COVID-19 - News digest as of 16.07.2021

1. OPEC forecasts global oil demand to reach pre-pandemic level in 2022

MOSCOW (MRC) -- OPEC stuck to its forecast for a strong recovery in world oil demand in the rest of 2021 and predicted oil use would rise in 2022 at similar to pre-pandemic rates, led by growth in the United States, China and India, reported Reuters. The Organization of the Petroleum Exporting Countries said in its monthly report on Thursday that demand next year would rise by 3.4% to 99.86 million barrels per day (bpd), and would average more than 100 million bpd in the second half of 2022.

MRC

MOSCOW (MRC) -- Crude oil futures were steady during mid-morning Asian trade July 16, as increased certainty over the OPEC+ supply accord and robust demand projections from OPEC analysts arrested the plunge in oil prices thus far this week, reported S&P Global.

At 11:26 am Singapore time (0326 GMT), the ICE September Brent crude futures contract rose 2 cents/b (0.03%) from the previous close at USD73.49/b, while the NYMEX August light sweet crude contract was up 4 cents/b (0.06%) at USD71.69/b. The front month ICE Brent and NYMEX light sweet crude markers had fallen 3.94% and and 4.78% over July 13-15.

Reports have emerged that the impasse between the UAE and Saudi Arabia is on the verge of a resolution. Tensions between the two members of OPEC+, a coalition of OPEC and other oil producers, had flared after the UAE had objected to Saudi Arabia's plan to tie OPEC+ production increases to a lengthening of the supply management pact, insisting that its baseline production level, from which its quota is determined, be raised first.

Negotiations between the two seem to be heading towards an upward revision of the UAE's baseline production to 3.65 million b/d, from the current 3.168 million b/d, although this figure has yet to be ratified by other OPEC+ members.

The market also received some assurance from OPEC's July 15 monthly oil market report, in which OPEC analysts have kept their 2021 forecast for oil demand at 96.58 million b/d, up 5.95 million b/d from 2020. Furthermore, OPEC's analysts see demand growing by another 3.28 million b/d to 99.86 million b/d in 2022, expecting demand to top the 100 million b/d mark in the second half of the year. OPEC's robust demand outlook comes despite the spread of the more transmissible Delta variant of the coronavirus.

As MRC informed earlier, OPEC stuck to its forecast for a strong recovery in world oil demand in the rest of 2021 and predicted oil use would rise in 2022 at similar to pre-pandemic rates, led by growth in the United States, China and India.

We remind that China's crude oil imports fell 3% from January to June versus a year earlier, in the first first-half contraction since 2013, as an import quota shortage, refinery maintenance and rising global prices curbed buying. Imports totalled 40.14 million tonnes last month, data released by the General Administration of Customs showed on Tuesday, equivalent to 9.77 million barrels per day (bpd).

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC

MOSCOW (MRC) -- Contrary to many consumers' expectations, July low density polyethylene (LDPE) prices went up in the Russian market. Tight supply from virtually all producers was the main driver of the price rise, according to ICIS-MRC Price report.

Scheduled shutdowns for maintenance in June-July and lower utilisation of one of the producers in the first half of July led to a major reduction in supply of LDPE in the Russian market. At the same time, demand remained strong. Under these conditions, LDPE prices began to go up, and the price increase of some grades exceeded Rb2,000/tonne from June.

Angarsk Polymers Plant shut its LDPE production capacities for a scheduled turnaround on 21 June. The outage will be quite long, the resumption of LDPE production is planned only in early August. Gazprom neftekhim Salavat will be the next one to shut its production for repairs, the shutdown is scheduled for 20 July and will last for about 30 days.

Since February, Ufaorgsintez has been operating with the reduced capacity utilisation at its LDPE production due to a fire in the gas distribution shop. And the timing of reaching full capacity has not been announced yet. The Belarusian producer - Polymir - has also reduced its footprint in the Russian market since May.

Back in the second half of June, many buyers reported unstable LDPE shipments from Russian producers, and this factor intensified even more in July. And tight supply began to drive prices up, although converters were trying to resist any price hikes.

Spot offer prices of 108 grade LDPE started from Rb132,500/tonne CPT Moscow, including VAT, in the last week of June, but some sellers' prices of this PE grade have grown to Rb140,000/tonne CPT Moscow, including VAT, by mid-July.
MRC

MOSCOW (MRC) -- ExxonMobil will begin hiring additional temporary operators of its Beaumont, Texas refinery as a lockout of 650 union-represented workers runs into its 11th week, reported Reuters.

Exxon said it took the decision to hire the new workers after four meetings with the United Steelworkers (USW) union local 13-243 failed to yield the results the company expected.

"It is also worth clarifying that our USW represented employees remain employed by the company while locked-out and we look forward to welcoming them back when there is a ratified contract," Exxon said in a statement posted to its website.

Hoot Landry, USW International staff representative, said Exxon's hiring another group of temporary workers was meant to frighten the locked-out employees.

Exxon said in its statement the refinery is being run by superviors while the temporary workers, called contractor operators, "will help us to maintain headcount."

As MRC reported earlier, Exxon locked out the union-represented workers at the 369,024 barrel-per-day (bpd) refinery and adjoining lubricant oil plant on May 1 to avoid a strike as a 75-day labor peace period came to an end following the expiration of the contract.

The USW has said the company's last proposal, made in April, requires its members to give up long-standing seniority and would create a separate contract for workers in the lube oil plant from that for workers in the refinery. Exxon has said the proposal would give it flexibility to be profitable in low-margin environments.

We also remind that ExxonMobil's Beaumont, Texas refinery is operating at about 60% of its 369,024-bpd capacity because of the lockout of union workers.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- Axens announced the signature of a Share Sale and Purchase Agreement for the acquisition of Flowvision (Denmark, Odense), an engineering company specialized in emission abatement systems for the reduction of nitrogen oxides in flue gas from industry, said the company.

Flowvision provides design and equipment for the entire scope of Selective Catalytic Reduction (SCR) and Selective Non-Catalytic Reduction (SNCR) systems, which have been installed throughout the world in a variety of sectors.

Flowvision has a wide range of references within Heat Recovery Steam Generator (HRSG), Biomass boilers, Waste to Energy, Circulating Fluidized Bed Boilers, Gas turbines offshore, Refining, Heaters and steam reformers within Petrochemical plants.

"The acquisition of Flowvision’s DeNOx business will strengthen our offer in the area of Air Pollution Control and will help us better serve our customers providing them with sustainable solutions, integrated with our processes and equipment, to support their environmental and energy transition challenges. Axens is very pleased to welcome on board the Flowvision’s team," said Jean Sentenac, Chairman and CEO of Axens Group.

As MRC informed previously, earlier this month, Axens and Sulzer Chemtech (GTC Technology) formed an alliance to license an advanced process for fluid catalytic cracking (FCC) naphtha processing.

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