Petronas restarts No. 2 methanol unit

MOSCOW (MRC) -- Petronas Chemical Group (PCG) is in plans to bring on-stream its No. 2 Methanol unit following a turnaround, as per Apic-online.

A Polymerupdate source in Malaysia informed that, the company is likely to resume operations at the unit on June 22, 2020. The unit was shut for maintenance on June 7, 2020.

Located at Labuan in Malaysia, the unit has a production capacity of 1.7 million mt/year.

As MRC wrote before, in early May, 2020, Petronas Chemicals (Kuala Lumpur), Malaysia’s leading petrochemicals player, reported a drop in first-quarter sales and earnings citing the coronavirus disease 2019 (COVID-19) pandemic. The sharp decline in petrochemical product prices following the outbreak of COVID-19, the deepening industry downcycle as crude oil prices collapsed due to the OPEC+ fallout, and the recessionary global economic outlook have hurt results, the company says.

We remind that PRefChem, owned by Petronas and Saudi Aramco (50:50), received commercial ethylene and propylene at its new cracker in Pengerang (Malaysia,) on 13 September, 2019.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.

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 firs 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) -- Oil prices steadied, supported by tighter supplies from major producers but held in check by concerns over a record rise in global coronavirus infections that could stall a recovery in fuel demand, said Hydrocarbonprocessing.

Brent crude LCOc1 rose 5 cents, or 0.1%, to USD42.24 a barrel by 0941 GMT. U.S. crude CLc1 was down 10 cents, or 0.2%, at USD39.65. South Korea on Monday said for the first time that it is in the midst of a ‘second wave’ of the coronavirus. The World Health Organization reported a record increase in global cases on Sunday, with the biggest increase from North and South America.

“Infections are rising in key markets around the world and there are valid concerns that the world is in for a prolonged period of dealing with its consequences,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen. Oil prices have been supported by a recovery in fuel demand globally as nations resume economic activity after coronavirus lockdowns.

Signalling a recovery in global markets and tighter supplies, Brent has moved into backwardation, where oil for immediate delivery costs more than supply later. Both contracts rose about 9% last week. However, after weeks of rising, prices of physical oil have begun to ease, traders and analysts say, as the rally succumbs to the reality of poor refinery margins and brimming storage tanks.

“I find it more difficult for oil to move higher at this point, especially with the growing concern about second-wave contagion,” said Howie Lee, an economist at Singapore’s OCBC Bank. In Canada and the United States, the number of operating oil and natural gas rigs fell to a record low last week, even as higher oil prices prompt some producers to resume drilling.

The OPEC+ group, consisting of the Organization of the Petroleum Exporting Countries and allies such as Russia, has yet to decide whether to extend a record supply cut of 9.7 million barrels per day (bpd) for a fourth month in August. Russia sees between USD40 and USD50 to the barrel as a fair and balanced oil price, Deputy Energy Minister Pavel Sorokin said.

As MRC informed previously, global oil consumption cut by up to a third. 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) -- Economic uncertainty caused by the COVID-19 pandemic has trimmed 11% off the price of the now-closed Philadelphia Energy Solutions (PES) refinery site, said Chemweek.

In papers filed with the US Bankruptcy Court in Delaware on 18 June, PES has requested approval of an agreement that would reduce the initial USD240 million purchase price by USD27.5 million. Court approval would mean the sale to Chicago real estate developer Hilco could close by 26 June.

COVID-19 "has led to unprecedented economic uncertainty, resulting in many counterparties abandoning acquisitions that were agreed upon prior to the pandemic, with others significantly retrading on economic terms," PES’s submission states.

While the refiner believes "that all conditions to the purchaser's obligations to close other than closing deliverables have been satisfied, the purchaser has taken the opposite position," the motion said. "Under these circumstances it would be challenging to compel the purchaser to close the sale transactions as reflected in the original agreement, and that the debtors would face a challenge to their retention of the deposit."

In the request, Hilco cites difficulties created by COVID-19 as well as increased environmental remediation costs and expenses.

Under the terms of the amendment, if the deal doesn't close by 26 June, the purchase price will increase by USD357,143 for each calendar day during the period starting on June 1 and ending on the closing date. If the closing doesn't occur by June 26 or one business day after the court approves the amendment, PES will keep the USD15 million of Hilco's deposit in escrow and reserve its right to seek further relief.

In addition, PES will retain the emission reduction credits it owns instead of transferring them to the liquidating trust at closing, as stipulated by the original agreement. As previously reported by OPIS, the bankruptcy court approved on 3 June a settlement agreement between EPA and PES that would require the refiner to buy and retire USD10 million worth of third-party verified Renewable Identification Number (RIN) credits.

That agreement resolved PES's Renewable Fuel Standard compliance obligation under a deal it struck with EPA in 2018 after it first filed for Chapter 11 bankruptcy protection. PES shut its 335,000-b/d refinery and again filed bankruptcy in 2019 after a fire on June 21 destroyed parts of the two-plant facility.

As MRC informed previously, global oil consumption cut by up to a third. 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) -- Japanese firm Hitachi Chemical Company will undergo a name change to Showa Denko Materials on 1 October this year, parent firm Showa Denko said.

The name change "represents Hitachi Chemical's determination of opening its new chapter as a consolidated subsidiary of SDK", the producer said in a statement.

Here SDK announces the change in the firm name of Hitachi Chemical because it was resolved at Hitachi Chemical's annual general shareholders' meeting held on June 23, 2020. The new firm name "Showa Denko Materials Co., Ltd." represents Hitachi Chemical's determination of opening its new chapter as a consolidated subsidiary of SDK, and now SDK and Hitachi Chemical share the idea of offering their customers and society optimum solutions by combining Showa Denko Group's wide-ranging material technology with Hitachi Chemical Group's material design technology utilizing characteristics of raw materials, ability to evaluate functions, and ability to design functions leading to process technology, including module segmentation.

As MRC informed earlier, Showa Denko (SDK) expanded production lines to produce vinyl ester resin (VE) and synthetic resin emulsion (EM) in the premises of Shanghai Showa Highpolymer Co., Ltd. (SSHP), a Chinese subsidiary of SDK, and has increased production of VE and EM there, aiming to expand the Showa Denko Group’s functional resin business in China.

As per MRC's ScanPlast, Russia's production of unmixed polyvinyl chloride (PVC) decreased in April, including due to the scheduled maintenance works of one of the producers. Overall PVC output totalled 432,100 tonnes in January-May 2020, up by 2% year on year.

Showa Denko K.K. Mainly engaged in the petrochemical business. The company's petrochemical division produces and markets industrial gases, olefins, organic chemicals, and others.

Hitachi Chemical is a consolidated subsidiary of Showa Denko and is involved in the manufacturing, processing and sales of functional materials and advanced components and systems.
MRC

MOSCOW (MRC) -- After weeks of rising, prices of physical oil have begun to ease, traders and analysts say, as the rally succumbs to the reality of poor refinery margins and brimming storage tanks, said Hydrocarbonprocessing.

Refinery runs in Europe and China have been cut to allow time to sell off supplies of refined products before processing stored crude which is also stored in abundance, making the purchase of new oil shipments less attractive.

Meanwhile, refining profits for products have improved slightly but are still near their depths during the worst of the pandemic, as the world faces an uncertain recovery. "Margins are not at the bottoms but they’re very bad - that’s not going to help demand. We see these potential spikes in COVID-19, which are also not going to help matters,” one oil trader said. “The market was overdone and is going to need to retrace to reflect the realities now."

The price slowdown is visible globally: offers for heavier Angolan Dalia crude and Congolese Djeno are down at least a USD1 from just a week earlier to around a USD1 above dated Brent. Spot discounts for Abu Dhabi’s light sour Murban grade have widened nearly a dollar compared to their official selling price in just a few days.

Mediterranean crudes have also come off peaks: offers for CPC Blend have fallen by almost a dollar and Azeri crude is selling for a dollar less than earlier in June. "We haven’t bought anything in the last several weeks as everything is so expensive. CPC is still the most affordable, but still 20-30 cents away from profitability," a refiner said.

"Many Mediterranean refiners have cut runs, so hopefully weaker demand may push differentials down." In the United States, shale producers are now bringing back about a quarter of the volumes they shut as prices have improved, weighing on physical prices in the Permian and Bakken basins.

Much of the uptick in demand for physical crude deliveries came from China, but market sources say independent refiners there have shied away from the higher prices, cutting runs as they await new quotas from the government for crude imports.

As MRC informed previously, global oil consumption cut by up to a third. 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