Sabic extraordinary general meeting clears way for Aramco acquisition

MOSCOW (MRC) -- Sabic extraordinary general meeting (EGM) approved a series of changes to the company's bylaws in preparation for the acquisition of a 70% stake in the company by Saudi Aramco, said Chemweek.

Aramco plans to complete the acquisition by the end of this month, barring last minute hitches. In April the company was reported to be in talks with the Public Investment Fund (PIF; Riyadh), which is selling the holding to Aramco, to reduce the price of USD69.1 billion following the collapse in the price of oil and the drop in Sabic's share price since the deal was agreed on.

Of the numerous changes, the most important includes the article that says, the government, represented by the PIF, shall retain ownership of at least 25% of the shares of the corporation throughout the whole duration of the corporation. The article further says that a portion of these retained shares may be sold by virtue of cabinet decree by the normal procedure followed in the public offering of the shares of joint stock companies for general subscription according the the relevant laws.

Sabic CEO Yousef al-Benyan says the changes to the bylaws pave the way for a new chapter for Sabic. "We recognize the importance of meeting shareholder expectations and delivering value is fundamental for us. We are geared for long-term growth and moving towards a new chapter that can position Sabic as the kingdom's chemical growth platform," he said. The virtual EGM voted to change bylaws relating to a wide range of matters, such as the company's head office and share ownership. 30% of Sabic shares will continue to trade on the Riyadh stock exchange.

Aramco's chemical business, following the Sabic and other acquisitions, will operate in more than 50 countries and is expected to have the largest net production capacity for ethylene and be among the top four companies by net production of polyethylene, polypropylene and ethylene glycol.

As MRC informed earlier,Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, has taken off-stream its styrene monomer (SM) plant. The company has undertaken a planned shutdown at the plant on May 7, 2020. The plant is slated to remain under maintenance for about 7-8 weeks. Located at Tianjin, China, the SM plant has a production capacity of 35,000 tonnes/year.

SM is the main feedstock for the production of polystyrene (PS).

According to MRC's ScanPlast report, March 2020 estimated consumption of PS and styrene plastics dropped by 2% year on year, totalling 42,130 tonnes. The estimated consumption totalled 121,880 tonnes in the first three months of 2020, down by 2% year on year. Overall, Russian plants produced 42,790 tonnes in March 2020. Overall output of high impact polystyrene (HIPS) and general purpose polystyrene (GPPS) totalled 32,100 tonnes in March 2020. 98,390 tonnes of HIPS and GPPS were produced in January-March 2020. The decrease in Russian plants' output was 3%.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

MOSCOW (MRC) -- China’s Shanghai International Energy Exchange (INE) has approved four entities as designated delivery warehouses for its upcoming low-sulfur fuel oil (LSFO) futures contract, according to Hydrocarbonprocessing with reference to the company's statement.

The entities were listed as Sinochem-Xingzhong Oil Staging (Zhoushan) Co., Ltd., Zhejiang Ocean Oil Products Warehousing Co.,Ltd., Dading Petroleum Logistics Co.,Ltd. and Yangshan Shengang International Oil Logistics Co., Ltd.

They will have total approved storage capacity of 570,000 tonnes and active storage capacity of 320,000 tonnes. The storage fee is 3 yuan per tonne each day.

The LSFO contract, with sulphur content lower than 0.5%, will debut on June 22, with foreign investors allowed to participate.

The INE had published rules for its low sulphur fuel oil contract on Wednesday, stating that it will be traded at 10 tonnes per lot with a daily price limit of 5% and a minimum trading margin of 8%.

As MRC reported earlier, China’s Sinochem Quanzhou Petrochemical successfully started up its newly constructed naphtha cracker in Quanzhou, Fujian province on 16 May 2020, setting the company on track to bring its downstream units online by mid of the year. The cracker has an annual capacity of 1 million tons of ethylene.

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

MOSCOW (MRC) -- Sinopec is pushing an expansion project that can produce up to 1 million tonnes of ethylene and refined oil annually in Hainan Free Trade Zone, located in South China, said Companynewshq.

It is estimated that this project will fuel growth of downstream industries with more than 100 billion RMB (14.1 billion US dollars) and become a new engine for regional economic development.

On the basis of the original project, ten sets of equipment for chemical production, three sets of equipment for oil refining as well as supporting facilities will be built.

The project will also support Hainan in accelerating the development of leading industries including energy storage and petrochemical production, and effectively expand the scale of import and export.

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

1. Indian Oil aims to operate refineries at 90% capacity in June

MOSCOW (MRC) -- Indian Oil Corp, the country’s top refiner, aims to operate its refineries at an average 90% capacity in June as fuel demand recovers with the easing of a coronavirus lockdown, the company said, said Reuters. IOC, which along with subsidiary Chennai Petroleum Corp , controls about a third of India’s 5 million barrels per day (bpd) refining capacity, is operating its plant at about 83% capacity, a sharp increase from 39% at the beginning of April. Refiners in Asia are cranking up runs as the lifting of lockdown restrictions is pushing up fuel demand. India’s fuel consumption in May increased significantly from April.

MRC

MOSCOW (MRC) -- The June contract price of propylene was settled in Europe up by EUR60/tonne from the previous month. Nevertheless, European producers are not going to increase export PP price proportionally for shipments to the CIS markets, according to ICIS-MRC Price Report.

Negotiations on June prices of European PP began last week. All market participants said that European producers have made a significant increase in the export prices of propylene polymers for shipments in the current month, but the price increase does not exceed EUR40/tonne, while propylene increased by EUR60/tonne in the current month in Europe.

Deals for June shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR840 - 900/tonne FCA, up by EUR40/tonne from May. Deals for block copolymers of propylene for June delivery were discussed in the range EUR920-980/tonne FCA.

Some producers had export restrictions, in particular, injection moulding homopolymer PP. But they are not critical for most buyers, since the demand for polypropylene has declined significantly in the last two months.
MRC