PP imports to Russia grow by 21% in H1 2020

MOSCOW (MRC) -- Polypropylene (PP) imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports, according to MRC's DataScope report.

In June, Russian companies significantly raised their purchasing of PP in foreign markets partially because of a major increase in demand, imports were 20,000 tonnes versus 14,200 tonnes a month earlier. Thus, overall PP imports to Russia reached 105,300 tonnes in January-June 2020, compared to 86,800 tonnes a year earlier. Purchasing of all grades of propylene polymers in foreign markets increased, with homopolymer PP imports accounting for the most noticeable rise.

Overall, the structure of PP imports by grades looked the following way over the stated period.

June imports of homopolymer PP were 9,600 tonnes versus 4,900 tonnes a month earlier, PP shipments from Turkmenistan increased significantly. Thus, overall imports of homopolymer PP into the country totalled 43,600 tonnes in the first six months of 2020, compared to 28,600 tonnes a year earlier.

Last month's imports of propylene block-copolymers (PP block copolymers) were 5,200 tonnes versus 3,500 tonnes in May, demand for pipe grade PP increased from Russian companies. Imports of PP block copolymers into Russia reached 28,800 tonnes in January-June 2020, compared to 25,600 tonnes a year earlier.

June imports of statistical copolymers of propylene (PP random copolymer) dropped to 2,800 tonnes from 3,800 tonnes a month earlier, with pipes producers accounting for the main reduction in shipments due to higher prices in Europe. Overall imports of this grade of propylene copolymers were 17,400 tonnes in January-June 2020, compared to 15,100 tonnes a year earlier.

Imports of other propylene polymers totalled 15,500 tonnes over the stated period versus 17,400 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Ukraine's polypropylene (PP) imports totalled about 61,100 tonnes in January-June of this year, down 8% year on year.
All PP grades accounted for the decrease in shipments, according to a MRC's DataScope report.

June imports rose to 13,400 tonnes against 8,700 tonnes a month earlier under the pressure of the seasonal factor and the relaxation of quarantine restrictions. Overall imports of propylene polymers reached 61,100 tonnes in January-June 2020, compared to 66,800 tonnes a year earlier. Demand for all grades of propylene polymers decreased, but propylene block copolymers (PP block copolymers) accounted for the largest reduction.

The structure of PP imports by grades looked the following way over the stated period.
June imports of homopolymers of propylene to the Ukrainian market grew to 10,900 tonnes from 6,600 tonnes a month earlier, local companies increased purchasing of homopolymer PP raffia in Russia and Azerbaijan. Total homopolymer PP imports were 47,900 tonnes in January-June, compared to 52,200 tonnes a year earlier.

June imports of PP block copolymers into the country amounted to a little more than 1,500 tonnes compared to 700 tonnes in May, local companies increased the volume of purchases of injection moulding polypropylene. Over the reporting period, about 5,700 tonnes of propylene block copolymers were imported against 6,400 tonnes for the same period in 2019.

June PP random copolymers imports decreased to 700 tonnes from 1,200 tonnes a month earlier, local companies decreased their purchasing of pipe and injection moulding PP random copolymers. Overall PP random copolymers imports reached 6,500 tonnes in January-June 2020, compared to 7,300 tonnes a year earlier.

Overall imports of other propylene copolymers totalled slightly over 900 tonnes over the stated period.

MRC

MOSCOW (MRC) -- Imports of polyethylene (PE) into Russia decreased by 7% year on year to 328,000 tonnes in January-June. High density polyethylene (HDPE) accounted for the main decrease in imports, according to MRC ScanPlast report.

June imports of polyethylene rose to 53,500 tonnes against 49,100 tonnes a month earlier, the supply of low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) increased. Overall PE imports totalled 328,000 tonnes in the first six months of 2020, compared to 350,900 tonnes a year earlier. Only the supply of LDPE increased, while for other types of ethylene polymers there was a decrease in imports.

The structure of HDPE imports by grades looked the following way over the stated period.

June HDPE imports decreased to 19,300 tonnes from 22,100 tonnes a month earlier, on weaker shipments from Uzbekistan and Europe. Overall external supply of HDPE in the country decreased to 147,400 tonnes in the first six months of 2020, down 14% year on year. The largest decrease in supplies was due to film and pipe HDPE.

Last month's imports of low density polyethylene (LDPE) exceeded 10,600 tonnes, compared to 8,500 tonnes in June, shipments of film grade PE from Europe and Belarus increased. Total imports of blow moulding HDPE in the country reached 51,400 tonnes in January -June 2020, up 9% year on year.


June LLDPE imports into Russia increased to about 15,600 tonnes against 11,400 tonnes a month earlier, local converters increased their purchases of film PE. Overall LLDPE imports totalled 83,200 tonnes in the first six months of the year, down 5% year on year.

Last month, external deliveries of other ethylene polymers, including ethylene vinyl acetate (EVA), amounted to 7,300 tonnes against 6,200 tonnes in May. The overall imports of other ethylene polymers exceeded 46,100 tonnes over the stated period versus 45,200 tonnes a year earlier.

MRC

MOSCOW (MRC) -- A coronavirus-driven collapse in fuel demand is threatening Australia’s oil refining industry, just as supply chain disruptions wrought by the pandemic have focused the government on the need to shore up fuel security, reported Reuters.

Already dependent on imports for more than half its fuel needs after the closure of four refineries since 2003, industry and analysts say at least one of the country’s four remaining refineries could close unless the government steps in.

Pandemic lockdowns decimated demand for gasoline, jet fuel, diesel and shipping fuel, hitting refiners that only recently enjoyed a return to profitability after years in the red.

“When the global margin environment weakens and gets tougher, the threat of closure definitely increases,” said Sushant Gupta, head of Asia Pacific downstream oil and gas research at consultants Wood Mackenzie.

Seeing an existential threat facing the four refineries - owned by global majors BP Plc and Exxon Mobil Corp, and Australian-listed Ampol Ltd and Viva Energy - the government stepped in last month.

As well as seeking proposals to build fuel storage, Energy Minister Angus Taylor launched talks with the industry on how to shore up the refineries, aiming to “protect Australia’s national sovereignty”.

“I’m sure the government is very keen to make sure the country doesn’t lose the majority of them,” said Mark Samter, an analyst at MST Marquee.

It’s already tough for Australia’s four ageing plants to compete with Asia’s newer, mega refineries.

Combined, the four refineries have a capacity of just 464,000 barrels per day (bpd), compared with Asia’s biggest refinery, the 1.24 million bpd Jamnagar plant in India.

There is also some uncertainty over the majors’ long-term commitment to refining in Australia, with Exxon having put long-held local oil and gas assets up for sale and BP’s energy priorities shifting.

Critically, the pandemic has smashed earnings just as the refiners face decisions on whether to invest a total of A$1 billion (USD690 million) to upgrade their plants to produce gasoline with lower sulfur content from 2027. Work would have to begin in 2022 to meet the deadline.

“Whilst we support the investment and support the outcomes it will deliver, it is an investment that’s not going to deliver any extra return for the refinery, therefore it’s a difficult one to make, and it’s obviously a sizable one,” Viva Energy Chief Executive Scott Wyatt told Reuters.

Exxon Mobil Australia Chairman Nathan Fay noted the “challenges” in competing with Asia’s big refiners at an energy conference last month.

Options to help the industry could include direct subsidies for plant upgrades, a government-underwritten minimum refining margin, or fuel excise relief, Samter said.

Viva’s Wyatt said the government could also provide incentives for refiners to produce higher quality gasoline earlier than 2027.

Another option could be to skip the expensive refinery upgrades and instead run at lower rates locally while importing higher quality fuel as there will likely be a global gasoline surplus, said WoodMac’s Gupta.

If any refineries close, the most likely would be Exxon’s Altona facility in Victoria state, the oldest, and Ampol’s Lytton plant in Queensland, which has already been shut for extended maintenance, said Samter.

Ampol sees no problem with relying on imports.

“We remain of the view that there is no issue with security of supply, and we have very secure supply chains,” Ampol Chief Executive Matt Halliday told Reuters.

“But we also understand that the government is looking at supply security through a slightly different lens at the moment.”

As MRC informed before, boiler work at the ExxonMobil-operated 830,000-metric tons/year ethylene plant at Mossmorran, UK, was scheduled for completion in June, 2020. Two of the three boilers at the plant exploded in August 2019, resulting in the plant being taken offline until the end of February. OPIS sources said in May that the plant was currently able to operate at full capacity with two boilers in operation but that the third boiler would be working by June.

We remind that in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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) -- PPG Industries today reported second-quarter net income from continuing operations down 63.3% year-on-year (YOY), to $99 million, on net sales down 25%, to USD3.0 billion, said Chemweek.

Adjusted net income declined tk% YOY, to USD235 million, or 99 cents/share, ahead of analysts’ consensus estimate of 71 cents/share, as reported by Refinitiv (New York, New York). Selling prices were up 2% YOY, but volumes fell 24%. “The lower sales volumes reflect the negative economic impact of the COVID-19 pandemic,” PPG says.

“The strongest performance came from our global architectural coatings businesses, which was driven by increased do-it-yourself (DIY) demand of PPG paint products in all major regions,” says PPG chairman and CEO Michael McGarry. “During the quarter, several of our businesses in China, including automotive original equipment manufacturer (OEM) coatings, general industrial coatings, and protective and marine coatings, achieved higher sales volumes year-over-year supported by a recovery in Chinese economic activity. Year-over-year demand was lower across most businesses in other major global regions, but our sequential monthly sales volumes improved in each region during the quarter."

Performance coatings segment sales declined 15% YOY, to USD2.1 billion, while segment operating income also fell 15%, to USD362 million. Volumes fell 15% and selling prices rose 3%, with sales boosted by currency translation. DIY architectural coatings sales were strong, but most other parts of the business reported declines, with the largest drops seen in aerospace coatings and automotive refinish.

Industrial coatings segment sales declined 40% YOY, to USD950 million, while segment income fell 85%, to USD34 million. Volumes were down 38%, while selling prices rose slightly. Automotive OEM coatings sales were down 50% YOY, and general industrial coatings sales were down 35% YOY, both due to COVID-19 shutdowns. Packaging coatings were a bright spot, with modes sales increases, PPG says.

"Looking ahead, we expect overall economic activity to continue to recover, although at a varied pace across end-use markets and regions given the uncertainty around the ongoing effects of the pandemic,” McGarry says. “We anticipate positive overall global architectural coatings demand trends to continue, with some moderation from the elevated DIY demand experienced in the second quarter. We expect continued, solid recovery patterns in automotive OEM and general industrial coatings demand in the U.S. and Europe, but still below 2019 levels. Automotive refinish and aerospace coatings sales are expected to be lower until travel and vehicle traffic density return toward more normal levels."

PPG expects aggregate sales volumes for the third quarter to decline 8-15% YOY.

As MRC informed earlier, PPG has reached a definitive agreement to acquire Industria Chimica Reggiana (ICR), an Italian manufacturer of paints and coatings for the automotive refinish and light industrial coatings industries.

Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May.
MRC