced loads, as well as mild weather conditions and lower gas prices due to ample supply, FERC said.

For June, July and August 2020, the National Oceanic and Atmospheric Administration forecasts a greater than 50% probability of above average temperatures throughout the western US, parts of the southern US and much of the eastern US.

Elsewhere, the Upper Midwest is expected to experience average temperatures during the same months, FERC said.

ERCOT expects its summer reserve margin will be 12.6%, an increase from the 10.67% initially expected, but below NERC's reference margin level of 13.75%.

In 2019, ERCOT was also below its reserve margin and experienced an all-time peak load and real-time power prices of USD9,000/MWh, but continued to operate reliably, FERC noted.

Snowpack varies across the western US this year with California's snowpack 54% below average as of April 1, which is the lowest level since 2018.

"Considering the drought-like conditions in some parts of California, there is again a risk of wildfires and therefore Public Safety Power Shutoffs may occur," FERC staff member Alex Ovodenk said on the podcast.

Drought monitor data indicate that Northern California is drier than Southern California so the shutoffs may be more likely in Northern California, Ovodenk said. "We don't expect those shut-offs to have major impacts on the wholesale markets - they didn't last year - but we will need to see what happens," he said.

Several solar, wind, and gas resources are expected to come online by the summer, while certain coal-fired resources are scheduled to retire. Gas is expected to continue to play a large role in the wholesale electric markets during the summer, the report said.

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

Air Products to establish new Indonesian coal-to-methanol unit for Bakrie, Ithaca

MOSCOW (MRC) -- Air Products will invest around USD2-billion to build, own and operate a new coal-to-methanol production facility in Bengalon, East Kalimantan, Indonesia, and has agreed to supply methanol to Bakrie Capital Indonesia and Ithaca Resources, according to Apic-online.

The plant, which will include Air Product's proprietary Syngas Solutions dry-feed gasifier, will enable the production of nearly 2-million t/y of methanol utilizing technology from Haldor Topsoe. Start-up is expected in 2024.

Under a long-term on-site contract, Bakrie and Ithaca will supply coal feedstock and have committed to offtake the methanol production for sale within Indonesia.

"As Southeast Asia's largest economy, Indonesia is committed to reduce its energy imports and efficiently convert abundant coal resources into high-value products," said Seifi Ghasemi, chairman, president and chief executive of Air Products.

"We are proud to have been awarded another world-scale gasification project, where we will deploy our capital, technology and operational expertise to help Indonesia meet these important goals."

As MRC wrote earlier, in December 2014, SIBUR-Khimprom (a subsidiary of SIBUR Holding) and Air Products entered into an agreement to build a new air separation unit in Perm and to supply the facility with locally produced gases. The unit came on-stream in 2016. After the commissioning Air Products will supply industrial gases for SIBUR-Khimprom over the next 20 years.

Besides, we remind that in September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (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

Toray carbon fiber and thermoplastic pellet advances poised to enhance molded product

MOSCOW (MRC) -- Toray Industries, Inc., announced today that it has created a high tensile modulus carbon fiber and thermoplastic pellets that are ideal for injection molding employing that fiber, said the company.

The pellets will enable the efficient production of complex, rigid parts that are also light, thereby lowering environmental impact. These advances could greatly enhance cost performance. Toray will push ahead with research and development to commercialize the fiber and pellets within the next three years.

Toray markets the TORAYCA® T series of high-strength carbon fibers for pressure vessel, automotive, and other industrial applications, as well as for aerospace. In 2014, it launched the TORAYCA T1100G carbon fiber, which offers a world-leading tensile strength of 7.0 GPa and a tensile modulus of elasticity of 320 GPa.

In 2018, the company further expanded the potential of carbon fiber for high-end sports equipment and aerospace structural materials by commercializing TORAYCA M40X. This offering employs proprietary nano-level fiber structure control technology to balance a high compression strength and a tensile strength of 5.7 GPa, with a tensile modulus of 377 GPa. The fiber’s diameter of 5 microns constrains productivity, however, making costs an issue.

In the development effort announced today, Toray tackled that challenge by pursuing further advances with its TORAYCA MX series control technology to create 7-micron fibers with uniform internal structures. The result was a fiber with a tensile modulus of elasticity of 390 GPa, around 70% higher than the standard level of TORAYCA series offerings for industrial applications, delivering a much better cost performance.

TORAYCA thermoplastic pellets incorporating the newly developed carbon fibers maintain longer fibers than conventional high tensile modulus offerings after molding processes. The pellets can thus deliver attain a tensile modulus of 41 GPa. That is comparable to the 45 GPa of magnesium alloys. At the same time pellets have a specific gravity of just 1.4, against the 1.8 of magnesium alloy. Using these pellets to make complex parts through injection molding processes would significantly enhance productivity and contribute much ?to lightening parts.

Toray looks to cultivate diverse applications for its advanced pellets, including for parts in lightweight next-generation automobiles and in industry in general.

The Toray Group is committed to delivering innovative technologies and advanced materials that provide the world with real solutions to the challenge of balancing ??development and sustainability. The new carbon fiber should contribute to the Group’s vision of balancing greenhouse gas emissions and absorption worldwide through the use of parts that are lighter and more energy efficient. Toray will contribute to society by creating new value through its drive to enhance the performance of TORAYCA carbon fiber and pellets and production processes.

As MRC informed earlier, Toray Industries, Inc., announced today that it will lift production capacity for Torayfan oriented polypropylene film for Automotive capacitors by 60% at its Tsuchiura Plant in Ibaraki Prefecture in 2022.

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