Saudi Sipchem restarts PP and PE plants in Jubail after maintenance

MOSCOW (MRC) -- Sahara International Chemical (Sipchem) has restarted its polypropylene (PP) and low density polyethylene (LDPE) plants in Jubail after completing the maintenance works, reported Chemweek.

The turnarounds were scheduled to begin on 1 February, 2021, and were expected to last during approximately six days.

The weeklong turnaround took place at the 200,000 tons/year PP unit and the 200,000 tons/year LDPE unit.

As MRC informed earlier, Sipchem is planning to mothball the Polybutylene Terephthalate (PBT) plant, owned by its affiliate, Sipchem Chemical Co., and Ethylene Vinyl Acetate (EVA) Film plant that is owned by affiliate firm, Saudi Specialized Products Co. Steps to implement the decision are underway, Sipchem said in a statement to Tadawul, adding that the suspension of both plants will start on Jan. 1, 2021, until further notice. The company expects a positive financial impact starting from Q1 2021 results.

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).
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MOSCOW (MRC) -- Solvay and Leonardo announced the launch of a joint research lab dedicated to the development of novel composite materials and production processes critical for the future of the aerospace industry, said the company.

This collaboration represents an important milestone in enabling a step-change in composite part manufacture and in reducing environmental impacts. The Solvay Leonardo Joint Lab will focus on thermoplastic “engineered materials” and in particular on welding and automatic lamination (in-situ consolidation) of complex and large aerospace structures with the goal of maximising product properties, increasing part production efficiency and extending the product life cycle.

The focus is on thermoplastic composites as they offer unique benefits to users such as lightweighting for more fuel efficient aircraft and they do not require autoclave for part consolidation thus enabling the development of much more sustainable production lines. Leonardo and Solvay believe that this agreement will be the foundation for further platform collaboration on short and mid-term applications in aerospace and beyond.

"This collaboration is in line with the G.R.O.W. strategy of Solvay to strengthen our leadership position as supplier of innovative composite materials for aerospace and other markets” shared Nicolas Cudre-Mauroux, Solvay Chief Technology and Innovation Officer. “We believe that the partnership with Leonardo will boost our ability to develop breakthrough thermoplastic composite solutions and substantially increase their adoption in aerospace, contributing to reducing fuel consumption and CO2 emissions".

"This collaboration with Solvay is a significant step in research on advanced materials, which are part of the R&D programs to be developed by the Leonardo Labs.” underlines Roberto Cingolani, Leonardo’s Chief Technology and Innovation Officer. The research area, central to Leonardo, is a key factor of competitiveness, and it will make it possible to improve the performance and safety of our products, to expand its potential, with a direct return on the environmental impact and consumption of resources, boosting a circular and efficient production system".

As per MRC, Solvay says it has accelerated changes that form part of the company’s G.R.O.W. strategy, announced at the end of 2019, due to the “new economic reality linked to COVID-19”.

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.

Solvay is a science company whose technologies bring benefits to many aspects of daily life. With more than 24,100 employees in 64 countries, Solvay bonds people, ideas and elements to reinvent progress. The Group seeks to create sustainable shared value for all, notably through its Solvay One Planet plan crafted around three pillars: protecting the climate, preserving resources and fostering better life. The Group’s innovative solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices, health care applications, water and air purification systems. Founded in 1863, Solvay today ranks among the world’s top three companies for the vast majority of its activities and delivered net sales of EUR10.2 billion in 2019. Solvay is listed on Euronext Brussels (SOLB) and Paris and in the United States, where its shares (SOLVY) are traded through a Level I ADR program.

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1. U.S. refiners talk up renewable projects after a year of lousy fuel demand

MOSCOW (MRC) -- Following a year of grim losses amid pandemic lockdowns that dented demand for fuel as people stuck close to home, the largest U.S. independent refiners are promoting plans to boost production of renewable fuels, said Hydrocarbonprocessing. Renewable fuels represent a silver lining for refiners under threat of being left behind by the shift to electric vehicles and away from fossil fuel processing. As the big refining companies in recent days reported year-end results, executives devoted plenty of time to discussing how they will create fuels that emit fewer emissions that contribute to global warming. "Renewables is the hot topic, and I think we're in a real good position to put ourselves in a good spot there," Marathon Petroleum Chief Executive Mike Hennigan said. Marathon reported losses of USD12.2 billion for 2020. Hennigan said the company isn't clear what gasoline and diesel demand will be post-pandemic.

MRC

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.
MRC

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).
MRC