Sinopec Hainan cracker project to generate huge downstream investment

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.
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COVID-19 - News digest as of 11.06.2020

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

June prices for European PP up EUR40/tonne for CIS countries

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

S-Oil likely to undertake maintenance at RFCC unit

MOSCOW (MRC) -- S-Oil, South Korean petrochemical major, is in plans to take off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround, as per Apic-online.

A Polymerupdate source in South Korea, informed that, the company is likely to undertake a planned shutdown, at the unit by early-July, 2020. The unit is slated to remain off-line for about two weeks.

Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

As MRC reported earlier, S-Oil's new residue upgrading complex (RUC) and olefin downstream complex (ODC) was inaugurated at the company's Onsan Refinery in Ulsan, South Korea, in July, 2019. The project, which cost around USD4-billion, involved construction of a plant to upgrade low-value residue oil to high-value gasoline and propylene. The propylene is to be used for the production of 405,000 t/y of polypropylene (PP) and 300,000 t/y of propylene oxide.

Separately, S-Oil and Saudi Aramco, a majority shareholder in S-Oil, signed a memorandum of understanding (MoU) to collaborate on a USD6-billion steam cracker and olefin downstream project. Completion is expected by 2024. PCN earlier reported that the project would include a 1.5-million-t/y steam cracker, which would produce ethylene and other basic petrochemicals from naphtha and refinery off-gas. The downstream units would include the production of polyethylene and PP.

Propylene is the main feedstock for the production of PP.

According to MRC"s ScanPlast report, 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.
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UK expected to break away from ECHA and EU Reach post-Brexit Close

MOSCOW (MRC) -- The UK is no longer seeking associate membership of the European Chemicals Agency (ECHA) after it departs the EU customs union umbrella next year, meaning that the country will have its own regulatory framework post-Brexit, according to a UK Member of Parliament, said Hydrocarbonprocessing.

Rebecca Pow, Parliamentary Under Secretary of State at the UK’s Department for Environment, Food and Rural Affairs (Defra), confirmed in a letter to the chair of the state watchdog the Environmental Audit Committee (EAC) that Brexit negotiators are not seeking to broker associate membership of ECHA.

“We are not seeking associate membership of the European Chemicals Agency (ECHA) and participation in EU REACH,” she said, in a letter dated 22 May and disseminated by the UK Lubricants Association (UKLA) to its members on Thursday. “While the transition to UK REACH will take some adjustment, we believe that the benefits of having control of our own laws outweigh the costs,” she added.

No country currently holds associate membership status with ECHA but the UK’s regulatory overlap with the EU and its unusual position of shifting from an EU member state to a third country fuelled hopes that a new arrangement could be brokered.

The UK’s Confederation of British Industry (CBI) has stated that the chemicals sector is among the industries with the least to gain from any deviation from EU norms, as the sector is so tightly regulated and the UK is so dependent on the EU as a market. 60% of the UK’s chemicals exports flow to the bloc.

Lobbyists and industry have pushed for continued tight regulatory harmony with the EU post-Brexit, with former Prime Minister Theresa May singling out Reach in speeches as one of the regulatory frameworks the UK hoped to remain tied to. Chemicals has been mentioned in government updates alongside aerospace and pharmaceuticals as the sectors where it was hoped special arrangements could be agreed as recently as the end of 2019.

UK distributor trade body the Chemical Business Association confirmed that it had received notification of the plan last week and has been asked by the EAC to provide feedback, which is expected to be complete in the next few days.

The UK Chemical Industries Association (CIA) stated that, while the best outcome for the sector would have been remaining within EU Reach, the specific mention of special arrangements for the chemicals sector in the UK’s free trade agreement proposals for the EU could provide some benefit.

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