August prices of Russian PVC to rise by Rb2,000/tonnes

MOSCOW (MRC) -- Negotiations over August shipments of suspension polyvinyl chloride (SPVC) to the domestic market began in the Russian market on Wednesday. Local producers announced a further price increase, according to ICIS-MRC Price report.

Last month, amid a major rise in polyvinyl chloride (PVC) prices in foreign markets and a significant fall in supply due to scheduled outages for maintenance, Russian producers achieved a price increase of Rb6,000/tonne and higher. Russian producers also intend to raise their August prices by Rb1,500-2,000/tonne partially because of the weakening of the rouble against the dollar and high prices in Asia and Europe.

Demand for SPVC in the Russian market began to recover dynamically in June-July after a major decrease in April-May. And in July, due to scheduled shutdowns for maintenance at SayanskKhimPlast and RusVinyl, some converters were unable to build up sufficient stocks of polymer.

Turnarounds have been coming to an end, RusVinyl resumed its production at the beginning of the week. SayanskKhimPlast will begin producing PVC in a week, which should increase supply of resin in the market. But at the same time, demand for polymer is strong. And the increased supply from domestic producers might be easily offset by deferred demand from converters.

Imports have grown in the past couple of months, but they were still significantly lower year on year. High prices in foreign markets, particularly, in China and Europe, the incessant devaluation of the rouble against the dollar and long-term deliveries in certain regions, also negatively affected imports.

Converters were in no hurry to agree deals for August shipments of Russian PVC, hoping to limit price increases by a less amount than was announced by producers. Consumers understand that they will hardly be able to avoid the rise in August prices, but it is becoming increasingly difficult to transfer new prices of material to finished products.

Overall, August deals for Russian resin with K=64/67 were negotiated in the range of Rb80,000-83,500/tonne CPT Moscow, including VAT, up by Rb1,000-2,000/tonne from July, for quantities of up to 500 tonnes.
MRC

MOSCOW (MRC) -- SK Energy plans to shut a CDU and a RHDS at the Ulsan complex in second-half of 2020, said Chemweek.

SK Energy has decided to pursue a deep change that boldly breaks the mold of the existing business structure and working method, recognizing that it’s not possible to survive or grow in this new normal with only the existing business portfolio focused on the existing oil business, amidst this low-carbon energy paradigm shift. The company has decided to innovate the business model in the two directions of 'Green' and 'Platform', based on eco-friendliness and digital technologies.

Securing carbon reduction technologies: All efforts to secure innovative technologies that can reduce greenhouse gases, is being made by SK Energy. It is taking the lead in discovering CCU (Carbon Capture & Utilization) technology that captures greenhouse gases (CO2) and reuse them as biofuels or raw chemical materials through chemical and biological processes.

Eco-friendly biofuel production and renewable energy business promotion: With the spread of the green paradigm the need for eco-friendly low-carbon fuels is continuing to increase. Major oil companies such as Shell and BP are reorganizing their portfolios around low-carbon businesses such as natural gas and renewable energy. Also participating in this trend, SK Energy, using the manufacturing facilities and infrastructure of the existing fuel products is reviewing ways to produce eco-friendly biodiesel and bio aviation oil.

At present, around 10 SK fuel service stations and NeTruck Houses are producing electricity through solar panel installations, and the company plans to keep expanding and will continue to review eco-friendly businesses that are the best fit for energy companies based on renewable energy such as solar power and hydrogen.

As MRC informed earlier, SK Capital (New York, New York) is acquiring a majority interest in Techmer PM (Clinton, Tennessee), a designer and producer of engineered compounds and polymer modifiers. John Manuck, president and CEO of Techmer, says access to the resources of SK Capital will allow Techmer to grow beyond North America.

We remind thatn SK Global Chemical, a subsidiary of SK Innovation, plans to shut down its production processes for ethylene and ethylene propylene diene monomer (EPDM) within its naphtha cracking center in Ulsan, South Korea. The 200,000-t/y naphtha cracker, which started commercial operation in 1972, and the EPDM unit, which began commercial operation in 1992, will be mothballed from December 2020 to shift the company's focus to high-value added chemicals.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, 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.
MRC

MOSCOW (MRC) -- Sinopec Corp’s Zhongyuan Petrochemical Corp has shut down its ethylene production of 180,000 tonnes per year from Aug. 1 until Sept. 14 for maintenance, reported Reuters with reference to Sinopec's statement.

The plant, based in the central region of Henan, also plans to carry out maintenance on its 600,000-tonnes-per-year methanol to olefins (MTO) unit during the period of July 24 to Oct. 22.

The overhaul aims to eliminate safety risks at the production units and to ensure smooth operation in the next five years, the statement said.

Zhongyuan Petrochemical also has polyethylene (PE) production capacity of 260,000 tonnes per year and polypropylene (PP) capacity of 160,000 tonnes per year.

As MRC wrote previously, in mid-June 2020, top Chinese state refiner Sinopec Corp said it had started up a USD6 billion new refinery and petrochemical plant in south China, making it the country’s third integrated complex to start operations in the past 18 months or so. The Sinopec venture, situated in coastal city of Zhanjiang, comprises a 200,000 barrel per day (bpd) crude oil refinery and an 800,000 tonne-per-year ethylene facility, built at a cost of 44 billion yuan (USD6.2 billion), Sinopec said in a statement.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, 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.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

1. Marathon Petroleum to permanently close two oil refineries

MOSCOW (MRC) -- Marathon Petroleum plans to permanently close two small US oil refineries in Martinez, California, and Gallup, New Mexico, the company said, eliminating 800 jobs in response to lower fuels demand, reported Reuters. The largest US refiner by volume had earlier idled the two facilities following weak demand due to COVID-19 outbreaks in the United States. US refiners on average idled about 20% of total processing capacity on falling vehicle and air travel. Marathon said it plans to use the Martinez facility as an oil-storage facility and is evaluating its future use to produce renewable diesel, a fuel made from industry waste and used cooking oil. Martinez is California’s fourth largest refinery.



MRC

MOSCOW (MRC) -- Crude oil futures were steady to higher in mid-morning trade in Asia July 29 after an unexpected draw in US crude stocks provided some support to the global crude complex amid an uncertain demand outlook, as per S&P Global.

At 11:05 am Singapore time (0305 GMT), ICE Brent September crude futures were up 11 cents/b (0.25%) from the July 28 settle at USD43.33/b, while the NYMEX September light sweet crude contract was 1 cent/b (0.02%) higher at USD41.05/b.

"Broadly, we have been seeing crude oil prices paring gains from Tuesday with continued growth concerns capping further upsides at current levels," IG market strategist Pan Jingyi said July 29. "The surprise draw in crude oil inventories according to the API report had played a part in supporting prices overnight, though WTI can be seen staying relatively more cautious with a buildup in official EIA crude inventory expected on Wednesday," she added.

The American Petroleum Institute overnight reported a 6.83 million-barrels draw in crude oil inventories for the week ending July 24, against market expectations of a 450, 000-barrel rise, according to analyst reports. More definitive US stocks data is due for release by the Energy Information Administration later on July 29.

"The enormity of the inventory draw should be sufficient to hold the bears (at) bay (and) temporarily alleviate some concerns about ongoing demand distress," AxiCorp chief global markets analyst Stephen Innes said in a note July 29.

However, a resurgence in coronavirus infections in the Asia-Pacific, protracted US fiscal stimulus negotiations and an increase in supply from OPEC+ from August were weighing heavily on market sentiment, keeping crude prices rangebound, market sources said.

China reported 101 new coronavirus cases July 28 and Vietnam 30, while Tokyo, Hong Kong and Melbourne have reported jumps in infections rates in recent days, underlining the difficulty of containing the virus as restrictions ease in places that had earlier curbed infection rates, and indicating that demand was likely to remain subdued amid the uncertainty.

In the US, negotiations over a proposed trillion-dollar fiscal stimulus package that would provide a one-off USD1,200 payment while cutting weekly federal unemployment benefits from USD600 to USD200 are continuing; analysts said the protracted stimulus negotiations and USD400 reduction would weigh on consumer spending and market sentiment.

Global crude output is also set to increase in August as OPEC+ sticks with its schedule of tapering coordinated production cuts from 9.7 million b/d to 7.7 million b/d from August 1.

As MRC reported earlier, US crude oil inventories moved sharply lower during the week ended July 24 as exports and refinery demand climbed to multi-month highs, US Energy Information Administration data showed July 29, 2020. Commercial crude stocks fell 10.61 million barrels to 525.97 million barrels last week, EIA data showed. While the draw pushed stockpiles to 14-week lows, they remained more than 17% above the five-year average for this time of year.

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 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 DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, 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.
MRC