PP prices decreased in Russia on stronger supply in late April

MOSCOW (MRC) - Russia's supply of polypropylene (PP) improved in the Russian market in the first half of April, and this factor halted the dynamic price growth that began in January. The increased supply will lead to price cuts in the second half of April. Also, the situation in foreign markets began to put pressure on PP prices in Russia, according to the ICIS-MRC Price Report.

Russian converters faced a limited supply of polypropylene from local producers in the first three months of the year.
The dynamic growth of polypropylene prices in Europe and Turkey also had an additional impact on the market.
As a result, PP prices had dynamically increased during this period and by the beginning of April it reached record levels.

But already in April, the supply of polypropylene on the Russian market increased, including from the largest seller.
Prices began to decline in Turkey, and there were also offers for the supply of polypropylene from Asia. And all these factors led to the beginning of the decline in PP prices in Russia.

Some Russian converters could not fully replenish their inventories of polypropylene in the first three months of the year due to lack of supply in the market. And the dynamic rise in prices further limited the ability to replenish stocks due to the limited working capital.

It is also worth noting that the situation with PP in Europe and Turkey had an additional affect prices in Russia; export prices of Russian polypropylene for shipments to these regions exceeded domestic prices in Russia. By the beginning of April, the situation with the availability of polypropylene in the Russian market had changed, the supply increased from the largest seller, while some converters limited their purchases.

Restrictions on purchases was a result of problems with working capital and hopes for an early decline in prices.
At the same time, the situation with prices in Turkey began to change, and Russian companies also began to receive offers for PP supplies from Asia, including China.

The growing supply of polypropylene in the market, low demand and cheap offers for imports, albeit with a rather long delivery time, began to put downward pressure on polypropylene prices in Russia. So, if at the beginning of April the prices of homopolymer PP significantly exceeded the level of Rb180,000/tonne CPT Moscow, including VAT at a number of sellers.

At the end of the month, some sellers cut their prices below the level of Rb170,000/tonne CPT Moscow, including VAT. At the same time, it should be noted that in the propylene copolymer market, the lack of supply of polypropylene remained during all April. And only for the May shipments, some sellers announced a slight price cut.
And some of the sellers practically rolled over April prices of propylene copolymers for May.
MRC

COVID-19 - News digest as of 12.05.2021

1. Limited flights and a COVID-19 cases in India will keep jet fuel demand below pre-pandemic levels

MOSCOW (MRC) -- Restrictions on long-distance flights and the surge in COVID-19 in India will keep jet fuel demand below pre-pandemic levels over the coming months, even as an easing of lockdown in some parts of the world boosts jet fuel demand, said Reuters. Vaccination success and reduced infection rates in Western countries are allowing travel to resume. It will, however, be dominated by short-haul flights, which account for almost two thirds of the total fuel used by the sector, but on average use around 35 times less fuel than long-haul flights, the International Energy Agency estimates. The result will be jet fuel demand of around 5.8 million barrels per day (bpd) this year, almost 30% higher than 2020, but below the 8 million bpd of 2019 before the pandemic struck, energy consultancy FGE says.

MRC

MEGlobal nominates ACP for June 2021 at USD830 per tonne

MOSCOW (MRC) -- MEGlobal has announced its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in June 2021, according to the company's press release.

Thus, on 10 May, the company said ACP for MEG would be at USD830/MT CFR Asian main ports for arrival in June 2021, which corresponds to the previous month's level.

The June 2021 ACP reflects the short term supply/demand situation in the Asian market.

As MRC reported earlier, MEGlobal announced its May ACP for MEG at USD830/MT CFR Asian main ports, down by USD100/tonne from April 2021.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to ICIS-MRC Price report, May formular prices for most contract customers were in the range of Rb103,000-117,000/tonne CPT Moscow, including VAT.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).
MRC

LyondellBasell lifts FM on PE supplies from several plants in the USA

MOSCOW (MRC) -- LyondellBasell subsidiary Equistar Chemicals has lifted its force majeure (FM) on polyethylene (PE) from petrochemical sites in Texas, Louisiana, Illinois and Iowa, reported S&P Global with reference to the company's letter to customers.

Thus, the FM was lifted in early May, 2021.

Morris, Illinois (HDPE, LDPE, LLDPE, PE Specialties), Clinton, Iowa (HDPE, LDPE), Lake Charles, Louisiana (LDPE, LLDPE), La Porte, Texas (LLDPE) and Victoria, Texas (HDPE) force majeures were all lifted, the letter said.

However, the company applied a strict sales control program from these sites until further notice, as PE supply remains tight in the region.

Polyethylene resin, particularly LDPE and HDPE, have been talked tight by market participants in recent months amid healthy demand, with spot and export resin particularly tight. The severe freeze that hit the US Gulf Coast in February further aggravated supplier output as many companies reduced rates and some shut down.

Chocolate Bayou, Texas (HDPE), Matagorda, Texas (HDPE) and La Porte, Texas (LDPE, EVA) will remain under force majeure until further notice, the company said.

As MRC informed before, LyondellBasell (Houston, Texas), one of the largest plastics, chemicals and refining companies in the world, reports fourth-quarter net income of USD855 million, up 40% year-over-year (YOY) from USD612 million on higher polyolefin volumes and margins. A USD147 million non-cash, lower-of-cost-or-market (LCM) inventory valuation benefit increased net income by USD119 million, or USD0.36 per share. Sales totaled USD7.937 billion, down 3.0% YOY from USD8.179 billion. Adjusted earnings per share of USD2.19 increased 15% YOY from USD1.91 and beat the consensus of USD1.31 as compiled by Zacks Investment Research.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges, like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world"s largest producer of polymer compounds and the largest licensor of polyolefin technologies. In 2020, LyondellBasell was named to Fortune Magazine"s list of the "World"s Most Admired Companies" for the third consecutive year.
MRC

Marathon trying to find other logistics to ship fuels to customers if Colonial Pipeline outage extended

MOSCOW (MRC) -- Marathon Petroleum, the largest US refiner, can meet its supply commitments for now but is working to find alternative ways to ship motor fuels to the eastern United States if the Colonial Pipeline shutdown is extended, reported Reuters with reference to a company spokesman's statement.

"Marathon Petroleum is working with customers and other business partners to determine potential alternative logistics arrangements in the event of an extended shutdown of Colonial Pipeline," said Marathon spokesman Jamal Kheiry. "At this time, there is no impact to our ability to meet supply commitments."

Marathon operates the 585,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, and the 578,000-bpd Garyville, Louisiana, refinery.

As MRC informed earlier, a cyberattack last week on Colonial's software shut the company's pipeline system, which moves 2.5 million barrels per day of gasoline, diesel and jet fuel to the eastern and southeastern United States.

We remind that most units were shut on Sunday night and Monday morning (15-16 February) at Marathon Petroleum Corp's 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, as temperatures plunged due to a Arctic cold front reaching the Gulf Coast. They resumed operations in the first half of March.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC