Baofeng awards Johnson Matthey technology license for five-plant methanol complex in China

MOSCOW (MRC) -- Johnson Matthey (JM; London, U.K.) has secured a multiple licence win for China’s Ningxia Baofeng Energy Group’s latest project to develop five of the largest single-train methanol plants in the world, said Chemweek.

Located at Baofeng’s Ordos City complex in Inner Mongolia, PRC, the plants have a planned capacity of 5 x 7,200 metric tons (m.t.) per day, and mark the fourth project on which Baofeng has selected Johnson Matthey as its collaboration partner for methanol technology.

Under the agreement Johnson Matthey will be the licensor of all five methanol plants and supplier of associated engineering, technical review, commissioning assistance and catalyst. The JM methanol plants will take synthesis gas as a feed and use JM radial steam raising converters in a patented Series Loop. Within the design, there is potential for 1–2% more feedstock efficiency over the life of the catalyst, says JM.

JM catalysts will enable Ningxia Baofeng Energy to produce stabilized methanol as a product that is used to produce olefins downstream. Thanks to JM’s methanol loop synthesis technology, the plants will provide enhanced energy savings along with low OPEX, CAPEX and emissions.

Upon startup, this will represent JM’s 13th operating license in China with a plant capacity greater than 5,500 m.t./d and the fourth JM methanol design licensed by Ningxia Baofeng Energy. This latest award follows the recent award of the 7200 tonnes per day licence in July 2020, the successful commissioning of the 6,600-m.t./d Baofeng methanol synthesis unit in May 2020 and the original 4,450-m.t./d methanol synthesis unit, which was commissioned in 2014. It again demonstrates Baofeng’s recognition of JM’s technical leadership in this key growth market and is a testament to Johnson Matthey’s commitment and dedication to the delivery of the most energy, cost and environmentally efficient large-scale methanol production units.

"We are deeply proud that Ningxia Baofeng Energy has selected JM yet again as methanol technology provider at their newest and grandest complex”, says John Gordon, managing director for Johnson Matthey. “Our continuing collaboration speaks volumes to their confidence in JM’s expertise and ability to design and deliver large scale plants. Our plant designs and catalysts are recognized the world over for their efficiency, enabling customers to enhance yields and improve the economic and environmental footprint of their plants. It’s an exciting time for both JM and our valued customer so we look forward to this next phase of our partnership".

As it was written earlier, Johnson Matthey JMAT.L on Thursday reported a near 90% slump in half-year profit and also refrained from providing an outlook for 2021, as pandemic restrictions continued to dent demand for its pollution filters. The company named the group’s financial controller Karen Hayzen-Smith as its interim chief financial officer and said sales at its Clean Air division fell nearly 30% on-year.

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 density 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, excluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Vopak, Blackrock JV completes USD620-million acquisition of USGC terminals from Dow

MOSCOW (MRC) -- Vopak (Rotterdam, Netherlands) and BlackRock (New York, New York) say they have completed the previously announced USD620-million acquisition of three marine and tank storage terminals on the US Gulf Coast from Dow, said Chemweek.

The 50/50 joint venture (JV) between Vopak and Blackrock’s Global Energy & Power Infrastructure Fund, called Vopak Industrial Infrastructure Americas, has entered into long-term service agreements with Dow to provide storage and infrastructure services. Dow expects Vopak’s terminal expertise and capabilities to deliver additional operational efficiencies and opportunities for growth, Vopak says.

Each of the three terminals is located alongside an active Dow production complex, with the JV to operate total storage capacity of 852,000 cubic meters. The largest terminal is at St. Charles, Louisiana, featuring 73 tanks with 409,000 cu meters of chemicals storage capacity, while the terminal at Freeport, Texas, has 53 tanks with 140,000 cu meters of chemicals storage capacity. The third terminal at Plaquemine, Louisiana, has 30 tanks with 303,000 cu meters of storage capacity for chemicals and refined products.

The assets also include 16.4 hectares of expansion land, 36 vessel berths, multiple pipeline connections, rail, and truck racks.

As MRC informed earlier, SABIC and Vopak Holding Terminals BV have signed an agreement with the Jubail and Yanbu Industrial Cities Company (JYIC), owned by the Royal Commission for Jubail and Yanbu (RCJY). Unnder the agreement, JYIC will become a 20 percent stake partner in Jubail Chemical Storage and Services Company (Chemtank).

We remind that, as MRC wrote before, SABIC Europe declared a force majeure on its low density polyethylene (LDPE) supplies from Wilton, the UK on November 3. The company had shut its LDPE plant for a maintenance work in the first half of October. The Wilton unit is able to produce 400,000 tons/year of LDPE.

According to MRC's ScanPlast report, September estimated LDPE consumption in Russia fell to 23,930 tonnes from 47,610 tonnes a month earlier. Russian producers reduced their domestic LDPE shipments due to shutdowns for maintenance at production capacities in Ufa, Tomsk and Kazan. Russia's estimated LDPE consumption totalled about 406,500 tonnes in January-September 2020, which virtually corresponded to the last year's figure.

SABIC is a global diversified chemical company headquartered in Riyadh. The company manufactures on a global scale in the Americas, Europe, the Middle East and Asia Pacific, producing different kinds of products including chemicals, commodities, high-performance plastics, agri-nutrients and metals. The company supports customers by identifying and developing opportunities in key end-use applications such as construction, medical devices, packaging, agri-nutrients, electronics, transportation and clean energy. Production in 2019 measured 72.6 million metric tons. SABIC has more than 33,000 employees worldwide and operates in about 50 countries. Fostering innovation and a spirit of ingenuity, SABIC has 12,540 global patent filings and has significant research resources, with innovation hubs in five key regions - the US, Europe, the Middle East, South Asia and North Asia.
MRC

Polynt hikes EAME prices for composites on escalating raw materials, logistics costs

MOSCOW (MRC) -- Polynt Composites (Scanzorosciate, Italy) says it will raise prices in the EAME region for all its unsaturated polyester resins (UPRs), vinyl esters, and gelcoats, effective 1 January 2021 or as agreements allow, due to an “extraordinary escalation” in raw materials and logistics costs, reported Chemweek.

The company is “forced to announce a price increase” as a result of the higher costs, with its full range of UPRs to rise by EUR200/metric ton (USD242/metric ton) and its full vinyl ester range to be hiked by EUR300/metric ton, it says. It’s gelcoats range will rise by EUR100/metric ton.

The thermoset composites manufacturer says it will “continue to work hard to limit the impact of rising costs and raw material availability upon product pricing and supply.”

The company increased prices for the EAME region in early November for the same products, also due to rising raw material and logistics costs.

As MRC informed previously, in early March, 2020, Polynt announced that all its sites and activities in Italy were running smoothly and according to plan, despite the news about the Italian situation related to the spreading of the coronavirus in the country.

Polynt runs two maleic anhydride (MA) plants in northern Italy, including Bergamo’s 36,000 tonne unit in Lombardy and Ravenna’s 60,000 tonne plant on the east coast. The bigger production line at Ravenna had been operating at a reduced rate since March 2019 due to technical issues, the firm previously said. A new reactor ordered is expected to be operational in 2021. Polynt also produces phthalic anhydride at Bergamo and its San Giovanni Valdarno site, as well as plasticizers at San Giovanni Valdarno.

Maleic anhydride is a feedstock for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids and a number of chemicals for agriculture.

Plasticizers are substances introduced into a polymeric material to give it elasticity and plasticity during processing and operation. In particular, plasticizers are used to produce polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

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.
MRC

European refiners look to demand recovery, plant closures to reverse dire margins

MOSCOW (MRC) -- European refiners are struggling with their weakest market in decades. But some industry watchers have become cautiously optimistic that improved demand, plant closures, and longer OPEC+ supply cuts could put a floor under margins, reported S&P Global.

Although oil demand has been recovering globally from April lockdown lows, led by a rebound in China, European refining margins remain near decade lows, and have even flirted with turning negative over the last two months.

With Dated Brent crude prices surging 30% in November, pushed up by news of a COVID-19 vaccine, refined products in Europe have failed recover at the same pace as the in the US and Asia, weakening margins in the region.

Cracking margins for key European feedstock crudes from the US, Saudi Arabia and Russia were all negative in the week to Nov. 27, against year-ago levels of USD3-5/b, according to S&P Global Platts Analytics data.

Underpinning the European margin weakness has been anemic transport fuel demand, exacerbated by the latest round of mobility restrictions in the region.

Europe's latest round of lockdowns removed some 900,000 b/d of road fuel demand last month, according to Rystad Energy. This year, European demand is forecast to decline by about 15%, or 1.8 million b/d on average.

But as the latest round of national restrictions begins to ease, early signs are that fuel demand is already recovering.

Average road congestion in Europe's five biggest capitals is now around 26% below year-ago levels, according to TomTom data for the week to Nov. 27, the highest level since the last week of October, before new national lockdowns were rolled out.

Europe, which remains structurally short of distillates, will likely see gasoil demand around 80,000 b/d below year-ago levels in December, according to Platts Analytics, a sharp rebound from the 200,000 b/d year-on-year drop in November.

While more robust heavy transport consumption has helped shield diesel demand from the worst of the lockdown impact, Europe's gasoline and jet markets will continue to bear the brunt of the demand impact on volumes.

Europe's jet/kerosene demand is forecast to fall 655,000 b/d in December on the year, while gasoline demand is seen 320,000 b/d down year on year due to persisting lockdowns and restrictions on movements, according to Platts Analytics.

Meanwhile, discretional crude run cuts and plant closures should also help put a floor under refining margins in the near term, according to some market watchers.

Finland's Neste became the latest regional refiner to announce a plant closure on Nov. 30, confirming that its 58,000 b/d Naantali refinery in Finland will shut down by the end of March.

"Up until a few weeks ago, we were not optimistic on the pace of rationalization for various reasons," HSBC said in a Dec. 1 note. "There are hopeful signs that the industry's rationalization is happening faster than we anticipated."

In Europe alone, Total, Galp, Petroineos and Cepsa have all mothballed capacity to mitigate exposure to demand weakness and negative margins. Globally, closures of some 1.7 million b/d of refining capacity, mostly in Europe and the US, have already been announced this year, according to the International Energy Agency.

Adding in maintenance downtime and the idling of units, around 15-16 million b/d is expected to be sidelined for November, nearly double the previous year's level, according to Platts Analytics. In Europe, however, HSBC estimates that a further 600,000 b/d of refining capacity remains at risk of permanent shutdown.

Nevertheless, regional refinery margins are expected to remain weak through the winter, with gradual improvement expected to start in March when the impact of COVID-19 vaccines could start being felt.

"As the European economies gradually prepare to lift their lockdowns, economic activity in the month of December should be significantly stronger than has been recorded over the past five weeks," Jefferies said in a recent note. "Enhanced social restrictions measures will remain in place, however, which suggests that our [economic activity] index is unlikely to rebound all the way to the levels reached earlier in the autumn."

Platts Analytics expects refinery margins to remain weak until the first quarter of next year before becoming somewhat higher into the Q2 gasoline season.

"Our view is that refining margins will remain under pressure from surplus capacity relative to demand in 2021 even though...refinery closures have been announced and more are likely to follow," it said in a recent note.

Although a three-month extension of the current OPEC+ output cuts has largely been priced in to crude futures prices, a prospect of constraints on medium-sour Middle East crudes means concerns over a continued near-term oil glut are fading. Brent crude futures timespreads have firmed in recent weeks, with the market structure for ICE Brent largely flat for the six-month strip.

As a result, the current oil market structure is insufficient to cover new floating storage costs and is starting to incentivize the destocking of crude, according to crude analyst Sergio Baron at Platts Analytics, who notes that the Dubai crude forward curve is in backwardation.

"We believe that the Dubai structure is outperforming the Brent structure because of OPEC+ likely rolling supply cuts for an additional three to six months, crude runs recovering faster in Asia than in the West and also Libya producing more than 1 million b/d and displacing West African and US domestic crudes in Europe."

Indeed, initial concerns of returning Libyan supplies rapidly swamping the market for sweet grades in the Mediterranean have not materialized.

Market sources have said that European refiners have readily absorbed the Libyan crudes aided by fewer cargoes of US crude arriving into the region, and as recovering Asian attracts competing for sweet crude grades such as Kazakhstan's CPC Blend and Azerbaijan's Azeri Light.

As MRC wrote before, Total's oil and gas production dropped 11% on the year in the third quarter, to 2.72 million b/d of oil equivalent and it forecast full-year output below 2.9 million boe/d on the back of OPEC+ cuts, as its third-quarter results showed financial improvement Oct. 30.

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.
MRC

Borealis resumes production at Porvoo cracker

MOSCOW (MRC) -- The 380,000-metric tons/year steam cracker at Porvoo, Finland, operated by Borealis, resumed normal operations in early December after the company declared force majeure following a technical failure on 11 November, reported Polymerupdate.

The cracker was shut down to allow necessary repair works, according to Borealis. The company began restart operations on 23 November, 2020.

As MRC informed earlier, Borealis announces that its new naphtha cavern in Porvoo, Finland has now been safely commissioned as of October 2020. Having invested around EUR25 million in the construction of this 80,000 m3 facility, Borealis can now source and store naphtha for its Porvoo operations from the global market in a more flexible, cost-efficient, and secure way. The cavern can also accommodate renewable naphtha, making it possible for Borealis customers in future to draw on certified renewable polypropylene (PP) and polyethylene (PE), as well as renewable base chemicals, ethylene, propylene and phenol.

We remind that the light-feed 625,000-metric tons/year Borealis steam cracker at Stenungsund, Sweden, is expected to restart operations in the fourth quarter this year after a fire broke out at the plant in May, 2020. The cracker has been under force majeure ever since after the blaze at the plant on 10 May, which was subsequently brought under control the following day.

Ethylene and propylene are feedstocks for producing PE and 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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC