Crude oil futures steady in Asia as market awaits OPEC+ meeting

MOSCOW (MRC) -- Crude oil futures were flat during the mid-morning trade in Asia June 28, as the market awaited the upcoming OPEC+ meeting later in the week for pricing cues, reported S&P Global.

At 10:18 am Singapore time (0218 GMT), the ICE August Brent futures contract inched slightly lower by 3 cents/b (0.04%) from the previous settle at USD76.15/b, while the NYMEX August light sweet crude contract dipped 3 cents/b (0.04%) at USD74.05/b.

All eyes are on the OPEC+'s July 1 meeting, during which the producer group is expected to provide guidance into its production plan for August, and possibly beyond. OPEC+ is currently holding crude production at 6.2 million b/d below October 2018 levels and intends to taper this output cut to 5.76 million b/d in July.

The coalition has met with several calls to raise production August onward to ensure adequate oil supply in the market, with Indian oil minister raising concerns over inflationary pressure from increasing oil prices in a virtual meeting with OPEC Secretary General Mohammed Barkindo on June 24. Others have made similar calls, saying that countries emerging from the shadow of lockdown restrictions need affordable energy prices to support their economic recovery.

Yet analysts expect the coalition to remain cautious when it comes to raising production, as a myriad of developments could still derail the recovery in the oil market. Analysts said that, when doing its calculus, the OPEC+ will also be taking into account the spread of the more transmissible Delta variant of the coronavirus, which has caused an uptick of infections in Israel, the UK, parts of the EU and Australia.

Additionally, the producer group will also be wary of a deal on the Joint Comprehensive plan of action, even though progress on that front remains elusive.

We remind that as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

MRC

MOSCOW (MRC) -- Saudi Arabia’s Rabigh Refining and Petrochemical Co (PetroRabigh) has no overhaul schedule for its linear low density polyethylene (LLDPE) plant at the moment, according to CommoPlast with reference to market sources.

The company operates two lines at this plant: No. 1 line can produce 250,000 mt/year of LLDPE, whereas No. 2 line can manufacture 350,000 mt/year of material.

As MRC wrote previously, in early May, 2020, the company resumed operations at its No. 1 and 2 LLDPE units in Rabigh after maintenance, with began in early March, 2020.

Besides, the company has a 300,000 tons/year high density polyethylene (HDPE) unit and a 160,000 tons/year low density polyethylene (LDPE) unit at the same site.

According to MRC's ScanPlast report, April LLDPE shipments to the Russian market increased to 56,810 tonnes from 35,810 tonnes a year earlier. Local producers raised their PE output. LLDPE shipments to the market were 132,470 tonnes in January-April 2021, up by 4% year on year.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.6-million t/y of ethylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC

MOSCOW (MRC) - After a long period of price rise, high density polyethylene (HDPE) prices began to decrease gradually in Russia at the end of May - June. At the same time, some of the sellers decreased prices significantly in the second half of June significantly, according to the ICIS-MRC Price Report.

Since the beginning of the year, HDPE in Russia has been dynamically rising in price under the pressure of a similar situation in the markets of Europe and Turkey. And only in April, foreign markets stopped putting pressure on polyethylene prices in the Russian market.

In May, the demand for polyethylene film decreased due to a number of factors, including long vacations. The situation with demand did not change dramatically in June, and the increase in supply led to a decrease in prices in the second half of the month.

Despite a serious reduction in the volume of supplies to the domestic market in the past few months from Kazanorgsintez, there is no shortage of supply of film polyethylene in the Russian market. ZapSibNeftekhim and Stavrolen fully meet all the needs of the market.

In addition, the import of polyethylene from neighboring countries have begun to grow since May, and already in June, an excess of supply began to be felt. Low prices of film HDPE in the spot market could be found in the end of May, small sellers "sold" ZapSibNeftekhim material at roubles (Rb) 121,500-123,000/tonne, including VAT, and delivery.

But since mid-June, an increasing number of sellers began to adjust their prices downward. By the beginning of this week, there were more and more offers for the supply of Russian and imported film HDPE in the range of Rb121,000-123,000/tonne, including VAT, and delivery.

MRC

MOSCOW (MRC) -- Rabigh Refining and Petrochemical Co (PetroRabigh) has decided to begin the maintenance shutdown at its high denisty polyethylene (HDPE) plant in Jubail, Saudi Arabia to July, according to CommoPlast with reference to market sources.

The initial schedule was to shut this plant with an annual output of 300,000 tons/year on 15 June 2021.

A source close to the producer informed at that there has not been confirmation on the new maintenance date, however, the duration of the plant's outage would be 15 days.

As MRC informed before, Petro Rabigh resumed production at its HDPE plant in Rabigh, Saudi Arabia after maintenance in late May, 2020. This HDPE plant was shut in early March, 2020, although initially it was scheduled to be taken off-stream in late February.

Petro Rabigh also operates No. 1 and 2 linear low density polyethylene (LLDPE) units at the same location with a combined capacty of 600,000 tons/year.

According to MRC's ScanPlast report, Russia's overall HDPE production totalled 653,500 tonnes in the first four months of 2021, up by 9% year on year. At the same time, only one Russian producer increased its HDPE output.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.6-million t/y of ethylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC

MOSCOW (MRC) -- Evonik has signed a purchase agreement to acquire the privately owned technology-driven company Infinitec Activos, with closing expected by July, as per the company's press release.

The Spanish company focuses on the development and production of novel active delivery systems for cosmetic active ingredient applications. Infinitec Activos will be integrated into the Care Solutions business line of Evonik’s Nutrition & Care division complementing the active delivery systems acquired in 2017.

This latest acquisition continues the portfolio shift of Evonik’s life science division Nutrition & Care towards system solutions, which are characterized by high growth prospects and above average margin potential. Nutrition & Care aims to increase the share of system solutions it offers from 20% today, to more than 50 percent by 2030.

With its portfolio of natural-based active ingredients and seven delivery systems, the integration of Infinitec Activos into the Care Solutions business line reinforces Evonik’s position as a sustainable specialties partner, while also further strengthening Nutrition & Care’s wide technology platform. By combining its existing actives portfolio with the new delivery systems, Care Solutions’ capabilities to generate new concepts for scientifically substantiated consumer cosmetic claims are significantly enhanced. The integration and roll-out across the existing platform of cosmetic solutions offers strong synergy potential.

As MRC informed earlier, in February, 2020, Dow and Evonik entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. The company is active in more than 100 countries around the world and generated sales of EUR12.2 billion and an operating profit (adjusted EBITDA) of EUR1.91 billion in 2020.
MRC