Lotte enters PTA supply deal with Hanwha; will convert PTA plant to PIA production

MOSCOW (MRC) -- Lotte Chemical and Hanwha General Chemical have entered into an agreement, in which Hanwha will supply 450,000 t/y of purified terephthalic acid (PTA) to Lotte, effective July, as per Apic-online.

In order to meet its supply obligation, Hanwha will restart PTA production at its No. 2 plant in Ulsan, S. Korea, which has been idle. Hanwha owns Korea's "largest" PTA facility with a capacity of 2-million t/y, Lotte noted.

Lotte will transform its 600,000-t/y PTA facility in Ulsan to produce purified isophthalic acid (PIA), beginning this July. It has 520,000 t/y of PIA production capacity.

"This agreement is a case to expand profitability and business competitiveness through the voluntary cooperation of the two companies, who are competitors in the petrochemical industry, and it is meaningful in that they came together for the bigger goal of developing the domestic chemical industry," said Lotte.

As MRC reported earlier, on 4 March, 2020, Lotte Chemcial shut its naphtha cracker after an explosion at the plant in the southwestern city of Seosan, which injured 31 people. The explosion, which was triggered by a fire at a compressor in Lotte Chemical’s naphtha cracker at around 3 a.m. local time (1800 GMT), was soon contained and under control, the company said then in a statement. The cracker may resume production this October, although initially the restart was planned in a couple of weeks after the accident.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, May estimated PET consumption in Russia amounted to 70,170 tonnes, which corresponds to the level of consumption last year (70,450 tonnes). In total for the period January - May of this year, the estimated PET consumption in the Russian Federation amounted to 304,310 tonnes of material. This is 3% lower than the same indicator in 2019.

South Korean Lotte Chemical is a global petrochemical company, established in 1976. It produces low density polyethylene (LDPE), high density polyethylene (HDPE), linear low density polyethylene (LLDPE), polypropylene (PP), functional resins, styrene monomer (SM), polyethylene terephthalate (PET), etc.
MRC

MOSCOW (MRC) -- China has added polypropylene (PP), along with polyvinyl chloride (PVC) and linear low-density polyethylene (LLDPE), as a trading option on the Dalian Commodity Exchange in the country's northeastern province of Liaoning, said Technicaltextile.

With this, the number of options listed for trading on the Exchange has increased to seven, according to Chinese media reports.

The seven options and 20 futures listed for trading on the Exchange cover several fields including chemicals, energy and agriculture. The inclusion of PP, PVC and LLDPE will boost the risk management ability of petrochemical enterprises, the reports said.

China is a major producer and consumer of all three plastic chemical products—PP, PVC and LLDPE—and their listing will support the sound and stable development of the country's petrochemical industry.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- The International Energy Agency (IEA) bumped up its 2020 oil demand forecast on Friday but warned that the spread of COVID-19 posed a risk to the outlook. But oil refining activity in 2020 is set to fall by more than the IEA anticipated last month and to grow less in 2021, reported Reuters with reference to its statement.

The Paris-based IEA raised its forecast to 92.1 million barrels per day (bpd), up 400,000 bpd from its outlook last month, citing a smaller-than-expected second-quarter decline.

"While the oil market has undoubtedly made progress ... the large, and in some countries, accelerating number of COVID-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside," the IEA said in its monthly report.

The easing of lockdown measures in many countries caused a strong rebound to fuel deliveries in May, June and likely also July, the IEA said.

But oil refining activity in 2020 is set to fall by more than the IEA anticipated last month and to grow less in 2021, it said.

Demand in 2021 will likely be 2.6 million bpd below 2019 levels, with kerosene and jet fuel due to a drop in air travel accounting for three-quarters of the shortfall.

"For refiners, any benefit from improving demand is likely to be offset by expectations of much tighter feedstock markets ahead. Refining margins will also be challenged by a major product stocks overhang from the very weak second quarter of 2020," the IEA said.

On the supply front, the IEA said the Organization of the Petroleum Exporting Countries and other producers including Russia, a grouping known as OPEC+, had shown 108% compliance with their pact to rein in output.

Market driven cuts had also affected other producers, especially the United States, though US supply was expected to slowly recover in the second half of 2020 while the lifting of force majeure on exports of Libyan crude could add another 900,000 bpd to global markets by the end of the year.

As MRC wrote before, 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 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Sinopec Corp’s largest refining subsidiary, Zhenhai Refining and Chemical Co, has resumed operations after a nearly four-month overhaul, reported Reuters with reference to Sinopec's statement.

The refinery, based in east China’s coastal city of Ningbo, has crude oil processing capacity of 23 million tons per year, or 460,000 barrels per day (bpd).

“All production units at Zhenhai are now operating at high utilization rates,” Sinopec said, without providing further details.

As MRC informed earlier, Sinopec Tianjin Co (Tianjin United Chemical) is in plans to bring on-stream its naphtha cracker following a turnaround. The company was to resume operations at the cracker by early-July, 2020. The cracker was shut for maintenance on May 9, 2020. Located at Tianjin, China, the cracker has an ethylene production capacity of 240,000 mt/year and propylene capacity of 100,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) -- Members of the European Parliament (MEPs) are proposing ways to step up green energy storage solutions such as hydrogen or home batteries, in a report that was adopted in one of the Parliament’s voting sessions on Friday, reported Chemweek.

The proposals outlined in the report are set to play a crucial role in reaching the goals of the Paris Agreement on Climate Change, as more efficient energy-storage options in the EU will help "spur decarbonization," the EU Parliament says. In addition, since solar and wind have a variable electricity output, more storage solutions should become available to secure supply, MEPs say.

The EU Parliament has called on the European Commission and EU member states to remove regulatory barriers that hamper the development of energy-storage projects. MEPs say that “the Trans-European energy networks also need to be revised in order to improve eligibility criteria for those wishing to develop energy-storage facilities.” Meanwhile, they urge the Commission to continue supporting research into, and the development of, a hydrogen economy, and to implement measures that would reduce the cost of green hydrogen.

The Parliament also supports the Commission’s efforts to create European standards for batteries and reduce dependence on their production outside Europe. This could happen through “enhanced recycling schemes and by sourcing raw materials sustainably, possibly in the EU,” MEPs say.

Other storage options should be examined and developed to provide an environmentally-friendly solution to the EU’s energy-storage and -supply issue, MEPs say.

“Apart from technologies that we already know work well like pumped hydro storage, a number of technologies will play a crucial role in the future, such as new battery technologies, thermal storage, or green hydrogen. These must be given market access to ensure a constant energy supply for European citizens,” says Claudia Gamon, lead MEP.

The Commission estimates that the EU will need to be able to store six times more energy than it does today to achieve net-zero greenhouse gas emissions by 2050. To reach the goals of the EU Green Deal as well as the Paris climate agreement, the European energy system will need to become carbon-neutral by the second half of this century.

As MRC reported earlier, Italian oil major Eni is planning to create a division to focus on new energy solutions which could be headed by its CFO, as it steps up preparations for a decarbonised future.

Besides, Shell has deepened its carbon emissions targets promising to become a net-zero emissions energy business by 2050 or sooner as pressure mounts on oil majors to help mitigate climate change. Under the move, Shell said it will reduce the net carbon footprint of the energy products it sells by around 65% by 2050, up from a previous goal of around 50%, and by around 30% by 2035, increased from around 20%.

We remind that none of the big oil companies currently meet U.N. targets to limit global warming despite the most ambitious targets set by Royal Dutch Shell and Eni.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC