PVC imports to Belarus remains the same year on year in Jan-Apr 2020

MOSCOW (MRC) -- Overall imports of unmixed polyvinyl chloride (PVC) into Belarus totalled 12,800 tonnes in the first four months of 2020, which corresponds to the same figure a year earlier, according to MRC's DataScope report.

According to the Statistical Committee of the Republic of Belarus, local converters reduced their purchasing of PVC in April 2020 under the pressure of weaker demand for finished products because of the coronavirus pandemic, overall imports totalled 2,600 tonnes versus 3,500 tonnes a month earlier.

Thus, imports of unmixed PVC into the country reached 12,800 tonnes in January-April 2020, which corresponds to the last year's figure.

Russian producers with the share of about 82% of the Belarusian market were the key suppliers of resin to Belarus over the stated period. Producers from Germany and Ukraine with the share of approximately 7% each were the second and third largest suppliers, respectively.

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MOSCOW (MRC) -- More than 13% of crude oil production in the US Gulf of Mexico remained offline on June 11 after Tropical Storm Cristobal swept through the region during the weekend, bringing the region closer to normalcy during what's expected to be a busy hurricane season, reported S&P Global.

Nearly 200,000 b/d of crude came back online from June 10 to June 11, according to daily updates from the US Bureau of Safety and Environmental Enforcement. Almost 35% of the US Gulf production was shut-in in advance of the storm. After a peak of 635,781 b/d was shut in, BSEE said 242,681 b/d remained down on June 11, or 13.12% of total US Gulf oil production.

BSEE decreased its gas shut-in estimate from 619 MMcf/d down to 241 MMcf/d, keeping just 8.89% of the offshore gas volumes offline.

BP, Occidental Petroleum and other producers that shuttered some volumes have said they were working to resume operations and production volumes.

"We have safely returned staff to all of our central and eastern (US Gulf) facilities that were affected by Tropical Storm Cristobal, and we are in the process of carefully ramping back up production and resuming normal operations," Oxy said in a statement late June 9.

Ahead of Cristobal's move onshore, BSEE said, operators evacuated 188 platforms and rigs in the US Gulf - roughly 30% of the region's total platforms with working personnel - and relocated several drillships. BSEE said 20 platforms, or 3%, remained evacuated on June 11.

BP reduced output at its Thunder Horse, Atlantis and Na Kika platforms in the US Gulf. Those three BP-operated platforms churn out more than 200,000 boe/d. BP's Mad Dog platform was not affected.

"BP has started to resume normal operations at its four operated platforms in the deepwater Gulf of Mexico," BP said in a June 8 statement, declining to give further updates.

Others such as Shell and Chevron said they had not reduced their US Gulf production volumes during the storm.

Cristobal battered southern Mexico and shut down ports over the past week, before moving through the Gulf of Mexico and depositing heavy rainfall from Louisiana to Florida. The storm hit just as oil prices were moving up, with the OPEC+ group agreeing to extend deeper production cuts at least through July and front-month NYMEX WTI flirting with $40/b for the first time since early March.

Total US Gulf oil production was nearly 2 million b/d before the coronavirus pandemic cratered global demand and oil prices. BSEE was estimating US Gulf oil production at closer to 1.85 million b/d before Cristobal.

However, S&P Global Platts Analytics data estimates that US Gulf crude production will fall to an estimated 1.62 million b/d average for June as some producers reduced their volumes because of lower prices.

In Mexico, Pemex had to shutter production at some of its wells in the area struck by storms Amanda and Cristobal for 10 working days between May and June, CEO Octavio Romero said during a press conference June 7.

Romero did not say how many wells were affected or where they are located. Amanda hit Mexico on May 31, passing through the states of Campeche, Chiapas, Oaxaca, Tabasco and Veracruz. Only Chiapas does not have Pemex oil or gas infrastructure.

As MRC informed earlier, Total SA cut production at its Port Arthur, Texas, refinery to 70% of its 225,500 barrel-per-day (bpd) capacity with a reduction in the operating level of the large crude distillation unit (CDU), said Gulf Coast market sources in mid-May, 2020.

We also remind that Total has recently disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.
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1. China is stockpiling crude oil and exporting fuel, not boosting consumption

MOSCOW (MRC) -- The rebound in China’s crude oil refinery processing and record imports of the fuel in May would seem to be bullish indicators that the world’s second-largest economy is recovering strongly after the hit from the coronavirus lockdowns, said Hydrocarbonprocessing. For sure, the numbers are robust. But there are some other factors within the data that give rise to caution against becoming too optimistic about the real strength of the crude oil sector in China. The two main factors worth looking at are the amount of crude flowing into commercial and strategic storage tanks, and the amount of crude that is ultimately being exported back out of China in the form of refined fuels.


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MOSCOW (MRC) -- Russia may further cut overseas supplies of its Urals oil next month due to rising demand from domestic refineries as coronavirus-related restrictions ease, reported Reuters with reference to sources familiar with the data and oil producers’ plans.

The wrapping up of the refineries’ seasonal maintenance is also expected to increase the appetite for the crude from processing plants.

Russia agreed to reduce its oil production in May through to July by almost 2.5 million barrels per day of as a part of a deal with other oil producers, a group widely known as OPEC+, to combat the economic fallout caused by the coronavirus.

Moscow lifted its coronavirus lockdown last week.

“Demand for gasoline is ramping up fast, we have to increase runs or there will be nothing to supply to our petrol stations,” a source with a major Russian oil company told Reuters.

Exports of Russia’s flagship Urals oil bend in June have been set to decline to the lowest in months, to just 4.4 million tonnes from the Baltic ports and 1.2 million tonnes from the Black Sea’s Novorossiisk.

Traders familiar with Russian oil companies’ export plans expect oil loadings from the Baltic Sea ports to decline further next month to roughly 3 million tonnes.

Low supplies of Urals oil has driven the premium for the grade to dated Brent to historic highs in early June - plus USD1.95 and USD1.80 per barrel due to a lack of alternatives in Europe.

“Urals alternatives are either absent or very expensive,” a trader in northwest Europe market said.

Russia’s primary offline refining capacity is expected to decrease to 1.6 million tonnes from 3 million tonnes in June, according to Energy Ministry data and Reuters calculations.

It means oil companies will have roughly 1.4 million tonnes less oil for export, traders said. An increase in gasoline demand in June has been above expectations so far, which may lead to even more supplies going to domestic refineries, they added.

As MRC wrote 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) -- PolyOne says it expects second-quarter sales to be down 20% year-on-year (YOY), on big declines in automotive production and consumer discretionary spending due to the coronavirus disease 2019 (COVID-19) pandemic, said Chemweek.

Sales bottomed out in May, chairman and CEO Robert Patterson told investors during a conference call today. However, sales still declined on a YOY basis in June, despite a small sequential improvement.

The May sales trough stands in contrast to many chemical makers, who saw sales bottom out in April. Sales related to the automotive sector are expected to fall by 40% YOY in the second-quarter, although such sales represent only 10% of PolyOne’s total, according to Patterson. “The balance is mainly due to a decline in demand for consumer discretionary items,” particularly athletic apparel—for which PolyOne produces inks—and off-road vehicles, Patterson says. The industrial, construction, and oil and gas markets also experienced lower demand this quarter.

Packaging and healthcare related end markets were a bright spot for PolyOne. Sales into packaging applications were up 5% YOY, while sales into healthcare applications were up 8%.

Regionally, second-quarter sales are expected to be down by 27% YOY in Europe and by about 20% in the Americas. In Asia, sales are expected to rise 10% YOY, due mainly to reopening in China. While sales are improving in Europe and North America, Latin America has been a laggard, as the pandemic has grown worse in the region over the course of the quarter. “For PolyOne overall, we view May as the trough, but we’re not sure we can say that about Latin America,” Patterson says.

“North America and Europe are likely starting to rebound, but demand trends in Latin America and India have yet to stabilize,” notes Laurence Alexander, an analyst with Jefferies (New York, New York).

Second-quarter sales in PolyOne’s distribution segment are expected to fall by 23% YOY, with sales 18% in engineered materials and 16.5% in the colors, additives and inks segment. The larger decline in distribution sales in mainly due to that segment’s greater exposure to the automotive sector and consumer discretionary spending.

Adjusted earnings for the quarter are expected to total 26 cents/share, including the impact of new share issuance and new interest expenses, according to Patterson. This compares with adjusted earnings of 48 cents/share in the second-quarter of 2019.

As MRC informed earlier, in December 2019, Clariant (Muttenz, Switzerland) agreed to sell its entire Masterbatches business to PolyOne Corp. (Avon Lake, Ohio). The transaction values the Masterbatches business at USD1,560 million, representing about 12.2 times the last twelve months reported EBITDA (ending September 2019) on a cash and debt free basis.

Meanwhile, the USD1.45-billion acquisition of Clariant’s masterbatches and color additives business is on track to close on 1 July. The deal will expand PolyOne’s colors, additives, and inks segment.

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.
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