PE imports to Kazakhstan up 16% in January-October

MOSCOW (MRC) - Imports of polyethylene (PE) into Kazakhstan increased to about 154,000 tonnes in January-October, up 14% compared with the same time a year earlier, according to MRC analysts. The greatest increase in demand accounted for high density polyethylene (HDPE), according to MRC DataScope.

PE imports to Kazakhstan reached 14,700 tonnes in October, compared to 12,200 tonnes a month earlier, local companies increased purchasing ethylene polymers in Russia. Overall PE imports totalled 154,000 tonnes in the first ten months of 2020, compared to 135,100 tonnes a year earlier. Purchases of HDPE increased significantly, whereas imports of low density polyethylene (LDPE) decreased.

The structure of PE imports by grades looked the following way over the stated period.

October imports of low-density polyethylene rose to 12,100 tonnes against 9,800 tonnes, Russian producers increased their export sales to the local market. Overall HDPE imports totalled 127,300 tonnes in the ten months of 2020, up by 21% year on year.

October LDPE imports increased to 1,800 tonnes from 900 tonnes in September, several Russian producers simultaneously increased their shipments because of scheduled turnarounds. Overall LDPE imports reached 15,800 tonnes over the stated period, down by 17% year on year.

October linear low density polyethylene (LLDPE) imports reached 800 tonnes versus 1,500 tonnes a month earlier. Overall output of these products exceeded 10,800 tonnes in January-October 2020, up by 4% year on year.

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1. US jet fuel consumption during the week of Thanksgiving was about half of last year figure

MOSCOW (MRC) -- For the week of Thanksgiving 2020, estimated consumption of major transportation fuels (motor gasoline, distillate, and jet fuel) was 11% lower than during Thanksgiving week 2019, reported Hydrocarbonprocessing. About half as much jet fuel was consumed during the week of Thanksgiving as last year, measured using product supplied as a proxy for consumption: 1.1 million barrels per day (b/d) in 2020 compared with 2.0 million b/d in 2019, according to estimates in the US Energy Information Administration’s (EIA) Weekly Petroleum Status Report. Using flight-level data provided by Cirium on commercial passenger flights (which accounted for approximately three-quarters of overall jet fuel consumption in 2019), EIA estimates that about 108,000 flights took off from US airports during the week of Thanksgiving in 2020, or 37% fewer than the 170,000 flights that departed during Thanksgiving week in 2019. EIA estimates that these flights consumed 45% less fuel than the flights during Thanksgiving week in 2020 compared with 2019. EIA’s analysis, published in This Week in Petroleum, shows that states such as New York, Massachusetts, and California may have had the largest percentage declines (at least 60%) in commercial jet fuel consumption between the two Thanksgiving weeks. However, two states - Montana and Wyoming - may have had increases in commercial jet fuel consumption. State-level variation in flight volume and implied fuel consumption could result from several factors: ifferences in state quarantine policies and travel restrictions, the relative severity of COVID-19 in that state, the share of the state’s population that was born or naturalized there (with higher shares associated with less travel during holidays), the share of each state’s international air travel (which has generally been more affected than domestic travel).


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MOSCOW (MRC) -- Crude futures settled at fresh nine-month highs Dec. 18 as the US moved closer to greenlighting a second COVID-19 vaccine, reported S&P Global.

NYMEX January WTI settled 70 cents higher at USD49.24/b, and ICE February Brent was up 76 cents at USD52.26/b.

Front-month settled at the highest since Feb. 25, while front-month Brent was last stronger on Feb. 26.

NYMEX January RBOB settled 75 points higher at USD1.3956/gal, and January ULSD was up 1.78 cents at USD1.5130/b.

A US Food and Drug Administration advisory panel on Dec. 17 voted to approve Moderna's COVID-19 vaccine, paving the way for the agency to issue emergency authorization.

"Crude prices are rising again as Moderna's COVID vaccine is poised to get vaccine authorization from the FDA," OANDA senior market analyst Ed Moya said in a note. However, prices are likely to run into resistance at higher levels until the vaccine rollout becomes widespread, he added.

"Successful vaccine execution is what is needed to send WTI crude well above the USD50 level and that is unlikely to happen for months," Moya said. "The virus spread across the US is going to test hospital capacity over a few states, and that should see lockdowns extended throughout the next couple of months."

Progress on the vaccine approval comes as Congress appears closer on passage of a USD900 billion stimulus package that includes direct payments and expanded unemployment benefits. Lawmakers had said they intended to attach the relief bill to broader government funding bill due by midnight Dec. 18.

A total 885,000 people filed for unemployment benefits for the first time for the week ended Dec. 11, according to US Department of Labor data released Dec. 17, up 23,000 from the prior week and above market expectations of around 800,000.

The weaker-than-expected labor market data highlights the vulnerabilities in the US economic recovery but may in fact be somewhat supportive of oil prices, as it is likely to add pressure to congressional efforts to pass a stimulus package.

Still, gasoline cracks were trending lower amid near-term demand concerns. The front-month ICE New York Harbor RBOB crack against Brent fell to USD6.11/b in afternoon trading Dec. 18, down from a close of USD6.53/b the day prior.

Oil prices have also gleaned support from a weaker US Dollar. The ICE US Dollar Futures Index was trading at below 90 late Dec. 18, up slightly its Dec. 17 close but still at levels last seen in April 2018.

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.
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MOSCOW (MRC) -- A tanker chartered by the National Iranian Oil Company (NIOC) is loading Venezuelan crude for export, documents from state-run PDVSA show, providing evidence of the two countries' latest tactics to expand their trade in defiance of US sanctions, reported Reuters.

Venezuela and Iran have deepened their cooperation this year as Venezuela has exchanged gold and other commodities for Iranian food, condensate and fuel.

Names of scrapped vessels are being used by several PDVSA (Petroleos de Venezuela, S.A.) customers, including NIOC, to disguise the routes and identities of the tankers they use.

A very large crude carrier (VLCC), identified in PDVSA's loading documents as the Ndros, arrived at Venezuela's main oil port of Jose last week to load 1.9 million barrels of heavy Merey 16 crude bound for Asia, the documents showed.

Vessel-monitoring service TankerTrackers.com used satellite photos to show the Ndros was scrapped in 2018, confirming reports on international shipping databases.

Also using satellite imagery and comparing it with photographs, it said the VLCC's real identity is the Liberia-flagged Calliop. Reuters could not independently verify that as the tanker's name at the hull had been painted black before its arrival at Jose.

PDVSA, Venezuela's oil ministry and NIOC did not respond to requests for comment. The US Treasury Department declined to comment.

Hong Kong-based Ship Management Services Ltd, which bought the Calliop in October, the shipping databases showed, could not be reached for comment.

A spokesperson for the US State Department said that "reports of any impending deliveries would again illustrate the illegitimate regime in Venezuela has turned to international pariahs like Iran to enable their exploitation of Venezuela's natural resources".

Iran sent a VLCC named the Horse to Venezuela in September. It delivered condensate, a very light form of oil, for PDVSA to blend with its very heavy oil to formulate exportable crude.

The tanker returned to Iran in October carrying Venezuelan heavy oil for NIOC, PDVSA's schedules showed. The tanker was misidentified at PDVSA's databases as the Master Honey.

In the run-up to leaving office in January, US President Donald Trump's administration has tightened sanctions on Iran and Venezuela.

A handful of PDVSA's customers that had been allowed to swap Venezuelan oil for fuel under US sanctions had their authorisations suspended in October. But Washington has not intercepted vessels that contribute to the Iran-Venezuela trade.

Smaller Iranian tankers have also delivered gasoline to Venezuela, making several voyages between the two countries since May.

The US Department of Justice in August seized 1.1 million barrels of Iranian gasoline bound for Venezuela on four privately-owned tankers.

The cargoes were transferred to two separate tankers that delivered the gasoline to US ports for auction, in what the department said led to the largest seizure of Iranian fuel.

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.
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MOSCOW (MRC) -- Shell says it expects improved base and intermediate chemicals margins in the fourth quarter compared with the third quarter of 2020, reported Chemweek.

The company did not give specific estimates for the forecast margins in a trading update for the fourth quarter issued today.

Group post-tax charges of USD3.5-4.5 billion are also expected in the fourth quarter related to “impairments, asset restructuring, and onerous contracts,” Shell says. These include charges related to the previously announced restructuring of its refinery and chemicals portfolio, impairments for some of its upstream assets, and contracts within its integrated gas business, it says.

The utilization rate for its chemicals manufacturing plants in the fourth quarter is now expected to be 77-81%, narrowing slightly from a range of 77-85% given when Shell released its third-quarter results on 29 October. The company has also narrowed slightly its forecast for chemicals sales volumes in the fourth quarter, estimating them at 3.6–3.9 million metric tons.

Shell also expects to report a loss in adjusted earnings in its upstream business for the fourth quarter due to the current price environment, it says. Gross refining margins in its downstream business are expected to improve slightly quarter on quarter, with the forecast utilization rate put at 72–76%, it says.

The company is scheduled to release its financial results for the fourth quarter on 4 February.

As MRC informed previously, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are feedstocks for producing 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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
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