Chinese independent refineries in Shandong receive more condensate in June

MOSCOW (MRC) -- China's independent refineries in Shandong province received more imported condensate as feedstock amid recovering gasoline demand, but the trend is unlikely to continue as prices of the raw material is rising, trading and refining sources told S&P Global June 16.

Condensate is usually a rare feedstock for the small-scale independent refineries in Shandong because most of these refineries are configured to crack medium to heavy oil to produce gasoil.

"Demand for condensate emerged in the sector as gasoline sales are improving, " a trading source said.

Trade flow tracker Kpler showed that the Greece-flagged Athinea has discharged 42,000 mt of North West Shelf condensate from Australia at Shandong's Longkou port on June 10. This was likely one of the two condensate cargoes chartered by Glencore for independent refineries, sources with knowledge of the matter said.

Prior to this, several condensate cargoes had arrived at Shandong in May, local trading and refining sources said, adding that Vitol and Mercuria were also actively trading condensate cargoes for the sector.

The gasoline sales by this group of Shandong's independent refineries jumped 30.4% year on year in May to 3.28 million mt, also rising 8.8% from April, data from local information provider JLC showed.

Trading sources said most of the condensate barrels end up at some tiny independent refineries, which have no quota to crack imported crudes.

These tiny refineries have splitters, which are able to process condensate to produce naphtha as a gasoline blending material for sale. These refineries, each with the ability to consume 30,000-50,000 mt of feedstock per month, usually buy import quotas to bring in the condensate barrels, refining sources said.

"There are some inquiries for condensate, but the premiums have gone up, dampening their interest to close deals," another trading source said.

As MRC wrote previously, Shandong Chambroad Petrochemicals has recently brought on-stream its No.1 propylene unit following a turnaround. Thus, the company had resumed operations at the plant by early-June, 2020. The plant was shut on March 25, 2020 and was supposed to remain under maintenance for about two weeks. Located at Shandong province of China, the No. 1 plant has a production capacity of 125,000 mt/year.

Propylene is the main feedstock for producing 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) -- Celanese Corporation, a global specialty materials company, has increased July list and off-list selling prices for Vinyl Acetate Monomer (VAM) sold in Asia outside China (AOC), as per the company's press release.

The price increase is effective for orders shipped on or after 1 July, 2020, or as contracts otherwise allow, and is incremental to any previously announced increases.

Thus, July VAM prices rose by USD100/mt - for AOC.

As MRC reported earlier, Celanese last raised its VAM prices for this region on 17 January, 2020. The price increase was also USD100/mt.

According to MRC's DataScope report, April EVA imports to Russia dropped by 5,85% year on year to 3,050 tonnes from 3,250 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation increased in January-April 2020 by 1,55% year on year to 12,540 tonnes (12,350 tonnes a year earlier).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
MRC

MOSCOW (MRC) -- As the world continues to struggle with the Covid-19 pandemic, the protective equipment is being utilized by both healthcare professionals and citizens alike. A range of products including respirators, surgical & respiratory masks, gloves, protective gowns, face shields, syringes, shoes, and many others has been vital to the fight against a hyperactive contagion. And Saudi Aramco has joined an array of industry players in supporting the effort to combat the Covid virus, according to Hydrocarbonprocessing.

In regions around the world, Aramco has donated medical supplies, protective masks, gloves, PPE suits, and sanitizers, and has provided both remote and in-person medical services.

In addition to providing material support, the company's downstream chemicals business continues to manufacture and supply the products that constitute the plastics used to produce the protective equipment being used by so many.

The company's production of ethylene, polypropylene (PP), and polymethyl methacrylate (PMMA) in locations ranging from North America to the GCC to East Asia, and marketed around the world through the Aramco Chemicals Company, is an important part of the end-products used in the struggle with the virus.

Unfortunately, the role being played by Aramco - along with many others - is simply not enough. Based on World Health Organization (WHO) modelling, Covid-19 responders require an estimated 89 million masks, 76 million examination gloves, and 1.6 million goggles each month. And at what is arguably the most critical time in recent memory for ample supplies of such materials to be readily available, PPE is vastly undersupplied all over the world.

In response to the rapid rise in the number of cases, hospitals, caregivers, and the medical supply chain have been completely overwhelmed. The WHO has cautioned that the shortage of PPE is endangering the health of workers worldwide and has called on industry and governments to increase manufacturing by 40% to meet rising global demand.

The surge in demand for PPE across the globe translates into higher demand for the plastic used to manufacture it. This will not change any time soon; therefore, how humanity goes about handling and properly disposing of it, must.

Covid-19 will change the way the world views and deals with public health and hygiene. The public will be more cautious, government health policies will be more stringent, and the preparedness of the medical industry will continue to be a priority. As a result, a significant increase in demand for PPE is likely to remain.

The benefits of plastic are as undeniable as the challenges related to its proper use and treatment. Better waste management practices, including the recycling of plastics into energy and fuels; mechanical and chemical recycling; and converting recycled plastic into material used in paving roads and producing concrete are but a few examples of steps that must be permanently incorporated into the downstream value chain.

The current battle against Covid-19 is highlighting many of the vital uses of plastic. While its versatility, physical flexibility, and cost-effectiveness are unparalleled, we must continue to be responsible stewards of this essential material by disposing of it in an environmentally responsible manner. This will ensure society can continue to enjoy the benefits of plastic and be confident that it will be sufficiently available when needed to protect us.

As MRC reported earlier, state-owned Saudi Aramco bought 2.1 billion shares of Saudi Basic Industries (SABIC) on the stock market last Sunday as it completed its deal agreed last year to buy 70% of the petrochemical giant.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- India’s Reliance Industries has cut the pay of some top oil-and-gas division employees by up to 50%, according to six sources and a letter seen by Reuters, as it battles lower profitability because of the coronavirus epidemic, reported Hydrocarbonprocessing.

Reliance, headed by India’s richest man, Mukesh Ambani, has decided that employees earning more than 1.5 million rupees (USD20,000) a year will face a 10% salary cut, while the cuts will be 30% to 50% for senior executives, the sources said.

The pay cuts were cited in a company note to employees.

“The hydrocarbons business has been adversely impacted due to reduction in demand for refined products and petrochemicals ... the situation demands that we maintain razor sharp focus on operating costs and fixed costs and all of us need to contribute to make this happen,” Executive Director Hital R. Meswani said in the letter.

“Our Chairman has agreed to forgo his entire compensation,” he added, referring to Ambani.

A spokesman for Reliance did not immediately respond to calls or an emailed request for comment. The company announced its quarterly results later that day.

Thus, Reliance Industries says that its group net profit for the fiscal fourth quarter ended 31 March decreased 37.2% compared with the same period of the prior year, to 65.46 billion Indian rupees (USD873.9 million). The company reports a 2.5% year-on-year (YOY) decline in sales, to Rs1.51 trillion.

Reliance’s petchem business saw a YOY decline in quarterly revenue of 24%, to Rs322 billion, because of lower price realization together with disruptions in local and regional markets. Quarterly EBIT in the petchem sector declined 42.8% YOY to Rs45.5 billion because of a significant decline in margins. The impact of lower margins was mitigated by optimizing the feedstock mix during the quarter.

It was not immediately clear whether other Reliance divisions were affected, but three of the sources said that the company’s telecom unit, Reliance Jio Infocomm, did not appear to have been impacted.

Reliance also said it would consider its first rights issue in almost 30 years, part of its broader commitment to eliminating net debt by March 2021. Reliance’s outstanding debt was about USD43 billion at the end of last year.

India’s crude processing in March fell 5.7% from a year earlier, its biggest drop since September, as the coronavirus crisis and travel restrictions to curb it hit demand for fuel and forced refineries to cut output.

While Reliance has raised crude processing at its domestic- markets-focussed plant by about 6% it had cut oil refining at its export-focussed plant by 24% in March, from the same month last year.

As MRC wrote before, RIL has been running its two refineries almost uninterrupted at its integrated Jamnagar petrochemical complex despite the lockdown.

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.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
MRC

MOSCOW (MRC) -- BASF, at virtual annual shareholders’ meeting, said it is alert to a possible risk of an unsolicited takeover approach or an attack from activist investors and was ready to react, as per Chemweek.

Speaking at the meeting, CEO Martin Brudermuller said he could not rule out unwanted attempts to take control of the company, given the decline in its market value. Brudermuller was responding to a question posed by Ulrich Hocker, president of DSW, a German association for private investors, who wanted to know whether BASF has a defense strategy against hostile takeovers, especially from China, and how BASF assesses the current market situation.

“The risk that BASF, given its current market capitalization, could become the target of a takeover or of activist investors cannot be ruled out. Consequently, we monitor market developments and prepare ourselves for such situations. A successful, transparent corporate strategy that highlights future potential and the associated correct reflection of our value on the capital markets are the most effective instruments against unwanted external influence. In addition, we ensure that we achieve the best performance in the respective market environment and implement the strategic measures to improve performance consistently and quickly. At the same time, we are in continuous dialogue with all interest groups in order to take their demands and expectations into account and explain our strategy,” Brudermuller says.

BASF’s market value has lost more than 20% this year to EUR49 billion (USD55 billion) as the COVID-19 pandemic reduced global demand for its products.

We remind that BASF has restarted its No. 1 steam cracker following a maintenance turnaround. 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