March PVC prices to rise by Rb4,000-5,000/tonne in Russia

MOSCOW (MRC) - The shortage of suspension polyvinyl chloride (SPVC) remained in the world, and in recent weeks it has been exacerbated by a series of force majeure shutdown of the largest US producers. Many producers announced further price rise for March shipment; Russian producers also announced price increase for March shipment, according to the ICIS-MRC Price Report.

World PVC prices have been dynamically growing since the middle of last year due to tight supply. Export prices fell slightly in some regions in January, including in China. But already in the second half of February, the situation changed dramatically due to a series of unplanned shutdowns of key producers in the United States.

After a short pause, Russian producers also announced their plans to increase prices by roubles (Rb) 4,000-5,000/tonne in March. Domestic PVC prices in China decreased in January, so export prices were also cut, including for Russian buyers.

The lower price level in China in comparison with domestic material led to a surge in demand from Russian companies.
And by mid-February, the first volumes of Chinese acetylene PVC began to appear on the Russian market this year.
Russian converters have a hope that the arrival of an imported PVC will temporarily stop the rise in PVC prices, which has not stopped since June last year.

But since this week, the situation in the Chinese domestic market began to change sharply, PVC prices began to rise dynamically. During the week, prices rose by more than 15%.

And along with the rise in domestic prices, Chinese producers began to adjust export prices, one of the producers announced an increase in export prices for March shipments by USD200/tonne compared to the level at the beginning of February.

Despite the winter period, when the demand for polyvinyl chloride in the market is at a minimum, Russian producers do not have an excess of polymer. Moreover, PVC with K70 is in small shortage. At the same time, there was virtually no import alternative.

Negotiations over March shipments of Russian PVC began on Tuesday, deliveries of Russian PVC with K64/67 were discussed in the range of Rb116,000-120,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes versus Rb112,000-115,000/tonne CPT Moscow, including VAT.
MRC

MOSCOW (MRC) -- Last Saturday, after a long break at the State Commodity and Raw Materials Stock Exchange of Turkmenistan, the export trades for Turkmenbashi refinery's polypropylene (PP) were resumed. 1,000 tonnes of PP were sold at record high prices over the past two years, according to the ICIS-MRC Price Report.

According to the bidders, on Saturday, 20 February, at the State Commodity and Raw Materials Exchange of Turkmenistan, 1,000 tonnes of PP raffia grade produced by the Turkmenbashi refinery was offered for export shipment. The starting price was set at USD1,050/tonne FOB / FCA.

During the trades, the price of polypropylene grew dynamically and reached USD1,515/tonne FOB / FCA, the total volume of PP was sold in one day. The previous export trades of PP produced by the Turkmenbashi refinery were held on December 8 and 9 last year, and then 5,000 tonnes of PP raffia grade were sold at prices of USD1,046-1,050/tonne FOB / FCA.

It is also worth noting that in March 2020, export sales of polypropylene from the Kiyanlyn Polymer Plant ended at USD750/tonne FOB / FCA.
MRC

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) into Russia slightly exceeded 500 tonnes in January, down by 68% year on year. At the same time, exports decreased by 15%, according to MRC's DataScope report.

Last month's external supplies of SPVC in Russia fell to 500 tonnes against 1,600 tonnes and 6,000 tonnes in January and December last year.
High prices of PVC in the foreign markets and long New Year holidays 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. At the same time, despite rather high prices for PVC in foreign markets, Russian producers have reduced export sales in favour of the domestic market.

Thus, the total export of Russian suspension PVC in January amounted to about 14,500 tonnes (excluding shipments to Belarus and Kazakhstan) against 17,000 tonnes and 11,700 tonnes a year earlier in January and December last year. Thus, overall exports of PVC from Russia totalled 192,700 tonnes in 2020 versus 204,400 tonnes a year earlier.
MRC

MOSCOW (MRC) -- Shell Catalysts & Technologies has signed an agreement with PT Pertamina Rosneft Pengolahan dan Petrokimia (PT PRPP) located in Tuban, Java Timur, Indonesia to provide licensing and basic engineering for state-of-the-art proprietary technologies, Hydrocarbonprocessing.

This includes Shell’s OMEGA process for the production of mono-ethylene glycol, as well as distillate hydrotreating process for the catalytic removal of sulfur and/or nitrogen and/or hydrogenation of aromatics from diesel fractions of certain crude oils.

"We are grateful that PT PRPP has selected Shell Catalysts & Technologies for their major grassroots refinery and petrochemical complex, which is a testament to the technology offerings of Shell Catalysts & Technologies and our owner-operator experience enabling PT PRPP to achieve a high return on investment,” said Gurminder Singh, Director, technology licensing of Shell Catalyst & Technologies.

The refinery will have a crude processing capacity of 300,000 barrels per day and include a petrochemical complex equipped to produce more than one million tons per year of ethylene, 1.3 million tons per year of aromatic hydrocarbons, and 650,000 tons per year of polyethylene. The complex is expected to be completed in 2025.

"Our comprehensive agreement with Shell Catalysts & Technologies will provide PT Pertamina Rosneft Pengolahan dan Petrokimia with the technology and engineering needed in order for the integrated refinery and petrochemical complex to be one of the most competitive in the Asia-Pacific Region,” said Carlos Mondolfi, Project Director with PT PRPP. “We look forward to a collaborative and successful relationship, and future working together."

We remind that Royal Dutch Shell has reported an outage at its olefins plant in Deer Park, Texas, USA, on 5 January, 2021. The plant flared for 16 hours following unspecified process upset. Maximum steam cracker operating rate in Texas falls to 89%.

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.

PT PRPP was established to manage the New Grass Refinery Root (NGRR) project in Tuban, East Java, which is a joint project between PT Pertamina (Persero) and Rosneft Oil Company. The shareholders of the Company are PT Kilang Pertamina Internasional as representative of the interests of PT Pertamina (Persero) and Rosneft Singapore Pte. Ltd as a representative of the interests of Rosneft Oil Company.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- U.S. crude oil production dropped by more than 1 million barrels per day last week during Texas's deep freeze, equaling the largest weekly fall ever, and refining use also fell dramatically, the Energy Information Administration said, said Hydrocarbonprocessing.

Overall output fell by 1.1 million bpd to 9.7 million bpd in the week to Feb. 19, the EIA said, as the brutal cold forced most of the state's power grid offline, and oil operators and refiners were forced to shut as components and pipelines froze. Some analysts had estimated far higher figures for production declines.

Refinery crude runs fell by 2.6 million bpd in the week, EIA said, and refinery utilization rates fell by 14.5% in the week as numerous facilities along the Gulf Coast shut in. Many of those operations are now restarting, though analysts say it will take a few weeks before both refining and production reaches pre-storm levels.

“It’s my understanding as I’ve talked to CEOs and operators that most folks are back online," said Ben Shepperd, president of the Permian Basin Petroleum Association. Crude inventories rose by 1.3 million barrels in the week to 463 million barrels, compared with analysts' expectations in a Reuters poll for a 5.2 million-barrel drop.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.8 million barrels, and net U.S. crude imports rose by 249,000 bpd, the EIA said. U.S. gasoline stocks rose by 12,000 barrels to 257.1 million barrels, compared with expectations for a 3.1 million-barrel drop.?

Distillate stockpiles, which include diesel and heating oil, fell by 5 million barrels in the week to 152.7 million barrels, versus expectations for a 3.7 million-barrel drop, the EIA data showed.

U.S. crude stockpiles fell more than expected in the week to Feb. 12, before the freeze, with inventories down by 7.3 million barrels to 461.8 million barrels, their lowest since March, the Energy Information Administration reported on Thursday.

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