COVID-19 - News digest as of 15.07.2020

1. Eni lowers price assumptions, expects to write off EUR3.5 billion in assets value

MOSCOW (MRC) -- Eni (Rome, Italy) says it expects to record a post-tax, noncash impairment charge of approximately EUR3.5 billion (USD3.95 billion) in its second-quarter 2020 results after revising downward its short- and long-term price assumptions for oil and gas following an assessment of the impact of COVID-19 on its trading environment, said Chemweek. Up to EUR2.8 billion of the write-down relates to the value of its upstream assets, with the remaining amount to be recorded in its refining business, says Claudio Descalzi. The company’s long-term price of Brent crude oil has been lowered by USD10/barrel (bbl) from its previous assumption to USD60/bbl from 2023 onward in real terms, he says. The estimated impairment charge has a plus or minus range of 20%, with the estimation representing a drop of around 4% in the value of noncurrent assets, he adds.



MRC

Chinese June crude imports hit fresh high at 12.99 mil b/d, surge 34% on year

MOSCOW (MRC) -- China's crude oil imports surged 34.4% year on year to all-time high of 12.99 million b/d or 53.18 million mt in June as Chinese buyers who rushed into the market to secure cheap crudes in late March received their deliveries in the month, reported S&P Global with reference to preliminary General Administration of Customs data as of July 14.

It was the first time China's monthly crude imports had surpassed 12 million b/d, and was 14.6% higher than the previous record high of 11.34 million b/d in May, GAC data showed.

The record-high inflow was within expectations, but has caused serious congestion in China waters, S&P Global Platts has reported.

The record June volume brought imports for the first half of 2020 to 10.82 million b/d, up 9.3% on year, despite inflow hitting an eight-month low of 9.72 million b/d in March amid the coronavirus pandemic, the data showed.

GAC releases data in metric tons, which Platts converts to barrels using a 7.33 conversion factor.

For oil products, China's exports fell further to a 16-month low of 3.88 million mt in June from 3.89 million mt in May after hitting a fresh record high of 8 million mt in April, GAC data showed. Exports were last lower at 3.81 million mt in February 2019.

Product exports over January-June rose 3.8% on year to 33.76 million mt, the data showed.

Meanwhile, China's oil product imports edged up 0.7% on year to 16.9 million mt in H1. As a result, China's net oil product exports rose 7.1% on year to 16.86 million mt in the period, the GAC data showed.

As MRC wrote earlier, Chinese independent refineries' June crude imports edged down 0.5% to 4.4 million b/d, or 18 million mt, in June from the record high of 4.42 million b/d in May as Zhejiang Petroleum & Chemical could only manage to take in half of its feedstock tanker arrivals due to port congestion. ZPC received about 2.85 million mt of crude arrivals in June, according to market information collected by S&P Global Platts on July 3.

We remind that Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December, 2019. Based in Zhejiang, China, the cracker is able to produce 1.4 million tons/year of ethylene.

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

Three workers injured at Westlake chemical plant in West Virginia

MOSCOW (MRC) --Three workers have been injured at a West Virginia chemical plant after an apparent release of chlorine gas at the plant, reported U.S.News with reference to officials' statement.

The incident happened Sunday evening at the Westlake Chemical plant, which produces caustic soda and chlorine, news outlets reported. Details of what happened at the Marshall County facility weren't immediately released.

One worker was taken to the hospital by ambulance and two others were transported by personnel at the plant, Marshall County Emergency Management Agency Director Tom Hart said.

Route 2 was closed briefly but has reopened.

Westlake’s plant located in Natrium, West Virginia can produce 409,000 dry metric tonne/year caustic soda and chlorine per year.

As MRC informed earlier, May production of sodium hydroxide (caustic soda) in Russia was 112,000 tonnes (100% of the basic substance) versus 101,000 tonnes a month earlier. Russia's overall output of caustic soda totalled 543,000 tonnes in the first five months of 2020, up by 1.4% year on year.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

Polynt-Reichhold announces maleic project; phthalic plans by year-end

MOSCOW (MRC) -- Polynt-Reichhold has decided to build a 50,000 metric tons/year maleic anhydride plant at its Morris, Illinois, site, said Chemweek.

The move is part of the company’s Strategic Integration Initiative, which was announced in 2019. The company says it is still considering its options for production of another key feedstock, phthalic anhydride, and it expects to make a decision by the end of 2020.

Polynt-Reichhold currently produces both maleic and phthalic anhydride in Italy. The company has 36,000 metric tons/year of maleic anhydride capacity based on benzene at Scanzorosciate, and 65,000 metric tons/year of capacity based on n-butane at Ravenna, according to data from IHS Markit. The company has 30,000 metric tons/year of phthalic anhydride capacity based on ortho-xylene at San Giovanni Valdarno, and 80,000 metric tons/year of capacity at Scanzorosciate.

"For maleic anhydride, we evaluated options for purchasing an existing plant, but this proved to not be feasible,” says Rosario Valido, president and CEO. “Therefore, we decided to go ahead and build our own maleic anhydride plant."

Polynt-Reichhold says its options for phthalic anhydride are integrating with existing operations or construction of a greenfield plant, and a decision is expected by year-end. “An investment in phthalic anhydride will strengthen our competitive position in the Americas while leveraging our proprietary technologies and deep experience operating intermediates facilities in Europe and Asia," notes Valido.

The company owns all of the technology and catalyst manufacturing necessary for the production of phthalic anhydride. Global capacity for maleic anhydride totaled 3.6 million metric tons/year in 2019. The largest producer was Huntsman, with 208,000 metric tons/year of capacity.

Global capacity for phthalic anhydride totaled 6.3 million metric tons/year in 2019. The largest producer was UPC, with 750,000 metric tons/year of capacity. A producer of intermediates, coating and composite resins, thermoset compounds, gelcoats, and niche specialties, Polynt-Reichhold was formed in May 2017 by the merger of Polynt and Reichhold.

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

3M and MIT partner on rapid COVID-19 diagnostic

MOSCOW (MRC) -- 3M announced today that it has partnered with Massachusetts Institute of Technology (MIT) researchers to develop a rapid diagnostic test for COVID-19, said Chemweek.

The goal is a new, highly accurate, mass-produced low-cost diagnostic device that delivers results in minutes, the company adds. The test would detect viral antigens and deliver highly accurate results within minutes via a paper-based device. The test could be administered at the point-of-care and would not need to be sent to labs.

The effort draws on 3M’s expertise in biomaterials and bioprocessing and global medical device manufacturing. The 3M team is led by scientists and manufacturing and regulatory experts from its corporate research laboratories and health care business group. The research team at MIT is led by Professor Hadley Sikes at the Institute’s Department of Chemical Engineering. The Sikes lab specializes in the creation and development of molecular technologies to improve the performance of rapid, cellulose-based protein tests.

"We are excited to collaborate with Professor Hadley Sikes and the team at MIT. Our approach is ambitious, but our collective expertise can make a difference for people around the world, so we owe it to ourselves and society to give it our best effort,” says John Banovetz, 3M Senior Vice President for Innovation and Stewardship and Chief Technology Officer.

The U.S. National Institute of Health (NIH) selected the rapid COVID-19 test for accelerated development and commercialization support. The test is in the Rapid Acceleration of Diagnostics Tech (RADx Tech) program, an aggressively-paced COVID-19 diagnostics initiative from the NIH’s National Institute of Biomedical Imaging and Bioengineering. RADx Tech’s phased innovation funnel is initially supporting a four-week period of intense research to demonstrate the test concept works and can be commercialized on a large scale. The project received $500,000 in validation funding from RADx Tech and is eligible for further investment in later stages of the development funnel.

“There is a pressing need for a highly scalable rapid test,” Sikes said. “We are working with our colleagues at 3M to overcome the challenges to move this research from lab to impact, and find an innovative path forward to manufacture it at scale. Joining forces with 3M and the NIH has greatly enhanced our collective efforts toward swift detection of the virus, and a potential tool to help mitigate and contain this public health crisis."

The teams at 3M and MIT believe a diagnostic test can be deployed once validated. Manufacturing equipment can be scaled to produce millions of units per day.

As MRC informed earlier, SIBUR and 3M have signed an agreement to cooperate in product development and polymer recycling at SIBUR’s PolyLab. Thanks to their durability, strength, eco-friendliness and other advantages, such polymers as polyethylene and polypropylene are some of the most widely used synthetic materials, popular with the construction, utilities, automotive, healthcare, food and other industries.

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