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MOSCOW (MRC) -- Crude oil futures settled higher Oct. 14 as fundamental outlooks turned more bullish amid reports of improved OPEC+ quota compliance and rising Chinese crude demand, reported S&P Global.
Oil climbed in a late session rally following a Reuters report stating OPEC+ producers achieved 102% quota compliance in September. The latest S&P Global Platts survey Oct. 9 found compliance reached 99% last month, led by the Gulf states, but discipline from Russia and some African producers continued to slip.
Russian energy minister Alexander Novak said Oct. 14 that OPEC+ did not expect the second coronavirus wave to impede plans to increase oil output gradually.
The comments come on the heel of a call between Russian President Vladimir Putin and Saudi Arabia 's Crown Prince Mohammed bin Salman, where the pair underscored the necessity of continuing to cooperate within OPEC+, according to a statement posted on the Kremlin website late Oct. 13.
The call took place ahead of a key OPEC + monitoring committee, co-chaired by Saudi Arabia and Russia, which is scheduled to meet virtually Oct. 19, amid speculation that OPEC+ may not go ahead with easing its current 7.7 million b/d production cut in 2021.
Oil was already trending higher earlier in the session amid reports of rising Chinese crude demand. China's independent refineries' crude and bitumen blend imports were up 1.6% to 18.14 million mt, or 4.43 million b/d, in September, from a three-month low of 17.85 million mt in August, information collected by S&P Global Platts showed Oct. 14.
This is the fourth time that Chinese independent refineries' crude and bitumen imports have been over 18 million mt, having hit a record high 19.81 million mt, or 4.68 million b/d, in July, Platts data showed.
Rising Chinese demand helped push the benchmark cash Dubai spread to Dubai futures higher for a third consecutive day. December cash Dubai crude was assessed at a discount of 54 cents/b to same-month Dubai futures at the 4:30 pm (0830 GMT) Singapore close on Oct. 14, a two-week high and up from minus 75.5 cents/b the previous session, S&P Global Platts data showed.
OPEC in its monthly oil market report released Oct. 13 raised its global oil demand forecast for 2020 by 60,000 b/d to 90.29 million b/d citing growing Chinese crude appetite. However, it downgraded its forecast for 2021, expecting oil demand to total 96.84 million b/d, 80,000 b/d lower than its last forecast in September.
Refined product futures traced crude higher, but growing risks of a resurgent coronavirus pandemic capped the rally and weighed on crack spreads.
NYMEX November RBOB settled 1.44 cents higher at USD1.1971/gal and November ULSD settled up 2.35 cents at USD1.1925/gal.
In the US, a surge in new infections in the Midwest helped push the seven-day moving average of new cases to more than 51,000 on Oct 13, the highest since Aug. 16, according to data from The COVID Tracking Project.
The front-month ICE New York Harbor RBOB crack versus Brent was testing one-month lows at around USD6.24/b midafternoon.
As MRC iformed before, China's Sinopec has started operation of a 800,000 tons-per-year ethylene facility at its Zhanjiang refinery. The refinery, located in the southern Chinese coastal city of Zhanjiang, commenced operation of its 200,000 barrel per day crude oil refining units in June.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
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Crude tests six-week highs as fundamental outlooks tighten
PE imports to Ukraine increased by 2% in January-September 2020
Last month, external supplies of polyethylene to Ukraine amounted to slightly less than 21,900 tonnes against 22,900 tonnes in August, local companies reduced their purchases of low density polyethylene (LDPE) and linear low density polyethylene (LLDPE). Thus, overall PE imports reached 204,200 tonnes in January-September 2020, compared to 200,800 tonnes a year earlier. Imports of all grades of ethylene polymers increased, with LLDPE, demand for which subsided in all consumption sectors, being the only exception.
The supply structure by PE grades looked the following way over the stated period.
September imports of pipe HDPE into the country increased to 6,800 tonnes, compared with 5,600 tonnes in August, Ukrainian companies have increased their purchases of pipe and injection moulding polyethylene. Overall HDPE imports exceeded 73,400 tonnes in the first nine months of 2020 versus 72,500 tonnes a year earlier.
September imports of low density polyethylene (LDPE) were slightly over 6,400 tonnes versus 7,300 tonnes a month earlier, producers from Azerbaijan and Russia reduced their export sales. Overall LDPE imports reached 60,900 tonnes over the stated period, compared to 58,100 tonnes a year earlier.
Last month's imports of linear low density polyethylene (LLDPE) were about 7,400 tonnes, compared to 8,300 tonnes in June, shipments of film grade LLDPE decreased. Overall LLDPE imports reached 59,300 tonnes in January-September 2020, compared to 60,800 tonnes a year earlier.
Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled about 10,600 tonnes over the stated period, compared to 9,400 tonnes a year earlier.
MRC
PP imports to Ukraine remained at the level of last year in January-September 2020
September PP imports into the country fell to 12,500 tonnes from 13,300 tonnes a month earlier, the decrease in demand led to a decrease in the volume of purchases of homopolymer PP. Overall imports of propylene polymers reached 101,200 tonnes in January-September 2020, compared to 101,500 tonnes a year earlier. Demand for all types of propylene polymers decreased slightly, but demand for PP random copolymers increased.
The structure of PP imports by grades looked the following way over the stated period.
September imports of homopolymer PP to the Ukrainian market decreased to about 9,000 tonnes from 9,200 tonnes a month earlier, local companies suspended their purchasing of PP in Azerbaijan and Turkmenistan. Total homopolymer PP imports were 77,300 tonnes in January-September, compared to 77,900 tonnes a year earlier.
September imports of PP block copolymers was about 1,700 tonnes, which actually equal to the level in August. Over the reporting period, about 10,400 tonnes of propylene block copolymers were imported against 10,600 tonnes for the same period in 2019.
September PP random copolymers imports decreased to 1,600 tonnes from 1,900 tonnes a month earlier, local companies decreased their purchasing of injection moulding PP random copolymers. Overall PP random copolymers imports reached 11,800 tonnes in January-September 2020, compared to 11,600 tonnes a year earlier.
Overall imports of other propylene copolymers totalled about 1,700 tonnes over the stated period.
MRC
Arlanxeo sells Canada olefins business to Mitsubishi Corp.
MOSCOW (MRC) -- Arlanxeo is selling its Canadian olefins business, which produces butadiene and raffinate in Sarnia, Ontario, to Mitsubishi Corp. for an undisclosed sum. Arlanxeo expects the deal to close in the first half of 2021, said Chemweek.
Mitsubishi Corp. intends to continue operations in Sarnia and to retain the associated employees. Arlanxeo, a producer of synthetic rubber, will continue to produce butyl rubber at Sarnia.
Arlanxeo has 120,000 metric tons/year of butadiene capacity and 150,000 metric tons/year of butyl rubber capacity at Sarnia. The company is a wholly-owned subsidiary of Saudi Aramco.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC
Lummus announces agreement with New Hope Technologies
MOSCOW (MRC) -- Lummus Technology and New Hope Technologies announced that the companies have entered into a cooperation agreement for the marketing and further development of a leading plastic waste conversion technology based on thermal pyrolysis, according to Hydrocarbonprocessing.
The agreement is part of Green Circle, Lummus’ new business entity formed to place the company at the forefront of the circular economy and energy transition.
“This partnership, between Lummus and New Hope, will help reduce plastic waste through integrated processing solutions for turning end-of-life plastics into pyrolysis oil,” said Leon de Bruyn, president and CEO of Lummus Technology. “Lummus has a long history of successful partnerships to commercialize newer, better technologies, and we are grateful for this collaboration with New Hope. We will leverage the extensive expertise, innovation and technology of both companies.”
“New Hope is excited to partner with Lummus to create industrial scale waste plastic to circular chemicals plants to address the over one million tons of plastic impacting the environment daily,” according to Johnny Combs, CEO of New Hope. “New Hope and Lummus intend to be the largest supplier of plastic waste to renewable circular product solutions in the world, helping to support the commitments of the major brands and producers.”
New Hope has over 10 years experience in plastic waste conversion, and its plant in Tyler, Texas, has units that have been in operation for over 5 years. It is one of the largest facilities in the Western Hemisphere, having a design capacity of 150 tons per day (50,000 tons per year). Through a proprietary feedstock preparation and reactor section design, the technology allows for an optimized investment cost and thus higher returns for converting plastic waste. The technology is robust and forgiving to variations in plastic waste feedstock and contaminants.
Under the terms of the agreement, Lummus’ Green Circle LLC will be the exclusive licensing party for this technology and will be responsible for providing studies, basic engineering, technical services, and proprietary equipment as part of the technology transfer package. Green Circle is a business entity recently established by Lummus to offer sustainable solutions including: converting plastic waste to value-added products; production of chemicals and fuels from biomass; and decarbonization of refinery and petrochemical assets.
As MRC reported earlier, Lummus Technology has just announced that it has been awarded a contract by Enter Engineering Pte. Ltd. for the Shurtan Gas Chemical Complex in Uzbekistan. Lummus’ scope includes the design and supply of four proprietary Short Residence Time VI and VII type cracking furnaces, which will more than double the production of ethylene at Shurtan’s facility. Lummus was selected due to its leading ethylene technology position and its extensive experience with ethylene furnaces, having developed pyrolysis furnaces as part of its proprietary equipment portfolio.
Ethylene is the main feedstock for the production of polyethylene (PE).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE).
MRC