Having fallen in May, PVC prices in Russia begin rising in June

MOSCOW (MRC) -- Negotiations over June shipments of suspension polyvinyl chloride (SPVC) to the domestic market began in the Russian market in the middle of last week. After a sharp price drop in May, domestic producers announced a price increase in June, according to ICIS-MRC Price report.

Last month, amid a significant fall in PVC prices in foreign markets and a major decrease in demand due to quarantine restrictions in the domestic market, Russian producers were forced to reduce their prices by Rb8,000/tonne or lower. In the second half of May and early June, PVC prices resumed their upward trend in foreign markets, and demand for resin began to slowly recover from the domestic market. On the back of this, Russian producers raised their prices for June deliveries to the domestic market by Rb1,000-2,000/tonne.

Quarantine restrictions due to the spread of coronavirus negatively affected demand for finished products from PVC in April-the first half of May. As a result, many converters reduced their capacity utilisation, and some of them, including the large ones, were forced to suspend their operations in the first decade of May.

In the second half of May, quarantine restrictions were eased, and many consumers have already predicted a gradual recovery in demand for finished products from PVC in June and intend to increase their capacity utilisation. At the same time, the last year's figures are unlikely to be reached in the next couple of months.

Demand has been also gradually recovering in the Chinese domestic market, which led to higher PVC prices in the Asian region. Chinese producers also raised their export prices of acetylene PVC. Offer prices for preferential shipments in containers by rail for Russian consumers have reached USD820/tonne DAP Moscow by early June.

Despite weaker demand for finished products, amid low prices in foreign markets, some Russian companies still began to buy resin. Chinese and American producers traditionally accounted for the bulk of PVC purchases, and according to preliminary results, resin imports reached 6,000/tonnes in May.

Kaustik (Volgograd) shut down its production capacities for maintenance in May. The two largest producers - SayanskKhimPlast and RusVinyl - will shut down their production capacities in July, the outages will last for a month and a couple of weeks, respectively.

Most Russian converters announced an increase in PVC purchases in June, which was partially caused by expectations of stronger demand for finished products. Some companies still began to build up additional stocks for July.

Overall, June deals for Russian resin with K=64/67 were negotiated in the range of Rb72,000-74,500/tonne CPT Moscow, including VAT, up by Rb1,000-2,000/tonne from May, for quantities of up to 500 tonnes.

Last week, some consumers were in no hurry to agree on deals for June deliveries. At that time, SayanskKhimplast had already sold out all of its June quotas by the middle of this week, and the producer announced a price increase of another Rb2,000/tonne for additional quantities.
MRC

COVID-19 - News digest as of 04.06.2020

1. COVID-19 economic shock, capacity overhang to pressure petchem margins, stall investment

MOSCOW (MRC) -- The worldwide economic shock due to the coronavirus disease 2019 (COVID-19) pandemic and a major petrochemical production capacity overhang could mean weak industry margins and low plant utilization rates for several years, according to the International Energy Agency (IEA; Paris), said Chemweek. The wide-ranging annual benchmark analysis by the IEA in its world energy investment report also includes a forecast for the largest annual decline in energy investment on record in 2020, with the total to plunge by $400 billion compared to capital spending in 2019.




MRC

BASF to launch first Australian wheat seed variety Ascot

MOSCOW (MRC) -- BASF and its commercial partner Seednet have confirmed Australian growers will have access to Ascot, the first BASF-bred wheat seed, in 2021. Selected for its yield, quality, and agronomic adaptability, Ascot is the first in a series of wheat varieties to be commercialised by BASF nationally, said BASF.

This innovation is the result of almost a decade of research at BASF’s Wheat and Oilseed Breeding Centre in Longerenong, Victoria. "We see the development of new varieties as the key to increasing productivity,” said Rob Hall, Seeds & Traits Business Head Asia Pacific, BASF. “Ascot will be the first release from our wheat breeding program and is the result of our investment in research at Longerenong. We look forward to producing a range of exciting wheat varieties in the next few years."

Ascot has shown excellent yield potential during development and is produced for BASF and Seednet by Australian Grain and Forage (AGF) Seeds in the Central Highlands of Victoria. Growing exceptionally well in the region, Ascot will be suited to farmers with similar growing conditions, in the recommended growing area, covering eastern South Australia, central Victoria and southern New South Wales, for the 2021 season.

Each Australian BASF wheat variety will be named in honor of a local industry pioneer. Ascot was named after James Fry, a gold rush miner who switched to growing and milling wheat in the 1850s. At Fry’s Ascot Mill, located only a few kilometers from where the BASF seeds are cultivated, he experimented with new varieties to increase the viability of wheat crops for the region.

"We think it’s very appropriate to acknowledge early innovators in this way. We want to recognize that everyone who is working to move local agriculture forward today, is building on the work of previous generations – people who had a vision of what could be achieved through a combination of boldness, imagination and sheer persistence," added Hall.

As MRC informed earlier, BASF kicked off the piling work of the first plants of its smart Verbund project in Zhanjiang, Guangdong, China. This came as another important milestone in the development of the company’s USD10 billion investment project since its official commencement in November 2019. The first plants will produce engineering plastics and thermoplastic polyurethane (TPU) to serve the increasing needs of various growth industries in the southern China market and throughout Asia.

We remind that BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
MRC

At least 5 dead, 50 injured in blast at chemical factory in Gujarat Dahej

MOSCOW (MRC) -- At least five workers died and around 50 suffered severe burn injuries after a mysterious explosion took place in Yashashvi Rasayan Private Ltd chemical factory at Dahej in Bharuch Wednesday, as thick smoke billowed out of the plant, said Indianexpress.

The injured have been admitted in Bharuch civil hospital and two other private hospitals. The explosion was so loud that it was heard up to a three kilometre radius. As a precautionary measure, the district administration officials has shifted around 4,800 people staying in two neighbouring villages. Fire tenders have been rushed to the spot to control the blaze.

According to Bharuch district disaster management authorities, hundreds of workers were present inside Yashashvi Rasayan at Lakhi village on Wednesday afternoon. Due to some unknown reason during a chemical process between two containers a reaction took place leading to a blast. The firm manufactures 20 types of chemical components.

Soon after the blast, some of the workers managed to come out of the factory and informed the managers and owners. Fire officials immediately reached the spot, along with the Disaster Management team of Bharuch district collector. Subsequently, a rescue operation was carried out from the factory premises. Police have initiated a probe into the incident.

Bharuch District collector M D Modia said, “We have sent our high level officials to the spot to know how the blast had taken place. The fire department are trying to douse the flames. At present around 50 workers were injured and they are been treated in Bharuch civil hospital and two private hospitals. We have evacuated 3000 villagers from Lakhi village and 1800 from Luvara village, to safer places, as a precautionary measure as there are few other chemical companies. Once the fire is brought under the control, we will shift them back."


Bharuch District Superintendent of police Rajendrasinh Chudasma said, “We have come to know that five bodies had been found inside the factory premises, but still fire staff is battling with fire flames. Once the fire is brought under control the exact picture will come out. Police are also present at the spot and are talking to people to get information. It will take after couple of hours. Some of the injured ones undergoing treatment in the hospitals are also critical."

As MRC informed earlier, in January 2020, a fire broke out the Bharat Petroleum Corporation Limited's (BPCL) plant in Mahul area of suburban Chembur. The blaze erupted in an air compressor at the main gate of the BPCL plant.

As MRC informed previously, BPCL plans to set up a petrochemicals unit at its Bina refinery in Madhya Pradesh as part of its Rs25,000 crore expansion plan for the refinery. The petrochemical unit, which will include a 1.5 mln tpa naphtha cracker, is expected to cost Rs6,000-7,000 crore.

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

PTTGC on lookout to acquire specialty polymer assets

MOSCOW (MRC) -- PTT Global Chemical (PTTGC), Thailand's largest petrochemical maker, is planning to acquire new assets related to specialty polymer production during the recession, said Bangkokpost.

President and chief executive Kongkrapan Intarajang said yesterday that the company foresees a decline in asset value in the coming year, so it will consider asset acquisitions around the globe.

He did not specify regions or name firms. Many specialty polymer makers are suffering from a lack of liquidity during the coronavirus pandemic because purchase orders have dropped significantly.

"The new assets we plan to acquire will enhance our competitiveness and add value to existing downstream petrochemical products," Mr Kongkrapan said.

As MRC informed earlier, PTT Global Chemical Public Co Ltd (PTTGC) has shut its one of HDPE units for a planned maintenance since 25 May 2020. 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.

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