COVID-19 - News digest as of 06.04.2021

1. Phillips 66 expects Q1 net lower on winter storm

MOSCOW (MRC) -- Phillips 66 expects to report a first-quarter net loss of USD680m-865m because of the polar storm and the effects of the coronavirus pandemic, said Reuters. A February deep freeze in U.S. central and southern states led to power outages and gas-supply disruptions that knocked oil refineries and chemical plants out of commission for up to two weeks. Several companies have issued warnings due to the storm.Phillip 66’s adjusted net loss will reach between USD550 million and USD700 million for the quarter ended March 31 due to lost production and higher costs from the outages, it said. IBES data on Refinitiv had estimated a USD210 million loss.

MRC

MOSCOW (MRC) -- LG Chem, a South Korean petrochemical major, plans to resume operations at its side cracker in Daesan, South Korea, by 8 April, according to CommoPlast with reference to market sources.

This LPG cracker with an annual output of 230,000 tons/year of ethylene and 100,000 tons/year of propylene was reportedly shut on 28 March, 2021, because of an issue at the compressor.

LG Chem also operates another cracker in Yosu, South Korea, with the capacity of 1.2 million tonnes of ethylene per year.

As MRC informed earlier, LG Chem is planning to spend USD2.4-billion to expand its naphtha cracking center (NCC) and polyolefin (PO) plant in Yeosu, South Korea. The project, which will expand the NCC and PO facility by 800,000 t/y each, is expected to be completed in the second half of 2021.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) -- Cornerstone, a key producer of acrylonitrile (ACN) in the US, has not lifted the force majeure (FM) as of 5 April, 2021, reported S&P Global with reference to market sources.

Thus, the FM was declared at its facility in Waggaman (Waggaman, Louisiana, USA) with a capacity of 240,000 mt/year of ACN on 1 February, 2021, due to mechanical issues and a shortage of feedstock.

At present, the company has been conducting a scheduled turnaround at this plant since mid-March.

Acrylonitrile is one of the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, ABS imports into Russia totalled 2,700 tonnes in January, compared to 2,600 tonnes a month earlier and 2,300 tonnes in January 2020.

Cornerstone Chemical Company manufactures a variety of petrochemical products. Thus, the company produces acrylonitrile (ACN), which is used in the production of acrylamide, acrylic fibers, nitrile rubber, elastomers, ABS plastics, surface coatings and other products; melamine and other petrochemical products. The company was founded in 1952 and is headquartered in Waggaman, Louisiana, USA.
MRC

MOSCOW (MRC) -- Ineos Nitriles, an American subsidiary of Ineos Group, plans to resume operations at its acrylonitrile (ACN) plant in Green Lake, Texas, USA, in the first half of April, after the deep freeze in the region, according to S&P Global with reference to market sources.

Thus, this plant with the capacity of 545,000 mt/year was shut in mid-February, and the company announced then force majeure (FM) on supplies of ACN from its production site in Green Lake. As of 5 April, 2021, the FM still remains in place.

As MRC informed before, in June, 2019, Ineos announced Antwerp as the location for its new petrochemical investment. The EUR3 billion investment will be the biggest ever made by Ienos and is first cracker to be built in Europe in 20 years.

And in January, 2021, Ineos said it reschedulied its EUR5-billion (USD6 billion) olefins project at Antwerp, Belgium, and will build the planned complex’s ethane cracker before its propane dehydrogenation (PDH) plant. When it announced the project in January 2019, Ineos said the PDH unit and cracker would be built at the same time with the PDH facility due onstream a year ahead of the cracker.

Acrylonitrile is one of the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, ABS imports into Russia totalled 2,700 tonnes in January, compared to 2,600 tonnes a month earlier and 2,300 tonnes in January 2020.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for April shipments to the CIS countries began last week. A shortage continued to put a major pressure on European producers' export prices, in some cases, a price increase was EUR100/tonne from March, according to ICIS-MRC Price report.

The April contract price of ethylene was settled up by EUR40/tonne from the previous month, which theoretically allows to talk about an increase of EUR20/tonne in the net cost of PVC production. But in the past few months, the deficit was the determining factor in the market, and it was the shortage of polymer in the market that had led to a three-digit rise in export PVC prices. European producers announced an increase in export prices for the CIS countries in April by an average of EUR100/tonne.

Seasonal factors has started to play an increasing role in demand for PVC, many converters continue to gradually raise their capacity utilisation. But export quotas of European producers, on the contrary, decreased more and more with every passing month. Unstable operations at some producers' production capacities and strong demand led to an acute shortage of PVC in Europe.

Resin with K=58/70 accounted for the cutest shortage of export quotas. Many market participants could not fully meet their needs in this PVC from European producers. At the same time, it is often possible to agree on deliveries of no more than 50% of the submitted enquiry.

Overall, deals for April shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of EUR1,185-1,245/tonne FCA, whereas the previous month's deals were discussed in the range of EUR1,085-1,145/tonne FCA.
MRC