PVC imports into Ukraine fell by 3% in Jan-May, exports up by 35%

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 3% in the first five months of this year, compared to the same period in 2019 and reached about 17,800 tonnes. At the same time, sales of Ukrainian PVC to foreign markets grew by 35% year on year, according to a MRC's DataScope report.

Last month SPVC import deliveries to the Ukrainian market grew to 3,500 tonnes against 2,800 tonnes in April, the increase in foreign purchases was largely due to the desire of some companies to build up additional stocks of PVC before introducing an import duty in the amount of 18%. Overall SPVC imports reached 17,800 tonnes in January-May 2020, compared to 18,400 tonnes a year earlier.

The increase in capacity utilisation allowed Karpatneftekhim to increase export volumes.The key suppliers of PVC to the Ukrainian market were producers from Europe, their share in total imports for the period under review amounted to about 80%. Producers from the USA with the share of about 17% were the second largest suppliers.

Last month, Karpatneftekhim had to increase export sales due to falling demand from the domestic market, the export sales of Ukrainian PVC amounted to 17,400 tonnes, which was almost the same as in April. Overall, about 89,600 tonnes were shipped for export in the first five months of 2020, compared to 66,600 tonnes a year earlier.
MRC

Crude futures remain lower in Asia trade as COVID-19 cases rise in US

MOSCOW (MRC) -- Crude oil futures were trading lower in mid-morning trade in Asia June 12 as a rise in COVID-19 cases in the US clouded the overall outlook for oil demand recovery, reported S&P Global.

At 10:10 am Singapore time, ICE Brent August crude futures were down 58 cents/b (1.50%) from the June 11 settle at USD37.97/b, while the NYMEX July light sweet crude contract was 72 cents/b (1.98%) lower at SD35.62/b.

"A surprise stockbuild in the US last week as well as increasing concerns over a second wave of coronavirus cases in the US have been the main catalysts for oil's slide," OCBC analysts said in a June 12 note.

Bearish sentiment spilled over into early Asia trading after crude settled sharply lower June 11 on concerns a resurgent COVID-19 pandemic would dampen economic recovery.

"The oil markets turned unreservedly defenseless to a post-lockdown uptick in COVID-19 infections in the world's largest oil consuming economy, the humongous US market," AxiCorp's chief global markets strategist Stephen Innes said in a June 12 note.

Around six US states have seen an increase in new COVID-19 cases, including Texas and Arizona, according to media reports. The total number of cases in the US had surged past 2 million as of June 11.

"If a widespread secondary outbreak is confirmed, it will undoubtedly threaten to bring the US economy and global market to its knees once again," Innes added.

On the OPEC+ front, focus remains on supply cut compliance after the alliance agreed on June 6 to extend a record 9.6 million b/d of output cuts through to the end of July.

Several OPEC+ delegates have recently voiced concerns over plans for the group to meet monthly to assess production levels, S&P Global Platts reported earlier.

Meanwhile, the US oil rig count fell by seven on the week to 199, Enverus data showed June 11. This indicated that drilling activity has slowed, but failed to spur an uplift in sentiment.

As MRC wrote previously, OPEC, Russia and allies agreed on Saturday to extend record oil production cuts by one month until the end of July.

We remind that 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 also 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

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

Umicore issues EUR500 million bonds

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

Repsol reduced operations at some refineries on poor demand

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