Shanghai Golden Phillips starts maintenance at HDPE plant

MOSCOW (MRC) -- Shanghai Golden Phillips Petrochemical Co, a subsidiary of Sinopec Shangai Petrochemical Co, has shut its high density polyethylene (HDPE) plant for a maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed that the company halted operations at its plant on September 5, 2020. Exact duration of the shutdown could not be ascertained.

Located in Shanghai, China, the HDPE plant has a production capacity of 140,000 mt/year.

As MRC reported earlier, the company shut down its HDPE plant in Shanghai for scheduled turnarounds from 20 March to 8 April, 2019, and from 30 June to 15 July, 2019.

According to MRC's ScanPlast report, Russia's HDPE production totalled 1,040,000 tonnes in the first seven months of 2020, up by 84% year on year. ZapSibNeftekhim accounted for the main increase in the output.

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

MOSCOW (MRC) -- Major petrochemicals producer, SABIC, expects the lifestyle changes brought about by the COVID-19 pandemic to shape the different usage of plastics going forward, reported S&P Global with reference to the company's vice president and regional head for South Asia and ANZ, Janardhanan Ramanujalu.

"We have seen a rise in demand for new and enhanced applications to help safeguard against COVID-19 on the frontlines," Ramanujalu said in an email interview with S&P Global Platts. This included "production of ventilators and respiratory masks; polypropylene (PP) products used in making medical disposable gowns, masks, shields and coveralls to safeguard community health as well as other intensive care equipment, such as infusion pumps, monitors and diagnostic devices."

In the early stages of the pandemic, PP prices were supported by the sharp spike in demand for masks, S&P Global Platts data showed. Demand for plexi-glass, a derivative of methyl methacrylate, or MMA, also witnessed a steep climb given its usage in protective gears.

It is not impossible for these lifestyle changes to become the new normal.

"Aside from medical supplies, the demand for packaging materials used for food and other essential goods has certainly grown, driven by retailers' need to meet rising consumer demand and (to) restock shelves quickly," Ramanujalu said.

The increase in demand for plastics used in packaging was driven mainly by the shift in consumer's preference for retail e-commerce during the pandemic.

A key challenge during the COVID-19 pandemic is to ensure the stability of the supply chain amid logistics and manpower issues as countries went under lockdown.

With several planned petrochemical expansions delayed due to the pandemic, SABIC, according to Ramanujalu, did not experience any major disruption to its production or expansion plans.

"As the majority of SABIC products are considered essential during this crisis, we could continue to supply material and support customers without disruption, amid unprecedented prolonged challenges."

SABIC prioritized requests from the healthcare industry for the production of, among others, ventilators to aid the fight against COVID-19, by leveraging on its extensive worldwide distribution network and regional business response teams.

"With the chemical industry playing a crucial role in the fight against the pandemic, many of our manufacturing sites were permitted to operate in full compliance with local regulatory as well as health and safety guidelines aligned with the local authorities and the World Health Organization guidelines", he added.

Global recycled plastic demand is expected to grow in the next few years given the increased focus and capital investments into the recycled plastic space, according to S&P Global Platts Analytics. Some of the new projects include investments from Coca-Cola, Indorama, PTT and Suez.

"It is even more critical during this time, that manufacturers commit their operations to supporting sustainable solutions and commit to designing products for recyclability. Change needs to happen throughout the value chain, and this starts from manufacturers and suppliers, down to the end-user," Ramanujalu said.

"To this end, we have made several landmark decisions and invested its scientific and technological expertise over the past year to advance the circular economy and help close the loop on waste for the good of our business and planet," he added.

As for SABIC's forecast and outlook on the growth of recycled plastics and the trend of sustainability, Ramanujalu said: "Today, more than ever, industry needs to respond to the world's environmental and societal challenges by embedding sustainability and recycling into its very DNA. We understand the global market for recycled plastics is expected to grow by USD14.74 billion over the next few years."

The growth in the use of plastics has put recycling in the spotlight and there is increasing pressure on the industry to utilize resources more efficiently, develop innovative ways to recycle plastics and avoiding waste by keeping valuable plastics in the value chain.

"Supporting the growth and development of a circular economy, one in which products and raw materials are not wasted, but rather used to create new, valuable and durable products, has been a key goal of SABIC's sustainability platform. The circular economy is a concept embedded in our product innovation and development processes," Ramanujalu said.

SABIC, headquartered in Saudi Arabia, is the first petrochemical company in the world to scale-up high-quality processes for the chemical recycling of used mixed plastic back to the original polymer for commercial application. SABIC is also a founding member of the Alliance to End Plastics Waste, or AEPW.

"In a circular economy, chemical recycling can play a crucial role in converting hard or difficult to recycle plastic wastes such as used mixed plastic waste, thereby preserving material resources, increasing overall recycling rates and enabling its further conversion back to the same or similar polymers," Ramanujalu said.

Not only does chemical recycling enable the possibility of closed loop recycling of plastics, it boasts of a carbon footprint advantage over incineration, offers greater flexibility and broader coverage of waste types, leading to higher potential for waste management.

"Chemical recycling also produces virgin-like quality as compared to mechanical recycling, and hence, can be used in applications with more stringent requirements (such as those found in the food packaging industries) where conventional mechanical recycling is not possible," Ramanujalu said.

As MRC informed before, Saudi Basic Industries Corp., the petrochemicals giant 70%-owned by Saudi Aramco, saw average petrochemical prices in the second quarter plunge by 27% year-on-year as it posted a third consecutive quarterly loss, according to CEO Yousef al-Benyan's statement Aug. 6.

According to MRC's DataScope report, 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.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

MOSCOW (MRC) -- Honeywell announced Bukhara Refinery LLC, a subsidiary of JSC Uzbekneftegaz, will use UOP technology to increase crude oil conversion and produce cleaner-burning Euro-V standard gasoline and diesel fuel in compliance with the government of Uzbekistan’s stricter specifications for fuel products taking effect in 2023, said Hydrocarbonprocessing.

Honeywell UOP will provide licensing and basic engineering design services to Bukhara Refinery LLC for new Naphtha Hydrotreating, Par-Isom, RFCC, SelectFining and Merox process units. In addition, the existing DHT and ARU units are to be revamped to meet new requirements. The Euro V standard limits sulfur content to less than 10 parts per million in transportation fuels and restricts emissions of carbon monoxide, hydrocarbons, nitrous oxides and particulate matter from gasoline and diesel vehicles and will improve overall refinery emissions.

"The Bukhara Refinery is revitalizing its operations for improved quality and increased production of fuels to meet growing domestic demand for motor fuels,” said Bryan Glover, vice president and general manager, UOP Process Technologies. “The company selected UOP due to its experience in working in the region and its technologies to assist Uzbekneftegaz in meeting sustainability goals."

The Bukhara refinery is part of the Uzbekistan government’s multi-year development plan to achieve national energy independence and increase the country’s export potential. With 33 million people, Uzbekistan is the most populous country in Central Asia and is a significant producer and exporter of oil and natural gas.

The Par-Isom™ process upgrades light naphtha into high-value isomerate for gasoline blending, and the Merox process treats the naphtha feedstock to meet product specifications. UOP’s Resid Fluid Catalytic Cracking process converts heavy feedstocks into cleaner-burning gasoline and diesel products that meet new global emissions regulations.The SelectFining process uses selective hydrodesulfurization of naphtha to meet low-sulfur gasoline specifications while minimizing octane loss.

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) -- Europe, one of the world’s biggest diesel consumers, faces a major glut which combined with weak demand is weighing heavily on the ability of the region’s refineries to keep running, said Hydrocarbonprocessing.

Having hit record lows at the height of the COVID-19 pandemic in April and May, European diesel margins are trending lower again after posting a modest recovery in July. "Gasoil and diesel is 40%-50% of refining output so it has to be profitable otherwise refineries just burn cash and must shut down,” Hayal Ahmadzada, chief trading officer at Azerbaijain’s SOCAR Trading said.

He said the paper market was showing some traders expect diesel cracks to fall close to zero or even into negative, which would be unprecedented. "There are too many refineries for current demand," he said, adding some won’t be able to operate at those levels for much longer.

While the easing of lockdowns in recent months across Europe has boosted diesel demand, some countries are seeing the recovery stall. According to leading Spanish fuel distributor CLH, August diesel deliveries to the domestic market were around 9% lower than July levels at 2 million cubic meters.

Experimental data from Britain’s Department for Business, Energy & Industrial Strategy shows that in the past four weeks a recovery which started in mid-April in road fuel demand has stalled. The diesel market is also afflicted with high stocks.

According to oil analytics firm Vortexa, Europe now accounts for the biggest share of global middle distillates floating storage globally.

As it was written earlier, Turkish Competition Council has given permission to SOCAR and BP to establish a joint venture that will operate in the petrochemical sector. Earlier it was reported that SOCAR and BP applied to the relevant institutions in Turkey to establish a joint petrochemical company, which will be called Mercury complex, in April 2020. Recall that on December 20, 2018 SOCAR and BP signed contractual principles for evaluation of plans for creation a world-class petrochemical complex in Turkey and establishment of a joint venture to manage it.

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) -- US refiners are stuck between meeting rising gasoline demand and the glut of supply in the lackluster diesel and jet fuel markets, reported Reuters.

Refiners cannot produce gasoline without making other products like diesel, commonly known as distillates. The coronavirus pandemic slashed demand by one-third worldwide, and so far the gasoline use has rebounded faster than that of distillates. Refiners still have big stockpiles of diesel and other fuels, and do not want to make more of those products due to poor margins.

Refiners have been running at around 80% utilization since the end of July, up from the spring, when the pandemic broke out, but still below usual levels. With summer driving season coming to a close, they are reluctant to boost output for the winter season, when gasoline demand declines.

“Once Labor Day wraps up, and especially this year where few parents are dropping off their kids (at school), gasoline and distillate demand will likely see more erosion than usual,” said Patrick De Haan with GasBuddy.

Refiners cannot bet on profit margins improving soon. The refining crack spread, a proxy for margins, fell last week to USD7.93, lowest since April 2020, because demand for product is not strong enough to draw down inventories, nor keep up with rising crude prices.

Several refiners shut during Hurricane Laura, reducing overall refining capacity use to less than 77%, but refiners have indicated that they will not ramp up much more due to concern of oversupply of distillates.

“Refineries are in no rush to reopen, because they’re making no money,” said Bob Yawger, director of energy futures at Mizuho.

One refining executive who requested to remain anonymous said they are constrained by distillate inventories and would continue to run plants between 80% to 82%.

US demand for gasoline has recovered by about 70% since early April, US Energy Information Administration data shows. Gasoline stockpiles have dropped over the last two months during the summer driving season.

Consumption for distillate fuel, which includes diesel widely used in trucks for construction and transporting goods, increased by only around 40% since April.

Distillate inventories are higher than usual, currently at 177.5 million barrels, or about 20% above the five-year average for this time of year, according to EIA data.

Jet fuel demand, meanwhile, is expected to drop by 40% this year to 3.1 million barrels per day, the International Energy Agency said earlier this month.

“I’m not convinced that we could get to full utilization in this industry if jet demand is where it is today,” PBF Energy Chief Executive Thomas Nimbley said on an earnings call in late July.

Refiners hope export demand will offset the weak domestic consumption, but there, too, distillates are lagging gasoline.

Finished gasoline exports in August were down just 4% from a year ago, compared to a 35% drop in middle distillate exports, said Matt Smith, director of commodity research at ClipperData.

We remind, as MRC wrote before, most chemical production facilities in the region between Beaumont-Port Arthur, Texas, and Lake Charles, Louisiana, have shut down in preparation for Hurricane Laura, which was forecast to make landfall near the Texas-Louisiana border Wednesday night or early Thursday. Several olefin crackers and associated derivative polymer units have been shut down, as has about 2.5 million b/d of refining capacity.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC