SK Global Chem, Brightmark Sign MoU For Plastics Renewal Plant in S. Korea

MOSCOW (MRC) -- SK Global Chemical and global waste solutions provider Brightmark have signed a memorandum of understanding (MoU) to form a partnership that aims to build a commercial-scale plastics renewal facility in South Korea, according to Apic-online.

Under the MoU, the parties will jointly utilize Brightmark's plastics renewal technology and confirm its commercial viability with the intention of forming a joint venture to develop, finance, construct and operate the plant.

The proposed facility is planned to have a capacity of 100,000 t/y. Both companies will perform a feasibility study during 2021 and intend to cooperate by combining experience of pyrolysis and post treatment. A planned schedule for the project was not available.

By the end of this year, they will complete an evalua-tion of the most optimal methods to operate, scale and develop Brightmark?s technology prior to finalization of a joint venture agreement for the plant development and operation.
Brightmark is currently building a USD260-million plastics renewal facility in Ashley, Ind., which will initially convert about 100,000 t/y of plastic waste into new products. It is scheduled to achieve full com-mercial scale this year.

As MRC reported previously, SK Innovation Co Ltd, the owner of South Korea's top refiner SK Energy, said in early February, 2021, that refining margins are expected to gradually recover this year on a pick-up in fuel demand as the impact of COVID-19 eases. The company, which has been battered by weak margins during the global pandemic, posted an operating loss of 243 billion won (USD218 million) in the October-December quarter.

We remind that SK Advanced is planning to start up the new polypropylene (PP) plant in Ulsan, South Korea this March 2021 as construction works are nearly completed. The PP unit is a joint venture between PolyMirae and SK Advanced, using the “Spheripol” process of LyondellBasell, and have an annual output of 400,000 tons/year. The unit will be utilizing the propylene output from SK’s 600,000 tons/year propane dehydrogenation (PDH) unit at the same complex. It is expected that SK Advanced would have a smaller propylene allocation for export once the new PP line comes online.

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, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
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Some U.S. ethanol producers reduce production to sell natural gas for a profit

MOSCOW (MRC) -- Sky-high U.S. natural gas prices have prompted some Midwestern ethanol producers to reduce processing in the last week, hoping instead to sell off some of their natural gas to take advantage of current high spot prices caused by the spike in cold weather, said Hydrocarbonprocessing.

Ethanol margins in the Corn Belt have dropped sharply due to the frigid weather, falling to negative-USD3.92 a gallon, lowest since at least 2010, Refinitiv Eikon data showed. Natural gas prices have soared because of power needs, hitting their highest levels in years due to the cold snap.

At the Waha hub in the Permian basin in Texas, next-day gas prices rose last week to as high as USD157.714 per million British thermal units (mmBtu).

The astronomical prices forced some ethanol producers who have not yet purchased all their needed natural gas to consider whether to reduce processing to avoid the high prices. It has forced others who have their natural gas bought to consider whether to reduce production rates to sell into the spot market. One ethanol producer reduced his company’s run rate by more than 25% last week to sell natural gas that he earlier had bought at a contracted price.

He calculated that his typical cost for gas used to produce ethanol comes to just over $30,000 per day in the spot market. But the surge in prices means that cost would amount to $2 million if he were buying gas daily. As a result, this producer said, he had to try to sell off his natural gas, cutting ethanol production in the process.

“The price is so ridiculous that I can’t do anything else that makes that kind of money,” said the producer, who wished to remain anonymous for market purpose.

As per MRC, a winter storm has brought unusually cold temperatures, snow, and freezing rain to Texas and western Louisiana, forcing a large share of US light olefins production offline. As of the evening of Tuesday, 16 February, IHS Markit had confirmed the shutdown of at least 61% of US ethylene capacity, 59% of US chemical- and polymer-grade propylene (CGP, PGP) capacity, and 22% of US fluid catalytic cracking (FCC) capacity. Many plants that remained online were running at reduced capacity.

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). Supply of exclusively PP random copolymer increased.
MRC

Cloudy outlook for stalled jet fuel demand recovery

MOSCOW (MRC) - Hopes of a speedy aviation recovery this year have been knocked back by global travel restrictions after the emergence of new coronavirus variants and a slower than expected vaccination rollout, dimming the outlook for jet fuel demand and oil prices, said Reuters.

Jet fuel suffered the biggest demand decline among oil products as aviation activity collapsed last year and is seen by market participants as one of the main factors influencing 2021 oil demand growth, given the lingering uncertainties. Almost 10% of total oil demand in OECD countries was for jet fuel in 2019, dropping to 6% in 2020, International Energy Agency (IEA) data shows. By comparison, gasoline demand remained around 30% in both 2019 and 2020.

Goldman Sachs last month lowered its forecast for first-quarter global oil demand by 700,000 barrels per day (bpd), or 0.7% of total consumption, mainly because of renewed travel restrictions. Analysts and traders had expected a swift recovery for jet fuel consumption on the back of a bounce in leisure travel. However, vaccination programs have been delayed and the skies remain empty, with thousands of planes grounded by the pandemic and many airlines pushed to the verge of bankruptcy.

"For the short-term, there is still no sign of recovery for jet fuel," said a senior jet fuel trader associated with a Japanese refiner. Most traders and analysts now expect the situation to improve only in the second half of the year as vaccine rollouts continue and domestic flights pick up. A recovery in international flights, however, is expected to take longer.

Long-haul flights burn an average of about 35 times more fuel than regional flights, the IEA says, and are responsible for more than a third of total fuel used by the aviation sector. Jet fuel demand will remain at about 5.4 and 5.7 MMbpd in the first and second quarters respectively, research consultancy Energy Aspects projects, far below average global consumption of 7.9 MMbpd in 2019.

In Asia, jet fuel cracks, or margins, have gained in recent weeks but remain at record lows for the time of year. "Refiners with substantial domestic markets will try to run just enough to produce jet fuel to meet domestic demand as the international market is still weak," one senior jet fuel trader said.

In Europe, jet fuel cracks continue to rise, mainly owing to expected heavy refinery maintenance work rather than strong demand. Jet fuel held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) hub rose in the week to Thursday to 983,000 tonnes, almost 110% higher than the same period last year.

Global jet fuel floating storage, meanwhile, rose to about 4 million barrels in early February, having dropped from a peak of about 20 million barrels in August 2020 to almost 2.5 MMb last month, according to data intelligence firm Kpler.

The emergence of more contagious variants of the virus has severely affected intercontinental travel, with recovery expected to be arduous, which analysts and traders say could be most painful for Middle East refiners that are heavily reliant on such flights.

With new refining capacity coming online in the region this year, the refiners have no option but to export more jet fuel to already oversupplied markets. In the United States, airline passenger volumes are still down 65% from pre-pandemic levels, said U.S. industry group Airlines for America.

American Airlines said in its fourth-quarter report that it is looking at 2021 as "a year of recovery" but could not predict exactly when passenger demand will return.

As per MRC, a winter storm has brought unusually cold temperatures, snow, and freezing rain to Texas and western Louisiana, forcing a large share of US light olefins production offline. As of the evening of Tuesday, 16 February, IHS Markit had confirmed the shutdown of at least 61% of US ethylene capacity, 59% of US chemical- and polymer-grade propylene (CGP, PGP) capacity, and 22% of US fluid catalytic cracking (FCC) capacity. Many plants that remained online were running at reduced capacity.

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). Supply of exclusively PP random copolymer increased.
MRC

US petrochemical production crippled by deep freeze

MOSCOW (MRC) -- Severe winter weather continues to decimate US base chemical production with just about every facility in Texas reporting shutdowns or curtailments on Wednesday. Production is expected to remain offline until this weekend at the earliest, reported Chemweek.

"While the US Gulf Coast is accustomed to severe hurricanes, the impact of the cold has been much more severe than the many Category 4-5 hurricanes that hit the coast over past decades," according to IHS Markit. "It is likely to be at least several days before refinery/petrochemical facilities and production operations can return to normal levels."

For polyethylene, IHS Markit is assuming outages affect all Texas and western Louisiana facilities. "We currently assume that 88% of all US PE capacity is offline and will be so until this weekend at the earliest," IHS Markit says. "We are assuming that upstream supply of key feedstocks for ethylene production, like ethane gas, are also experiencing issues as well as the actual ethylene crackers themselves."

The timing of successful startups upstream will be critical to support the restart of derivative units. Logistics are also widely affected and delays for moving polyethylene (PE) rail cars for both domestic and exports are expected. Multiple resin producers have announced either a sales allocation, force majeure, or some type of plant update.

IHS Markit estimates that 89% of all US polypropylene (PP) production is currently offline and will be so until this weekend at the earliest. Only four or 10 North American PP producers, only four (Braskem, Indelpro, Phillips 66, and Pinnacle Polymers) are not under a force majeure or sales allocation program.

Unusually cold temperatures are expected to persist in the Houston area through Friday morning. A hard freeze watch is in effect for Houston from late Thursday night through Friday morning. The National Weather Service expects temperatures in the Houston area to begin warming up later Friday, with a high of 60°F forecast for Sunday.

The Texas Commission on Environmental Quality (TCEQ) has been inundated with air emission reports from producers whose operations have been affected by the weather. “Extreme cold and instability of electrical supply, nitrogen, and fuel gas systems caused operating unit monitoring and control systems failures,” says a submission by Chevron Phillips Chemical (CPChem) relating to its Sweeny site in Old Ocean, Texas. CPChem shut down its Pasadena plastics complex because the cold has prevented delivery of nitrogen from a supplier. Many producers are also citing loss of steam because of the cold.

Specific South Texas operations shut down by the winter storm include Formosa Plastics’ three steam crackers at Point Comfort, and LyondellBasell’s cracker at Corpus Christi.

In the Greater Houston, Texas, area, steam crackers shut down include CPChem’s three at Sweeny and two at Cedar Bayou; ExxonMobil’s three at Channelview and Baytown; Ineos’s two at Alvin; and Shell’s one at Deer Park. Dow has shut down one of its Freeport crackers and is running two at reduced rates. LyondellBasell has shut down two of the three crackers it has at La Porte and Channelview, while one has been stabilized.

The Houston area is also home to five on-purpose propylene units. The Enterprise propane dehydrogenation (PDH) unit at Mont Belvieu is offline, as is the Flint Hills Resources PDH unit in Houston. Dow’s Freeport PDH unit is running at reduced rates, as are LyondellBasell’s metathesis units at Channelview.

The six steam crackers in the “golden triangle” northeast of Houston have all been shut down. These include BASF/Total, CPChem, and Motiva’s respective units at Port Arthur as well as Dow’s unit at Orange, ExxonMobil’s at Beaumont, and Indorama’s at Port Neches. BASF/Total’s metathesis unit is also offline.

Eastman’s three steam crackers in Longview, Texas, have also been shut down.

IHS Markit has confirmed the shutdown of three steam crackers in Louisiana: Westlake Chemical’s units at Sulphur and Indorama’s unit at Westlake. The status of Louisiana’s other steam crackers, which account for about 24% of US ethylene capacity, is uncertain. Located further east, they have been spared the worst of the cold, but with the winter storm moving in their direction over the next few days, that could change.

As MRC informed earlier, in late August 2020, Chevron Phillips Chemical shut down its Port Arthur, Texas cracker in preparation for Hurricane Laura. The unit's capacity of 855,000 mt/year. Chevron Phillips also shut its Cedar Bayou, Texas, crackers ahead of the storm. The company's Cedar Bayou crackers 1 and 2 have capacities of 837,000 mt/year and 1.7 million mt/year, respectively.

Ethylene and propylene are feedstocks for producing PE and 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). Supply of exclusively PP random copolymer increased.
MRC

AOC raises EMEA resin, vinyl ester prices on increased raw materials, logistics costs

MOSCOW (MRC) -- AOC (Collierville, Tennessee) says it is raising prices with immediate effect for its entire unsaturated polyester resins (UPR) portfolio and epoxy vinyl ester (EVE) range sold in the EAME region, due to continued increases in raw materials, logistics, and packaging costs, reported Chemweek.

Prices for its EVE products will rise by EUR300/metric ton (USD364/metric ton), with its UPR portfolio prices to increase by EUR250/metric ton. The increase is with immediate effect for all new deliveries or as contracts allow, it says.

“The pricing of liquid epoxy resin (LER), styrene, and other key raw materials has seen continued increases over the past months following outages across the globe and force majeure declarations in Europe,” says Fons Harbers, AOC's vice president/EAME marketing and sales. “Logistics and packaging costs have been increasing steadily. This leaves us no choice but to raise the prices of our products as a result,” he says.

AOC announced price increases in January this year and December 2020 for the same product ranges, citing the same reasons.

As MRC informed earlier, in October 2020, AOC, Kaprain and Spolchemie announced they had reached agreement on AOC acquiring the Unsaturated Polyester Resin (UPR) manufacturing operations located at the Spolchemie site in Usti nad Labem (Czech Republic). This footprint extension will allow AOC to further improve service and logistics to its customers in Central/ Eastern Europe as well as in Germany, and will make new products (e.g. based on recycled PET) available for customers around Europe.

According to MRC's ScanPlast report, overall estimated PET consumption in Russia was 71,830 tonnes in December 2020, up by 8% year on year. Russia's PET consumption in all sectors (injection moulding, fibers/filaments, films) exceeded the level of 2019 by 17%, totalling 717,310 tonnes.
MRC