US distillate inventories have fallen back within the five-year range

MOSCOW (MRC) -- According to the US Energy Information Administration’s Weekly Petroleum Status Report, for the week ending November 13, 2020, US distillate inventories fell to 143 million barrels, back within its previous five-year (2015-19) range for the first time since May 8, reported Hydrocarbonprocessing.

US distillate inventories reached 180 million barrels in late July, only 3% less than in December 1982, the largest US inventory in EIA’s data, which go back to 1982.

Distillate inventories started the year near the bottom of the five-year range and briefly fell lower than the range in March and April. Distillate inventories then increased rapidly as the US economy responded to COVID-19, and from late May through mid-September, inventories remained higher than 174 million barrels. Since mid-September, inventories have been declining and are once again within the five-year range.

US demand for distillate has been generally increasing since it reached an annual low in May (based on the rolling four-week average). The increasing demand for distillate fuel has contributed to the recent inventory decline. As of the week ending November 20, weekly EIA data indicate that distillate demand reached 4.2 million barrels per day (b/d), similar to the previous five-year average for this time of year.

In addition to rising demand from the trucking and railroad industries, refineries have been making less distillate fuel. Gross inputs into refineries measured 14.2 million bpd as of November 20, or 14% lower than the previous five-year average for this time of year. Distillate yields, or the ratio of distillate fuel production to refinery inputs, have fallen since reaching a record high of 38% in April, and more recently, it measured 31% in the week ending November 20, which is much closer to the previous five-year average for this time of year.

As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

Ethylene and propylene are feedstocks for producing 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.
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MOSCOW (MRC) -- Saudi Aramco has announced the expansion of its flagship program to increase local content and boost domestic supply chains, according to MarketScreener.

It is a significant milestone in the company's In-Kingdom Total Value Add (iktva) program, which marks its fifth anniversary on December 1st. The expansion includes plans for new international partnerships and the establishing of companies through an Industrial Investment Program (IIP), which is linked to the development of Aramco's business.

Aramco has signed MoUs with Shell & AMG Recycling BV (AMG) from the Netherlands; Chinese firms Suzhou XDM, Shen Gong, Xinfoo and SUPCON; and Posco from South Korea.

These strategic collaborations pave the way for the launch of new businesses across multiple innovative growth sectors, including steel plate manufacturing, industrial 3D printing, digital equipment manufacturing, energy management and control; catalyst manufacturing and recycling, and advanced chip and smart sensor manufacturing.

These new collaborations reflect Aramco's commitment to increasing the company's reliability and operational efficiency, as well as its commitment to further enhancing the Kingdom's commercial ecosystem and increasing employment and development opportunities for talented Saudis. Since iktva's launch, Aramco's local content index has increased from 35% at the end of 2015 to 56%.

Amin H. Nasser, Aramco's President & Chief Executive Officer, said: 'Today's announcement is a step change in Aramco's pioneering IKTVA program which was launched in 2015. Despite the uncertainties surrounding the global economy, we have sustained our focus on our long-term goals to enable growth and development for a thriving ecosystem and a more diversified Saudi economy.

'These new partnerships will contribute to advancing innovation, sustainability and enhance the scale of reliability in our business ecosystem and, in addition, benefit companies operating in the Kingdom's vast energy and chemicals sector. These partnerships will also have a strong focus on new technologies, by maximizing our investments in non-metallic materials and the circular carbon economy, as well as the development of talented Saudis in communities where we operate.'

Ahmad Al-Saadi, Aramco's Senior Vice President of Technical Services, said: 'Aramco has a long history of supporting the local business ecosystem. Our iktva program is a manifestation of our commitment to this and the resulting investments, either directly by Aramco or indirectly by suppliers, have promoted localization, contributed to Aramco's supply chain resilience and enhanced Saudi Arabia's economic growth. Our planned partnerships will continue this journey and advance the Kingdom's economic progress. We intend to act as an enabler, supporting the growth of national champions. Today we are expanding our flagship program, and expect more partnerships in the future.'

Saudi Aramco has concluded MoUs with the following companies:

POSCO - an agreement to collaborate on evaluating the feasibility of constructing an integrated steel plate manufacturing plant in Saudi Arabia.
Suzhou XDM 3D Printing Company Ltd - an agreement to collaborate on industrial 3D printing technologies and development in Saudi Arabia.
SHEN GONG New Materials (Guang Zhou) Co. Ltd - an agreement to focus on developing control systems technologies for LED lighting, energy management and intelligent control.
XINFOO Sensor Technology Company Limited - an agreement to explore opportunities in chip manufacturing and related technologies.
Shell & AMG Recycling B.V. - an agreement to explore collaboration to develop plans for a state-of-the-art regional hub for the recycling of gasification ash and reclamation of spent catalyst, in addition to providing sustainable solutions.
Zhejiang SUPCON Technology Co., Ltd - an agreement to explore potential joint investment opportunities in Saudi Arabia for the services and manufacturing value chain.

As MRC wrote before, Saudi Aramco and Saudi Basic Industries Corporation (SABIC) have decided to reevaluate their crude-oil-to-chemicals project in Yanbu on the kingdom's west coast, according to an Oct. 18 statement on the Tadawul stock exchange, as they slash spending due to low prices. The USD20 billion project may be downsized to use Aramco's existing facilities in the port city, instead of building a new plant, the statement posted by SABIC said.

We remind that in June, Aramco said it had completed the share acquisition of a 70% stake in SABIC from the Public Investment Fund, the sovereign wealth fund of Saudi Arabia, for a total purchase price of Riyals 259.125 billion (USD69.1 billion). Combined, in 2019 Aramco and SABIC recorded petrochemicals production volume of nearly 90 million mt, including agri-nutrient and specialty products.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- Wacker Chemie says it is in advanced, “near to final” negotiations to sell its entire 30.8% stake in silicon wafer producer Siltronic to GlobalWafers Co. (Hsinchu, Taiwan), said Chemweek.

The sale would take place in the context of an offer by GlobalWafers to acquire all of Siltronic at a price of EUR125/share, valuing the company a tEUR3.75 billion (USD4.5 billion).

The remaining 69.2% of Siltronic is publicly traded. Wacker says its management board considers the offer price to be “attractive and appropriate.” A binding agreement between the two companies, under which Wacker will tender its approximately 9.24 million Siltronic shares at the offer price in a voluntary tender offer, is almost finalized, but remains subject to approval by Wacker’s supervisory board. The Wacker supervisory board is expected to take a decision on the proposed deal in the second week of December.

GlobalWafers says its offer price implies a premium of 48% to the volume weighted average price of the last 90 days and comes as a result of lengthy and involved negotiations, as well as price improvements, over a number of months between GlobalWafers and Siltronic. The offer price is 10% above Siltronic’s closing price on 27 November.

GlobalWafers is a leading manufacturer of silicon wafers and also makes solar wafers and crystal rods. The company had 2019 sales of 58.1 billion new Taiwan dollars (USD2.0 billion). Siltronic had 2019 sales of almost EUR1.3 billion. Analysts say the deal would create the largest manufacturer of silicon wafers by revenue.

"A combination of GlobalWafers and Siltronic would create a leading player in the industry with a comprehensive product portfolio that can offer technologically sophisticated products to all semiconductor customers globally, and brings together two companies with complementary skills which will enable the combined business to invest more in capacity expansion," says GlobalWafers.

Wacker owned 100% of Siltronic until 2015, when it launched an initial public offering for the business. Wacker retained a majority stake in Siltronic but has since reduced this to 30.8%.

As MRC reported earlier, Wacker Chemie operates a 90 ktpa EVA compounding plant at the Ulsan site, consisting of two lines. The second line with a capacity of 40 thousand tons of products per year was launched in 2013.

According to MRC's DataScope, September EVA imports to Russia fell by 30,32% year on year to 2,38 tonnes from 3,420 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-September 2020 by 9,85% year on year to 26,340 tonnes (29,220 tonnes a year earlier).

Wacker Chemie manufactures and markets EVA dispersions under the VINNAPAS brand name. VINNAPAS polymer dispersions are used in a wide range of industries: for the production of complex thermal insulation systems, building and tile adhesives, plaster, building mixtures and mortars, cement sealing slurries and nonwovens.

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MOSCOW (MRC) -- Total SE has acquired Charging Solutions, a German business that operates electric-vehicle charging infrastructure, report market Watch with reference to the French energy company's statement.

The acquisition of the Munich-based business from Viessmann Group provides Total with a network of 2000 charge points in the country. The points are installed at the sites of private businesses, with some accessible to the public, Total said.

The company provided no financial details of the deal, but said that the integration of Charging Solutions into its German affiliate Total Deutschland was effective as of Nov. 1.

Alexis Vovk, Total's president for marketing and services, said the company's ambition was to operate 150,000 charge points in Europe by 2025.

As MRC wrote earlier, within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- IMCD N.V., a leading distributor of speciality chemicals and ingredients, has announced that it has successfully signed an agreement to acquire the personal care business of Ejder Kimya, according to the company's press release.

Ejder Kimya was founded in 1999 and is a Turkish chemicals distributor of raw materials for personal care and pharmaceutical products and food additives. It has a strong and solid position in the personal care market in Turkey. Ejder Kimya’s personal care business generated a revenue of EUR4.7 million in 2019.

Aylin Zakuto, Managing Director IMCD Turkey, comments: “This acquisition is a solid step to strengthen IMCD Turkey’s footprint in the personal care market in line with IMCD’s global growth strategy. Adding Ejder Kimya’s personal care market expertise and extensive portfolio to IMCD will expand our offered solutions to customers and accelerate the growth of our suppliers in the personal care market”.

Pervin Ejder, CEO and owner of Ejder Kimya, adds: “I am very excited and proud to hand over the value created by Ejder Kimya to the safe hands of IMCD. IMCD’s decisiveness to invest and grow in the personal care market enabled us to do this transaction. I am very confident that both our customers and suppliers will benefit from this transaction”.

The closing of the transaction is subject to customary closing conditions and regulatory approval and is expected to take place in early January 2021.

As MRC reported previously, SIMONA AG plans to acquire 70% of the ownership interests in MT Plastik AS, Duzce, Turkey. Established in 2007, MT Plastik is Turkey's market leader within the area of PVC foam sheets. The products are used primarily in the field of digital printing, advertising and structural engineering. MT Plastik is a private owned company, employing around 50 people and generating revenue in excess of EUR11 million. The company exports approx. 60 per cent of its revenue, mainly to Europe. The planned acquisition is to be seen in the context of SIMONA's strategic realignment in Europe and will help to strengthen the Group's market position within the area of PVC foam products.

Accoring to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 38,500 tonnes in the first ten months of 2020, down by 16% year on year. At the same time, exports decrease by 1%.
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