European PP prices increased by EUR90/tonne and more in January for CIS markets

MOSCOW (MRC) -- The January contract price of propylene was settled in Europe up by EUR65/tonne from the previous month. However, all European producers announced a greater increase in export prices of polypropylene (PP) to be shipped to the CIS markets in January, than the rise of monomer prices, according to ICIS-MRC Price report.

Negotiations over January prices of European PP began in the first days of the month. All market participants reported that European producers have gone for a significant increase in export prices for propylene polymers.
Moreover, some producers adjusted their export prices twice in the first two weeks of January.

In some cases, the price growth was recorded at the level of EUR90/tonne, and in some cases, the price increase reached EUR160/tonne.

It is also worth noting that all producers in Europe have serious export restrictions, and some producers do not even plan to sell PP to the markets of the CIS countries this month. Deals for January shipments of homopolymer propylene (homopolymer PP) were done in the range of EUR1,040-1,100/tonne FCA, whereas last month's deals were done in the range of EUR950-1,000/tonne FCA.

Deals for block copolymers of propylene (PP block copolymers) were done in the range of EUR1,100-1,190/tonne FCA, versus EUR970-1,030/tonne FCA a month earlier. The situation with the Middle East polypropylene is no better; local producers also started raising export prices under the pressure of rising oil prices.

Quotas for shipments to the markets of the CIS countries have been reduced in comparison with December. Also, the price of the Middle Eastern PP is under serious pressure from the growth of sea freight.

The deals for January shipments of Middle Eastern homopolymer PP were in the range of USD1,280 - 1,360/tonne CIF. Some sellers have already started negotiating deals for February shipments, and prices are reaching USD1,400 /tonne CIF.

MRC

MOSCOW (MRC) -- ENEOS Corporation (formerly known as JXTG Nippon Oil & Energy) is planning to restart its naphtha cracker in Kawasaki by mid to end of January 2021, reported CommoPlast.

The company shut this cracker with an annual capacity of 515,000 tons/year of ethylene, 300,000 tons/year of propylene, and 105,000 tons/year of butadiene on 4 December, 2020, for repairment after a technical issue reported at the butadiene separation unit and initially planned to resume operations on 28 December. Then the restart was postponed until 4 January, 2021.

The company’s smaller cracker at the same location was not affected by the issue.

The restart of ENEOS Corp’s cracker come together with three other major crackers in South Korea, which are expected to ease the ethylene supply tightness in the region toward the end of January to early February 2021.

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.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
MRC

MOSCOW (MRC) -- US combined propane and propylene stocks slid 6.7 million bbl, or 9.2%, during the week ended 8 January to 66 million bbl, the Energy Information Administration reported Wednesday, said Chemweek.

Product supplied for propane and propylene, an indicator of implied demand, surged 402,000 b/d on the week to 2.1 million b/d. Exports advanced 272,000 b/d to 1.075 million b/d and the four-week average for exports rose 257,000 b/d year-over-year (YOY) to 1.389 million b/d.

Propane imports for the week dipped 32,000 b/d to 149,000 b/d, while the four-week average moved up 7,000 b/d to 154,000 b/d from the four-week average a year ago.

Gulf Coast (PADD 3) inventories tumbled 4.2 million bbl to 35 million bbl in the latest week. Midwest (PADD 2) stocks slipped 700,000 bbl to 18.7 million bbl. PADD 1 inventories fell 600,000 bbl to 7.5 million bbl, and PADDs 4 and 5 stocks dipped 100,000 bbl to 4.9 million bbl.

Mont Belvieu TET propane climbed to 92.375 cts/gal from 89.625 cts/gal last traded before the report's release. Non-TET propane advanced to 91 cts/gal from 88.5 cts/gal. Conway propane rose to 90.25 cts/gal from 87.5 cts/gal prior to the report's release.

As per MRC, exports of polypropylene (PP) from the US were up 4.2% in the eleven months of 2020 compared to the same period in 2019, while imports were down 34% over the same period. The decline in imports was mainly due to a sharp drop in imports from Brazil, which supplied large volumes of material in 2019 as a pre-sale of Braskem's new PP plant in La Porte, Texas, which was launched in 2020.

Propylene is a feedstocks for producing 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) -- SCG Packaging (SCGP) is expanding is food packaging business by acquiring Go-Pak, a leading food packaging provider in the UK, European and North America with production based in Vietnam, said Nationthailand.

This deal will help SCGP expand its customer base in the food service sector, retail and wholesale businesses, restaurants and fast-food restaurants in the UK, Europe and North America, as well as help expand its market base in Asean.Wichan Jitpukdee, SCGP’s chief executive officer, said the company is expanding its food packaging business in line with rising demands.

SCGP has a manufacturing base in Thailand and has been producing foodservice packaging products such as paper straws under the Fest brand in response to demands for safe and eco-friendly food packaging.In 2018, it expanded its production base to Malaysia buy acquiring shares of Interpress Printers Sendirian Berhad (IPSB), a leading producer of food packaging made from paper.

IPSB supplies packaging solutions to restaurants and fast-food companies in Asia.With lifestyles changing due to the Covid-19 outbreak, consumers are more inclined towards taking meals home or to the office or getting food delivered. And this trend is giving the food packaging industry reason to expand.

As MRC informed earlier, Dow and SCG has recently signed a collaboration agreement to develop new complete recycling solutions to add value to plastic waste and prevent them from ending up in the environment. This agreement is an attempt to create a circular economy for plastic in Thailand.

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.

SCGP is a unit of Thai conglomerate Siam Cement.
MRC

MOSCOW (MRC) -- Top oil exporter Saudi Arabia has cut supplies of February-loading crude for some Asian buyer by up to a quarter while meeting requirements of at least four others, reported Reuters with reference to several refinery and trade sources with knowledge of the matter.

This comes after Saudi Arabia pledged additional voluntary output cuts of 1 million barrels per day (bpd) in February and March under a deal between the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.

Most OPEC+ producers will hold production steady in the face of new coronavirus-induced lockdowns. Global oil prices are trading at their highest since February following Saudi’s decision.

Two North Asian refiners have received a 10% supply cut from the state-owned energy giant Saudi Aramco, sources said. February allocations for at least three Indian refiners have been cut between 15% and 26%, the sources said on the condition of anonymity.

Saudi Aramco declined to comment.

Last year, the company cut June-August shipments to Asian term buyers to comply with the OPEC+ agreement.

Saudi Arabia exported about 7 million barrels per day of crude, of which around 70% landed in Asia last year, data on Refinitiv Eikon showed.

While the additional Saudi oil supply cut could help support the spot market this month, Asia’s crude consumption is expected to fall amid seasonal refinery maintenance while arbitrage supplies from the West could supplement demand, trading sources said.

Differentials for Middle East benchmarks cash Dubai and DME Oman to Dubai swaps fell by 20 cents from Tuesday, data compiled by Reuters showed, due to weak demand.

Refiners, including India’s HPCL-Mittal Energy Ltd (HMEL), Taiwan’s Formosa Petrochemical Corp, and Thailand’s IRPC Pcl and Bangchak Corp, are heading into maintenance in the first quarter.

Japan’s Idemitsu Kosan Co has shut a 150,000 barrels-per-day (bpd) crude distillation unit (CDU) following a fire mishap.

As MRC wrote previously, 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.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC