November PVC prices rise by Rb3,000/tonne in Russia

MOSCOW (MRC) -- High global prices of suspension polyvinyl chloride (SPVC) and the rouble devaluation for the third month in a row continued to boost prices in the Russian market. Russian producers announced a further price increase of on average of Rb3,000/tonne for November shipments, according to ICIS-MRC Price report.

A shortage of PVC has remained in many regions of the world for the past few months because of scheduled and unscheduled shutdowns of the plants amid strong demand, and prices have broken records for the past few years. And this situation is reflected in the Russian market. In the autumn months, Russian producers virtually maintained their prices of suspension in dollars the same for the domestic market, whereas the weakening of the rouble against the dollar boosted prices for domestic consumers. Russian producers announced a price increase of on average of Rb3,000/tonne for November deliveries.

Demand for SPVC was strong from Russian converters in October, although some consumers still reduced their purchases, in order to optimize resin and finished product stocks. However, even given high level of capacity utilisation of domestic producers, a shortage of PVC supply was registered during the past month.

The similar situation is seen in November. Demand for resin continued to subside from some converters due to seasonal factors, but domestic producers still had insufficient quantities of PVC. And, as a result, some clients, even given lower purchasing, could not fully meet their November needs for material.

The shortage of resin from Russian producers in the past few months was caused by two factors. Firstly, high PVC prices in foreign markets led to a major decrease in imports in October-November. And in December, one should hardly expect a significant drop in global PVC prices.

Secondly, Russian resin was in high demand from consumers from other regions. And prices for shipments to some export directions exceeded those for the domestic market, even given the November increase. As a consequence, some producers have been gradually increasing their export sales of PVC.

In general, the current situation with the rise in PVC prices in October-November is typical neither for the Russian market, nor for the world market. Buyers were used to the fact that in the previous years, prices had been gradually going down since September until the end of the year. But now there is simply no alternative to Russian resin.

Negotiations over November shipments of Russian PVC began at the end of last week, with Russian resin with K64/67 being negotiated in the range of Rb86,000-89,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes. Traditionally, already for the past few months, resin with K=70 has accounted for the acutest shortage.
MRC

Crude futures dive on demand-side worries amid US election uncertainty

MOSCOW (MRC) -- Crude oil futures dived during midmorning Asia trading Nov. 5 as the demand-side gloom brought about by the pandemic festered in the markets gripped by uncertainty about the US elections, reported S&P Global.

At 11.08 am Singapore time (0308 GMT), ICE January Brent crude futures was down 60 cents/b (1.46%) from the Nov. 4 settle at USD40.63/b while the NYMEX December light sweet crude contract was also down 60 cents/b (1.53%) at USD38.55/b.

ICE January Brent and NYMEX December crude futures had surged 3.83% and 3.96% to settle at USD41.23/b and USD39.15/b, respectively, on Nov. 4 as the market received a boost from indications that the OPEC+ alliance may maintain or deepen its current production cuts instead of easing them as scheduled from 2021 onward.

However, on Nov. 5, the pernicious demand-side impacts of the coronavirus pandemic came back into the spotlight as England joined France and Germany in a lockdown, and fundamentals in downstream oil markets deteriorated.

"Weakening demand in Europe weighed on sentiment. Road usage is suffering as France, Italy, Spain and (England) have reinstated lockdowns. The average highway use (in these countries) has fallen to its lowest level since late June, which doesn't bode well for gasoline demand," said ANZ analysts in a Nov. 5 note.

Downstream US oil markets were faring no better, with Nov. 4 data from the Energy Information Associations showing a 1.54 million-barrel build in US gasoline inventories at 227.67 million barrels in the week ended Oct. 30. In contrast, analysts surveyed by S&P Global Platts had expected a 1.1 million barrel draw in US gasoline inventories.

The EIA data was not all bearish, as it also showed that US crude inventories had plummeted 8 million barrels in the week ended Oct. 30. While this draw propped up oil prices toward the close on Nov. 4, it was largely ignored by Asia.

The Asian market's indifference could have stemmed from the dramatic fall in crude stocks being underscored by the effects of Hurricane Zeta, which at its peak had shuttered 84.8%, or about 1.57 million b/d of crude capacity in the US Gulf Coast, and from the notion that demand outlook in the coronavirus-stricken global markets is still bleak.

"The Asian market is still focused on the implications of surge in coronavirus infections in Europe and the US, and is bearish in view of the European lockdowns," Victor Shum, vice president at IHS Energy Insight, told Platts on Nov. 5.

Meanwhile, the US elections continued to grab headlines this morning, with some analysts saying that a Biden presidency may put pressure on the oil complex due to his greener approach toward climate policy and his less hawkish view on Iranian sanctions. Other analysts though said a Biden administration may bode well for oil prices, at least in the near term, by offering more support for stimulus spending.

"The election is still undecided, and so it is too early to make a definitive assessment over how a Biden presidency will impact the market, and definitely too early to price it in," Shum added.

As MRC informed previously, 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).

ccording to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Trinseo raises November PC prices in Europe

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price increase for all polycarbonate (PC) grades in Europe, as per the company's press release.

Effective November 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below increased as follows:

- CALIBRE PC resins - by EUR150 per metric ton.

As MRC informed earlier, Trinseo last raised its prices for all PC grades in Europe on 1 October 2020 by EUR300 per metric ton.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in the first three quarters of 2020 by 32% year on year to 75,600 tonnes (57,200 tonnes a year earlier).

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.
MRC

European PVC prices increased by EUR50/tonne and more in CIS markets

MOSOCW (MRC) -- Negotiations on prices of European polyvinyl chloride (PVC) for November shipments to the CIS markets started at the beginning of this week. European producers announced another increase of EUR50/tonne or higher in their export PVC prices, despite steady ethylene price, according to ICIS-MRC Price report.

November contract price of ethylene was agreed at the previous month's level, which theoretically allowed to talk about the steadiness of the net cost of PVC production, if compared to October. Nevertheless, shutdowns of several plants in Europe and good demand for PVC in the world helped European producers to talk about a significant increase in export prices for the CIS markets in November. An increase of EUR50-60/tonne in export PVC prices has been under discussion.

Demand for PVC from CIS consumers decreased in November under the pressure of the seasonal factor, but still remained at a good level for the current season. Also, local producers have restrictions on supplies, in particular, from the Ukrainian producer - Karpatneftekhim due to a shutdown for scheduled maintenance works.

Nevertheless, European producers reported that export quotas were significantly limited in November for supplies to the CIS markets due to shutdowns of several plants in the region, and good demand from the domestic and a number of export markets.

Overall, deals for November shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of EUR820-905/tonne FCA, whereas the previous month's deals were discussed in the range of EUR770-840/tonne FCA.

MRC

North America weekly railcar volume softens

MOSCOW (MRC) -- During the week ended 31 October, chemical railcar traffic in North America weakened on a four-week basis, but year-to-date figures continued to improve, according to Chemweek.

The four-week moving average (4wma) was up 0.8% from 2019 and down 3.2% from 2018, declines from the respective 1.4% gain and 1.5% shortfall of the previous week (chart). Year-to-date, however, volume was down 4.0% from 2019 and 5.5% from 2018, up from the previous week’s shortfall’s of 4.1% and 5.6%, respectively.

Volume totaled 43,167 carloads, down 0.7% year-over-year (YOY) and up 1.9% from the previous week, according to data released on 5 November by the Association of American Railroads (AAR).

Chemical railcar traffic in the United States contributed 30,535 carloads to the total, down 3.9% YOY and down 1.3% from the previous week. For the year to date, US chemical railcar traffic is down 4.8%.

Canadian chemical rail traffic totaled 11,658 carloads, up 7.6% YOY and up 11.1% from the previous week. For the year to date, Canadian chemical railcar traffic is down 1.7%.

Chemical railcar traffic in Mexico totaled 974 carloads, a YOY increase of 12.9% and a sequential increase of 4.5%. For the year to date, Mexican chemical railcar traffic is down 5.1%.

As MRC informed earlier, Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, 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-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC