US LPG imports to NW Europe plunge as lockdowns hit feedstock demand

MOSCOW (MRC) -- Imports of liquefied petroleum gas (LPG) into northwest Europe from the US plunged by 75% in November month-on-month, as a second wave of new COVID-19 infections sent feedstock buyers running for cover, according to Chemweek.

Total US-origin cargoes coming to northwest Europe were estimated at 95,000 metric tons in November, down from 400,000 metric tons in October, which was the highest for 2020 so far. Total November LPG cargo trade in northwest Europe was down by 16% to an estimated 675,000 metric tons compared to October, while intake as petrochemical feedstock for the month declined 29% from October’s level to 400,000 metric tons.

The return of regional and national lockdowns early in November, and subsequent partial and gradual cargo liftings, appeared to take CIF Amsterdam-Rotterdam-Antwerp propane and CIF northwest European naphtha prices in different directions. Propane saw a USD6/metric ton rise over the month to USD382/metric ton from USD376/metric ton, whilst naphtha rocketed by USD54/metric ton to USD393/metric ton, from USD339/metric ton. The relative price swings resulted in the propane/naphtha spread shifting from USD35/metric ton at the start of November to minus USD9/metric ton by the end of the month, averaging USD6.5/metric ton for the month as a whole.

The local North Sea supply of LPG entering the petchems feedstock pool was 290,000 metric tons in November, equivalent to 73% of total feedstock intake, up markedly from 165,000 metric tons in October. The remainder of intake from the petchems sector in November saw 13% come from the US east coast, down from 32% in October. Imports from the US Gulf Coast were just 11% of the intake, down from 36% in October. The retail and refining sector saw LPG intake stable at 180,000 metric tons month on month.

Exports out of northwest Europe in November climbed to 95,000 metric tons from 60,000 metric tons in the previous month, with cargoes moving to the Baltic, eastern Mediterranean, US east coast and the Caribbean. Exports of LPG from Ust-Luga in the Russian Baltic to northwest Europe were an estimated 13,000 metric tons.

OPIS is an IHS Markit company.

As MRC reported earlier, expectations of a seasonal increase in heating demand ha prompted Asian petrochemical makers to buy LPG as cracker feedstock to capitalize on positive olefin margins, though any further purchases could be limited by a rebound in the LPG market led by renewed Chinese and possibly Indian imports, trade sources said S&P Global in August, 2020.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- South Africa’s second-largest crude oil refinery, the Engen plant in Durban, has been shut down to allow investigators a chance to find out the cause of a “fire incident” earlier on Friday, reported Reuters with reference to Engen's statement.

Engen, which operates the 120,000 barrel per day plant and is majority owned by Malaysia’s Petronas, said a fire broke out at around 0510 GMT and was extinguished by 0645 GMT.

“Engen is currently assessing its overall bulk fuels supply and demand position and implementing immediate mitigations to manage inventory and product supply requirements,” Engen said in an update.

Local emergency services said seven people were injured, although Engen said no injuries were recorded and all refinery personnel were accounted for.

“I saw a massive fireball at the centre of the refinery with thick black smoke billowing from it,” Durban resident Shane Lloyd Pretorius told Reuters.

Engen said in a statement that the cause of the fire was under investigation.

A Reuters witness at the scene saw several fire engines spraying foam onto the affected part of the refinery, as well as ambulances, metropolitan police and national police standing by.

Africa’s most industrialised economy has six refineries, four using crude oil and two synthetic fuel as feedstock. It is a net importer of petroleum products.

The country’s third-biggest crude oil refinery, a 100,000 bpd facility operated by Astron Energy in Cape Town, also suffered an explosion earlier this year.

Top refinery SAPREF, which is also located in Durban and is a joint venture between BP and Shell, said the incident at Engen’s facility had no impact on its operations.

The Engen Refinery and SAPREF form part of a major petrochemical hub on the east coast close to Durban’s port.

As MRC informed previously, in June 2019, Malaysian state oil company Petroliam Nasional Bhd, or Petronas, and Saudi Aramco started operations at their new 1.2-million-tonnes-per-year naphtha cracker. The cracker is part of the USD2.7 billion joint-venture oil refinery and petrochemical project known as RAPID - or Refinery and Petrochemical Integrated Development - located in Pengerang in the state of Johor, at the southern tip of peninsular Malaysia.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- Henkel says it has opened a fully automated laundry and home-care warehouse at its production facility at Montornes del Valles, Spain, said Chemweek.

The company says it has invested EUR22.0 million (USD26.1 million) in the 24,000-square-meter warehouse, which will serve as a major logistics hub for southern Europe. The center has the capacity to move more than 1 million pallets per year and more than 7 million product units per year, and comprises three different areas, Henkel says.

The Montornes del Valles site is one of the company's most important sites in Europe, Henkel says. It produces more than 200,000 metric tons/year of powder detergents, liquid detergents, and adhesives, exporting to 60 countries, the company says.

As MRC informed earlier, Henkel AG & Co. KGaA (Dusseldorf, Germany) announced that Henkel Adhesives Technologies has officially inaugurated its new production facility in Kurkumbh, India.

Henkel are also partnering with Borealis and plastics solutions company Borouge to develop flexible packaging solutions for detergents containing both virgin polyethylene (PE) and high amounts of post-consumer recyclate (PCR) in efforts to increase sustainability.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

MRC

MOSCOW (MRC) -- Brenntag says it has signed a deal with Elementis under which Brenntag will distribute the company’s products in coatings, adhesives, sealants, inks and construction materials in Canada, according to Chemweek.

Exact terms of the deal were not disclosed. The product range includes rheology modifiers, defoamers, and various types of additives.

“(Elementis’) high performance and versatile product line, reputation in various markets, and commitment to customer service will further strengthen our position as the preferred solutions provider to our customers,” says Stephen Regular, director/coatings and construction, Canada at Brenntag.

As MRC informed earlier, in April 2020, Brenntag sai it had acquired the operating assets of Suffolk Solutions’ (Suffolk, Virginia) caustic soda distribution business. Financial terms of the deal have not been disclosed.

We remind that October production of sodium hydroxide (caustic soda) in Russia were 109,000 tonnes (100% of the basic substance) versus 108,000 tonnes a month earlier. Russia's overall output of caustic soda totalled 1,054,600 tonnes in the first ten months of 2020, down by 1.6% year on year.
MRC

MOSCOW (MRC) -- 3M will be restructuring and streamlining its business in the wake of shifts in the global economy caused by the coronavirus pandemic, said the company.

3M said the move will streamline its business and invest more in health care, e-commerce and home improvement. The company's restructuring efforts will cost the company up to USD300 million before taxes.

3M added this move will position the company for greater growth as global markets emerge from the pandemic. "The company will further enhance its operations and marketing capabilities," 3M said. "In operations, 3M will eliminate redundancies and better use analytics to drive additional efficiencies. In marketing, 3M will build on its success in utilizing data insights, accelerating global marketing programs, and activating digital engagements with customers."

3M cut 1,500 jobs back in January amid a trade war between the United States and China. "The COVID-19 [coronavirus] pandemic has advanced the pace of change and disrupted end markets around the world, increasing the need for companies to adapt faster," said Mike Roman, 3M chairman and CEO.

"As a result, we are taking further actions to streamline our operations, positioning us to deliver greater growth and productivity as global markets emerge from the pandemic," he said. Please also visit the ICIS topic page on coronavirus impacts and the oil price crash.

As it was said earlier, 3M Co said it would restructure its business into four operating units from five, as it looks to sharpen its focus on customers and boost growth. The company’s shares fell 1 percent in early trading after it announced the four units - safety & industrial, transportation & electronics, healthcare and consumer.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC