January PVC imports to Ukraine fell by 36%, exports down by 25%

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 36% in January of this year, compared to the same period in 2020 and reached about 2,600 tonnes. Sales of Ukrainian PVC to foreign markets dropped by 25% year on year, according to a MRC's DataScope report.

Last month's suspension polyvinyl chloride (SPVC) imports into the Ukrainian market decreased to 2,600 tonnes from 4,100 tonnes in January 2020 and 2,400 tonnes in December a year earlier. Overall imports of suspension reached 33,400 tonnes in 2020, compared to 49,000 tonnes a year earlier.

At the same time, stronger demand from the domestic market amid the increased capacity utilisation of the Ukrainian producer led to lower export sales. European producers with the share of about 83% of the total imports over the stated period were the key suppliers of PVC to the Ukrainian market. Producers from the USA with the share of about 15% were the second largest suppliers.

Last month, Karpatneftekhim decreased the volume of external sales, the export sales of Ukrainian PVC amounted to 19,700 tonnes against 26,300 tonnes in January 2020 and 15,800 tonnes in December 2020. Overall, about 155,300 tonnes of PVC were shipped for export in 2020, compared to 163,300 tonnes a year earlier.
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MOSCOW (MRC) -- Crude oil futures strengthened during mid-morning trade in Asia Feb. 9, as expectations of a return to pre-coronavirus consumption patterns amid the abating crisis and hopes of an upcoming US stimulus package lifted demand sentiment. The production curbs by OPEC+ along with lower year-on-year US shale production has tightened supply, providing yet another boost to the international crude markers, reported S&P Global.

At 11:00 am Singapore time (0300 GMT), the ICE Brent April contract was up 61 cents/b (1%) from the Feb. 8 settle to USD61.17/b, while the March NYMEX light sweet crude contract was up 52 cents/b (0.9%) to USD58.49/b.

The front month ICE Brent crude futures contract hurtled past the USD60/b milestone for the first time in a year as fundamentals improved on both the demand and supply side.

According to analysts, signs of recovering demand could be seen across the globe, with Chinese imports at a six-month high last week, Indian demand returning to pre-pandemic levels amid increased car use, and the US becoming the largest buyer of its domestic crude in January.

"Optimism is high that vaccine rollouts will have key parts of the global economy's return to normal," Edward Moya, senior market analyst at OANDA, said in a Feb. 9 note.

Along with vaccinations, the demand sentiment has been boosted by rising hopes of a stimulus package in the US, analysts at ANZ said in a Feb. 9 note.

Supply side restraint from oil producers in both the OPEC+ alliance and the US has also contributed to the bull run in the oil markets, analysts said.

"The supply side of the oil equation is not at risk as the Saudis have taken that risk off the table for the next couple of months and as US shale producers' output is almost 20% less than last year," Moya said.

Analysts at ANZ echoed a similar sentiment, adding that total rig count in the US remains 60% below levels seen prior to the pandemic, demonstrating a reluctance to increase drilling activity.

However, some analysts remained cautious of the optimism surrounding oil markets, warning that it may have overestimated the effect of the improving fundamentals.

"Oil is surging on a combination of supply constraints and rising demand (both current and anticipated), [but] a word of caution is due as both the WTI and Brent markets are well in thick of overbought territory," Stephen Innes, chief global markets strategist at Axi, said in a Feb. 9 note.

Energy producers have increased their downside risk cover as they remain slightly skeptical of the recent uptrend in crude prices, and retail investors expect prices to correct downwards in the near term despite being bullish in the long term, according to S&P Global Platts Analytics.

Meanwhile, market participants are looking for fresh cues on the supply outlook in the upcoming weekly inventory reports from the American Petroleum Institute and the US Energy Information Administration, due later Feb. 9 and Feb. 10, respectively.

Commercial crude stocks are expected to have declined 2.7 million barrels to around 473 million barrels last week, analysts surveyed by Platts said, leaving them just 3% above the five-year average of US Energy Information Administration data; the narrowest surplus since the week ended April 3, 2020.

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).
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MOSCOW (MRC) -- Braskem says it has made the first international shipment of polypropylene (PP) from its new Global Export Hub in Charleston, South Carolina, said Chemweek.

The facility, which has capacity to ship up to 204,000 metric tons/year of resin, will complement existing export facilities in North America, South America, and Europe, says Braskem. The company says it will continue to ship internationally from Houston, Texas.

US exports of PP totaled 1.16 million metric tons during the 12 months through November 2020, according to data from IHS Markit’s Global Trade Atlas.

Braskem in September began commercial production at its new USD750-million, 450,000-metric tons/year “Delta” polypropylene (PP) plant in La Porte, Texas. The plant, which began construction in October 2017, was planned under the assumption that about half of its output would be exported to Europe, South America, and Asia.

"Given the current tight North American market, we are prioritizing our domestic clients, but over time, the hub will allow us to leverage our feedstock advantaged, polymer production assets in the US Gulf Goast, Pennsylvania, and West Virginia to best meet our international clients needs,” says Alexandre Elias, vice president/olefins & polyolefins North America.

Braskem has 7 PP plants in the US totaling 2 million metric tons/year of capacity. The company also has 560,000 metric tons/year of PP capacity in Germany, and 1.85 million metric tons/year of PP capacity in Brazil.

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.
MRC

MOSCOW (MRC) -- Rohm (Darmstadt, Germany) says it has increased prices for its polymethyl methacrylate (PMMA) products in Europe due to a “sharp rise in raw material costs,” according to Chemweek.

The price hike of EUR0.15/kilogram (USD0.18) applies to all deliveries from 1 January 2021 onwards, it says.

The increase is for Rohm’s PMMA semi-finished products sold under its Plexiglas and Deglas brands. The price of the company’s solvent-based Acrifix brand of adhesives has also been raised by 5%.

Rohm put methyl methacrylate (MMA) and all its other methacrylate monomer products in Europe on sales control in January due to a shortage of raw materials. The MMA market became increasingly tight during the latter part of 2020, with rising prices in Europe and Asia on strong end-user demand for applications such as coatings, construction, and healthcare, combined with limited availability due to production and supply issues.

As MRC reported earlier, Rohm plans to carry out a scheduled turnaround in September 2021 of its methacrylate monomers plant at Worms, Germany. No specific date or duration for the planned maintenance program has been given. The company announced in early January a series of scheduled shutdowns for four of its methyl methacrylate (MMA) and methacrylate monomer facilities in the first half of 2021, including one planned for 10–22 March also at its Worms plant. The other plants planned for turnaround in the first six months of the year are in Wesseling, Germany; Shanghai, China; and Fortier, Louisiana.

The principal application, consuming approximately 75% of the MMA, is the manufacture of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used for the production of the co-polymer methyl methacrylate-butadiene-styrene (MBS), used as a modifier for polyvinyl chloride (PVC).

According to MRC's DataScope report, last month's SPVC imports to Russia dropped to 0,600 tonnes from 1,600 tonnes in November. High PVC prices in foreign markets and a seasonal decline in demand in the last two months have put serious pressure on import purchases of PVC from Russian companies. Thus, overall imports were 40,800 tonnes in January-December 2020, compared to 50,900 tonnes a year earlier, with PVC from China and the United States accounting for the main reduction in imports. PVC shipments from these countries decreased by almost a third over the stated period.
MRC

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