Crude oil futures fell on latest US EIA statistics and concerns over pandemic-induced demand

MOSCOW (MRC) -- Crude oil futures fell during mid-morning Asian trade April 22 following the latest release of the US Energy Information Administration's weekly statistics, which was a mixed bag, and as sentiment slumped on pandemic-induced demand concerns after India reported record high COVID-19 infections, reported S&P Global.

At 11:03 am Singapore time (00303 GMT), the ICE Brent June contract was down 28 cents/b (0.42%) from the April 21 settle at $65.04/b, while the June NYMEX light sweet crude contract was 30 cents/b (0.49%) lower at $61.05/b.

EIA data released late April 21 showed that commercial crude stocks had climbed 600,000 barrels to 493.02 million barrels in the week ended April 16. The build came as a surprise to analysts, who had expected inventories to fall by 4.4 million barrels instead, according to an S&P Global Platts survey.

The EIA data was mixed for downstream product inventories, with gasoline stocks edging up 90,000 barrels and distillate stocks falling 1.07 million barrels last week.

Of particular concern to the market was the total product supplied figure, EIA's proxy for demand, which fell almost 8% from the week prior at 18.76 million b/d in the week ended April 16. The market, however, received solace from rising gasoline demand, which averaged 9.1 million b/d last week, up 1.8% from the week prior and the highest since August.

Over in Asia, the rise in COVID-19 cases in Japan and India portends curtailed energy demand in the region. India reported a record 295,158 cases on April 20, latest data from John Hopkins University showed, even as large parts of country remained under lockdown. Meanwhile, Japan is also considering putting Tokyo and Osaka under a state of emergency, media reports showed.

As MRC informed earlier, 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 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 polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- Nghi Son Refinery and Petrochemical (NSRP) has restarted its polypropylene (PP) in central Vietnam on 13 April 2021 after a two-week turnaround due to a technical issue, according to CommoPlast.

The plant with an annual capacity of 370,000 tons/year of PP was shut on 30 March, 2021, and was initially estimated to remain off-line for three weeks.

As MRC wrote oreviously, in the third week of September 2020, NSRP restarted its PP unit in Vietnam following a 10 days unscheduled shutdown starting 7 September 2020 due to a persistent technical issue.

We also remind that Vietnam’s Nghi Son oil refinery officially began commercial production from 14 November 2018, following months of tests. The USD9 billion refinery is 35.1 percent owned by Japan’s Idemitsu Kosan Co, 35.1 percent by Kuwait Petroleum, 25.1 percent by PetroVietnam and 4.7 percent by Mitsui Chemicals Inc.

According to MRC's ScanPlast report, 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.
MRC

MOSCOW (MRC) -- DuPont Clean Technologies (DuPont) has announced successful performance tests for the STRATCO alkylation units at the Zhenhai Refining and Chemical Company (ZRCC) refinery in Ningbo, Zhejiang, China and the Yangzi Company (YPC) refinery in Nianjing, Jiangsu, China, according to Hydrocarbonprocessing.

These performance tests certify the STRATCO alkylation units are meeting performance guarantees. The ZRCC and YPC STRATCO alkylation units both process MTBE raffinate feeds and are designed to produce 7,700 bpsd (300 kmta) and 7,500 bpsd (300 kmta) of alkylate, respectively.

The STRATCO alkylation units will enable Sinopec to generate low-sulfur, high-octane, low-Rvp alkylate with zero olefins that meets the criteria of the China VI standard. The STRATCO alkylation technology is a sulfuric acid-catalyzed process that converts low-value, straight-chain olefins (propylene, butylene and amylene) into high-value, branched components called alkylate. Alkylate is known for its superior blending properties and is a key component for clean gasoline.

The STRATCO alkylation technology helps refiners safely produce cleaner-burning gasoline with high octane, low Reid vapor pressure, low sulfur, zero aromatics and zero olefins.

As MRC wrote previously, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) have just entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) -- Maire Tecnimont's subsidiaries NextChem and MET Development have signed an MoU with MC TAIF JSC (TAIF) to co-develop a new bio-degradable polymer plant in the Republic of Tatarstan (Russian Federation), using NextChem’s know-how and MET Development’s project development capabilities, said Hydrocarbonprocessing.

TAIF is the largest industrial investment company in Tatarstan, engaged in Oil and Gas, Chemistry, Petrochemistry and Energy. Under the agreement, TAIF and Maire Tecnimont Group’s subsidiaries will jointly assess and evaluate the biopolymer plant opportunity in order to establish the fundamentals of the joint development collaboration between the Parties. NextChem will be selected to provide its expertise and know-how to carry out the FEED (Front End Engineering Design) and EPC activities for the realization of the biopolymer plant. Maire Tecnimont Group will bring technological solutions and the best know-how for project development and execution, relying on its portfolio of technologies as well as its strong capabilities as an end-to-end developer of large-scale complex projects.

Pierroberto Folgiero, Maire Tecnimont Group and NextChem Chief Executive Officer, commented: “Our Group can boast a very long-term, mutually beneficial cooperation with TAIF, which dates back to the 1970s. Today, we are enthusiastic to put our technological and entrepreneurial mindset at the service of such a prominent partner, to support the industrialization of the green economy in Tatarstan. This agreement is another tangible achievement of our project development strategy in green chemistry, as we are best equipped to assist our clients at the very early stage of their strategic investment initiatives in the energy transition sector, also by leveraging on our Group’s synergies”.

As per MRC, subsidiary of Maire Tecnimont S.p.A. signed a EUR1.2 billion contract for engineering, procurement and on-site services (EPSS) for the planned Amur Gas Chemical Complex (Amur Gas Chemical Complex) of SIBUR, the largest petrochemical holding in Russia and Eastern Europe. The agreement was signed with Amurskiy GKhK, a subsidiary of SIBUR.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

MOSCOW (MRC) -- Shell Catalysts & Technologies will supply ethylene oxide catalyst to Jiangsu Dynamic Chemical after demonstrating high selectivity, desired reliability and advantageous lifetime of its catalyst, according to Hydrocarbonprocessing.

This will help to maximize returns for the company which manufactures chemical new materials and fine chemicals. An additional key element of the agreement includes providing technical services utilizing Shell’s upstream and downstream expertise.

“We are pleased that Jiangsu Dynamic Chemical is turning to Shell Catalyst & Technologies’ market-leading ethylene oxide catalysts as the key to maximize their returns,” said Peace Chen, China Head of EO Catalysts Business with Shell Catalysts & Technologies. “Our high-performance ethylene oxide catalysts offer both high selectivity and advantageous lifetimes, allowing customers to manage their units in their preferred way and to stay profitable.”

Jiangsu Dynamic Chemical, located in Nanjing, Jiangsu province, is the leading company specialized in researching and manufacturing ethylene oxide derivatives and fine chemicals in China. The total ethylene oxide capacity of units one and two is 180 kilo tons per annum.

As MRC informed earlier, Royal Dutch Shell Plc restarted the small crude distillation unit (CDU) on 2 April at its 318,000-bpd joint-venture Deer Park, Texas, refinery. The 70,000-bpd DU-1 CDU was shut on Feb 14 by a pump seal failure. All other units were shut the following day by severe cold weather. DU-1 is the last unit shut in February to restart at the refinery.

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.

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