PP production in Russia up by 27% in Jan-Apr 2020

MOSCOW (MRC) -- Russia's overall polypropylene (PP) production grew in first four months of 2020 by 27% year on year, totalling 602,500 tonnes. ZapSibNeftekhim accounted for the main increase in the output, according to MRC's ScanPlast report.

Russian producers reduced their total PP production to 129,600 tonnes in April 2020 from 146,600 tonnes a month earlier, as SIBUR Tobolsk shut its production capacities for scheduled maintenance works and Poliom reduced its capacity utilisation. Russia's overall PP production reached 602,500 tonnes in the first four months of 2020, compared to 473,800 tonnes a year earlier. Four out of eight producers increased their capacity utilisation, with a new producer - ZapSibNeftekhim - accounting for the main increase in capacity utilisation.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk shut down its production capacities for slightly more than a one-month turnaround in mid-March. The plant's April output was 17,500 tonnes, compared to 22,900 tonnes a month earlier. The Tobolsk plant's overall PP production reached 130,100 tonnes in January-April 2020, down by 17% year on year.

ZapSibNeftekhim, the second Tobolsk producer, produced 32,600 tonnes of PP in April versus 37,500 tonnes in March. The plant's overall output totalled 149,000 tonnes in the first four months of 2020.

Omsk Poliom reduced its capacity utilisation in April, having produced about 13,000 tonnes of PP, compared to 18,000 tonnes a month earlier. Overall, the Omsk plant produced 64,500 tonnes of PP in January-April 2020, down by 10% year on year.

Nizhnekamskneftekhim produced about 18,000 tonnes of propylene polymers in April versus 19,100 tonnes a month earlier. The Nizhnekamsk plant's overall output of polymer exceeded 73,100 tonnes in the first four months of 2020, compared to 68,800 tonnes a year earlier.

Tomskneftekhim produced 13,300 tonnes of propylene polymers in April versus 13,400 tonnes a month earlier. The Tomsk plant's overall PP output reached 51,300 tonnes in January-April 2020, up by 4% year on year.

Ufaorgsintez's production was 11,200 tonnes of PP in April, which virtually corresponded to the figure of March. The Ufa plant's overall output of polymer reached 43,600 tonnes in January-April 2020, down 3% year on year.

Neftekhimiya (Kapotnya) produced 12,600 tonnes of PP in April, compared to 13,100 tonnes a month earlier. The plant's overall PP output reached 49,500 tonnes in the first four months of 2020, up by 2% year on year.

Stavrolen (Lukoil) produced 11,300 tonnes of propylene polymers in April versus 11,500 tonnes in March. The Budenovsk plant's overall output of propylene polymers reached 41,300 tonnes in the first four months of 2020 versus 33,500 tonnes a year earlier.

MRC

1. Global chemicals output falls in April

MOSCOW (MRC) – Data collected and tabulated by the American Chemistry Council (ACC) show that with stabilizing activity in China partially offsetting widespread weakness due to COVID-19, global chemicals production fell 1.3 percent in April, an improvement from the 3.3 percent decline in March and 2.1 percent decline in February, said Americanchemistry. During April, chemical production fell in every region. Headline global production was off 5.8 percent year-over-year (Y/Y) on a three-month moving average (3MMA) basis and stood at 110.2 percent of its average 2012 levels.



MRC

MOSCOW (MRC) -- Crude oil futures were steady to marginally higher in mid-morning trade in Asia June 2 as traders looked toward a possible extension of output cuts by OPEC+ in an upcoming meeting, reported S&P Global.

At 09:55 am Singapore time (0155 GMT), ICE Brent August crude futures were up 19 cents/b (0.50%) from June 1's settle at USD38.51/b, while the NYMEX July light sweet crude contract was 8 cents/b (0.23%) higher at USD35.52/b.
"Expectations of an extension of the current supply cuts by OPEC+ when they meet this week is keeping prices buoyed," OCBC analysts said in a note Tuesday.

"If OPEC+ can deliver on the reported extension, we expect Brent to possibly test USD40/b," the analysts added.

US President Donald Trump and Russian President Vladimir Putin spoke June 1 about the importance of implementing the OPEC+ oil supply cuts and stabilizing global oil prices, the Kremlin said in a statement.

"It was stated that this multilateral agreement, reached with the active support of the presidents of Russia and the United States, would lead to a gradual restoration of oil demand and price stabilization," the Kremlin said.

The OPEC+ accord calls for 9.7 million b/d in production cuts for May and June, before easing to 7.7 million b/d for the second half of the year, then to 5.8 million b/d for January 2021 through April 2022.

"A confirmation of the meeting along with suggestions from members on the willingness to comply may be necessary to keep prices thriving at current levels. Any leap through the resistance zone may still boil down to demand," IG market strategist Pan Jingyi said in a note June 2.

Apart from OPEC+ commitment, investors have been monitoring Chinese demand recovery and US product demand, along with any fresh developments in the US-China trade tensions.

The OPEC+ meeting may be moved up to June 4, from the scheduled June 9-10, so July nominations can factor in any changes to oil production quotas, S&P Global Platts reported earlier citing sources familiar with the discussions.

As MRC informed 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

MOSCOW (MRC) -- Abu Dhabi, the oil-rich emirate in the seven-member UAE federation, is forecast to see its economy contract by 7.5% in 2020 due to the oil price crash and coronavirus outbreak, S&P Global Ratings said.

Abu Dhabi, which pumps most of the UAE's oil, is projected to rebound with economic growth averaging 2.2% between 2021-2023, the agency said Friday.

The emirate is forecast to pump on average of 2.8 million b/d in 2020, down from 3.1 million b/d in 2019, S&P Global Ratings said.

The emirate generates about 90% of its income from oil and derives 50% of its GDP from crude, according to S&P Global Ratings.

The UAE, OPEC's third largest oil producer, is trimming an extra 100,000 b/d in June, on top of its OPEC+ commitments, as it joins Saudi Arabia and Kuwait in helping to rebalance the oil market.

OPEC+ is cutting a record 9.7 million b/d in May and June as part of an agreement that will ease curbs through to April 2022.

"Even before the pandemic began, economic growth had been subdued, averaging 1.3% over 2018-2019, largely as a result of oil production cuts under the previous OPEC agreement," S&P Global Ratings said.

The ratings agency said the emirate's financial assets will help it offset the impact of oil price volatility and the pandemic.

"The exceptional strength of the government's net asset position provides a buffer to counteract the effect of oil price swings and COVID-19 on economic growth, government revenue, and the external account, as well as the effect of increasing geopolitical uncertainty in the Gulf region," S&P Global Ratings said.

The agency is also forecasting that Abu Dhabi's fiscal deficit will widen to 12% of GDP in 2020 from 0.3% in 2019 due to the low oil prices.

As MRC informed earlier, UAE's ADNOC is keeping a beat ahead of the OPEC+ members by ensuring customers of its crude oil in Asia of sufficient supplies as demand for Middle East sour crude returns.

We remind that in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

MOSCOW (MRC) -- Zhejiang Petrochemical Co Ltd has delayed the start-up of its new acrylonitrile (ACN) plant to around mid-June, 2020, reported S&P Global.

Based in Zhejiang, China, this plant is able to produce 260,000 tons/year of ACN. Initially, the company planned to begin operations at this production in early May, but then postponed the start to the second half of May. Zhejiang Petrochemical past announced May 20 to be the start.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December 2019 and its polyolefin plants in late December 2019-January 2020.

Market sources reported then that one of its polypropylene (PP) plant with capacity of 450,000 tons/year started up by 30 December 2019, followed by another line with same capacity by 15 January 2020.

Meanwhile its 450,000 tons/year of linear low density polyethylene (LLDPE) and 300,000 tons/year of high density polyethylene (HDPE) were launched around similar time with PP plants.

We also remind that China's greenfield Zhejiang Petrochemical will use a range of process technology from Honeywell UOP for the second phase of its integrated refining and petrochemical complex in Zhoushan, Zhejiang province, according to a document, quoting a senior Honeywell official. "This second phase of the complex by itself will process 20 million tons per year of crude oil and produce another six million tons per year of aromatics when completed," Bryan Glover, vice president and general manager, Process Technology and Equipment, at Honeywell UOP, stated in the document as of January 2019.

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

According to MRC's ScanPlast report, Russia's ABS output was 920 tonnes in March. Russian producers manufactured 2,600 tonnes of ABS plastics in January-March 2020, down by 59% a year earlier.
MRC