Surprise draw for weekly US propane, propylene stocks

MOSCOW (MRC) -- US propane and propylene inventories fell by 1.2 million barrels (bbl) to 96.1 million bbl in the week ended 11 September, reported Chemweek with reference to the Energy Information Administration (EIA)'s statement on Wednesday.

The result stood in stark contrast to expectations for an average build of 1.3 million bbl, based on an OPIS poll published Tuesday.

Exports increased 146,000 barrels per day (b/d) last week to 950,000 b/d. Imports increased 6,000 b/d to 89,000 b/d.

Product supplied, an indicator of implied demand, increased 382,000 b/d to 1.478 million b/d. Refinery and blender net production increased 38,000 b/d to 2.163 million b/d.

Gulf Coast (PADD 3) stocks plunged 2.1 million bbl to 54.9 million bbl. Midwest (PADD 2) stocks rose by 900,000 bbl to 27.3 million bbl. PADD 1 inventories dropped 100,000 to 8.6 million bbl. PADD 4 and 5 inventories increased 100,000 bbl to 5.3 million bbl.

Propane markets were unmoved by the latest round of EIA data. TET propane prices ranged from 50.75–51.00 cents/gallon, with non-TET at 50.50–51.25 cents/gallon. Conway propane was last seen at 44–45 cents/gallon.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, 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.
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1. China key oil product exports set to fall in 2020 amid tepid international demand

MOSCOW (MRC) -- China is set to register a sharp decline in oil product exports for calendar 2020 and oil companies may fail to fully utilize their export quotas as they find sales in the international market difficult during the coronavirus pandemic, said S&P Global. Over January-September, China was likely to export about 36.2 million mt of oil products, S&P Global Platts estimated based on recent customs data and company export plans. This could mean that Chinese oil companies would have to offer about 20 million mt of oil products into the international market in the fourth quarter if they are to fully use up their quotas.


MRC

MOSCOW (MRC) -- Lotte Chemical is likely to undertake a planned shutdown at its monoethylene glycol (MEG) unit, according to Apic-online.

A Polymerupdate source in South Korea informed that the company has planned to take its unit off-stream for maintenance in mid-October, 2020. The unit is expected to remain off-line for about two weeks.

Located at Daesan in South Korea, the unit has a production capacity of 400,000 mt/year.

As MRC informed earlier, Lotte Chemical's second-quarter net profit fell 88.7 percent from a year earlier due to low demand amid the coronavirus pandemic. For the April-June period, Lotte Chemical posted a net profit of 30.6 billion won (USD25.8 million), compared with a profit of 271.2 billion won a year earlier, the company said in a regulatory filing.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes in June.
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МОSCOW (MRC) -- Lanxess plans to expand capacity for Oxone monopersulfate - a main active ingredient for disinfectants, said the company.

Due to the continuous strong demand for disinfectants, specialty chemicals company Lanxess is planning to expand its production capacity for Oxone monopersulfate by around 50 percent. To this end, the company intends to invest a lower double-digit million euro sum in its production facility in Memphis, USA.

Lanxess uses Oxone monopersulfate as the main active ingredient in many of its Virkon and Rely+On disinfection products. Demand for these products has increased significantly in recent months due to, amongst others, the outbreak of African swine fever as well as the corona pandemic. The company also sells Oxone as a powerful oxidizing agent for numerous other applications. The capacity expansion is expected to be completed in the second half of 2022.

“Disinfection products are important growth drivers in our highly profitable Consumer Protection segment. We expect a sustainable high level of demand even after the corona pandemic,” said Matthias Zachert, Chairman of the Lanxess Board of Management.

Michael Schafer, head of Lanxess Material Protection Products business unit, added: “We are also seeing a growing demand for Oxone in the water treatment sector as well as from the electronics and paper industries. We want to meet this demand by expanding our production capacity."

Lanxess also offers disinfectants for human health: The product Rely+On Virkon is used in hospitals, laboratories, public institutions and for medical equipment. It is proven to completely inactivate the coronavirus SARS-CoV-2 in only 60 seconds.

Oxone is used, for example, to clean pool water, thereby reducing the use of chlorine. In the electronics industry, it is applied to prepare surfaces within the production process of printed circuit boards. Paper manufacturers use the product to effectively break down paper products containing wet strength resins during paper reprocessing. In addition, Oxone is a primary component of denture cleansers. Demand in these industries is growing, not least because regulatory requirements are becoming stricter and customers increasingly prefer chlorine-free oxidation solutions.

The expansion will meet growing demand for disinfectants and be completed in the second half of 2022.

Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six 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-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.

MRC

MOSCOW (MRC) -- BP and Microsoft Corp. announced that they have agreed to collaborate as strategic partners to further digital transformation in energy systems and advance the net zero carbon goals of both companies, said Hydrocarbonprocessing.

This includes a co-innovation effort focused on digital solutions, the continued use of Microsoft Azure as a cloud-based solution for bp infrastructure and bp supplying renewable energy to help Microsoft meet its 2025 renewable energy goals.

“Bp is determined to get to net zero and to help the world do the same. No one can do it alone – partnerships with leading companies like Microsoft, with aligned ambitions, are going to be key to achieving this,” said William Lin, bp executive vice president for regions, cities & solutions. “By bringing our complementary skills and experience together, we are not only helping each other achieve our decarbonization ambitions but also creating opportunities to support others on their ?journey towards reducing carbon emissions."

“Bp shares our vision for a net zero carbon future, and we are committed to working together to drive reductions in carbon emissions and fulfil demand with new renewable energy sources,” said Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business. “A strategic partnership such as this enables each organization to bring its unique expertise for industry-leading change and the potential to positively impact billions of lives around the world."

Earlier this year, bp announced its ambition to become a net zero emissions company by 2050 or sooner, and to help the world reach net zero. By the end of the decade, it aims to have developed around 50 gigawatts of net renewable generating capacity – a 20-fold increase on what it has previously developed, increased annual low carbon investment 10-fold to around USD5 billion and cut oil ?and gas production by 40%. In January 2020, Microsoft announced its goal to be carbon negative by ??2030 and remove more carbon from the environment than it has emitted since its founding by 2050. Today’s announcements build on the potential that both companies see in working together to help deliver a net zero carbon future.

Earlier this year, as MRC wrote previously, 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.

And in September 2019, 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.
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