PTTGC shut HDPE plant in Thailnd for maintenance

MOSCOW (MRC) -- State-owned PTT Global Chemical Public Co Ltd (PTTGC) has shut its one of HDPE units for a planned maintenance since 25 May 2020, reported CommoPlast with reference to market sources.

Based in Map Ta Phut, Thailand, the HDPE plant is having a production capacity of 300,000 tons/year.

The HDPE plant is expected to remain offstream until 9 June 2020.

Meanwhile the other 200,000 tons/year HDPE plant is still operating.

In addition, the company is planning to shut one of its linear low density polyethylene (LLDPE) unit with production capacity of 400,000 tons/year in July for 20 days and 300,000 tons/year low density polyethylene (LDPE) plant in September for 24 days.

As MRC informed before, PTT Global Chemical Public Co Ltd resumed operation at its LDPE units by 17 March 2020 following an emergency shutdown during mid of February 2020. The unit is designed to produce 400,000 tons/year and had been shut longer than expected, which players attributed to the draught issue in Thailand.

According to MRC's ScanPlast report, April estimated HDPE consumption in Russia fell to 69,130 tonnes from 78,220 tonnes a month earlier. ZapSibNeftekhim significantly increased its export sales to China. Overall HDPE imports to the Russian market totalled 377,450 tonnes in the first four months of 2020, which corresponds to the last year's figure. Production increased significantly, and exports also grew by 5 times.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

N. America weekly chemical rail traffic holds steady

MOSCOW (MRC) -- Chemical railcar traffic in North America showed some firming last week. Volume remained significantly down year-over-year (YOY), but the deficit did not deepen, said Chemweek.

On a four-week basis, volume declined 12% from 2019 and 11.3% from 2018 (chart), improving slightly from the 12.8% and 11.8% declines of the previous week.

Railcar loadings totaled 39,854 carloads during the week ended 30 May, down 1.9% from the previous week and down 10.5% YOY, according to data released on 3 June by the Association of American Railroads (AAR).

For the year to date, chemical railcar traffic in North America is down 3.4% from 2019 and down 4.3% from 2018.

Chemical railcar traffic in the US contributed 26,714 carloads to the weekly total, down 15.2% YOY and down 6.4% from the previous week. For the year to date, US chemical railcar traffic is down 3.5%.

Canadian chemical rail traffic totaled 12,299 carloads, up 2.0% YOY and up 10.4% from the previous week. For the year to date, Canadian chemical railcar traffic is down 3.1%.

Chemical railcar traffic in Mexico totaled 841 carloads, a YOY decrease of 12.2% and a sequential decrease of 11.2%. For the year to date, Mexican chemical railcar traffic is down 4.3%.

As MRC informed earlier, Russia's output of products from polymers grew in April 2020 by 11.2% year on year due to quarantine restrictions. However, this figure increased by 3.4% year on year in the first four months of 2020. According to the Russian Federal State Statistics Service, April production of unreinforced and non-combined films decreased to 107,000 tonnes from 110,400 tonnes a month earlier. Output of films products grew in the first four months of 2020 by 12.5% year on year to 402,800 tonnes.
MRC

Sinopec to build new LNG terminal in Zhoushan

MOSCOW (MRC) -- China Petroleum & Chemical Corporation (Sinopec) has inked a deal to build a new LNG terminal in Zhoushan, reported OffshoreENERGY.

The company has signed a deal with the Zhejiang provincial government worth USD2.8 billion to develop a 15 mtpa import terminal.

According to a Reuters report citing a government notice, the facility will include four LNG storage tanks with 220,000 cubic meter capacity. It will be the third import facility in Zhoushan.

It will include two wharfs, ancillary facilities and have a 7 mtpa capacity once the first development phase is complete.

Construction is planned to start during the first half of the next year. Operations are planned to start in 2024.

As MRC informed earlier, Sinopec Corp is expected to start commercial operations at its oil refining and petrochemical complex in Zhanjiang at the end of July. The refinery is capable of processing 200,000 barrels per day (bpd) of crude oil and the petrochemical plant will produce 800,000 tonnes per year of ethylene. The project, with first phase investment of 40 billion yuan ($5.59 billion), is located in southern China’s Guangdong province. The refinery received its first crude oil cargo of 128,900 tonnes from a very large crude carrier (VLCC) that arrived at the plant’s 300,000-tonne capacity berth in early May, Sinopec said on May 9.

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.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

OPEC+ oil cut extension talks complicated by Saudi and Russia haggling

MOSCOW (MRC) -- Saudi Arabia and Russia appear at loggerheads over an extension to the historic output cut agreement by the so called OPEC+ alliance, just days before the producer coalition is due to hold its much anticipated meeting, reported S&P Global with reference to people involved in the discussions.

The kingdom has proposed a three-month extension of the 9.7 million b/d cut accord, while Russia -- the key non-OPEC partner in the deal -- has countered with one month.

The cuts otherwise are set to be scaled back to 7.7 million b/d starting in July for the rest of 2020.

OPEC+ is scheduled to meet June 9-10 via webinar, but Algerian energy minister Mohamed Arkab - who holds OPEC's rotating presidency for 2020 - has proposed moving the gathering forward to June 4 to help members determine July export volumes.

"I hope there will be an agreement on at least a 1-2 month extension," one delegate said, asking not to be named due to the sensitivity of the talks. "Otherwise, there's no sense to have the (earlier) meeting."

The production cut accord, forged in April after days of acrimonious talks with oil prices crashing, is aimed at bolstering the market against the steep decline in demand caused by the COVID-19 pandemic.

The alliance scheduled its biggest cuts - the largest coordinated supply restrictions in the oil market's history - for May and June, when they figured the worst of the pandemic's effects would be felt.

Prices have rebounded but are still far below desirable levels for many OPEC+ members, and with the global economy only just starting to recover, many members are pushing to maintain the deeper cuts.

EC Secretary General Mohammed Barkindo said June 2 in a commentary posted on the bloc's website that the production cuts so far have prevented a build in global crude oil inventories of some 1.3 billion barrels.

"To navigate the choppy waters that are yet to come as the industry traverses this ocean of volatility, every single industry stakeholder will need to do its part to contribute to this staggering recovery effort," the commentary stated.

Whatever the date of the meeting and its result, compliance will be key to the deal's credibility. The six secondary sources used by OPEC to monitor output, including S&P Global Platts, have yet to report May production figures and are unlikely to do so before a June 4 meeting.

Several delegates have cited the lack of compliance data as reasons not to move the meeting forward. Preliminary production and export reports by some countries have indicated uneven performance.

Russia - the largest non-OPEC participant in the deal - on June 2 said it pumped 8.59 million b/d in May, exceeding its quota by 100,000 b/d. Still that is the closest Russia has come to meeting its commitment under OPEC+ agreements in several months.

Iraq - which has also habitually lagged on compliance in previous OPEC+ deals - on June 1 revealed May crude exports of 3.58 million b/d, just 12,000 b/d below its production quota. This means Iraq will breach its quota by nearly the amount of its internal consumption, which is expected to be around 550,000 b/d, according to sources familiar with the matter.

Iraq's interim oil minister, Ali Allawi, on June 2 cited "technical issues" for his country's failure to cut output down to its agreed cap.

"We remain committed to the OPEC+ deal, and to doing our part towards ensuring a stable and secure global energy market," he said on Twitter.

As MRC wrote previously, global oil consumption cut by up to a third in Q1 2020. 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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC

Braskem posts quarterly loss of USD777 mln, amid forex swings, expenses

MOSCOW (MRC) -- Brazilian petrochemical firm Braskem SA reported on Wednesday a net loss of USD777 million in the first quarter compared with a profit of USD243 million a year ago, as foreign exchange oscillations led to higher financial expenses, reported Reuters.

The company said financial expenses grew to USD1.332 billion in the quarter ended March 31 from USD243 million a year ago, given the depreciation of the Brazilian real and the Mexican peso against the US dollar.

In April, Braskem revised its capital expenditure forecast in 2020 to USD721 million from around USD600 million, as part of its strategy to preserve cash.

Its operating performance measured by recurring earnings before interest, tax, depreciation and amortization (EBITDA) declined by 34% compared with the first-quarter of 2019 to USD294 million, excluding extraordinary expenses related to the geological disaster in Brazil’s Northeastern state of Alagoas.

Braskem’s quarterly net sales revenue fell 17% to USD2.846 billion, while cost of goods sold declined by 14% to USD2.581 billion.

The petrochemical company ended March 2020 with a net debt/EBITDA ratio in US dollars of 5.84 compared with 4.71 at the end of 2019 and 2.09 in March 2019.

As MRC wrote previously, the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

Besides, Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC