N. America chemical rail extends volume gains

MOSCOW (MRC) -- During the week ended 12 December, chemical railcar traffic in North America was up 7.4% from 2019 and down 0.8% from 2018 on a four-week moving-average (4wma) basis, extending the recovery that began in late October (chart), according to data released on 16 December by the Association of American Railroads (AAR), as per Chemweek.

For the year to date, chemical railcar traffic in North America was down 2.8% from 2019 and down 5% from 2018. Weekly volume totaled 46,463 carloads, down 6.2% from the previous week and up 7.0% year-over-year (YOY).

Chemical railcar traffic in the United States contributed 32,591 carloads to the total, up 5.4% YOY and down 10.2% from the previous week. For the year to date, US chemical railcar traffic was down 3.6%.

Canadian chemical rail traffic totaled 12,967 carloads, up 10.6% YOY and up 5.9% from the previous week. For the year to date, Canadian chemical railcar traffic was down 0.8%.

Chemical railcar traffic in Mexico totaled 905 carloads, a YOY increase of 13.0% and a sequential decrease of 9.0%. For the year to date, Mexican chemical railcar traffic was down 2.0%.

As per MRC, North American chemical rail traffic continues to recover from the effects of COVID-19. During the week ended 5 December, volume totaled 49,537 carloads, up 8.6% year-over-year (YOY).

We remind that Russia's output of chemical products rose in October 2020 by 7.2% year on year. At the same time, production of basic chemicals grew in the first ten months of 2020 by 6.3% year on year, 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-October output. October production of polymers in primary form grew to 857,000 tonnes from 852,000 tonnes in September. Overall output of polymers in primary form totalled 8,340,000 tonnes over the stated period, up by 17% year on year.
MRC

MOSCOW (MRC) -- Venezuela's Oil Minister Tareck El Aissami said on Friday that authorities had disrupted a plan to attack Venezuela's 146,000-barrel-per-day (bpd) El Palito refinery, and had arrested two suspects in the plot, reported Reuters.

El Aissami alleged, without providing evidence, that the planned attack had the support of the Colombian and US governments. Bogota, Washington and dozens of other countries do not recognize Venezuelan President Nicolas Maduro as the country's rightful leader, arguing he rigged his 2018 re-election.

"This terrorist plan was prepared in Colombia," El Aissami said. "It is also important to denounce that the US Central Intelligence Agency and National Security Agency had knowledge of the plan and advised the terrorists involved."

El Aissami said the alleged attackers also planned to blow up a pipeline supplying gasoline from the refinery to the Yagua fuel sorting station. El Palito halted gasoline output earlier this month.

The announcement comes as the once-prosperous OPEC nation suffers chronic gasoline shortages due to years of underinvestment and lack of maintenance at its 1.3 MMbpd refining network, as well as US sanctions disrupting fuel imports.

In October, President Nicolas Maduro said the country's 645,000-bpd Amuay refinery was hit by a "terrorist attack."

Venezuela's opposition has in the past accused the government of making false claims of sabotage to critical infrastructure to distract from its mismanagement of public services.

As MRC wrote before, in late October 2020, Venezuelan state oil company Petroleos de Venezuela restarted gasoline production at the FCC unit of its 310,000 bpd Cardon refinery. The unit was producing between 15,000 and 20,000 bpd of gasoline, according to union leader Ivan Freites. PDVSA earlier last week of October began producing at least 25,000 bpd of gasoline at Cardon’s reformer unit.

MRC also reported that Russian state oil company Rosneft's decision to cease operations in Venezuela and sell its assets there to a Russian government-owned company was a "maneuver" made in reaction to collapsing oil prices, a US State Department official said earlier this year.

We remind that Angarsk Polymers Plant, part of Russian oil giant Rosneft, has resumed its low density polyethylene (LDPE) production after an unscheduled shutdown because of a technical issues at the ethylene unit. The plant's customers said Angarsk Polymers Plant had brought on-stream its LDPE production by 28 August after the forced shutdown due to technical problems at its ethylene production. And the first shipments of polyethylene (PE) to customers began on 31 August. The outage lasted slightly over two weeks and began on 10 August The plant's annual production capacity is about 75,000 tonnes.

According to MRC's ScanPlast report, October estimated LDPE consumption in Russia grew to 50,030 tonnes from 23,930 tonnes a month earlier. Russian producers increased domestic LDPE shipments after the September shutdowns for maintenance. Russia's estimated LDPE consumption was about 456,490 tonnes in January-October 2020, down by 1% year on year. Lower production was offset by higher imports.
MRC

MOSCOW (MRC) -- Oil prices rose on Tuesday as investors focused on the rollout of COVID-19 vaccines, looking past tightening lockdowns in Europe and forecasts for a slower-than-expected recovery in fuel demand, reported Reuters.

Brent crude settled at USD50.76 a barrel, rising 47 cents, or 0.9%. US West Texas Intermediate (WTI) crude settled at USD47.62 a barrel, gaining 1.3%, or 63 cents.

The United States began vaccinating people on Monday as the country’s COVID-19 death toll crossed the 300,000 mark. Britain and Canada have also begun to administer shots.

“The crude market continues to seize upon the future outlook of the post-pandemic period, which could be as soon as next summer,” said John Kilduff, partner at Again Capital in New York.

Crude oil throughput rose by 3.2% year-over-year in China in November,a record. That helped investor sentiment about coming increases in fuel demand, said Phil Flynn, senior analyst at Price Futures Group in Chicago. China has been one of the rare countries where oil demand has fully recovered from earlier this year.

“People would assume that the oil demand surge is right around the corner,” Flynn said.

Still, the International Energy Agency said on Tuesday any impact of vaccines on demand is still several months away, while OPEC said on Monday oil demand will rise more slowly than expected.

Brent hit USD51.06 on Dec. 10, highest since March, supported by vaccine approvals, even as the infection rate has surged in most regions worldwide.

London stepped up pandemic rules requiring bars and restaurants to close, Italy is considering more stringent steps over Christmas, and Germany is likely to be under lockdown until early 2021.

The latest snapshot of US oil supplies showed crude oil stocks unexpectedly rose last week, according to the American Petroleum Institute, an industry group.

Crude inventories swelled by 2 million barrels in the week to Dec. 11 to about 495 million barrels, compared with analysts’ expectations in a Reuters poll for a draw of 1.9 million barrels, API said.

Official government data was scheduled for Wednesday.

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% 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).

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) -- Ineos says it will form a new energy group combining all of its existing oil and gas assets and its low-carbon technologies and activities it has under development. Brian Gilvary, who left his role as CFO of BP in June this year, has been appointed as the energy group’s executive chairman, said Chemweek.

Gilvary was at BP for 34 years and held the role of CFO from 2012 until his retirement in June. "We are delighted that someone of Brian’s caliber has agreed to join us to head up this exciting new venture at a time of significant transformation in the energy industry,” says Ineos chairman Jim Ratcliffe. “We are determined that Ineos will be at the forefront of the industry and that Brian will provide the experience and leadership to achieve that aim."

The new combination of assets and technologies within Ineos Energy means the company can play a leading role in the upcoming energy transition “at a time of tremendous change within our industry,” says Gilvary.

As MRC informed earlier, Ineos Oxide, an Ineos subsidiary, has declared force majeure on propylene output from one of the two steam crackers at Dormagen. This declaration was not confirmed by Ineos. There are two steam crackers at Dormagen, one with a capacity of 670,000 metric tons/year and another with a capacity of 530,000 metric tons/year.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, 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.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- Asahi Songwon Colors on Monday announced the commencement of commercial operations at the Dahej plant of Asahi Tennants Color, its joint venture with Tennants Textile Colours Limited (TTC) of UK, said Chemweek.

Gokul Jaykrishna, CEO of Asahi Songwon Colors said, “The commencement of operations of the JV company gives Asahi the perfect launching pad to widen its presence as a leading global supplier of pigments, and make a mark in the AZO pigment space."

In the JV, Asahi holds a controlling stake of about 51% while the remaining 49% is held by TTC. The JV which was announced in October 2019, launched the plant on December 12, 2019, with an expected date of commissioning in March 2021.

Asahi in its regulatory filing highlighted that the state-of-the-art Dahej plant will make Red & Yellow pigments. The installed capacity of the AZO pigment plant is 2400 metric tonnes per annum. The plant has been set up for Rs82cr.

Arjun Jaykrishna, Executive Director, Asahi Songwon Colors, said, “It is our pleasure to announce that in spite of the Covid-19 pandemic, we successfully commissioned the plant on December 14, four months before the original target date. We are going to work towards full capacity utilisation at the plant, and aim to double capacity by 2022."

The Dahej plant will enable Asahi to extend its global pigment presence, which is currently dominant in the phthalocyanine pigment space, to the full range of pigment colours, the company pointed out. On Sensex, Asahi Songwon completed at Rs243.50 per piece up 3.53%.

We remind that Russia's output of chemical products rose in October 2020 by 7.2% year on year. At the same time, production of basic chemicals grew in the first ten months of 2020 by 6.3% year on year, 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-October output. October production of polymers in primary form grew to 857,000 tonnes from 852,000 tonnes in September. Overall output of polymers in primary form totalled 8,340,000 tonnes over the stated period, up by 17% year on year.
MRC