China 2020 refinery output rises 3% to record; gas output up nearly 10%

MOSCOW (MRC) -- China’s refineries posted record throughput in 2020, processing 3% more crude oil than a year ago, as they took advantage of low prices and healthy margins on a quick rebound in domestic fuel demand from the coronavirus pandemic, reported Reuters.

Annual throughput stood at 674.41 milion tons in 2020, or about 13.45 million barrels per day, up roughly 410,000 bpd from 2019, data from the National Bureau of Statistics showed.

December output rose 2.1% on the year to a monthly record at 60 million tons, or about 14.13 million bpd, a touch below the daily record set in November, which has one less day, at 14.2 million bpd.

“China’s manufacturing sector strength climbed to levels not seen in years,” said Seng Yick Tee, a senior director at SIA Energy.

“The economic acceleration boosted by investments, merchandise exports and domestic consumption all contributed to record crude runs in December and the whole of 2020.”

Refineries slashed operations from February through April amid widespread lockdowns nationwide to rein in the virus, but operations rebounded from May, after China largely contained it. Plants raised operation to peak rates through the rest of 2020.

The rebound was also bolstered by expanded capacities at state-run refiners and full operations at large private refiners Hengli Petrochemical and Zhejiang Petrochemical Corp.

Zhejiang started its third 200,000 bpd crude unit in November, becoming China’s single-largest oil processor.

Independent plants in the eastern province of Shandong that account for nearly a fifth of national capacity have raised throughput since April, operating at their highest levels since they first became importers of crude in 2016, says Sublime China Information.

While a decline in vehicle sales dragged on gasoline demand, the booming trucking business and construction gave diesel an unexpected boost.

China’s crude oil production gained 1.6% last year to 194.92 million tons, equivalent to 3.89 million bpd, the data showed.

Although marginal, this figure represents a hard-won increase as companies scaled back capital spending amid lower oil prices and as reserves at top onshore producing fields such as Daqing and Shengli were quickly depleted.

Offshore oil and gas giant CNOOC Ltd accounted for most of the increase, pumping about an extra 2.4 million tons, a top executive of China National Offshore Oil Company said in January.

Natural gas output rose 13.7% in December from a year ago to a record high of 18.7 billion cubic meters, to meet surging heating demand as cold spells grip large areas of the country.

Total 2020 output was 188.8 bcm, up 9.8% from 2019, in one of the swiftest annual expansions since 2014, as companies prioritised gas drilling in Beijing’s long-term drive to boost use of a fuel that emits half the carbon dioxide of coal.

As MRC informed earlier, in late December 2019, Zhejiang Petrochemical Co Ltd started up its ethylene cracker. Based in Zhejiang, China, the cracker is able to produce 1.4 million tons/year of ethylene.

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

Hanwha Total to start up its new PP plant

MOSCOW (MRC) -- Hanwha Total is expected to start up its new downstream polypropylene (PP) unit in Daesan, South Korea, in second-half February, 2021, reported S&P Global.

The capacity of the new plant will be 380,000 mt/year of PP. After its launch, the company's total PP production capacity will increase to 1.1 million tons per year.

Hanwha Total currently operates three PP plants in Daesan with a capacity of 190,000 mt/year, 170,000/mt year and 360,000 mt/year of PP.

The South Korea market is poised to receive support from demand for spot materials with the launch of Hanwha Total's new downstream PP unit.

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).

Daesan is one of Total's six world-class integrated complexes and a strategic asset for both shareholders. It comprises a flexible condensate splitter, a competitive steam cracker and units producing polymers, styrene and aromatics.

Hanwha Group, founded in 1952, is a global leader in a broad range of business spanning the spectrum of manufacturing, construction, finance, services and leisure industries. Hanwha Group consists of 56 domestic affiliates and 226 global networks, as of June 2016.

Total is a major energy player, which produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.
MRC

Cornerstone declares force majeure at its ACN plant in US

MOSCOW (MRC) -- Cornerstone, a key producer of acrylonitrile (ACN) in the US, declared force majeure (FM) in the week ended Feb. 6, reported S&P Global.

Thus, the FM was declared at its facility in Waggaman (Waggaman, Louisiana, USA) with a capacity of 240,000 mt/year of ACN.

The force majeure was declared due to mechanical issues and a shortage of feedstock. FM is currently expected to stay in force until April after a 15-day scheduled overhaul at the plant from mid to late March.

The company sells 6,000-7,000 mt of ACN to India each month.

Acrylonitrile is one of the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, last year's ABS imports to Russia grew by 4% year on year to 35,000 tonnes from 33,700 tonnes. The share of South Korean supplies amounted to 62% (21,600 tonnes) versus 58% (19,700 tonnes) in January-December 2019.

Cornerstone Chemical Company manufactures a variety of petrochemical products. Thus, the company produces acrylonitrile (ACN), which is used in the production of acrylamide, acrylic fibers, nitrile rubber, elastomers, ABS plastics, surface coatings and other products; melamine and other petrochemical products. The company was founded in 1952 and is headquartered in Waggaman, Louisiana, USA.
MRC

Carlyle to increase its stake in Swiss refiner

MOSCOW (MRC) -- Private equity company Carlyle Group will increase its stake in Varo Energy by buying out one of two other partners in the Swiss refining firm, the companies said, said Hydrocarbonprocessing.

Carlyle is part owner of Varo with Dutch investment firm Reggeborgh and energy trader Vitol. Varo said Carlyle would raise its share by acquiring Reggeborgh’s interest.

Varo owns Switzerland’s Cressier refinery and a majority share of the Bayernoil refinery in Germany. It also has marketing and storage businesses in France, Belgium, Luxembourg, the Netherlands, Germany and Switzerland.

Marcel van Poecke, managing director and head of Carlyle International Energy Partners, said Varo was expected to expand “as it leverages its solid platform and further capitalizes on the opportunities presented by the shift towards low carbon."

Varo was valued at about 2 billion euros (USD2.4 billion) when it planned to list on the Amsterdam stock market in 2018. But the flotation was cancelled, with Varo citing market volatility due to tensions in relations between the United States and China at the time.

As per MRC, Dutch company Akzo Nobel NV has decided to sell its special purpose chemicals division to the American Carlyle Group and Singapore's GIC for EUR10.1 billion.

Besides, Varo Energy BV's owners, US private equity firm Carlyle Group and commodities trader Vitol, are looking at an initial public offering next year that could value the European oil refiner at about USD2 B.

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, excluding producers' inventories as of 1 January, 2020).
MRC

Tennant completes sale of coatings business to Sherwin-Williams

MOSCOW (MRC) -- Tennant Company announced it has completed the sale of its coatings business, Tennant Coatings, to The Sherwin-Williams Company, said Chemweek.

"The sale of Tennant’s coatings business is our latest move in the ongoing implementation of our enterprise strategy,” said Tennant CEO Chris Killingstad. “By divesting a business that is not central to our core strengths in industrial and commercial floor cleaning, we can redirect resources toward more strategic and profitable activities."

Tennant Coatings designs and manufactures indoor and outdoor coatings systems for a variety of applications and industries. For the trailing 12 months ended Sept. 30, 2020, the coatings business generated USD22.1 million in sales, or 2.2 percent of Tennant Company’s total sales. Following the sale, approximately 70 Tennant employees are expected to join The Sherwin-Williams Company.

As per MRC, Sherwin-Williams (SW) reported third-quarter net income up 22.4% year-on-year (YOY), to USD705.8 million, on net sales up 5.2%, to USD5.12 billion.Adjusted earnings totaled USD8.29/share, beating analysts’ consensus estimate of USD7.75/share, as reported by Refinitiv (New York, New York). Higher sales for architectural paint, especially residential repaint and do-it-yourself (DIY) paint, drove the increases.

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