Covestro launches circular economy program

MOSCOW (MRC) -- Covestro’s board of management and employee representatives have agreed a plan to reduce working hours in Germany and to cut salaries of all employees as the company faces the coronavirus 2019 pandemic and a decline in consumer demand, said Chemweek.

These measures are planned for a period of six months starting on 1 June 2020 and will serve as a supplement to the previously planned cost-saving measures. Covestro’s international subsidiaries will implement individual measures for cost reduction on a country-specific level.

The company has not said what the actual salary cuts will be but said that the reduction increases in percentage terms across all salary levels. The board of management as well as the supervisory board will take a salary cut of 15%, which the company says is a larger cut than that applied to other employees. Covestro employed approximately 17,200 people at the end of 2019.

Covestro says that despite the current cost-saving measures, it continues to drive forward its strategic focus of sustainability and innovation. In particular, the company says it plans to transition to a circular economy in order to eliminate the use of fossil resources to the greatest possible extent. It announced today that it wants to accelerate change to a circular economy to align its entire production and product range as well as all areas in the long term to the circular concept.

Specifically, the company plans to convert its production facilities worldwide to alternative raw materials and renewable energy. In addition, over 20 projects are researching new ways for more and better recycling. The company says that the aim is to become a producer and solution provider as well as innovative recycler. Covestro’s products are to be increasingly tailored for later recycling and aligned even more closely with the UN sustainability goals. In addition, Covestro says it wants to cooperate with partners in all areas of the value creation cycle and also to take advantage of new business opportunities of mutual interest.

Covestro launched a strategic program in 2019 to anchor circularity in all areas of the company in a holistic approach. It is now being implemented and backed up with concrete and measurable goals. The company is focusing on four topics: alternative raw materials; innovative recycling; common solutions; and renewable energies.

As MRC informed earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules totalled 12,600 tonnes in the Russian market in January-February 2020 (excluding imports and exports to/from Belarus), compared to 9,600 tonnes a year earlier. Demand increased by 31%.

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2018 sales of EUR 14.6 billion, Covestro has 30 production sites worldwide and employs approximately 16,800 people (calculated as full-time equivalents) at the end of 2018.
MRC

Celanese files antidumping petition with EU Commission against Korea Petrochemical Industry Co

MOSCOW (MRC) -- Celanese announced it has filed a petition with the European Commission’s Directorate-General for Trade seeking antidumping duties on imports of ultra-high molecular weight polyethylene (UHMWPE) from Korea Petrochemical Industry Co. (KPIC; Seoul) into the European Union, said Chemweek.

“After successfully filing an antidumping case in the US, which the US authorities voted unanimously to continue an investigation into, and in order to further ensure Celanese is able to operate in fair and sustainable industry conditions globally, we were compelled to also file an antidumping case against KPIC in Europe to address their destructive pricing practices in that region which have caused Celanese’s UHMWPE business to suffer significantly over the last several years since KPIC began selling in the region,” said Tom Kelly, senior vice president of the engineered materials business of Celanese.

As MRC informed eartlier, Celanese is currently operating its vinyl acetate monomer (VAM) unit at curtailed capacity levels owing to bearish market conditions. The company reduced run rates at the plant to around 60% levels in late April, 2020. Located in Jurong Island, Singapore, the unit has a production capacity of 210,000 mt/year.

VAM is the main feedstock for the production of ethylene-vinyl-acetate (EVA).

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).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
MRC

Sinopec poised to benefit from rising China marine fuels output

MOSCOW (MRC) -- Sinopec is expected to capitalize its position as a leading supplier of marine fuels in China, as the government paves way for domestic refiners to ramp up production of IMO-compliant marine fuels, reported S&P Global with reference to markets participants' statement.

The state-owned refining conglomerate is estimated to meet around 40% of 1 million mt/month or so of bunker fuel sold to ships calling at Chinese ports, said traders.

China issued a 10 million mt export quota to five oil companies to limit the volume of domestically produced tax-free low sulfur fuel oil for bonded bunkering at Chinese ports, S&P Global Platts reported April 28 quoting market sources.

Under the export quota, Sinopec was awarded 4.29 million mt, PetroChina and Sinochem were allocated 2.95 million mt and 900,000 mt, respectively, while the remaining 860,000 mt went to CNOOC.

Chimbusco, equally owned by PetroChina and China COSCO Shipping Corp., is China's leading bunker fuel supplier holding nearly 50% of the market share.

Prior to the International Maritime Organization's 2020 sulfur cap, China imported all of its fuel oil to meet its bunker fuel demand.

But since Beijing on February 1 approved a tax rebate for domestically produced fuel oil supplied to bonded storage, refiners have ramped up low sulfur fuel oil output, thereby reducing China's dependency on imported bunker fuel.

China's top four state-owned refiners - Sinopec, PetroChina, CNOOC and Sinochem - plan to boost their combined low sulfur fuel oil production capacity to 18.15 million mt/year in 2020, Platts reported previously, quoting company sources with knowledge of the matter.

Of this, Sinopec plans to ramp up LSFO production capacity to 10 million mt/year, while PetroChina would have the capacity to produce up to 4 million mt of IMO-compliant fuel by end-2020.

"Sinopec, as the world's biggest refiner by capacity coupled with its trading profile, has (more) opportunity to grow," a source close to the company said.

Sinopec could not immediately be reached for comment.

The majority of Sinopec's 10 LSFO producing refineries are located along the eastern and southern coast. As such, the company would be in a position to enjoy a relatively lower transportation cost to supply product to China's busiest bunkering ports of Shanghai and Zhoushan.

To capitalize on the growth opportunity, Sinopec plans to increase this year the number of barges it operates to 100 from about 20 currently, another source close to the company said.

China's bunker market receives demand largely from the eastern and southern bunkering ports like Shanghai, Guangzhou, Zhoushan, Ningbo and Shenzhen as compared to that from the northern ports.

Demand for bunker fuel in northern China comprises about 30% of the market, compared to 60% in the eastern coast and 10% in the south, market sources estimated.

Still, for Sinopec to capitalize on the growth opportunity, it would have to competitively price its product vis-a-vis international prices, especially Singapore, the world's largest bunkering hub, said traders.

"With sufficient domestic supplies, we expect bunker price in China to become more competitive than Singapore in future," a Beijing-based source said.

We remind that, as MRC wrote before, Sinopec Qilu Petrochemical, a subsidiary of Sinopec Corporation, plans to shut the cracker unit in Tianjin in northeast China for scheduled repairs on 15 June, 2020. This cracking unit with a capacity of 900,000 tonnes of ethylene per year and 480,000 tonnes of propylene tons per year will be closed for scheduled repairs until 24 June, 2020.

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 world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
MRC

Celanese runs its VAM unit in Singapore at 60% in May

MOSCOW (MRC) -- Celanese, a global chemical and specialty materials company, is currently operating its vinyl acetate monomer (VAM) unit at curtailed capacity levels owing to bearish market conditions, according to Apic-online.

A Polymerupdate source in Singapore informed that, the company reduced run rates at the plant to around 60% levels in late April, 2020.

Located in Jurong Island, Singapore, the unit has a production capacity of 210,000 mt/year.

As MRC reported earlier, Celanese Corporation restarted its VAM unit in Singaporet on March 16, 2020. The unit was shut since February 4, 2020 following a fire at the site.

We remind that Celanese Corporation brought capacity utilization at its VAM unit in Clear Lake (Texas, USA) to 100% in late January 2020. In October 2019, the company was progressing in restarting on-site production units after experiencing an emergency incident on Saturday, September 21, 2019, at its Clear Lake facility in Pasadena, Texas. The Fairway Methanol unit restarted in early October 2019 and approached full operating rates in mid-October. The acetic acid and VAM production units restarted at reduced rates during October, with full operating rates initially expected for all production units at Clear Lake within the fourth quarter of 2019.

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).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
MRC

Qatofin Company to resume production at LLDPE line in late May

MOSCOW (MRC) -- Qatofin Company Limited, is in plans to restart its linear low density polyethylene (LLDPE) plant in Mesaieed, Qatar, as per Apic-online.

A Polymerupdate source in the Qatar informed that, the company is likely to resume operations at the plant by end-May, 2020. The plant was shut in end-April, 2020. Further details on duration of the force majeure (FM) could not be ascertained.

Located at Mesaieed, Qatar, the plant has production capacity of 600,000 mt/year.

As MRC wrote before, Qatar Petrochemical Company (Qapco) has failed to restart its LLDPE line and extented FV on shipments of material. Apparently, the plant failed to restart on 12 May and official notification has been sent to customers informing that the company was working to bring the LLDPE line online by 20 May 2020.

We remind that, in 2013, Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat) took over the marketing and distribution responsibilities for Qatar’s globally recognised Lotrene brand of low density polyethylene (LDPE) and LLDPE. Muntajat has the mandate to export Qatar’s 10 million tonnes/year of chemicals and petrochemicals to markets worldwide.

In Qatar, LDPE and LLDPE are produced by Qatar Petrochemical Company (Qapco) and Qatofin, respectively, and these high-quality products are being sold to more than 4,500 customers worldwide under the brand name Lotrene.

Qatar’s chemical and petrochemical industry’s planned investments will further increase the country’s export portfolio to 23 million tonnes per year by 2020, from 10 million tonnes in 2013, according to Muntajat CEO Abdulrahman Ali Al-Abdulla's statement.

According to MRC's ScanPlast report, March LLDPE shipments to Russia grew to 36,790 tonnes from 25,690 tonnes a month earlier, production increased. Overall LLDPE shipments into the Russian market totalled 110,000 tonnes in the first three months of 2020, up by 11% year on year. SabSibNeftekhim accounted for the main increase in shipments.
MRC