Ningxia Baofeng shut coal-based PP plant on unexpected technical issue

MOSCOW (MRC) -- Ningxia Baofeng Energy Group Co Ltd unexpectedly shut its coal-based PP Phase II unit on 27 December 2020 due to technical glitches, according to CommoPlast with reference to market sources.

Based in Ningxia, China, the unit has a production capacity of 300,000 tons/year.

The restart schedule could not be ascertained at the time of this report.

As MRC reported earlier, in June 2020, Johnson Matthey (JM) announced that Ningxia Baofeng Energy Group ha "successfully" commissioned a new methanol plant at Ningxia Baofeng's 600,000-t/y coal-to-olefins complex in Ningxia Province, China.

The 6,600-t/d methanol unit, based on technology from JM, utilizes syngas feedstock and combines advanced JM catalysts to produce stabilized methanol, which is used to produce olefins in a downstream facility.

According to MRC's DataScope report, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Ningxia Baofeng Energy Group Co., Ltd. manufactures and distributes chemical products. The company produces methanol, olefin, residue catalytic, and other products. Ningxia Baofeng Energy Group also produces coal tars, petrochemical oils, and other products.
MRC

MOSCOW (MRC) -- Diversified CPC International (DCPC), an industry leader in the design, production, and distribution of the highest purity specialty gasses for a variety of industries, has completed the first phase of their new Beaumont, Texas plant, according to Hydrocarbonprocessing.

This new facility, which is located at the Iron Horse Terminals, launched a commercial operation in late November 2020. The company has invested USD10 million in Phase I of the project.

“The addition of the new Beaumont facility is a key step in strengthening our competitive position and ensuring DCPC has all the resources to fully support our customers,” said Bill Auriemma, DCPC President and CEO. “We have significantly improved our supply chain capabilities for our aerosol, industrial refrigerant, and solvent extraction customers by consolidating several rail trans-loading operations at one location.”

Company officials have shared that Phase II will include the construction of bulk storage and processing capabilities, while Phase III will bring additional manufacturing capacity on-line in the following years.

“Our in-house engineers have incorporated the latest in manufacturing, safety, and environmental control technology into the design of the Beaumont site,” said William Frauenheim III, DCPC Vice President of Operations. “We are proud of the entire project management team and our partners at Ironhorse for working diligently during this challenging time to complete Phase I on schedule.

“This investment is a key part of our DCPC 5-year strategic plan,” said John P. Dowd II, VP of Strategy and Business Development. “In addition to strengthening our industry-leading customer service capabilities, we will enhance our ability to produce innovative new products that help our customers improve product design, plant efficiencies, safety, and environmental footprints.”

The Beaumont operation will be the second major production and distribution facility the company operates along with its Corporate Headquarters in Joliet, Illinois. DCPC also has regional facilities in Illinois, New Jersey, Florida, Mississippi, and California.

As MRC reported earlier, Exxon Mobil Beaumont confirmed that operations at its cracker resumed in the morning on 26 September, 2019, after being shut down more than a week in the wake of Tropical Depression Imelda. The company shut down chemical production at the plant on Sept. 19, the day after Tropical Depression Imelda dumped dozens of inches of rain across Southeast Texas, and said it was considering similar steps for its refinery. The refinery ultimately remained operational.

The company operates a cracker with a capacity of 830,000 mt of ethylene and 195,000 mt of proplyelen per year, low density polyethylene (LDPE) plant with a capacity of 236,000 mt per year and linear low density polyethylene plant with a capacity of 727,000 tonnes per year. At that time, Exxon’s Beaumont refinery was the fourth-largest oil refinery in Texas, churning through about 370,000 barrels of oil a day to produce gasoline and other fuels. The refinery was then undergoing a major expansion to make it one of the two largest refineries in the country.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Steam crackers in the UK and rest of Europe, including Germany and Sweden, have been running at reduced rates in recent weeks because of unexpected production problems, reported Chemweek.

This tightened the supply of pyrolysis gasoline feedstock needed for benzene extraction, according to sources. Prolonged cutbacks in refinery operating rates due to weak margins from falling demand following the COVID-19 pandemic have also reduced availability of reformate feedstock, further pressuring benzene supplies.

Demand from downstream sectors, including styrene and cumene, has remained strong, even as supplies have gradually tightened, sources said. "Despite the squeezed benzene-styrene spread, we continue to see strong demand for styrene and some of the styrene derivatives such as acrylonitrile-butadiene-styrene," said one styrene supplier.

"We see robust offtake of cumene," a market source said. "It's been difficult for us to source benzene during December, not just because of the price but also because of availability for the requested date."

Meanwhile, low inventory capacity in Europe will have limited success as a buffer for short-term supply-demand imbalances, according to Simon Cleghorn, director consultant/aromatics, EMEA at IHS Markit. "The ARA benzene trading hub has relatively low benzene storage capacity, which can lead to a volatile market, especially when faced with unexpected supply issues," Cleghorn said.

Benzene supplies in Europe will be bolstered by at least 35,000 metric tons set to arrive in the region from the US by the end of January.

OPIS is an IHS Markit company.

Benzene is a feedstock for the production of styrene monomer (SM), which, in its turn, is a feedstock for manufacturing polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 410,780 tonnes in the first ten months of 2020, which corresponded to the same figure a year earlier. High impact polystyrene (HIPS) and general purpose polystyrene (GPPS) shipments increased, whereas demand for other PS grades subsided.
MRC

MOSCOW (MRC) -- The Chinese economy stood out amid the global economic malaise in 2020, staging a v-shaped recovery from COVID-19 with growth expected to continue in 2021, reported Chemweek.

China’s rapid rebound - particularly in the infrastructure, property, and automotive sectors - paves the way for higher demand and prices for chemicals this year despite big, new capacity in some basic chemical sectors.

According to IHS Markit, China’s industrial output rose 6.9% year on year in October 2020, 1.2 percentage points above the pre-pandemic annual growth rate in 2019. Its economy grew overall by 2.0% in 2020, slowing from 6.1% in 2019, and will accelerate to grow 7.5% in 2021, IHS Markit says.

Demand for oil in China is already higher than a year ago, according to IHS Markit. Demand for many chemical products is also back to highs approaching, and in some cases exceeding, pre-pandemic levels, boosted by increases in government spending and consumer demand.

According to IHS Markit, China has been able to maintain the necessary condition for sustained economic recovery: containment of the pandemic. This has allowed the rebound to gather momentum, including in the service sector and consumer demand - parts of the economy most hampered by the pandemic - IHS Markit says.

“Underpinning China’s accelerating economic recovery is the effective containment of the COVID-19 pandemic,” says IHS Markit. “Through speedy contact tracing and rapid mass testing, the government has been able to bring new local COVID-19 virus outbreaks quickly under control. Effective pandemic containment has greatly reduced public fears of new outbreaks turning into widespread contagion.”

China’s chemical industry has mirrored the overall economy with a v-shaped recovery. Chemical production in China edged up 0.3% in 2020, a sharp slowdown from growth of 4.9% in 2019, but growth in China’s output of chemicals is expected to accelerate to 5.4% in 2021, according to ACC.

China’s chemical sector was the first to enter a severe downturn, beginning in December 2019, according to ACC. However, “China was the first nation to emerge from the downturn and by September had fully recovered and entered an expansion stage of the cycle,” ACC says.

The onset of the pandemic in China also highlighted the vulnerability of many international chemical supply chains, which could result in changes starting in 2021, particularly for critical raw materials used in industries such as agriculture, aviation, pharmaceuticals, and semiconductors. “As the pandemic unfolded, chemical supply chains that ran through China were initially disrupted,” ACC says. “Concern (overseas) about supply-chain disruptions will lead to near- and on-shoring, accelerating any such decisions already in consideration prior to the pandemic, for example producers negatively impacted by the US-China trade war considering modifications to sourcing.”

Petrochemical markets, meanwhile, are expected to see the continued impact in 2021 from a massive buildup of capacity in China, particularly for key products such as ethylene and paraxylene.

Companies including Hengli Petrochemical, Liaoning Bora, Sinochem Quanzhou, Sinopec Zhongke, Wanhua Chemical, and Zhejing Petrochemical started up steam crackers during 2020. China’s total ethylene nameplate capacity increased to 32.6 million metric tons/year (MMt/y) last year from 27.1 MMt/y in 2019, according to IHS Markit data. A further six projects, including debottlenecking of existing plants, are set to increase China’s ethylene capacity to 38.9 MMt/y in 2021, IHS Markit says.

The additional supply is expected to undermine the demand and price recovery in China from the COVID-19 pandemic, but the impact will not likely be severe. China’s ethylene market has shown “strong resilience” during the pandemic, says William Chen, executive director/global olefins at IHS Markit. China’s domestic demand for ethylene increased to 30.3 MMt in 2020 from 27.6 MMt the year before and is set to rise again to 32.8 MMt in 2021, according to IHS Markit data.

However, these additions and a continued wave of steam cracker projects due for completion over the next five years adding more than 18 MMt/y of capacity will not be enough to bring the country to its goal of ethylene self-sufficiency, according to Chen. IHS Markit projects China will achieve ethylene self-sufficiency of 73% in 2025. As a result, the country will remain a net importer of ethylene equivalent for years to come.

Meanwhile, China will in 2021 begin its long march to climate neutrality. President Xi Jinping announced last September that the country would become carbon neutral by 2060. A recent IHS Markit report calls it “a historic announcement with global implications for climate change and energy markets. It will require China to execute a nationwide transformation over the next 40 years, that is perhaps even more dramatic than over the past four decades. If done right, it would create a new energy system, and a new economy,” the report says.

China plans to reach peak greenhouse gas (GHG) emissions before 2030. The country is the biggest emitter of GHGs mainly due to its widespread use of coal, which accounts for about 64% of China’s CO2 emissions. Carbon capture and storage, renewables, hydrogen, and electromobility will play a big role in the transformation, the IHS Markit report says.

Following China’s action plan, Sinopec announced that it had partnered with experts in climate change, energy, and chemicals to carry out research on the “strategic path of having (CO2) emissions peak and achieve carbon neutral before 2030.”

As MRC informed before, in early December, 2020, KBR announced that Sinochem Quanzhou Petrochemical Co. ha successfully commissioned a new ethylene facility in Quanzhou, Fujian Province, China, utilizing KBR's SCORE (Selective Cracking Optimum Recovery) technology. The 1-million-t/y ethylene plant is part of Sinochem's grassroots integrated refining and petrochemical complex, which also includes a 400,000-t/y high-density polyethylene (HDPE) facility, which recently achieved on-spec production, as well as an 800,000-t/y paraxylene (PX) plant, a 350,000-t/y polypropylene (PP) unit and an aromatics extraction unit with 300,000 t/y of capacity. Sinochem is also expanding its existing refining capacity by 60,000 b/d to 300,000 b/d.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Even as global prices end the year at about USD51 a barrel, near the average for 2015-2017, it masks a year of volatility, said Reuters.

In April, U.S. crude plunged deep into negative territory and Brent dropped below USD20 per barrel, slammed by the COVID-19 pandemic and a price war between oil giants Saudi Arabia and Russia. The remainder of 2020 was spent recovering from that drop as the pandemic destroyed fuel demand around the world. While the short-lived decline of U.S. oil futures below negative-USD40 a barrel is not likely to be repeated in 2021, new lockdowns and a phased rollout of vaccines to treat the virus will restrain demand next year, and perhaps beyond.

"We really haven't seen anything like this - not in the financial crisis, not after 9/11," said Peter McNally, global sector lead for industrials, materials and energy at research firm Third Bridge. "The impact on demand was remarkable and swift."

Fossil-fuel demand in coming years could remain softer even after the pandemic as countries seek to limit emissions to slow climate change. Major oil companies, such as BP Plc and Total SE, published forecasts that include scenarios where global oil demand may have peaked in 2019.

World oil and liquid fuels production fell in 2020 to 94.25 million barrels per day (bpd) from 100.61 million bpd in 2019, and output is expected to recover only to 97.42 million bpd next year, the Energy Information Administration said.

"Every cycle feels like the worst when you're going through it, but this one has been a doozy," said John Roby, chief executive of Dallas, Texas-based oil producer Teal Natural Resources LLC.

As MRC informed earlier, Asian refining margins for jet fuel inched higher on Monday, but reimposed travel restrictions in several countries to slow the spread of a highly-infectious coronavirus variant is expected to dent passenger demand recovery. Refining margins, also known as cracks, for jet fuel ticked up USD0.05 to USD4.76/bbl over Dubai crude during Asian trading hours. The cracks, however, have shed 11% since hitting a more than nine-month high of USD5.35/bbl on Dec. 18.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC