US ethylene exports to Asia bounce back

MOSCOW (MRC) -- Navigator Holdings (London, UK) says US ethylene exports are back on the rise, driven by recovering Asian demand and a continuing arbitrage, according to Chemweek.

The company shared its assessment in preliminary second-quarter financial results released on 13 August.

Ethylene shipments slowed late in the first quarter as COVID-19 lockdowns and the related global economic downturn weighed on demand, says Navigator. “However, as Asian economies restarted during the latter half of the second quarter, so too did the demand for ethylene. An upsurge in US ethylene export capacity from our([Morgan’s Point) marine export terminal, drove an uptake in cargo liftings from the second half of May onwards, positively impacting handysize ethylene tonnage.”

The Morgan’s Point terminal, located near Houston, Texas, is a 50/50 joint venture with Enterprise Products Partners. The terminal loaded more than 80,000 metric tons of ethylene in June, including a 20,000-metric-ton parcel loaded onto the Navigator Eclipse, marking the largest ethylene parcel ever carried on a gas carrier, says Navigator. A new 30,000 ton storage tank will increase the terminal’s throughput capacity by the end of 2020.

Marine exports of ethylene from the US totaled around 100,000 metric tons in June, according to Navigator. “July and August also kept pace as the ethylene price arbitrage remained open, with charter rates and vessel utilization across the ethylene shipping fleet having improved markedly in the latter part of the second quarter,” says the company.

Navigator says its share of the Morgan’s Point terminal yielded a loss during the second quarter, but it was profitable June, owing to the start of long-term take-or-pay contracts, and the company expects it to remain profitable for the rest of 2020. The offtake agreements, which have minimum terms of five years, account for approximately 95% of the terminal’s nameplate throughput capacity of 1 million tons/year.

As MRC wrote before, Enterprise Products Partners (Houston, Texas) co-loaded olefins and natural gas liquids (NGLs) twice in July, the first time such cargoes have been loaded for export from the US. A VLGC (very large gas carrier) received propane and polymer-grade propylene (PGP) simultaneously into separate compartments at the Enterprise Houston Ship Channel terminal. Another vessel took on ethane and ethylene simultaneously at the company’s Morgan’s Point facility in Houston.

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) -- The Philippine unit of Royal Dutch Shell said on Thursday it will permanently shut one of the country’s two oil refineries, blaming a pandemic-led slump in margins, with other regional closures likely to follow, reported Reuters with reference to analysts.

Pilipinas Shell Petroleum Corp said its 110,000-barrel-per-day (bpd) Tabangao facility in Batangas province, which began operations in 1962, was no longer economically viable and would be turned into an import terminal.

Singapore’s complex refining margin, the bellwether in measuring profitability at Asian refineries, has been mostly negative since March prompting many refiners to cut output or temporarily shutter operations.

In the United States and Europe, refiners are permanently halting processing or weighing lasting shutdowns.

“We definitely see the possibility of more closures in Asia over the next 6-12 months,” said Mia Geng, consultant at FGE, adding that refineries in Japan, Australia and New Zealand could be likely candidates for closure.

“Given the uncertainties in demand and our subdued margin outlook, it would be challenging for those less complex and efficient refineries to continue running.”

The oil refining industry is well on track to registering more than 1 million bpd of global closures this year alone, although not all of them will come into effect in 2020, according to consultancy JBC Energy.

“The picture is fairly telling, with even the most complex refining margins down to just around 10% of their former levels, while steam cracking economics are currently at least around the 50% (of former levels) mark,” JBC said in a note.

The permanent closure of Tabangao comes after both of the Philippines’ refineries halted operations as coronavirus lockdowns pummelled oil demand.

“Due to the impact of the COVID-19 pandemic on the global, regional and local economies, and the oil supply-demand imbalance in the region, it is no longer economically viable for us to run the refinery,” Pilipinas Shell Chief Executive Officer Cesar Romero said.

The other local refinery, Petron Corp’s 180,000-bpd facility in Bataan province, has been on a scheduled turnaround since May and will restart on Sept. 1.

Energy Secretary Alfonso Cusi sought to allay concern over domestic fuel supply saying Pilipinas Shell is expected to fill its market share through imports of refined products.

Wood Mackenzie research director Sushant Gupta said the challenging environment would put pressure on weaker Asian refineries, particularly ones in mature markets, or with little or no integration with petrochemicals.

“We could see closures becoming a reality in many markets,” he said in a note.

As MRC reported earlier, oil major Royal Dutch Shell plans to buy a 50% stake in Indian-based Nayara Energy’s up to USD9 billion planned petrochemical project. Global oil majors are looking at expanding foothold in the vast Indian market, where local refiners are investing billions of dollars to boost their petrochemical capacities.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- As demand increases for COVID-19 related mental health programs, material supplier Ineos Styrolution Canada been working with Ontario organizations St. Clair Child & Youth Services and Canadian Mental Health Association Lambton Kent to fund virtual, mental health programs for their community, said Canplastics.

After the COVID-19 pandemic forced the cancellation of their Outreach Program, a cornerstone summer activity for “at-risk” children within the community, Ineos Styrolution Canada, delivered a USD10,000 grant through the Ineos Community Fund to St. Clair Child & Youth Services. This grant will used for the creation of virtual summer camps, ensuring that staff will have the ability to stay connected with families during challenging times.

And through its Ineos Community Fund, the company has also donated a $7,000 grant to the Canadian Mental Health Association Lambton Kent (CMHA Lambton Kent). This donation will support CMHA Lambton Kent in moving critical mental health programs and services to virtual platforms with secure software.

"We recognize the importance of good mental health and the potential risks during this challenging time,” Ineos Styrolution Canada site director Brian Lucas said. “The Ineos Community Fund investment will help this organization to extend their programs and services, using virtual care technologies, and we are delighted to play a role in addressing this critical need in the Lambton Kent area."

The one-million-euro Ineos Community Fund was established by INEOS Chairman Sir Jim Ratcliffe in March 2020 in tandem with the company’s Covid-19 “Hands On” campaign, which set up new production lines to provide millions of bottles of free hand sanitizer per month to hospitals and frontline healthcare. The fund enables Ineos sites across the world to support the charitable organizations doing vital work in their local communities at this particularly difficult time.

As it was written earlier, Ineos Styrolution is partnering with Recycling Technologies, a Swindon, UK-based specialist in plastic recycling technology, to advance the development of polystyrene (PS) recycling in Europe. The two companies have signed a joint development agreement to combine technologies to prevent post-consumer PS from being incinerated or ending up in landfills.

Ineos Styrolution Canada is a subsidiary of Ineos Styrolution, a global styrenics supplier with a focus on styrene monomer, polystyrene, ABS Standard and styrenic specialties.
MRC

MOSCOW (MRC) -- Hexion swung to a Q2 operating loss on weaker sales volumes due to the global coronavirus pandemic, said the company.

Also weighing on earnings were margin reductions in Hexion’s base epoxy resins business due to competitive pressures, as well as an outage at the company’s Pernis site in the Netherlands.

After emerging from US Chapter 11 bankruptcy protection on 1 July 2019, Hexion applies “fresh start accounting”, meaning that results are not directly comparable year on year. "We continue to see an impact in the third quarter of 2020 from the pandemic, although our July volumes continued to improve sequentially compared to the prior month,” said acting CEO George Knight.

“Looking ahead, while we expect the coronavirus to negatively impact our results in the second half of 2020, we are encouraged by the resiliency of our customers in certain end markets, such as wind energy and North American residential construction,” he added.

As MRC informed earlier, Hexion, a major American manufacturer of phenol and bisphenol A (BPA), plans to close its BPA plant in Pernis (Pernis, The Netherlands) in early October for scheduled maintenance. This 120 ktpa BPA production facility will be closed in the second week of October and is expected to resume production in three weeks.

Phenol is the main raw material for bisphenol A (BPA) production, which in turn is used to produce polycarbonate (PC).

According to MRC's ScanPlast, in Russia, following the results of the first two quarters, the total estimated consumption of PC granulate in the Russian Federation (excluding imports and exports to Belarus) amounted to 47.3 thousand tonnes against 40.7 thousand tonnes in 2019. Total demand increased by 16%.

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
MRC

MOSCOW (MRC) -- Flaring at Shell's Moerdijk petrochemical complex near Rotterdam on Wednesday has sparked rumors in the European aromatics market that one or both of the two propylene oxide/styrene monomer (POSM) units situated there have been impacted, reported Chemweek with reference to OPIS.

Shell said in a statement on Friday: "Shell Moerdijk is flaring due to a factory failure. We have identified the cause of the failure, allowing us to restart the factory. The full restart takes a few days, with the flaring gradually decreasing."

A Shell spokesperson declined to specify which unit or units were impacted, when asked by OPIS.

Moerdijk is one of the biggest petrochemical complexes in Europe with an ethylene capacity of 940,000 metric tons/year.

Feedstock supply and other petchems output at the plant are not yet noted to have been impacted by the events around the flaring.

Market speculation revolved around the potential restart date. One source said it "seems the unit is expected to restart this weekend (15-16 August)," and another placed the restart in about one week and a third source suggested that it could be as long as two weeks.

In April, OPIS reported that heavy maintenance is scheduled for parts of the Moerdijk complex this fall, having been delayed from its original May start date. The work will occur at the same time as maintenance at Shell's 300,000-metric tons/year Wesseling, Germany, steam cracker.

OPIS is an IHS Markit company.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC