Oil set to end week lower on coronavirus resurgence fears

MOSCOW (MRC) -- Oil prices edged higher last Friday but were on track for their first weekly fall as new US coronavirus cases spiked, raising the prospect of a second wave hitting demand, reported Reuters.

Brent was up 27 cents, or 0.7%, at USD38.82 a barrel by 1204 GMT, having lost more than USD1 earlier in the session.

After falling more than 5% on Friday, West Texas Intermediate was up 19 cents, or 0.52% to USD36.53 a barrel. Both contracts ended around 8% lower on Thursday.

The oil benchmarks are heading for weekly declines of more than 8%, their first after six weeks of gains which have lifted them off their April lows.

Fears that the coronavirus pandemic may be far from over has brought the rally to a halt, with about half a dozen US states seeing a spike in new infections.

Barclays on Friday raised its oil price forecasts for this year by USD4 per barrel, citing a bigger deficit in the second half of the year, although it expressed caution on a slow recovery in the near term.

"The rate of change in fundamentals is likely to moderate significantly as incremental demand improvement will depend more on consumer behaviour than the easing of enforced movement restrictions," the British bank said in a note.

Producers from the United States, as well as from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, have been cutting supply.

OPEC+ cut oil supplies by 9.7 million barrels per day (bpd), about 10% of pre-pandemic demand, and agreed last weekend to extend the reduction.

US crude and gasoline stockpiles grew last week, government data showed. US crude inventories hit a record 538.1 million barrels, as cheap imports from Saudi Arabia flowed into the country.

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) -- Umicore (Brussels, Belgium) says it has launched an offering of senior unsecured bonds of EUR500 million (USD563 million), maturing in June 2025 and convertible into Umicore ordinary shares, as per Chemweek.

“The net proceeds of the offering will be used for general corporate purposes and to fund Umicore’s strategic developments in the areas of clean mobility materials and recycling,” the company says.

This offering complements the EUR1.1 billion of medium- and long-term, fixed-rate private placement debt secured in recent years and will further strengthen and diversify Umicore’s funding structure, the company says. The settlement date is to be on or about 23 June 2020, Umicore says.

The bonds will not bear interest and will have a value of EUR100,000 in principal amount and integral multiples thereof, the company says. They will be issued at 100% of their principal amount and unless previously converted, redeemed or repurchased, and canceled, they will be redeemed at 100% of their principal amount on 23 June 2025, Umicore says.

Groupe Bruxelles Lambert, Umicore’s largest shareholder, has indicated its intention to participate in the concurrent equity offering, the company says. The final terms of the bonds will be announced once the book-building process is completed, Umicore says.

As MRC wrote before, in September 2018, Brenntag North America, Inc., part of the Brenntag Group, was appointed as the exclusive distributor of Valirex catalysts for unsaturated polyester resins (UPR) and Valikat catalysts for polyurethanes from Umicore Specialty Materials Brugge NV in the USA and Canada. "The Umicore UPR & PU catalyst product lines are an exciting addition to our ACES (Adhesives, Coatings, Elastomers, Sealants) portfolio," said then Ted Davlantes, ACES Director for Brenntag North America. "Distributing these products in North America will enable our team of technical sales professionals to meet the demands of new product development and the challenges of new regulations."

Besides, in December 2012, materials technology group Umicore and the Evonik Group subsidiary Evonik Litarion GmbH announced a business relationship for the supply of lithium-ion cathode materials.

We also remind that Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Propylene is the main feedstock for the production of polypropylene (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.
MRC

MOSCOW (MRC) -- Repsol has reduced operations at some refineries as a result of the pandemic and its impact on demand, said S&P Global.

It said its FCCs at Bilbao and Puertollano were running at reduced rates, with other units also affected by the industrial slowdown. The company also took its crude 2 unit offline at Bilbao on May 9 due to market reasons, with the unit staying offline until conditions improve.

Three of the company's Spanish refineries -- A Coruna, Bilbao and Tarragona -- have the capacity to process low sulfur crude and produce VLSFO in significant quantities, while its trading unit is used to optimize production and operations. The company also offers marine diesel (MGO) which is compatible with IMO 2020 regulations.

As MRC wrote previously, in Q1 2016, Repsol completed the construction work of its new metallocene polyethelene plant at its Tarragona site. Repsol started up the plant and began production and marketing of this new product during Q2 2016.

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

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

MOSCOW (MRC) -- Eni's Sannazzaro de Burgondi refinery in northern Italy started another cycle of maintenance and upgrade works, even as a decision on when to reactivate its Eni slurry technology (EST) unit, which has been offline since a 2016 fire, is still outstanding and not expected to be taken before demand for refined products picks up, according to a source close to the refinery, said S&P Global.

"The planned maintenance activity is ongoing according to the scheduled programs, and will be completed by the end of May," a spokeswoman for Eni said. No information was provided on which plants were involved in the maintenance and upgrade works, nor when the EST plant would be restarted.

The works being carried out are not the series of works planned for the EST unit that had previously been suspended, the source said. The refinery underwent maintenance in early March involving "units internal to the refinery," an Eni spokesperson said at the time. The work has been completed, the source said.

As it was informed earlier, in the late May, Versalis’ cracker is still offline a week after it was expected to be back in operation because, according to local media reports, the authorities failed to sign off on the restart because of environmental concerns. ENI have filed an appeal. In a press release dated 12 May, the company announced a five day outage starting from 13 May.

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

MOSCOW (MRC) -- Producer Yantai Wanhua restarted its propane dehydrogenation (PDH) plant on time - on June 10, 2020, after a month turnaround, reported S&P Global.

Thus, maintenance works began at this PDH facility around mid-May.

And the company is on track to run its 750,000 mt/yr plant at full rate by June 15.

As MRC wrote before, China’s top petrochemical maker Wanhua Chemical Group aims to increase LPG imports to about 5.5 million mt in 2020 from 4 million mt last year as it procures feedstock from diversified sources ahead of new projects in Yantai and widens trading activities in Asia.

A 1 million mt/year ethylene integration project - phase two of its petrochemical project in northeast Shandong province - will be the first ethylene cracker to use LPG as feedstock globally and is set for commercial production in the second half of 2020. Together with associated downstream units and a nearby feedstock storage rock cavern with a capacity of 1.2 million cubic meters, the project is costing around Yuan 20 billion.

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