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COVID-19 - News digest as of 30.12.2020

December 30/2020

1. Russian LDPE market: 2020 year results

MOSCOW (MRC) -- Demand for low density polyethylene (LDPE) subsided in Russia in 2020 by 2% after an increase a year earlier. At the same time, prices have reached a record level over the past five years and continued to rise, according to ICIS-MRC Price report.  Quarantine restrictions in April-May led to a significant reduction in demand for LDPE in Russia, despite seasonal factors. But already from mid-summer, processing volumes began to recover dynamically and remained at a good level until the end of the year. However, according to preliminary results, demand for LDPE showed a negative result in 2020. At the same time, the dynamically growing polyethylene (PE) prices in Asia have begun to put a major pressure on prices in the Russian market for the past two months of the year, and already in December, prices of Russian LDPE exceeded Rb100,000/tonne. Russian producers failed to maintain last year"s LDPE production figures. LDPE output totalled 574,600 tonnes in the first eleven months of 2020, down by 2% year on year. And lower PE production was largely due to the increase in the time of shutdowns for repairs at some plants.

2. U.S. fuel industry frazzled as EPA misses 2021 biofuel volumes deadline

MOSCOW (MRC) -- The U.S. Environmental Protection Agency was set to miss a deadline on Monday to announce how much renewable fuel the nation�s refiners must blend into their fuel mix next year, raising uncertainty in the fuel market and prompting one biofuel association to threaten to take the agency to court, said Hydrocarbonprocessing. Under federal law, the EPA must finalize its decision on the annual biofuel blending volume requirements it imposes on the refining industry for the next year by Nov. 30. The agency did not respond to requests for comment. �At this point, it likely makes more sense to let the new administration handle the 2021 RVO (Renewable Volume Obligations) rulemaking process entirely,� said Geoff Cooper, the president of the Renewable Fuels Association, one of the nation�s biggest biofuel industry groups. Growth Energy, another U.S. biofuel industry association, said it intends to file a lawsuit to force the Trump administration�s EPA to act �immediately." The American Fuel and Petrochemical Manufacturers, a top refinery industry association, said it hoped the EPA will �soon provide certainty� to its members. Under the U.S. Renewable Fuel Standard, refiners must blend billions of gallons of ethanol and other biofuels into their fuel pool, or buy credits from those that do - a policy that has created a huge market for corn-based ethanol but which the oil industry loathes. While the Trump administration has mainly hit its deadlines for setting specific biofuel volumes mandates under the RFS, the process this year has been complicated by the economic fallout of the coronavirus pandemic. Slumping fuel consumption has led refiners to argue for lower volume mandates to match demand, and biofuels producers to argue that doing so would only hurt them more.

3.UK industry gives mixed reaction to post-Brexit trade deal

MOSCOW (MRC) -- The UK chemical industry has given a mixed reaction to the post-Brexit trade and cooperation agreement announced on 24 December by the EU and UK, said Chemweek. The Chemical Industries Association (CIA; London, UK) says there is �some relief� that the deal confirms zero tariffs on EU-UK trade. However, a lack of clarity persists around the deal�s regulatory impact, it says. �We have consistently called for the threat of tariffs to be avoided, so we very much welcome the commitment and hard work from both parties in securing that outcome,� says Steve Elliott, chief executive of the CIA. �Failure here would have seen an annual cost of at least GDP1.0 billion [USD1.3 billion] to the chemical industry." UK prime minister Boris Johnson, announcing the deal last Thursday, highlighted the potential for divergence by the UK from EU chemical legislation. The UK plans to launch its own version of the EU�s Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) regulation, called UK REACH. �The prime minister has mentioned chemicals as an industry where we have the potential to do our own thing. With that in mind we need to see, in particular, the extent of regulatory cooperation agreed with regard to the industry�s REACH responsibilities,� Elliott says.

4. A historic oil price collapse, with worries headed into 2021

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.

5. China bounces back

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.

6. Crude oil futures rise as risk-on sentiment grips market

MOSCOW (MRC) -- Crude oil rose during mid-morning trade in Asia Dec. 29 as the oil complex was buoyed by bullish sentiment across risk assets emanating from US President Donald Trump"s signing of the massive coronavirus relief and spending package, with a weaker dollar also lending market support, reported S&P Global. At 10:55 am Singapore time (0255 GMT), the ICE Brent February contract was up 21 cents/b (0.41%) from the Dec. 28 settle to USD51.07/b, while the February NYMEX light sweet crude contract was up 24 cents/b (0.5%) at US47.86/b. Both markers had fallen by 0.84% and 1.26% on Dec. 28 to settle at USD50.86/b and USD47.62/b, respectively, as concerns over the spread of the highly infectious B.1.1.7 variant of the coronavirus had weighed on the market.
Author:Margaret Volkova
Tags:Asia, bioplastics, PP, PE, crude and gaz condensate, propylene, LDPE, ethylene, petrochemistry, COVID-19, UK, China, Russia, USA.
Category:General News
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