PVC production in Russia up by 1% in January-July 2020

MOSCOW (MRC) -- Overall production of polyvinyl chloride (PVC) reached 557,000 tonnes in the first seven months of 2020, up by 1% year on year. Only three producers managed to increase their output, according to MRC's ScanPlast report.

July total production of unmixed PVC was about 47,700 tonnes versus 77,200 tonnes a month earlier, SayanskKhimPlast and RusVinyl increased their capacity utilisation last month. Overall output of polymer rose to 557,000 tonnes in the first seven months of 2020 from 553,700 tonnes a year earlier, only three producers increased their production, whereas RusVinyl reduced its PVC production.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (JV of SIBUR and SolVin) produced about 19,200 tonnes of PVC in July, with emulsion polyvinyl chloride (EPVC) accounting for 1,000 tonnes, compared to 28,500 tonnes a month earlier. RusVinyl shut its PVC production capacities for a scheduled maintenance works on 14 July. RusVinyl's overall SPVC output reached 190,000 tonnes in the first seven months of 2020, compared to 196,300 tonnes a year earlier.

SayanskKhimPlast produced less than 4,000 tonnes of suspension PVC (SPVC) in July, whereas this figure was 27,700 tonnes in June.
SayanskKhimPlast shut its PVC production capacities for a scheduled maintenance works on 8 July. The Sayansk plant managed to produce about 169,000 tonnes of PVC in January-July, compared to 166,300 tonnes a year earlier.

The Bashkir Soda Company (BSK) worked without interruptions in July, while in mid-June, due to interruptions in ethylene supplies, PVC production was stopped for 5 days. July total imports of suspension were 23,600 tonnes, compared to 15,800 tonnes a month earlier. The Baskhir plant's overall production of PVC reached 154,300 tonnes in January-July 2020, up 4% year on year.

Kaustik Volgograd shut its production capacities for maintenance in May-June, as a result, the plant's July PVC output was 7,200 tonnes, while in June it was 1,500 tonnes. The plant's overall production of PVC exceeded 43,700 tonnes in the first seven months of 2020 versus 43,200 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Stronger demand and a shutdown for maintenance at a producer's production capacities have led to an increase in polypropylene (PP) prices in Russia since the second half of July. And in the first week of August, the dynamics of price growth increased, according to ICIS-MRC Price report.

Demand for PP subsided significantly in the Russian market in April-May under the pressure of quarantine restrictions, but already since June, demand for polymer has begun to gradually recover from local converters. And already in July, some converters' capacity utilisation approached the last year's figures. Strong demand and an unscheduled shutdown at Stavrolen limited the supply of PP in the market and caused prices to rise. And already in August, the factor of tight supply of polymer from small-sized sellers increased the pressure on prices.

The plant's customers said Stavrolen shut its PP production on 16 July due to technical issues. Initially, the unplanned outage was expected to last 3-7 days, but in fact, the maintenance works lasted for almost one month. The next launch date is scheduled for the middle of this week. The plant's annual production capacity is 120,000 tonnes.

In July, Ufaorgsintez reduced its PP production due to tight supply of feedstock, and already in September, the plant plans to shut down its production capacities for a turnaround (the exact dates of the outage have not been announced yet). The plant's annual production capacity is 120,000 tonnes.

It is also worth noting that Tomskneftekhim's production capacities are expected to be taken off-stream for a scheduled two-week maintenance in September. The plant's production capacity is 140,000 tonnes/year.

The pipe grade stat-copolymer of propylene (PP random copolymer) segment accounted for the acutest shortage. Some converters were unable to fully replenish their inventories both due to domestic producers and foreign suppliers.

In the propylene homopolymer (homopolymer PP) market, most small-sized sellers restricted their sales. And this factor put an additional pressure on prices.

Thus, if in the first week of July, Russian homopolymer PP raffia was sold in the spot market in the range of Rb83,600-87,600/tonne CPT Moscow, including VAT, then by the end of July, PP prices had grown to Rb88,300-92,500/tonne CPT Moscow, including VAT.
MRC

MOSCOW (MRC) -- SayanskKhimPlast (Irkutsk region) has resumed its polyvinyl chloride (PVC) production after a scheduled turnaround, according to ICIS-MRC Price report.

The plant's representative said PVC production was brought on-line on 5 August after the scheduled turnaround. The shutdown was quite long and started on 8 July. The plant's annual production capacity is 350,000 tonnes.

As reported earlier, Russia's second largest PVC producer - RusVinyl - had resumed its production by 28 July, after the shutdown for a scheduled turnaround from 13 July. The plant's annual production capacity is 330,000 tonnes.

Thus, Russian producers completed all their shutdowns for maintenance 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

1. Petron swings to H1 net loss on pandemic-hit demand

MOSCOW (MRC) -- Philippine refiner Petron swung into a net loss in the first half of the year due to fuel demand destruction brought on by the coronavirus pandemic, said the company. Petron Corp. incurred a consolidated net loss of P14.2 billion in the first half of 2020, reversing the P2.6 billion net income it posted in the same period a year ago. In a disclosure on Tuesday, the listed oil company blamed the net loss on the “combined slump in demand, poor refining margins and collapse in prices” and reported that its consolidated revenues fell by 40 percent to P152.4 billion from P254.8 billion.





MRC

MOSCOW (MRC) -- Exxon Mobil Corp reported a USD1.1 billion second-quarter loss on sharply lower energy demand and prices from the COVID-19 pandemic, and confirmed plans to make deeper spending cuts, reported Reuters.

It was Exxon's first back-to-back quarterly loss in at least 36 years, but was small in comparison to rivals who took giant charges last quarter. The top US oil producer took no asset write downs during the quarter, and got a 44-cent-a-share boost to earnings by increasing the value of inventories.

Chevron Corp, Total, Royal Dutch Shell , and Eni each wrote down their oil and gas properties last quarter by several billion dollars apiece, while BP signaled an up to USD17.5 billion hit.

Exxon slashed capital spending 30% this year to around USD23 billion, and Senior Vice President Neil Chapman said it expects to spend less than USD19 billion in next year. That would be the lowest spending for the company since at least 2005.

It plans both capital and operating expense cuts to defend its dividend, Chapman said on a call with analysts, adding that investors "come to view that dividend as a source of stability in their income."

It will not take on more debt and sees spending cuts as short term "to manage the current situation," Chapman said.

Prior to the pandemic, Chief Executive Darren Woods pursued an ambitious spending plan to boost oil output and turn around sagging profits on a bet that a growing global middle class would demand more of its products.

The plan to significantly raise production and boost cash by selling assets has faltered, leading Exxon to preserve an 8% shareholder dividend.

Exxon has identified an "undertaking a comprehensive evaluation," of its global businesses, it said, without providing details.

Exxon's oil and gas production business fell to a loss and its refining unit was hit by lower demand and weaker prices.

The US oil major reported a loss of USD1.08 billion, or 26 cents per share, compared with a profit of USD3.13 billion, or 73 cents per share, a year earlier. Excluding inventory adjustments, the loss would have been USD3 billion, it said.

On that adjusted basis, its per share loss of 70 cents missed Wall Street's estimate of 61 cents, according to data from Refinitiv.

Exxon's oil and gas output fell 7% to 3.6 million barrels per day during the quarter as it curtailed production due to the oil price crash.

Rival Chevron on Friday reported an USD8.3 billion loss on asset writedowns, plummeting fuel prices, and expenses tied to thousands of jobs cuts.

Exxon's production business reported a nearly USD1.7 billion loss on lower output prices, compared with a USD3.3 billion gain last year. Refining generated a USD976 million operating profit despite lower margins and volumes. The unit's gain came from an about USD3.5 billion boost from non-cash inventory revaluations and by reversing a prior quarter's impairment.

Chemical operating profit was USD467 million, up from USD188 million last year, and was "resilient" in a tough environment, said analyst Biraj Borkhataria of RBC Europe Limited.

The company is running out of capacity to add debt "without jeopardizing the strength of its balance sheet," said analyst Jennifer Rowland of Edward Jones. The losses call into question "how long Exxon can continue to fund its dividend if the macro environment doesn't substantially improve.

As MRC wrote before, ExxonMobil Corp is preparing deep spending and job cuts, according to people familiar with the matter, as it fights to preserve a 8% shareholder dividend with a multi-billion-dollar quarterly loss looming.

We remind that 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 also 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 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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.
MRC