Strong TDI demand boosts December toluene contract price in Europe

MOSCOW (MRC) -- The European toluene contract price for December settled at USD454/metric ton on Tuesday, rising USD93/metric ton, or 26%, month-on-month amid stronger demand and tighter supply, according to sources and IHS Markit data, said Chemweek.

The settled contract price in November was USD361/metric ton. The contract price is negotiated between major producers and consumers in the market and confirmed by IHS Markit once a settlement is agreed. Demand for toluene strengthened in November, when consumption from chemical players in the domestic market improved as two toluene diisocyanate (TDI) producers lifted declarations of force majeure after technical issues caused outages in September and October.

Strong TDI margins are expected to result in healthy offtake for toluene from chemical buyers, according to Eleanor Dann, principal analyst/aromatics and fibers, at IHS Markit. “We see good demand from chemicals and solvents sectors,” says one toluene supplier. “TDI reached rock bottom in August and September, not just because of the force majeures but also weaker downstream demand,” the supplier says.

Demand has grown for toluene cargoes from Europe to India and the US market, according to sources. An outage at an aromatics plant operated by the Bandar Imam Petrochemical Company in Iran siphoned off a regular supply of toluene from the Indian market between October and November. To fill the gap, at least 30,000 metric tons of toluene was shipped from West Europe to India in November, according to toluene traders. By comparison, total export volumes from West Europe to India totaled 6,000 metric tons in the first six months of the year, according to IHS Markit data.

"Export demand for toluene parcels to India is expected to persist into December, but more competitive pricing in the Asian markets and lower availability from Europe should prevent export volumes being as high as they have been in November," says Dann.

Toluene spot supplies remain tight in Europe, supporting the 26% monthly jump in the December contract price, as traders watch for trans-Atlantic export opportunities, but find instead scant volumes available for December shipping, according to market sources. “I’m looking for toluene for the US, but nobody is offering any product for December," says one trader.

Other factors that have contributed to low availability of spot toluene include lower refinery production rates, as gasoline demand has deteriorated during the second wave of COVID-19 lockdowns and mixed xylenes demand is capped by poor para-xylene margins. "The spread between benzene and toluene prices has turned selective toluene dis-proportionation margins positive, which has incentivized increased toluene consumption, particularly in the US," Dann says.

Meanwhile, reformer margins are still negative, and despite an increase in the toluene-naphtha spread of above USD50/metric ton from an October low of USD37/metric ton, poor demand for mixed xylenes is preventing refinery-based toluene producers from hiking toluene output, according to Dann. "Everyone’s minimum run rate varies, but we agree it’s low at the moment and it’s having an impact on [toluene feedstock] reformate supply,” says one producer. “We have enquiries for spot cargoes for first-half December, a lot of demand, but I don’t have spot cargoes,” the producer adds.

As MRC informed earlier, Covestro has lifted force majeure at its 270,000-metric tons/year toluene diisocyanate (TDI) plant in Dormagen, Germany.

As MRC reported earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market reached 58,000 tonnes in January-July 2020, up by 22% year on year (47,500 tonnes).
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1. Oil price declines extend amid OPEC+ uncertainty, COVID-19 spread

MOSCOW (MRC) -- Oil prices retreated Dec. 1 amid uncertainty surrounding an expected extension of OPEC+ production quotas after the group delayed its meeting to Dec. 3, reported S&P Global. NYMEX January WTI settled 79 cents lower at USD44.55/b, and ICE February Brent fell 46 cents to USD47.42/b. OPEC is hoping a couple of days away from the market's glare will allow cooler heads to prevail and rescue a deal to extend production cuts that analysts say is needed to prevent an oil glut in the months ahead. Disagreements - at times vehement, according to sources - between Saudi Arabia and the UAE over how quotas will be managed and enforced led to a breakdown of formal OPEC talks on Nov. 30, and a meeting with Russia and other partners scheduled for Dec. 1 has now been pushed back by two days.

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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.
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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.
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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.
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