Crude settles higher on COVID-19 vaccine progress, OPEC+ talks

MOSCOW (MRC) -- Oil futures settled higher Nov. 16 as supply and demand outlooks grew more bullish on COVID-19 vaccine progress and signs that OPEC+ was moving closer to extending output cuts into 2021, reported S&P Global.

NYMEX December WTI settled up USD1.21 at USD41.34/b and ICE January Brent was USD1.04 higher at USD43.82/b.

Oil futures stepped higher overnight following reports of a second COVID-19 vaccine developed by US company Moderna that is nearly 95% effective, according to data from the company Nov. 16. The news comes on the heels of a Nov. 9 announcement from pharmaceutical companies Pfizer and BioNTech that their coronavirus vaccine had shown itself to be more than 90% effective in a phase 3 trial.

NYMEX December RBOB settled 2.14 cents higher at USD1.1468/gal and December ULSD was up 2.47 cents at USD1.2289/gal.

While the vaccine progress was generally bullish for demand outlooks, near-term headwinds persisted amid fast-rising caseloads.

In the US, the seven-day moving average of new coronavirus cases reached a fresh all-time high 145,344 on Nov. 15, according to data from The Covid Tracking Project. Apple Mobility data accessed by S&P Global Platts showed that US driving activity during the week ended Nov. 13 was the lowest since late May.

The front-month ICE New York Harbor RBOB crack against Brent fell to around USD4.41/b in afternoon trading, the lowest since mid-August.

"The short-term headaches for the crude demand outlook however remain firmly in place," OANDA senior market analyst Edward Moya said in a note. "WTI crude looks ready to run higher but it may have to wait until the current coronavirus situation is under control in both Europe and the US."

Still, crude forward structure turned more bullish. Year-ahead WTI futures settled at a USD1.72/b premium to the front-month contract, the weakest contango since July 24.

Meanwhile, key oil ministers from OPEC and its allies will hold critical talks Nov. 17 on 2021 production quotas, steered towards an extension of current output cuts through March or June by an uncertain near-term market outlook.

OPEC+ ministers are weighing whether to relax their current 7.7 million b/d in collective production cuts to 5.8 million b/d as originally scheduled, maintain them at the same level for a few months, or even deepen them.

Saudi energy minister Prince Abdulaziz bin Salman has previously said the deal could be "tweaked" as market conditions warrant. An advisory delegate-level technical committee met Nov. 16, reviewing scenarios in which the current cuts were extended for three months or six months, sources told Platts.

Such an extension would help bolster the market as it awaits the mass availability of a COVID-19 vaccine, but many members are weary of having sacrificed so much production for so long already.

Demand outlooks also gleaned support from an unexpected increase in Chinese crude demand in October. China's domestic refineries processed 14.15 million b/d of crude oil in October, rising 0.9% on the month, to end the downtrend and hit a fresh record high, the National Bureau of Statistics' data released Nov. 16 showed.

The high throughput in October was unexpected, analysts said.

"We previously projected October crude throughput to remain in the low levels with notable cuts from state-owned refineries, due to high oil product inventory and weaker than expected demand," a Beijing-based analyst said.

The country's previous record high throughput was 14.14 million b/d in June, NBS data showed.

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

MOSCOW (MRC) -- Maire Tecnimont S.P.A. and Hera Group signed of a strategic agreement between Aliplast, Hera Group’s subsidiary, for the collection, recycling and conversion of plastics, and NextChem, Maire Tecnimont Group’s company, for the development of projects and technologies for the energy transition, said the company.

NextChem will provide technology and engineering, procurement and construction services to build a plant which will use proprietary innovative technology MyReplastTM for upcycling of plastic waste into high value-added polymers.

These partners are each leader in their respective sectors. Hera Group’s Herambiente unit – Italy’s pioneer in the treatment of all types of waste – has 90 plants with an important know-how in the management of the entire environmental chain, in which Aliplast contributes with a circular and integrated stronghold in plastic sector. Maire Tecnimont Group is a global leader in process engineering and strongly committed – through its subsidiary NextChem – to developing projects and technologies for the energy transition and circular economy. Maire Tecnimont adopts an innovative industrial approach focused on engineering of transformation processes able to produce polymeric high value-added materials which can replace virgin materials derived from fossil sources.

The synergy between skills and resources of these two big players will result in the only plant of its kind in Europe. One of Hera Group’s sites will use the innovative MyReplastTM technology licensed by NextChem and will produce recycled polymers of high quality and purity, with high-level chemical-physical and mechanical performance.

The aim of the plant is to treat post-consumer plastic waste to obtain customized recycled products capable of meeting customer requirements and quality market standards, with features and properties on par with virgin polymers from fossil sources. This is a cutting-edge plant engineering experience.

Once fully operational, the plant – powered by green sources thanks to Herambiente – will be able to produce up to 30,000 tons of polymers per year. The plant will ensure high security standards and be equipped with innovative features such as processes automation and high digitalization for data analytics, thereby allowing it to maximize energy efficiency, delivering further environmental benefits.

With this agreement, Aliplast takes another step forward in its mission to attain excellence, also at international level, in plastic recycling and regeneration. It is the first Italian company to have reached full integration in the plastic life cycle, using technology completely developed in house. Aliplast operates plants in France, Spain and Poland and is leader in the production of flexible film of PE and PET sheets, with 90,000 tons per year of finished products and regenerated polymers, and over 90% recovery/recycling in terms of volumes.

The partnership with NextChem will allow Aliplast to exploit recycling and compounding opportunities in order to expand into the sector of rigid plastics, like PP, HDPE and ABS, which are difficult to recycle effectively with mechanical processes.

The aim is to continue to serve customers offering them a larger choice of high-quality recycled plastics, moving towards more advanced circular economy models in line not only with EU and UN targets but also with the New Plastics Economy Global Commitment developed by the Ellen MacArthur Foundation, an important international network for the circular economy, of which Hera Group is a member.

As MRC informed earlier, Maire Tecnimont S.p.A. signed a EUR1.2 billion contract for engineering, procurement and on-site services (EPSS) for the planned Amur Gas Chemical Complex (Amur Gas Chemical Complex) of SIBUR, the largest petrochemical holding in Russia and Eastern Europe. The agreement was signed with the Amurskiy GCC, a subsidiary of SIBUR.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 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.

Maire Tecnimont S.p.A., a company listed on the Milan Stock Exchange, leading an international industrial group which is a leader in the transformation of natural resources (plant engineering in downstream oil & gas, with technological and execution competences). Through its subsidiary NextChem it operates in the field of green chemistry and the technologies to support the energy transition. Maire Tecnimont Group operates in about 45 countries, through 50 operative companies and a workforce of approximately 6,300 employees, along with approximately 3,000 professionals in the electro-instrumental division.
MRC

MOSCOW (MRC) -- Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, today announces the completion of its acquisition of Erber Group for an enterprise value of EUR980 million, said the company.

The transaction - which excludes two smaller units in the Erber Group - is expected to be earnings enhancing in the first year upon completion. The acquisition of Erber Group was first announced on 12 June 2020.

DSM acquired Erber Group’s Biomin and Romer Labs. Erber Group’s specialty animal nutrition and health business Biomin specializes primarily in mycotoxin risk management and gut health performance management, whereas the Romer Labs business focuses on food and feed safety diagnostic solutions. Both expand DSM’s range of higher value-add specialty solutions.

The acquisition of Erber Group’s Biomin further strengthens DSM’s expertise and reputation as a leading provider of animal health and nutrition solutions for farm productivity and sustainability, with an emphasis on emissions reduction, feed consumption efficiency, and better use of water and land. It is therefore very much aligned with DSM’s focus to make animal farming more sustainable from both an ecological and economical perspective. Romer Labs also complements DSM’s human nutrition and health offering to customers in the food & beverages market segments.

As MRC informed earlier, Royal DSM (Netherlands) announced an agreement to sell its resin and functional materials business units and related businesses DSM Resins & Functional Materials (RFM) to Covestro AG (Germany) for EUR1.6 billion.

As MRC informed earlier, DSM formed a 50/50 joint venture (JV) with VDL Groep (Eindhoven, Netherlands), called Dutch PPE Solutions, to produce medical facemasks and establish the first permanent production of critical facemask components in the Netherlands. The companies are investing several million euros to purchase manufacturing equipment and build manufacturing facilities to produce meltblown polypropylene (PP), the critical material layer in medical facemasks that filters viruses, and make medical masks.

We remind that 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.
MRC

MOSCOW (MRC) -- CCL Industries Inc. today announced plans for a strategic new capacity investment at its Innovia Films extrusion site in Plock, Poland. A new six-metre multi-layer co-extrusion line will be installed to produce EcoFloat shrink sleeve material, said Packagingeurope.

This hybrid polyolefin film facilitates easy separation of labels from PET bottles and other types of plastic containers in the recycling process with the aim of enabling bottle-to-bottle circularity, an important goal for global food and beverage brand owners. The capacity will come online in early 2022 with most of the capital deployed in 2021.

“CCL developed a floatable polyolefin shrink film to meet the new market demands and to help brand owners reach their sustainability and recycling targets set by the EU. We see this as the sustainable decoration solution of the future – for a whole range of packaging in the beverage, dairy, home care and other industries,” says Guenther Birkner, president of Innovia and CCL’s food and beverage business.

“This is why we have decided to invest in new capacities in Europe to be in an ideal position to supply the growing demand we expect in the future." Alongside the investment into extrusion, CCL has also secured a raw material supply agreement with its partner Polyplastics, a global supplier of cyclic olefin copolymer (COC) under the TOPAS brand.

Birkner concludes: “Our investment is part of our commitment to boost plastic recycling and take steps towards a circular economy as stated when we signed the Global Commitment of the New Plastics Economy led by the Ellen MacArthur Foundation earlier this year. In the future, the EU will set a target for the recycling rate in municipal waste.

"Reaching these will not be feasible without investing in new technologies for packaging materials that support ‘Design for Recycling’. As a floatable, low-density polyolefin film, EcoFloat fulfills the requirements for sleeves as defined in packaging design guidelines."

As MRC informed earlier, Innovia Films is launching the first of its new range of transparent high barrier packaging films, Propafilm Strata SL.. The film has been designed to be a standalone monofilmic solution, to be used in laminate constructions to be recycle ready, or recyclable in countries which have the infrastructure to recycle polypropylene films.

We remind, Innovia Films (Innovia) recognises that today’s competitive market place demands packaging films that perform on a variety of machines, at the highest possible speeds. As overall production costs are scrutinized, achieving high efficiencies is becoming increasingly vital. In response to these trends, Innovia is pleased to introduce its latest high speed Biaxially Oriented Polypropylene (BOPP) film - Propafilm REF.

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.

Innovia Films is a leading global manufacturer of two 'families' of speciality products supplied into the packaging, labels, tobacco overwrap and securities markets - Biaxially Oriented Polypropylene (BOPP) and Cellulose based films. With a turnover in excess of EUR400m, its total annual film production capacity currently stands at more than 120,000 tonnes.
MRC

MOSCOW (MRC) -- Croda International (Goole, UK) says it has entered a partnership with Sentient Science (Buffalo, New York), an asset management and software services company, for the recommended use of Croda’s Rewitec additives for wind turbine gearboxes and main bearings, said Chremweek.

Croda says that Sentient will calculate and demonstrate durability improvements imparted through using Croda’s Rewitec technology, to extend the lifetime of wind-turbine assets instead of costly part replacements.

“The competitive energy market is forcing energy producers to optimize maintenance practices and reduce operational expenses,” says Scott Gardiner, business development specialist/energy technologies at Croda. “Major correctives are the largest cost drivers in the wind energy market, specifically gearbox or main shaft replacement. The cost of this replacement can completely change the asset’s profitability during its lifetime."

As MRC informed earlier, Nexam Chemical has received an order from an existing customer in the area of PET additives for deliveries to the USA. The customer is a market-leading manufacturer of PET foam. It is the single largest order in the United States and also one of the largest ever for Nexam Chemical globally. Nexam Chemical has previously delivered products to this customer and this order confirms good growth in the business. The value of the order is SEK 9 million and applies to deliveries up to and including the spring of 2021.

We remind that 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.

Croda acquired Rewitec in 2019 and began to offer to energy technology customers nano- and micro-particle-based additives to increase the durability of machinery by lowering friction and reducing wear, the company says. Prior to the acquisition in 2017, Sentient Science validated Rewitec’s DuraGear gearbox oil additives for use in wind turbine gearboxes, it says.
MRC