Lotte Chemical to resume operations at its Daesan cracker in end-November

MOSCOW (MRC) -- South Korea’s Lotte Chemical has delayed the restart of its fire-hit naphtha-fed steam cracker in Daesan for the third time to end-November, from October, reported S&P Global.

And this is likely to reduce the propylene supply to China and push up CFR China price.

It had initially planned to restart the cracker in September, then - in mid-November.

"The restart has been moved back to mid-November, but could be delayed again," a company source told S&P Global Platts previously. Lotte Chemical has plans for the cracker to operate as per normal by the end of 2020.

As MRC wrote before, the cracker was shut on March 4 following an explosion, which injured more than 30 people.

Lotte Chemical has two steam crackers. The steam cracker in Daesan has a production capacity of 1.1 million mt/year of ethylene, 550,000 mt/year of propylene and 150,000 mt/year of butadiene, while the Yeosu steam cracker is able to produce 1.18 million mt/year of ethylene, 550,000 mt/year of propylene and 130,000 mt/year of butadiene.

We remind that Lotte Chemical shut down its Deasan cracker for maintenance turnaround on October 14, 2019. The cracker resumed production on November 10, 2019.

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.

Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the southwestern city of Yeosu.
MRC

Formosa Plastics USA force majeure on PVC supply remaines in force

MOSCOW (MRC) -- Formosa Plastics USA, part of Formosa Petrochemical, has left a force majeure on polyvinyl chloride (PVC) supplies from its Texas and Louisiana plants in force as of 12 October, reported S&P Global.

The force majeure circumstansed were announced in mid-August, 2020, due to difficulties to produce the product amid upstream steam cracker problems.

"Formosa Plastics Corporation, USA, on behalf of Formosa Plastics Corporation, Texas, and Formosa Plastics Corporation, Louisiana, has experienced unexpected difficulties in its upstream facility at Point Comfort, Texas, impacting the PVC production at both manufacturing sites," the company said in the letter as of Aug. 14.

As MRC informed before, in March, 2020, Formosa Plastics was emerging from a turnaround at its 798,000 mt/year PVC plant and upstream 753,000 mt/year vinyl chloride monomer unit at its Point Comfort, Texas, complex.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Force majeure on Lake Charles polymer units of Westlake Polymer remains in force

MOSCOW (MRC) -- Westlake Polymers has left in force the declared on Aug. 31 force majeure on its North American polymer facilities after Hurricane Laura adversely impacted its unit sites, reported S&P Global.

Westlake's Lake Charles, Louisiana, complex had "incurred limited physical damage" then and restarts primarily depended on the availability of electric power, industrial gases, and other feedstocks.

Westlake Chemical was in the process of a restart following the loss of electricity from Hurricane Laura on 27 August when the arrival of Hurricane Delta on 9 October interrupted the process.

Westlake's facility at Lake Charles, Louisiana, has a 200,000 mt/year linear low density polyethylene (LLDPE) unit; a 60,000 mt/year high density polyethylene (HDPE)/LLDPE unit; a 386,000 mt/year low density polyethylene (LDPE) plant.

Westlake Chemical also declared a force majeure on Aug. 31 for all its North American PVC and VCM, which is also left in force in mid-October. Westlake's shutdown of its Lake Charles complex has idled 38% of its US VCM production, resulting in two VCM plants with a combined capacity of 952,318 mt/year going offline. The complex also has three upstream chlor-alkali plants with a combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda - 46% of the company's overall North American chlor-alkali capacity.

Hurricane Delta appears to have wreaked minimal damage to chemical facilities in Lake Charles, Louisiana, just six weeks after Hurricane Laura blew through the region, severely damaging major electricity transmission lines that left facilities offline for weeks.

Westlake Chemical said in a statement on Oct. 12 that initial assessments after Delta's Oct. 9 landfall showed "very limited physical damage" to its Lake Charles complex, and facilities were "in the process of restarting."

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.

As per 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).

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

YNCC to start up new butadiene plant in Yeosu

MOSCOW (MRC) -- Yeochun Naphtha Cracking Centre (YNCC) plans to start up its new butadiene plant in Yeosu around the end of this year, reported S&P Global with reference to market participants.

The new plant's capacity will be 130,000 mt/year of butadiene.

Market participants see supplies in Asian butadiene to likely increase as new butadiene plants, including the one of YNCC, are due to start up in the region.

As reported earlier, YNCC has restarted its No. 1 naphtha cracker following a maintenance turnaround. The company resumed operations at the cracker on June 21, 2019. The cracker was taken off-stream on May 20, 2019. Located at Yeosu,South Korea, the cracker has an ethylene capacity of 860,000 mt/year and propylene capacity of 485,000 mt/year.

YNCC also has two other crackers at this site. Thus, the production capacity of its No. 2 naphtha cracker in Yeosu is 578,000 tonnes of ethylene per year ant that of its No.3 cracker - 470,000 tonnes of ethylene per year.

Butadiene is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, Russia produced 42,900 tonnes of polystyrene (PS) and styrene plastics in July, 2020, up by 5% year on year. Russia's ABS output totalled 1,100 tonnes over the stated period. At the same time, July estimated consumption grew in the ABS sector by 13% year on year to 4,300 tonnes (3,790 tonnes a year earlier).

South Korea’s Yeochun NCC (YNCC) pyrolyzes naphtha to produce basic feedstock materials for the petrochemical industry. YNCC, a joint venture between South Korean firms Hanwha and Daelim, is a key exporter of ethylene and propylene in the country.
MRC

Crude oil futures tick up on bullish API data, refinery activity

MOSCOW (MRC) -- Crude oil futures ticked higher during mid-morning Asian trade Oct. 15, as positive data from the American Petroleum Institute and an increase in China's and India's refinery activities stoked bullish market sentiment despite tightening coronavirus restrictions, reported S&P Global.

At 10.45 am Singapore time (0245 GMT), ICE Brent December crude futures were up 6 cents/b (0.14%) from the Oct. 14 settle to USD43.38/b, while the NYMEX November light sweet crude contract was up 4 cents/b (0.10%) at $41.08/b. Both international crude markets had jumped 2.05% and 2.09% to settle at USD43.32/b and USD41.04/b, respectively, on Oct. 14.

The uptick in prices can be attributed to positive API data released late Oct. 14, which showed that US crude inventories had declined 5.4 million barrels to 495.4 million barrels in the week ended Oct. 9. This large draw in crude stocks far exceeded analysts' expectations of a 2.3 million barrel draw, according to an S&P Global Platts survey.

The API also reported a 1.513 million-barrel and a 3.930 million-barrel draw in US gasoline and distillate inventories, respectively, indicating that fundamentals in downstream oil markets were improving.

At 10.45 am Singapore time, the NYMEX November RBOB contract was trading 0.0011 cents/gal (0.09%) higher from the overnight settle at USD1.1982/gal and November ULSD contract was 0.17 cents/gal (0.14%) higher at USD1.1942/gal.

An added boost to market sentiment were indications that demand in Asia's oil-consuming behemoths China and India were on the mend.

Data collected by Platts on Oct. 14 showed that crude and bitumen blend imports by independent Chinese refineries 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. Earlier, data from the Chinese customs released Oct. 13 had also shown that the country's crude imports were up 2.1% on the month and 17.6% year on year to 48.5 million mt in September.

Meanwhile, Indian demand was also on the rise according to ANZ analysts in an Oct. 15 note: "India's refiners have boosted buying ahead of two main festivals, Navratri and Diwali, that typically increase demand for consumer goods and transportation fuel."

However, capping oil markers was the demand outlook, which remained bleak amid the coronavirus pandemic, as France declared a state of emergency late Oct. 14. and became the latest in a growing list of countries that are imposing tougher restrictions to stem the spread of the virus.

Edward Moya, senior market analyst at OANDA, said in an Oct. 15 note: "The COVID-19 second wave in Europe is getting out of control and that should force further action from lawmakers and central banks...It will be hard for risk appetite to return as Europe continues to go down the path of lockdowns."

As MRC informed earlier, global oil demand is forecast to peak by around 2040 because transport-fuel demand will decline steeply and economic growth will slow in the post-coronavirus world, the Institute of Energy Economics, Japan, said in its annual IEEJ Outlook 2021 on Oct. 15.

We remind that global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, 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 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