Russian Urals crude at highest value since at least 2001

MOSCOW (MRC) -- With exports of Russia's medium sour Urals crude significantly reduced because of OPEC+ production cuts, the grade has risen to its highest value in S&P Global Platts data going back to 2001, reported S&P Global.

Urals was assessed at Dated Brent plus USD2/b on a delivered Rotterdam basis on June 30, Platts data showed.
Urals supply in July is sharply lower month on month even after May and June loading programs themselves saw big falls.

The July export schedule for seaborne Urals crude shows loadings averaging 774,310 b/d, a reduction of 536,730 b/d on the month to the lowest volume since at least 2012.

The volume in July reflects both the extension of the OPEC+ cuts and the impact of increased refinery runs in Russia, which will reduce the quantity of Urals available for export, sources said.

Loadings of heavier, sour crudes globally have been disproportionately impacted by the OPEC+ cuts, leaving refiners few alternatives.

A European refiner recently paid around Dated Brent plus USD2/b for a cargo loading July 7-11, a trader said. Another source said a cargo loading in the third decade of the month had traded at a premium of USD2.35/b to Dated Brent.

"Sour buyers in the Mediterranean are a bit stuck...nothing to buy and therefore bidding for anything remotely sour that can still be handled by refineries," a trader said.

However, the arbitrage to China for the grade was closed following ample inventory in the country, traders said.

With the country a significant buyer of the grade, reduced demand from the region may provide some respite to Mediterranean and European refiners.

In the Mediterranean, Urals was last assessed at a premium to Dated Brent of USD2.50/b on a delivered Augusta basis. The assessment has only been higher once before in Platts data, when it was assessed at a premium of USD2.55/b on June 18.

As MRC reported earlier, the 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 taht 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) -- Taiwan's CPC Corporation unexpectedly shut is No. 4 cracker due to technical glitches on 2 July, reported CommoPlast with reference to market sources.

Based in Linyuan, Taiwan, the cracker is able to produce 380,000 tons/year of ethylene and 193,000 tons/year of propylene. The shutdown period is slated for around 7 days.

Market players reported that this plant is supplying upstream to Taiwan's Oriental Union Chemical Corporation (OUCC)'s 250,000 tons/year monoyethylene glycol (MEG) plant as well as Taiwan‘s China Man-made Fiber Corporation (CMFC)'s 400,000 tons/year MEG plant, which causing both MEG plants to reduce production rate to around 70-80%.

The company also operates another cracker at the same site - No. 3 cracker, which has an ethylene capacity of 720,000 mt/year and propylene capacity of 370,000 mt/year.

As MRC informed previously, CPC Corporation took one of its naphtha crackers off-stream on 8 November 2019 for major maintenance work. The No. 4 cracker was expected to remain offline for about 65 days. The shutdown resulted in a production loss of 67,671 tons of ethylene and 34,370 tons of propylene.

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.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC

MOSCOW (MRC) -- Braskem USA is planning to startup its new polypropylene (PP) plant in the third quarter this year, reported CommoPlast with reference to market sources.

Based in La Porte, Texas, United States, the plant has a production capacity of 450,000 tons/year.

A source from the market players informed that the plant has been successfully conduct trial run and producers small quantity of off-grade homo-PP cargoes since beginning of June 2020, meanwhile it is slated to have offers to China within Q3 this year.

The new PP plant is known as the Delta project, which costs investment of USD675 million and the construction has begun since 2017.

As MRC informed earlier, in H2 June, 2020, Braskem announced it had completed construction of its newest PP production facility at La Porte, Texas. The new plant has the capability to produce the entire PP portfolio including homopolymer, impact copolymer and random copolymers. The plant added 50 permanent full-time jobs to support long-term commercial production.

According to MRC's ScanPlast report, 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.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- S-Oil Corp, South Korea's third-biggest refiner, will supply Won 3.14 trillion (USD2.66 billion) worth of refined oil products to Saudi Aramco's trading arm this year, reported S&P Global with reference to a company official.

As per the deal with Aramco Trading Singapore, S-Oil will provide a total of 36 to 44 million barrels of oil products over January 1 to December 31, 2020, the official said.

The products include 9 to 10 million barrels of gasoil, 10 to 11 million barrels of jet fuel, 6 to 8 million barrels of gasoline, 11 to 15 million barrels of naphtha and 40,000 barrels of MTBE, the official said.

S-Oil, which is 63.4% owned by Aramco Overseas Co., a subsidiary of Saudi Aramco, imports 90% of its crude oil needs from Saudi Arabia -- mostly Arabian Light and Arabian Medium.

For 2019, the refiner provided Won 2.61 trillion worth of refined oil products, including 10 to 17 million barrels of gasoil, 9 to 12 million barrels of jet fuel, and 4 to 5 million barrels of gasoline, to Saudi Aramco.

In November 2018, S-Oil started commercial production at a residue upgrading complex and olefin downstream complex in the Onsan complex on South Korea's southeast coast.

The new facility is producing 21,000 b/d of gasoline, 405,000 mt/year of polypropylene (PP) and 300,000 mt/year of propylene oxide.

S-Oil runs three CDUs - No. 1 with 90,000 b/d, No. 2 with 240,000 b/d and No. 3 with 250,000 b/d, as well as condensate fractionation unit with a capacity of 89,000 b/d. This makes its total refining capacity 669,000 b/d.

As MRC wrote before, S-Oil, South Korean petrochemical major, has taken off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround last month. The company is likely to undertake a planned shutdown at the unit by early-July, 2020. The unit is slated to remain off-line for about two weeks. Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

Propylene is the main feedstock for the production of PP.

According to MRC"s ScanPlast report, 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) -- Renewable aromatics technology firm Anellotech (Pearl River, NY) has announced R Plus Japan Ltd., a new joint venture company, will invest an undisclosed sum in the development of Anellotech’s Plas-TCat technology for recycling used plastics, said Chemweek.

Unlike the existing, multi-step processes that first liquefy plastic waste back into low value “synthetic oil” intermediate products, Anellotech’s Plas-TCat chemical recycling technology uses a one-step thermal-catalytic process to convert single-use plastics directly into basic chemicals such as benzene, toluene, xylenes (BTX), ethylene, and propylene, which can then be used to make new plastics. The technology’s process efficiency has the potential to significantly reduce CO2 emissions and energy con-sumption.

R Plus Japan was established by 12 cross-industry partners within the Japanese plastics supply chain. Member partners include Suntory MONOZUKURI Expert Ltd. (SME, a subsidiary of Suntory Holdings Ltd.), TOYOBO Co. Ltd., Rengo Co. Ltd., Toyo Seikan Group Holdings Ltd., J&T Recycling Corporation, Asahi Group Holdings Ltd., Iwatani Corporation, Dai Nippon Printing Co. Ltd., Toppan Printing Co. Ltd., Fuji Seal International Inc., Hokkaican Co. Ltd., and Yoshino Kogyosho Co. Ltd..

Suntory began collaborating with Anellotech in 2012, to develop the Bio-TCat process for making aromatics, including para-xylene, from non-food biomass (pine wood), required to make 100% plant-based polyethylene terephthalate (PET) bottles. Anellotech is leveraging and adapting its process technology for Plas-TCat, which will convert mixed plastic waste feedstocks, including composite films and other difficult-to-recycle materials, at industrial scale into the same basic chemicals (aromatics and olefins) already used to make most virgin plastics, including PET.

According to the ICIS-MRC Price Report , spot prices of Russian plants in early June approached contract prices and fell to the range of Rb72,000-74,000/tonne, CPT Moscow, including VAT. The plants Polyef, Ecopat and Senezh in early June have free material on the spot. The production of TPA at the plant in Blagoveshchensk finally returned to normal after a long period of unstable operation, according to information from market participants.
MRC