Total Port Arthur refinery operating at 60% capacity

MOSCOW (MRC) -- Total SA’s Port Arthur, Texas, refinery is operating at about 60% of its 225,500-barrel-per-day (bpd) capacity, said sources familiar with plant operations, said Hydrocarbonprocessing.

The refinery is running at reduced capacity because of the loss of demand during the coronavirus pandemic, the sources said.

As MRC informed earlier, Total Petrochemicals, Europe’s third largest producer of crude oil, announced an increase in polypropylene (PP) prices for US shipments in August. So, the price increase will come into force on 1, August of the current year and will be 3 cents per pound or USD66/tonne, or according to the terms of current contracts.

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

SayanskKhimPlast shut PVC production

MOSCOW (MRC) -- SayanskKhimPlast (Irkutsk region) has shut down its polyvinyl chloride (PVC) production for a scheduled maintenance, according to ICIS-MRC Price report.

The plant's representative said PVC production was taken off-stream for the scheduled turnaround on 8 July. The outage will be quite long and will last for about 25 days. The plant's annual production capacity is 350,000 tonnes.

As reported earlier, Russia's second largest PVC producer - RusVinyl - intends to shut its production for a two-week scheduled maintenance from 13 July. The plant's annual production capacity is 330,000 tonnes.

It is also worth noting that due to problems with feedstock, Bashkir Soda Company shut its PVC production for several days in mid-June. At the same time, the Bashkir producer will not conduct maintenance works this year.

JSC "Sayanskkhimplast" (Irkutsk region), established in 1998, is a complex of large-capacity chlororganic production facilities connected in a single production cycle. SayanskKhimPlast produces PVC, caustic soda and bleach. After commissioning of RusVinyl's PVC production (Nizhny Novgorod region), SayanskKhimPlast became Russia's second largest PVC producer.
MRC

LG Polymers CEO arrested after fatal India gas leak

MOSCOW (MRC) -- Police in India have arrested the South Korean CEO and 11 other employees of a chemical plant over a gas leak that killed 15 people and injured hundreds, reported BBC News.

The 12 employees are accused of causing the deaths by negligence.

The deadly leak occurred at the South Korea-owned LG Polymers plant in Visakhapatnam city on 7 May.

The arrests are the result of an official investigation into the cause of the leak, which found evidence of negligence and poor safety standards.

The inquiry found that "less stringent standards may have been applied to the Indian facility due to negligence, leading eventually to the disaster", BBC Telugu has learnt.

LG declined to comment when the BBC contacted them. But the company had issued a statement in May, saying that it was investigating the cause of the leak.

It offered "sincere condolences and apologies" to the victims and their families, and said it was looking into providing help and treatment to all of them.

Among those arrested on Wednesday are two South Korean nationals - CEO Sunkey Jiong and technical director DS Kim - who had been asked not to leave the country when the probe began in May.

Police told BBC Telugu that the other accused include the additional director of operations, three engineers and a safety officer.

Meanwhile, the state pollution control board in the southern state of Andhra Pradesh, where Visakhapatnam is located, has also suspended two environmental engineers who are being investigated for negligence - they are accused of having failed to enforce the necessary safety rules.

An earlier investigation by BBC Telugu had found evidence of negligence and reported that the plant was operating without the required environmental clearances.

On 7 May, people living in areas surrounding the plant woke up around 03:00 local time to a pungent smell and rushed from their homes suspecting a gas leak.

It later emerged that the deaths were caused by inhalation of vapours of styrene gas, a toxic compound that had leaked from the factory.

Styrene, a flammable liquid, is used in the manufacture of a range of plastics, including polystyrene (PS). It's stored in tanks at temperatures under 20C because it evaporates easily and the temperature has to be monitored regularly.

Officials now believe the leak was triggered by a significant rise in the temperature.

The investigation alleges that the leak happened due to various technical flaws in the way the gas was stored: "poor design of the tank, (an) inadequate refrigeration and cooling system, the absence of circulation systems, and inadequate measurement of parameters".

It described these as "a serious lapse" on the part of LG Polymers and said that the accident was also the result of "poor management" and "a total breakdown of the emergency response procedures".

"LG Polymers bears absolutely liability as a polluter," the findings of the investigation concluded.

As MRC informed before, LG Polymers has decided not to resume operations at its polystyrene (PS) plant in India after the gas leak. A company source who wished not to be identified informed a Polymerupdate editorial team member, on account of the coronavirus pandemic, the plant had been shut. After 40 days of being closed, the company was preparing to restart operations when the accident occurred. The leakage was plugged within hours of the accident and the vapours neutralised.

The PS plant was set up in 1961 as Hindustan Polymers and was taken over by South Korea?s LG Chem in 1997 following which it was named LG Polymers. The plant makes PS and expandable polystyrene (EPS).

According to MRC's ScanPlast report, May total estimated consumption of PS and styrene plastics in Russia was 29,990 tonnes versus 41,780 tonnes a year earlier, down by 28% year on year. Russia's overall estimated consumption decreased in the first five months of 2020 by 10% year on year to 186,670 tonnes.
MRC

Trinseo raises July PS, ABS, and SAN prices in Europe

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN) in Europe, according to the company's press release.

Effective July 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR95 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR95 per metric ton;
- MAGNUM ABS resins - by EUR100 per metric ton;
- TYRIL SAN resins - by EUR85 per metric ton.

As MRC informed before, Trinseo raised its prices for all PS grades on 1 June 2020, as stated below:

- STYRON GPPS -- by EUR85 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech HIPS - by EUR85 per metric ton;
- MAGNUM ABS resins - by EUR70 per metric ton;
- TYRIL SAN resins - by EUR80 per metric ton.

According to ICIS-MRC Price report, prices of Russian PS grew sharply in July, as market participant expected. There was a shortage of PS from Russian plants in the market, demand for material from converters has been increasing.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.
MRC

Russian naphtha exports fall in July as gasoline output rises

MOSCOW (MRC) -- Russian naphtha exports are declining in July while domestic refineries ramp up gasoline output to cover the shortfall following months of reduced production, reported S&P Global.

Northwest European naphtha traders said Russian naphtha exports are much smaller than usual.
"Russian exports are less than half we normally see," a trader said.

Data from Kpler software showed on July 7 that about 168,551 mt of full-range naphtha including Light Virgin grades mainly used for gasoline blending as well as petrochemicals grades, could be loading in the Baltics with a European destination for July, from 629,537kt in June. The majority of the July volumes are loading at port terminals at Ust-Luga.

Russian naphtha exports rose after March as refiners preferred to produce naphtha instead of gasoline, amid anticipated weak domestic demand during the lockdown introduced to combat the spread of the coronavirus, but also to benefit from improved demand from the petrochemical sector.

Gasoline exports were also up, rising 148.8% month on month in March and 47% over January-April, according to customs data.

Meanwhile, gasoline production was curtailed, dropping 29.5% month on month in April, the first full month of nationwide restrictions. Output continued to fall in May, as Russian refineries entered large-scale maintenance and also cut runs amid concerns that reduced traffic was taking up to 50% of the gasoline consumption.

However, contrary to expectations, gasoline demand started to recover in May and surged in June as the lockdown was eased.

"Demand in Russia has recovered very fast and could exceed last year," a Russia-based trader said.

The demand surge pushed prices, especially of premium unleaded 95 RON, to record highs, forcing the government to recommend a reduction of exports while calling on refineries to raise output.

While full June export data is not available, exports of Euro 5 gasoline alone halved last month and production was up 31.8% from May, according to energy ministry data.

Stocks also rose to 1.4 million mt, the ministry said, though traders said stocks remain low and thus still provides a boost to prices as demand continues to firm.

Gasoline demand is expected to continue to climb as many people opt to travel by car rather than public transport, but also to drive to Russian resorts this summer, sources said.

As a result, gasoline output is also projected to increase, especially as refineries have mostly completed maintenance. This would also result in less naphtha available for exports as heavy naphtha grades could be processed in catalytic reformers to boost octane numbers, while light naphtha grades can be added directly into the blending pool.

The increased gasoline production has started pushing down Russian domestic gasoline prices, which started to retreat this week.

But European naphtha has seen a significant boost in prices, led in particular by a supply squeeze stemming from reduced refinery runs, but also the decline in exports from the Baltics and particularly Russia.

"The lack of exports out of the Baltics is really adding to the overall supply reduction we see in the naphtha market," a source said.

Naphtha CIF NWE was assessed at $403/mt on July 6, up $8/mt on the day and above the $400/mt mark for the first time since March 3. This was a 10.8% increase week on week, and the upside is expected to continue, particularly if more gasoline blending demand absorbs naphtha blendstock grades.

As MRC wrote before, Russian offline primary oil refining capacity was seen declining in June to 1.583 million tons from an upwardly revised plan of 4.168 million tons expected in May, reported Reuters in late June with reference to energy ministry data, as seasonal maintenance comes off its peak.

We also remind that 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.

And 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