Brazil chief justice postpones voting on Petrobras refineries privatization

MOSCOW (MRC) -- Brazilian Chief Justice Luiz Fux postponed voting on the sale of state-controlled oil company Petrobras' refineries without setting a new deadline, said Hydrocarbonprocessing.

Initially, the Supreme Court had until Friday to rule on the matter. Three justices on Brazil's Supreme Court have voted against the sale of the refineries, in a setback for Petrobras, which is counting on asset sales to reduce its debt.

Despite these three votes against the privatizations, XP Inc's analyst Debora Santos said in a note to clients that the Supreme Court is likely to support the assets sale, adding that last year most justices had adopted a more flexible position regarding privatization of state-controlled companies' assets.

Preferred shares in Petrobras were up 0.8% in the morning trading, almost in line with the country's stock exchange index.

As MRC reported previously, Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July. She said during the companyпїЅs recent webinar that Petrobras plans to give more time for potential investors to make offers for the company's assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company's stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras" activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- BASF’s Global Business Services unit is being further developed. The division was established as of January 1, 2020, as part of the implementation of BASF’s corporate strategy, said the company.

As of that date, around 8,400 employees worldwide transferred to Global Business Services and since then have been providing services for BASF’s business units, ranging from financial and logistical processes to services in the areas of communication, human resources, environment, health and safety.

Following the bundling of services and resources and the implementation of a wide-ranging digitalization strategy, the number of employees in Global Business Services worldwide will decline by up to 2,000 by the end of 2022. From 2023 onward, the unit expects to achieve annual cost savings of over EUR200 million. “Overall, with these planned measures, we will make a considerable contribution to BASF Group’s efficiency,” said Marc Ehrhardt, head of the Global Business Services division.

"By fundamentally simplifying processes and utilizing digital solutions, we want to meet the needs of the BASF business units flexibly and competitively,” said Ehrhardt, describing the objective. As part of this, more services than before will be bundled in hubs, which will offer as many services as possible for the units in the BASF Group. Details of the planned realignment will be worked out in the coming months. Employee representatives will be involved according to local rules and regulations.

As MRC reported earlier, BASF-YPC undertook a planned shutdown at its polystyrene (PS) unit in China on May 5, 2020. The unit restarted on June 20, 2020. Located in Jiangsu, China, the PS unit a production capacity of 200,000 mt/year.

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics was 225,870 tonnes in the first half of 2020, down by 8% year on year. PS consumption increased by 2% year on year in June 2020, totalling 39,590 tonnes.

BASF-YPC Company Limited (BASF-YPC) is a 50-50 joint venture between BASF and Sinopec, founded in 2000, with a total investment of approximately USD5.5 billion. The integrated petrochemical site produces about three million tons of high-quality chemicals and polymers for the Chinese market annually. The products serve the rapid-growing demand in multiple industries, including agriculture, construction, electronics, pharmaceutical, hygiene, automotive and chemical manufacturing. All BASF-YPC plants are interconnected in order to use products, by-products and energy in the most efficient way, to save cost and to minimize the environmental impact. BASF-YPC posted sales of approximately CNY 19.6 billion in 2019 and employed 1,942 people as of the end of the year.
MRC

1. Crude, product prices diverge as market eyes US stimulus, European COVID-19 situation

MOSCOW (MRC) -- Crude prices were holding lower in midday US trading Sept. 25 as the market eyed rising COVID-19 cases in Europe as well as fresh hopes for more US stimulus spending, said S&P Global. In Europe, resurgence of the coronavirus is prompting governments to reintroduce new restrictions on movement. Around 40% of Madrid's intensive care capacity is now taken up by people suffering from the virus, while on Sept. 24 France, the UK and Spain reported 16,096, 6,634 and 2,321 new cases, respectively -- the highest totals for those countries since spring.

MRC

MOSCOW (MRC) -- Imports of polyethylene (PE) into Russia decreased by 12% year on year to 428,900 tonnes in January-August.
High density polyethylene (HDPE) accounted for the main decrease in imports, according to MRC DataScope report.

August HDPE imports fell to 49,500 tonnes from 51,400 tonnes a month earlier, with linear low density polyethylene (LLDPE) accounting for the main decrease. Overall PE imports totalled 428,900 tonnes in the first eight months of 2020, compared to 489,300 tonnes a year earlier.
The supply of high-density polyethylene (LDPE) and other ethylene copolymers increased, while imports of other types of ethylene polymers decreased.

The structure of HDPE imports by grades looked the following way over the stated period.

August HDPE imports rose to 18,700 tonnes from 17,800 tonnes a month earlier, shipments from Russia and Turkmenistan increased. Overall external supply of HDPE in the country decreased to 183,900 tonnes in the first eight months of 2020, down by 24% year on year. The largest decrease in supplies was due to film and pipe HDPE.

Last month's LDPE output was 11,400 tonnes, which was virtually corresponded to the July figure. Total imports of low density polyethylene (LDPE) in the country reached 74,500 tonnes in January -August 2020, up 14% year on year.

August LLDPE imports into Russia increased to about 11,300 tonnes against 13,400 tonnes a month earlier, local converters increased their purchases of film PE. Overall LLDPE imports totalled 107,500 tonnes in the first eight months of the year, down 10% year on year.

Last month, external deliveries of other ethylene polymers, including ethylene vinyl acetate (EVA), amounted to 8,100 tonnes against 8,800 tonnes in July. The overall imports of other ethylene polymers exceeded 63,100 tonnes over the stated period versus 63,100 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Crude prices were holding lower in midday US trading Sept. 25 as the market eyed rising COVID-19 cases in Europe as well as fresh hopes for more US stimulus spending, said S&P Global.

In Europe, resurgence of the coronavirus is prompting governments to reintroduce new restrictions on movement. Around 40% of Madrid's intensive care capacity is now taken up by people suffering from the virus, while on Sept. 24 France, the UK and Spain reported 16,096, 6,634 and 2,321 new cases, respectively -- the highest totals for those countries since spring.

"The crude demand outlook is unlikely to get a bump until concerns over growing coronavirus restrictions in both Europe and the US ease," said OANDA senior market analyst Edward Moya in a note. While the new restrictions on travel and trade are generally bearish for oil demand, outlooks remain somewhat supported due to the fact that so far there is little appetite for a return to full lockdown measures seen during the spring.

"European policymakers' view on what makes effective countermeasures to the coronavirus's spread has apparently changed -- blanket lockdowns, which caused sharp economic dislocations, are no longer in favor; selective measures targeting specific places/activity are in," S&P Global Platts Analytics said.

Meanwhile, refined products futures gleaned some support from the prospect of a second round of US stimulus spending. NYMEX October RBOB was up 35 points at USD1.1992/gal while October ULSD was trading around even and was up 11 points at USD1.1178/gal.

US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi agreed Sept. 24 to revive negotiations on a federal stimulus bill that stalled earlier this summer. Democrats in the House of Representative are seeking an aid plan for airlines, restaurants and small business worth USD2.4 trillion, according to media reports Sept. 25. The White House has signaled that it would support USD1.5 trillion in spending, but some Republicans are opposed to that level. The bill that the house passed in May was worth USD3.5 trillion and included USD25 billion for airlines.

Gasoline cracks were again testing one-month highs intraday. The front-month ICE NYH RBOB crack versus Brent strengthened to around USD7.70/b midmorning Sept. 25, on pace to close at the strongest level since Aug. 24.

As MRC informed earlier, global oil refiners reeling from months of lackluster demand and an abundance of inventories are cutting fuel production into the autumn because the recovery in demand from the impact of coronavirus has stalled, according to executives, refinery workers, and industry analysts. Refiners cut output by as much as 35% in spring as coronavirus lockdowns destroyed the need for travel. As lockdowns eased, refiners increased output slowly through late August. But in top fuel consumers the United States and elsewhere, refiners have been decreasing rates for the last several weeks in response to increased inventories, a sustained lack of demand, and in response to natural disasters.

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