LPG imports into Northwest Europe edge higher in December

MOSCOW (MRC) -- Northwest European LPG trade in December rose marginally month on month to an estimated 715,000 metric tons, up from 675,000 metric tons in November, according to Chemweek with reference to OPIS records.

Imports into the region from the US were 165,000 metric tons in December, up from 95,000 metric tons in the prior month, but down from a record 400,000 metric tons in October.

Main LPG imports into northwest Europe are earmarked typically as feedstock for the petrochemical sector, which had seen favorable economics for cracking propane early in December compared to naphtha. However, the propane/naphtha spread swung positive mid-December, after opening the month at minus USD19/metric ton, led by a strengthening propane price. The spread moved considerably further into positive territory by the end of the month, to USD44/metric ton, leaving propane much less attractive for feedstock end-users.

Imports of LPG from the US also slowed during December as the freight rate for the Houston-to-Flushing route for very large gas carriers (VLGCs) rose by nearly 30% in one month to USD90/metric ton from USD70/metric ton, according to shipbroker data. Delays for vessels waiting to transit the Panama Canal, combined with winter heating demand for LPG in Asia, led to a surprise jump in freight rates.

CIF ARA propane prices in northwest Europe rose by USD141/metric ton through December, topping USD507/metric ton by year-end. By comparison, CIF northwest European naphtha prices were up by 50% in the same month, increasing by USD69/metric ton to end 2020 at USD459.75/metric ton.

During December, local North Sea supplies of LPG entering the petchems feedstock pool totaled 248,000 metric tons, equivalent to 58% of total feedstock intake, and down from 290,000 metric tons in November. The remainder of intake from the sector in December consisted of 23% from the US East Coast, up from 13% in November, while imports from the US Gulf Coast made up 16% of intake, up from 11% in November. The retail and refining sector saw LPG intake slightly softer month on month at 165,000 metric tons for December.

Exports out of northwest Europe increased to 125,000 metric tons in December from 95,000 metric tons in November, with cargoes moving to the Baltic, eastern Mediterranean, and US east coast. Several of the US-Europe transit cargoes moved via the back-haul route, as some shippers looked to take advantage of the high market rates in the month. Exports of LPG from port of Ust-Luga in the Russian Baltic to northwest Europe were an estimated 12,000 metric tons.

OPIS is an IHS Markit company.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, exluding producers' inventories as of 1 January, 2020).
MRC

MOSCOW (MRC) -- Firefighters in Kaohsiung City worked through the night to extinguish a fire at a chemical plant in the Linyuan Industrial Park after an explosion and fire was reported at around 8:30 pm in the evening, January 29, reported Taiwan English News.

Thirty-six vehicles and 75 personnel were dispatched from 14 fire stations to battle the blaze at the UPC Technology Corporation (1313.TW) plasticizer plant on Gongye 2nd Road.

The fire destroyed around 300 square meters containing plasticizer dioctyl phthalate (DOP) and phthalic anhydride (PA) production lines. No casualties were reported and the cause of the fire is still under investigation.

The fire was described as intense and difficult to control due to the large amount of chemical raw materials involved. Firefighters battled to stop the fire spreading to the adjacent Formosa Plastics, and Taiwan Petrochemical Corporation plants.

The fire was brought under control at around 10:30 pm, but firefighters continued to deal with residual fires overnight, and were still dousing the area with water at 7:00 am this morning.

The Kaohsiung City Environmental Protection Bureau closely monitored air quality around the site saying that the plasticizers were a level one poison. The company will be fined NTD5 million under Article 32 of the air pollution law.

Nearby residents complained that this was the fourth pollution incident in the Linyuan Industrial Park this month, after a biogas explosion at the wastewater plant of the Taiwan Benzene Chemical plant January 12, a smoke incident at the Yaju Linyuan Plant January 22, and an air pollution incident at the Xinchang Chemical Plant January 27.

As MRC informed earlier, Formosa Petrochemical Corporation (FPCC) was running its crackers in Taiwan at 100% capacity utilisation in end-December, 2020. The company"s crackers have combined ethylene production capacity of 2.935 million metric tons/year. Meanwhile, FPCC is planning overhaul of the smallest cracker in mid-2021.

Plasticizers are substances introduced into a polymer material to make it elastic and plastic during processing and operation. In particular, plasticizers are used for the production of polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

According to MRC's ScanPlast report, Russia's overall PVC production reached 976,500 tonnes in 2020, up by 0.2% year on year. Only two producers managed to increase their PVC output.

Founded in 1976, Taiwan UPC Technology Corporation is mainly engaged in the research, development and manufacturing of petrochemical products. Its products include maleic and phthalic anhydrides, plasticizers, polyols, fatty esters, epoxy resins and other specialty chemicals.
MRC

MOSCOW (MRC) -- Clariant says that Harolf Kottmann, the company’s chairman since 2018, has informed Clariant’s board that he will no longer be a candidate for the office of chairman and board member, at the company's annual shareholders’ meeting in April, reported Chemweek.

Following Kottmann’s announcement, at an extraordinary board meeting, the Clariant board unanimously proposed to shareholders that Gunter von Au should be elected chairman, the company says.

Sabic, which owns 31.5% of Clariant’s shares, has agreed with the Clariant board's agenda items and withdrawn its request of a time limit of 12 years for members of Clariant’s board including the chairperson, which it had submitted in December 2020 as an item to be discussed at the upcoming shareholders' meeting, the company says. Sabic has instead asked for the time limit to be anchored in the bylaws of Clariant’s board, Clariant says.

Sabic has also withdrawn a proposal for the distribution of a special dividend to Clariant shareholders of up to 2.00 Swiss francs per share (USD2.24/share), the company says. The Clariant board has proposed an ordinary dividend of SFr0.70/share, which includes SFr0.55/share for 2019 and SFr0.15/share for 2020, it says.

According to an earlier Reuters report, adopting Sabic's proposed time limit “would force Clariant chairman Hariolf Kottmann out, though other board members have several years before they would be affected.” Kottmann said during an analysts’ presentation on 8 January that he could not comment on the matter and that Sabic’s request would be discussed at Clariant’s annual shareholders’ meeting.

Kottmann had been serving as Clariant’s executive chairman ad interim since the sudden departure of Ernesto Occhiello in July 2019, only 10 months after replacing Kottmann as Clariant’s CEO. On 1 January 2021, Conrad Keijzer assumed responsibility as Clariant’s CEO and Kottmann returned to his position as chairman of the board.

As MRC reported earlier, in October 2020, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, exluding producers' inventories as of 1 January, 2020).

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

MOSCOW (MRC) -- Ineos Styrolution, the styrenics subsidiary of Ineos, says it is collaborating with Polystyvert (Montreal, Canada) to convert post-consumer polystyrene (PS) into recycled PS resin using Polystyvert’s dissolution technology, said Chemweek.

The companies have signed a joint development agreement for the dissolution process to convert waste PS into recycled resin. The process takes solid PS waste and dissolves it in a solvent, before processing and then separating the end-product from the solvent as a polymer for reuse, it says.

Polystyvert’s purification technology “offers the ability to treat all types of feedstock, from industrial waste to post-consumer streams,” and can eliminate hard-to-remove contaminants such as pigments and brominated flame-retardants, Styrolution says. The recycled PS pellets can then be used to manufacture various categories of PS products, including food-grade applications, it says.

As MRC informed earlier, Ineos Styrolution plans to raise prices for acrylonitrile butadiene styrene (ABS) by 7 cents per pound (USD154 per tonne) from February 1. The company also sought a similar increase in ABS prices from December 15 by two of its brands. The intention to raise prices stems from rising raw materials and logistics costs associated with the production and supply of ABS, the letter said.

According to the ICIS-MRC Price Report, ABS imports to Russia grew by 4% in the first ten months of this year compared to the same period last year and amounted to 29,100 tonnes against 28,000 tonnes. The share of South Korean supplies amounted to 62% (18,200 tonnes) against 57% (16,100 tonnes) in January-October 2019.

MRC

MOSCOW (MRC) -- Air Liquide has completed the construction of the world’s largest PEM (Proton Exchange Membrane) electrolyzer in Becancour, Quebec, Canada, according to Kemicalinfo.

Supplied with renewable energy, this unit is now producing up to 8.2 tonnes per day of low-carbon hydrogen.

With this large-scale investment, the Group confirms its long-term commitment to the hydrogen energy markets and its ambition to be a major player in the supply of low-carbon hydrogen.

The new 20 MW PEM electrolyser, equipped with Cummins technology, is the largest operating unit of its kind in the world and will help meet the growing demand for low-carbon hydrogen in North America.

Becancour’s proximity to the main industrial markets in Canada and the United States will help ensure their supply of low-carbon hydrogen for industrial use and mobility. The commissioning of this electrolysis unit increases by 50% the capacity of Air Liquide’s Becancour hydrogen production complex.

Compared to the traditional hydrogen production process, this new production unit will avoid the emission of around 27,000 tonnes of CO2 per year, which is equivalent to the emissions of 10,000 cars per year.

The choice of Becancour is based on two attributes of the site: the access to abundant renewable power from Hydro-Quebec and the proximity to the hydrogen mobility market in the northeast of the continent.

Susan Ellerbusch, CEO, Air Liquide North America and Group Executive Committee Member: “The fight against climate change is at the heart of the Air Liquide Group’s strategy. The inauguration of the Becancour site in Canada marks an important step in the implementation of this strategy. With this world’s first, Air Liquide confirms its commitment to the production of low-carbon hydrogen on an industrial scale and its ability to effectively deploy the related technological solutions. Hydrogen will play a key role in the energy transition and the emergence of a low-carbon society.”

As MRC informed earlier, in September 2020, Air Liquide finalised an agreement with Sasol to acquire the biggest oxygen production site in the world with a plan to reduce its carbon dioxide (CO2) emissions by 30%. After the announcement on July 29, the international major industry gas company has now entered into a business purchase agreement with Sasol to acquire the oxygen production site in Secunda, South Africa.

We remind that Sasol's world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. Sasol's new cracker, the heart of LCCP, is the third and most significant of the seven LCCP facilities that came online and will provide feedstock to the company's six new derivative units at Sasol's Lake Charles multi-asset site.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, exluding producers' inventories as of 1 January, 2020).
MRC