US chemical production rises 0.8% in January - ACC

MOSCOW (MRC) -- The US Chemical Production Regional Index (US CPRI) rose 0.8% in January following a 1.4% gain in December and a 1.1% gain in November, according to CISION with reference to the American Chemistry Council (ACC).

During January, chemical output expanded in nearly all regions. The Gulf Coast region showed the largest gain, with smaller gains seen in the Midwest, Southeast, Ohio Valley, and Northeast regions. Output was flat in the Mid-Atlantic region and edged lower in the West Coast. The US CPRI is measured on a three-month moving average (3MMA) basis.

Chemical production continued to expand in chlor-alkali, fertilizers, organic chemicals, synthetic rubber, plastic resins, manufactured fibers, industrial gases, and synthetic dyes and pigments, measured on a 3MMA basis. Production eased for coatings, adhesives, crop protection, consumer products, and other specialty chemicals.

As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. The manufacturing recovery continued for a sixth consecutive month in January, with overall factory activity up by 1.0% (3MMA). The trend in production increased in many key chemistry end-use industries, with the strongest gains seen in food and beverages, appliances, motor vehicles, aerospace, construction supplies, fabricated metal products, iron and steel products, petroleum refining, oil and gas extraction, plastic products, structural panels, textile products, and furniture.

Compared with January 2020, US chemical production remained off by 0.6% on a year-over-year (Y/Y) basis, the twentieth straight month of Y/Y declines, but showed continued improvement compared with earlier in the year. Chemical production remained lower than a year ago in all regions except in the Gulf Coast region, which was up 2.5% Y/Y.

The chemistry industry is one of the largest industries in the United States, a USD565 billion enterprise. The manufacturing sector is the largest consumer of chemical products, and 96% of manufactured goods are touched by chemistry. The US CPRI was developed to track chemical production activity in seven regions of the United States. The US CPRI is based on information from the Federal Reserve, and as such, includes monthly revisions as published by the Federal Reserve. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. Thus, the reading in January reflects production activity during November, December, and January.

As MRC informed before, ACC’s chemical activity barometer (CAB), a leading economic indicator and composite index of industry activity, rose 1.5% in January, following a 1.3% increase in December, on a sequential three-month moving average (3MMA). The barometer was up 1.3% on a year-on-year (YOY) basis in January.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

Ethylene and propylene are feedstocks for producing 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.

The American Chemistry Council (ACC) represents the leading companies engaged in the business of chemistry. ACC members apply the science of chemistry to make innovative products and services that make people's lives better, healthier and safer. ACC is committed to improved environmental, health and safety performance through Responsible Care, common sense advocacy designed to address major public policy issues, and health and environmental research and product testing. The business of chemistry is a $565 billion enterprise and a key element of the nation's economy. It is one of the nation's largest exporters, representing ten cents out of every dollar in U.S. exports. Chemistry companies are among the largest investors in research and development. Safety and security have always been primary concerns of ACC members, and they have intensified their efforts, working closely with government agencies to improve security and to defend against any threat to the nation's critical infrastructure.
MRC

MOSCOW (MRC) -- Honeywell announced that Hengyi Industries will use advanced reforming and aromatics technologies from Honeywell UOP at its integrated petrochemical complex in Pulau Muara Besar, Brunei, said Hydrocarbonprocessing.

The facility will process 200,000 barrels per day. UOP will provide a range of technology licenses, engineering design, key equipment and state-of-the-art catalysts and adsorbents, operator training, and technical services for start-up and continuing operations.

"The increased demand for paraxylene in Asia has led companies to invest in technologies for the conversion of crude oil to petrochemicals on a larger scale,” said Bryan Glover, vice president and general manager of the UOP Process Technologies business. "Hengyi Industries selected UOP process technology to further expand its aromatics plant and meet the growing demand for paraxylene in the region."

The Brunei complex will include an aromatics block consisting of CCR Platforming™ technology to convert naphtha into aromatics, a Light Desorbent Parex TM aromatics complex to recover high-purity paraxylene from mixed xylenes using a more energy-efficient process. The LD Parex complex will produce up to 2.3 million tons of high-purity paraxylene, the primary component of many plastic resins, films and fibers.

The complex also will include a UOP naphtha hydrotreating unit, an Olefin Removal Process unit (ORP), Sulfolane™ technology for aromatics extraction, Isomar™ technology to convert xylene isomers into more valuable paraxylene, and Tatoray technology to convert toluene and heavier aromatics into mixed xylenes and high-purity benzene to more than double the yield of paraxylene from the naphtha feedstock. In addition, UOP is providing a second Sulfolane unit for the extraction of pygas, and a VGO Unicracking™ unit and Diesel Unicracking™ unit targeting maximum naphtha production.

When the project is completed, Hengyi Industries will have capacity to produce more 3.8 million tons per annum of paraxylene.

As it was written earlier, Hengyi Petrochemical is planning to add a 1.65mn t/yr naphtha cracker, 1.05mn t/yr polyethylene (PE) plant and 1mn t/yr polypropylene (PP) plant as part of a second phase at its refinery and integrated petrochemicals project in Brunei, with completion targeted for 2023.

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.


MRC

MOSCOW (MRC) -- Hempel (Lyngby, Denmark) reports 2020 net profit of EUR43 million (USD52 million), down from EUR50 million in the previous year, on revenue of EUR1.54 billion, up slightly from EUR1.53 billion, according to Chemweek.

The company says it achieved organic sales growth of 3.2% last year, building on momentum from 2019, despite an overall declining worldwide market for coatings.

Hempel says it faced uncertainty and disruption across regions and markets due to the COVID-19 pandemic, but was able to achieve an EBITDA margin of 10.1%, or 9.8% in reported numbers, in 2020. The company’s full-year EBITDA was EUR151 million, down from EUR157 million in the previous year. The margin figure excludes restructuring costs related to exiting certain countries. The company says it made “extraordinary high investments in our supply chain in China,” during 2020. Hempel, wholly owned by the Hempel Foundation, has not released fourth-quarter figures.

Hempel was able to deliver “a strong performance during unprecedented times,” says Lars Petersson, president and CEO of Hempel. “We have now seen organic growth for six quarters in a row and been able to reduce our debt further. This puts us in a strong position for the coming years.”

Last year was strong for Hempel’s marine coatings segment, especially in APAC, with many vessels coming into dry dockings for scheduled maintenance, the company says. Growth in Hempel’s decorative paints segment exceeded expectations, primarily driven by strong demand in the do-it-yourself markets in the UK and Germany, it says.

The company announced a new strategy recently, including plans to double its sales by 2025. The acquisition of Wattyl, expected to close in the first quarter, is “the first step” in the transformation strategy and will have “a major, positive impact on our footprint in South and East Asia and underlines our growth ambitions for our decorative and protective segments,” Hempel says. “We are going for leadership positions in selected segments and geographies, all while making sustainability the foundation of our business,” it says.

Hempel also presented its new sustainability framework in February as part of the strategy.

As MRC reported earlier, in January 2021, Hempel announced a new strategy that targets a doubling of the company’s sales by 2025. Hempel says it intends to achieve the target through refocused geographical priorities, focused segment leadership positions, and M&A, as well as an acceleration of sustainability, innovation, and digitalization activities.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC

MOSCOW (MRC) -- Reganosa will operate and maintain the first LNG terminal in Sardinia (Italy), whose construction in the port of Oristano, on the west of the island, is in its final phase, said Hydrocarbonprocessing.

In this way, the Spanish company will become the only in the world which manages up to three third-party LNG plants, in addition to the one it owns in Mugardos (A Coruna – Spain).Higas S.r.l. has awarded Reganosa the operations and comprehensive maintenance contract of the new terminal of importation, storage, and distribution in Oristano. The facilities are expected to be operational in the first half of 2021.

The Higas terminal includes a jetty capable of receiving LNG vessel up to 20,000 cubic meters, an unloading arm, six horizontal cryogenic holding tanks (1,500 cbm each), two LNG truck loading bays, and a natural gas captive power generation system. The terminal can load in excess of 8,000 LNG trucks each year (some 180,000 tons), for subsequent distribution to smaller satellite stations across the island.

Sardinia currently lacks a system of access to natural gas and only a small number of industrial customers receive LNG by truck which is brought to the island by ferry. The Higas terminal will provide Sardinia with LNG supply that is clean, affordable and reliable. Higas provides local access to significantly cleaner fuel for cooking, heating and power generation – LNG emits up to 30% less CO2 and 99% less SOx & NOx compared to traditional fuels such as Heavy Fuel oil, Diesel & Coal – HIGAS directly supports decarbonizing the Italian economy.

This process underpins the international expansion process of Reganosa, initiated in 2015 with the creation of Reganosa Services to provide the knowledge and experience of the group in studies, project designs, consulting, engineering, and asset management.

Over the last four-year period, the group has provided various services in 15 countries on four continents: Brazil, Canada, Chile, Colombia, Germany, Spain, France, Malta, Ghana, Mozambique, India, Japan, Kuwait, Pakistan, and Italy. With its involvement in those territories, the group has covered all the phases of development of a project, from viability studies to commercial operation.

While growing in Spain and diversifying its business, opting for a green and digital economy, Reganosa has strengthened over the last few months its internationalization process. Shortly, it will also begin the operation and maintenance of a single plant in Sub-Saharan Africa. In accordance with that process of sustained growth and constant adaptation, Reganosa has nearly tripled its staff in the last five years. The company has also established itself as an international benchmark in the O&M of third-party energy infrastructures.

The group either already manages or will manage imminently three kinds of LNG terminals: floating, that of Tema (Ghana); onshore, those of Mugardos and Oristano; and mixed, that of Delimara (Malta). These facilities have, moreover, a wide range of storage: from 9,000 to 300,000 cubic meters. With that of Sardinia, Reganosa will also make its international debut in the segment of small-scale solutions. This has been made possible thanks to Higas, whose shareholding belongs to two Italian partners (Gas & Hit and CPL Concordia) and to Avenir LNG.

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, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

MRC

MOSCOW (MRC) -- The Prax Group has completed the acquisition of the 110,000-b/d Lindsey refinery at Killinghome, UK, from Total, reported Chemweek with reference to the company's statement.

The value of the acquisition was not disclosed. Following the completion of the deal that was first announced in June 2020, the Prax Group has finalized a crude oil and feedstock supply agreement with global commodities giant Trafigura.

The Prax Group, a physical oil trading and logistics company, will purchase crude oil and refinery feedstocks from Trafigura for all of its requirements for the re-named Prax Lindsey oil refinery.

"This arrangement is an important step in the group's plans for the long-term growth of the refinery and it will pave the way to further strengthen our long-term relationship with Trafigura," Sanjeev Kumar, Prax Group CEO, said in the statement.

A shakeup of the European refinery sector is underway following a demand slump arising from the COVID-19 pandemic. Royal Dutch Shell put its subsidiary Dansk Shell up for sale in June last year, which included the 68,000-b/d Fredericia refinery in Denmark.

Even before the pandemic struck, a wave of rationalization was expected to sweep through Europe, as the region was caught between flagging domestic oil demand and competition from new super-sized refineries east of the Suez Canal.

More than 4 million b/d of new refining capacity will have been added to the world by 2023, mainly in the Middle East Gulf and China, according to Hedi Grati, head of Europe/CIS refining research at IHS Markit.

Overall, Europe currently has nameplate refining capacity of 14.9 million b/d, and utilization rates were around 12.35 million b/d in 2019, according to IHS Markit data. But IHS Markit forecast crude runs will fall to just 10.8 million b/d by 2025, according to Grati. IHS Markit analysts predict global oil demand will not return to levels seen in 2019 until 2023.

OPIS is an IHS Markit company.

As MRC wrote earlier, within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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