PVC imports into Russia down by 13% in Jan-Aug 2020, exports up by 3%

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) into Russia totalled about 32,000 tonnes in the first eight months of 2020, down by 13% year on year. At the same time, exports rose by 3%, according to MRC's DataScope report.

Last month's SPVC imports to Russia dropped to 7,400 tonnes from 10,900 tonnes in July. The increased supply from domestic producers and high prices in foreign markets were the main reasons for lower imports. Thus, overall imports were 32,000 tonnes in January-August 2020, compared to 36,900 tonnes a year earlier, with resin from China and the United States accounting for the main decreased in imports.

At the same time, Russian producers managed to increase their exports, although producers traditionally reduce their export sales in the summer months.
Russian producers reduced their SPVC exports last month because of stronger demand from the domestic market. August exports of suspension did not exceed 7,000 tonnes, compared to 14,000 tonnes a month earlier. Thus, overall PVC exports totalled 139,900 tonnes in January-August 2020 versus 135,800 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Brazilian Chief Justice Luiz Fux postponed voting on the sale of state-controlled oil company Petrobras' refineries without setting a new deadline. Initially, the Supreme Court had until Friday to rule on the matter, reported Reuters.

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 companyпїЅs 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.
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MOSCOW (MRC) -- Oil futures recovered slightly during the mid-morning trade in Asia Sept. 22, after the prospect of renewed lockdowns amid a potential resurgence of the coronavirus pandemic drove futures down Sept. 21, reported S&P Global.

At 11:16 am Singapore time (0316 GMT), ICE Brent November crude futures were trading at USD41.54/b, up 10 cents/b (0.24%) from the Sept. 21 settle, while the NYMEX October light sweet crude contract was at USD39.57/b, up 26 cents/b (0.66%).

This uptick in crude futures comes after the November Brent and the October WTI plummeted USD1.71/b and 1.80/b to close at USD41.44/b and USD39.31/b, respectively, on Sept. 21, following fears of renewed lockdown restrictions during the winter months, when the coronavirus is expected to spread faster.

The prospect of fresh lockdown restrictions has hit the oil market hard, since such restrictions could hamper global economic recovery, and weigh down demand for crude oil, analysts said.

"Many oil traders are subscribing to the dominant macro narrative that as far as the oil price recovery is concerned, last week's top might be as good as it gets for a while when mapping oil prices tangentially to the rebound in economic activity," said Stephen Innes, Chief Global Markets Strategist at Axi, in a Sept. 22 note.

Concerns lingered over the lifting of the Libya blockade, which could send up to 1.1 million b/d of crude to an already oversupplied market, even as Goldman Sachs analysts forecast on Sept. 21 that Libyan production would rise by just 400,000 b/d by December due to "significant uncertainty on the timing, magnitude and sustainability" of a restart.

They added that any upside supply risk to the forecast is offset by downside supply risks from better OPEC+ compliance.

Innes also noted that OPEC+ compliance remains key to balancing supply and demand in the crude oil markets. "OPEC's call for laggards to fully comply with their quotas by year-end must be delivered to offset the Libyan increased production risks," he said.

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

MOSCOW (MRC) -- Sekisui Chemical has commenced the production of thermal interface materials for environment-friendly vehicles at Roermond, the Netherlands. Sekisui Chemical has established a new company, Sekisui Polymatech, based in the Netherlands, said Chemweek.

The facility has the capacity to produce around 1 million litter grease for approximately 500,000 electric vehicles (EVs) and hybrid vehicles. Sekisui Chemical has invested 1.6 billion yens (15.2 million euros) in the company. The aim of this investment is to achieve a three-fold increase in the global production capacity for Sekisui Polymatech. The company intends to record 10 billion yens revenue in its thermal management business by 2022.

Sekisui Chemical says that original equipment manufacturers in Europe are developing large numbers of EV and hybrid vehicles. It is anticipated that 12.5 million of these vehicles will be produced for the European market by 2025. This trend shows that the demand for heat-dissipation products for the lithium-ion (Li-ion) batteries used in such vehicles is set to rise rapidly.

"Until now, elements for EVs, such as those for Li-ion batteries, have been made largely in Asia. Our focus is on local manufacturing,” says Sekisui Polymatech managing director Makoto Sambongi.

The company currently operates three thermal interface materials production bases in China, Japan, and Thailand.

As MRC informed earlier, Sekisui Chemical Co. Ltd. acquired carbon fibre parts manufacturer AIM Aerospace, based in Renton, Wash., for an undisclosed amount. As a result of the purchase, the company will change its name to Sekisui Aerospace.

As per MRC, Russia's output of chemical products rose in August 2020 by 5% year on year. At the same time, production of basic chemicals increased year on year by 5.3% in the first eight 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 January-July output. August production of benzene fell to 102,000 tonnes from 95,300 tonnes a month earlier due to scheduled shutdowns for maintenance at several producers. Overall output of this product reached 918,300 tonnes over the stated period, down by 0.9% year on year.

MRC

MOSCOW (MRC) -- Chemical production in the US increased by 0.6% on a sequential basis in August, with gains in all regions of the country except the West Coast, reported Chemweek.

Most industry segments reported higher production for August, as well.

The recovery in manufacturing activity also strengthened in August, “with overall factory activity up 4.1% on a 3MMA [three-month moving average] basis,” ACC says. “Production increased for all key chemistry end-use industries that ACC tracks, with the strongest gains in appliances, motor vehicles, aerospace, foundries, iron and steel, refining, plastic and rubber products, tires, and apparel.”

On a year-on-year (YOY) basis, US chemical production fell 4.8% in August, the fifteenth consecutive month of declines. Production remains lower on a YOY basis in all regions of the country. However, there has been “an improvement over the past several months,” ACC says.

As MRC wrote previously, US chemical volumes are expected to drop nearly 10% this year as global economic activity contracts due to the impacts of COVID-19, according to the American Chemistry Council's (ACC) Mid-Year 2020 Chemical Industry Situation and Outlook. Volumes should recover in 2021 with a return to pre-COVID-19 output levels in the US by the second half of 2021.

We remind that Russia's output of chemical products rose in August 2020 by 5% year on year. At the same time, production of basic chemicals increased in the first eight months of 2020 by 5.3% year on year, according to Rosstat"s data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-July output.
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