MOSCOW (MRC) -- The reemergence of COVID-19 cases in Beijing is expected to dampen oil demand as flights are canceled, schools shut and neighborhood lockdowns initiated, but the extent of demand destruction for both oil and gas will depend on how swiftly the government is able to contain the spread and which sectors are most seriously impacted, said S&P Global.
For now, the measures taken by the government seem moderate, but effective.
Some provinces are tightening checks on people and vehicles from Beijing, but no stricter measures are implemented at the national level, S&P Global Platts said in a report June 16.
The negative impact on China's oil demand is minimal for now and the government's quick response should be reassuring for the LNG market, as the prospect of another COVID-19 lockdown in China would have a significant negative global impact, the report said.
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