Idemitsu expects stable petrochemical sales in 2020-21

MOSCOW (MRC) -- Japanese refiner and petrochemicals producer Idemitsu expects to maintain sales of its basic petrochemical products in the April 2020-March 2021 fiscal year at the same level as 2019-20, said Chemweek.

Idemitsu sold a total of 4.1mn t of basic petrochemical products, including ethylene, paraxylene (PX), propylene and styrene monomer (SM), in 2019-20, down by around 5pc from 4.3mn t in 2018-19. The sales volume of each product was not disclosed.

The company has a production capacity of 1mn t/yr for ethylene, 1.3mn t/yr for PX, 817,000 t/yr for propylene and 750,000 t/yr for SM.

Idemitsu's forecast is based on exports of PX and SM to its main buyer China last month, which were almost stable from a year earlier. These April export volumes were not disclosed.

But there is a level of uncertainty in the forecast as demand from electronics manufacturers in the US and Europe is likely to fall in 2020-21, Idemitsu said.

Like rival refiner JXTG, Idemitsu has been focusing on producing petrochemical products, especially high-functioning engineering plastics, amid falling demand for gasoline.

The firm expects its 2020-21 gasoline sales to decline to 215,411 b/d, down by 11.5pc from 243,311 b/d in the previous fiscal year. Idemitsu's 2019-20 gasoline sales were down by 8.2pc from 265,145 b/d in 2018-19.

Japan raised its production of ethylene and propylene by 1.4pc to 6.3mn t and by 3.1pc to 5.4mn t, respectively, in 2019-20 from a year earlier, according to data from the ministry of economy, trade and industry. But the country produced less PX and SM in 2019-20, down by 7.3pc on the year to 3.3mn t and by 0.7pc to 2mn t, respectively.

As MRC wrote previously, Idemitsu Kosan shut its naphtha cracker for a maintenance turnaround in Chiba from 9 April 2019 to end-May 2019.

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.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC

MOSCOW (MRC) -- Celanese Corporation, a global specialty materials company, has increased May list and off-list selling prices for Vinyl Acetate Monomer (VAM) sold in China, as per the company's press release.

The price increase was effective for orders shipped on or after 22 May, 2020, or as contracts otherwise allow, and is incremental to any previously announced increases.

Thus, May VAM prices rose for the Chinese region by RMB350/mt.

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

MOSCOW (MRC) -- China's Jiangsu Sailboat Petrochemical shut down one line at its 260,000 mt/yr acrylonitrile (ACN) plant for turnaroundi from early May to mid-May, reported S&P Global.

The company's two 260,000 mt/year ACN plants are located in Lianyugang, Jiangsu province, China. Jiangsu Sailboat Petrochemical had run these ACN plants at 85%, down from near full capacity, since early March due to lackluster demand.

As MRC informed before, in March 2018, Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. had accepted a new methanol-to-olefins (MTO) unit provided by Honeywell UOP, and that the plant was operating and had met all guarantees. With a production capacity of 833,000 metric tons per year, the unit is the largest single-train MTO unit in the world. Honeywell UOP, which pioneered MTO technology, started its first MTO unit for China's Wison Clean Energy in 2013.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's DataScopr report, overall imports of acrylonitrile-butadiene-styrene (ABS) to the Russian market increased in the first four months of 2020 by 5% year on year to 10,900 tonnes. This figure was at 10,400 tonnes in January-April 2019. Last month's imports of material to the Russian Federation rose by 5% to 3,300 tonnes from 3,100 tonnes a year earlier. March ABS imports into the country were 2,800 tonnes.

Jiangsu Sailboat Petrochemical, part of the Shenghong Holding Group, is a major petrochemical manufacturer in China, including polyethylene (PE) and ethylene-vinyl-acetate (EVA). The company's production facilities are located in the new Xuwei Industrial Park in Lianyungang City, Jiangsu Province.
MRC

MOSCOW (MRC) -- Zhong Tian He Chuang, a joint venture of Sinopec and China Coal Energy Group, is in plans to undertake a planned shutdown at its No. 2 polypropylene (PP) unit for a turnaround, according to Apic-online.

A Polymerupdate source in China informed that, the company is likely to start turnaround at the unit on June 3, 2020. The unit is expected to remain off-line for about four weeks.

Located at Ordos in Inner Mongolia, China, the No.2 PP unit has a production capacity of 350,000 mt/year.

As MRC reported earlier, Zhong Tian He Chuang brought on-stream its PP plant in end-June 2019, following an unplanned outage. The unit was shut on June 11, 2019 owing to technical issues. Located at Ordos in Inner Mongolia, China, the plant has a production capacity of 350,000 mt/year.

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.

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

MOSCOW (MRC) -- Crude futures settled higher amid signs that the continued reopening of economies in the US and Europe could bring balance to oversupplied oil markets in coming weeks, reported S&P Global.

NYMEX July WTI settled USD1.10 higher at USD24.35/b and ICE July Brent climbed 64 cents on the day to finish at USD36.17/b. Front-month WTI and Brent was last higher on March 10.

Oil demand outlooks continue to improve as more state and local governments ease restrictions on non-essential travel and trade aimed at slowing the COVID-19 coronavirus pandemic.

"Crude prices continue to benefit from a relative smooth reopening of the global economy and as the oil market appears on target to reach balance next month," OANDA senior market analyst Edward Moya said.

Restrictions on non-essential travel and trade have been eased or lifted in all 50 US states as of late last week, though major metro areas, including Los Angeles and New York City, remain on lockdown.

Japan on Tuesday formally ended its national state of emergency, according to media reports, while British Prime Minister Boris Johnson announced that non-essential shops in England could reopen on June 15.

Refineries in China, generally considered as a model for post-lockdown economic recovery, have increased throughput and some have suspended product exports as domestic demand rises.

NYMEX June ULSD settled up 88 points at 99.08 cents/gal and June RBOB was up 1.07 cents at USD1.0489/gal.

NYMEX WTI has surge 170% from month ago levels, and is approaching levels where some US producers may see value in starting shut-in production, potentially capping further upside price movement.

If crude stabilizes in the USD30s/b, producers should be able to not only bring back selected wells they deem economic but even drill and complete new ones for future production, analysts said.

"I think starting in July we could see a lot of the shut-ins (wells) start to come back," said Bernadette Johnson, vice president of market intelligence for data provider Enverus. "The order in which this works is that demand (for oil) has to come back, which allows refiners to buy more crude, start ramping refinery runs and sell more gasoline and diesel. Then shut-ins come back on line."

But according to Commerzbank's head of commodity research, Eugen Weinberg, it is questionable whether the latest price rise will already help the US shale oil sector in any decisive manner in the short term.

"Its financing problems simply appear too great: the research company Rystad Energy estimates that leading companies would probably need to write off just shy of $40 billion at present. Rystad believes that up to 250 firms in the sector could therefore be driven into insolvency by the end of 2021 if oil prices do not recover any further," he said in a daily note. "Consequently, the response of shale oil companies to the latest upswing in prices is likely to be only muted, for exploration, drilling and commissioning of oil wells require start-up funding," he added.

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