COVID-19 - News digest as of 20.07.2021

1. Russian rouble, stocks down as oil retreats on OPEC+ output boost

MOSCOW (MRC) -- The rouble weakened to a one-week low against the dollar at one stage losing almost 1%, hit by retreating oil prices after OPEC+ overcame internal divisions and agreed to boost output, a move that also sent Russian stocks tumbling, reported Reuters. By 1529 GMT, the rouble was 0.8% weaker against the dollar at 74.63, a one-week low, and had lost 0.8% to trade at 88.16 versus the euro. Brent crude oil, a global benchmark for Russia's main export, was down 5.4% at USD69.60 a barrel. Oil prices were lower after OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices which have climbed to 2-1/2 year highs as the global economy recovers from the coronavirus pandemic.

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Yansab to restart PP and PE plants after unscheduled repairs

Yansab to restart PP and PE plants after unscheduled repairs

MOSCOW (MRC) -- Yanbu National Petrochemical Company (Yansab), part of Saudi Basic Industries Corporation (Sabic), is planning to restart its polypropylene (PP), linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) plants on 23 July, 2021, after an unplanned turnaround, reported Agraam with reference to the company's statement in a bourse filing.

Based in Yanbu, Saudi Arabia, the company has PP, LLDPE and HDPE plants with production capacity of 400,000 tons/year each, which were temporary shut on 11 July, 2021, due to technical issues.

The petrochemical producer is currently working on repairs and necessary maintenance. Thus, the shutdown is expected to continue for 12 days.

As MRC informed earlier, in 2021, the company conducted a scheduled turnaround at these plants from 5 to 15 February.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

Yansab is the most recent SABIC, (Saudi Basic Industries Corp), affiliate in Saudi Arabia, and will be the largest Sabic petrochemical complex. It will have an annual capacity exceeding 4 million metric tons (MT) of petrochemical products including: 1.3 million MT (metric-tons) of ethylene; 400,000 MT of propylene; 900,000 MT of polyethylene; 400,000 MT of polypropylene; 700,000 MT of ethylene glycol; 250,000 MT of benzene, xylene and toluene, and 100,000 MT of butene-1 and butene-2.

Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
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OPEC+ deal, COVID-19 fears send NYMEX crude plunging for biggest single-day drop since the historic April 20, 2020

OPEC+ deal, COVID-19 fears send NYMEX crude plunging  for biggest single-day drop since the historic April 20, 2020

MOSCOW (MRC) -- A new OPEC+ deal to hike production volumes this year and throughout 2022 combined with rising COVID-19 fears and a broad Wall Street selloff sent crude prices plunging July 19 for the biggest single-day drop since the historic April 20, 2020, negative pricing event, reported S&P Global.

Front-month NYMEX WTI plummeted more than 7%, down USD5.39, to settle at USD66.42/b, while ICE September Brent shed USD4.97 to settle at USD68.62/b.

NYMEX August RBOB fell by 14.32 cents to USD2.1104/gal, and August ULSD dropped 12.81 cents to USD1.9852/gal.

The Dow Jones Industrial Average nosedived by more than 900 points during July 19 New York trading as rising fears of the rapidly spreading COVID-19 delta variant triggered a market selloff. Energy futures were doubly shaken by the July 18 OPEC+ deal that not only returns crude production through the rest of 2021, but also throughout 2022. Adding additional tensions, the US and China are clashing over the US and NATO allies accusing China of major cybersecurity hacks.

OPEC+ is striving for a reasonably balanced market by ending its stalemate with the United Arab Emirates, according to energy analyst Bill Herbert of Simmons Energy, but the new deal also allows for Saudi Arabia, Russia and others to push their production volumes above pre-pandemic levels next year.

The deal allows OPEC and its allies to ease production cuts by 400,000 b/d each month starting in August, amounting to a 2 million b/d total increase by the end of the year. The deal also extends the OPEC+ supply management pact to the end of 2022, from its previous expiry of April 2022.

And none of this is occurring in a vacuum since the vast majority of the world remains unvaccinated while the coronavirus delta variant spreads worldwide from Asia to North America.

"The world needs a reality check," World Health Organization epidemiologist Maria Van Kerkhove recently said, arguing the world is moving further away from the end of the pandemic.

New infections have spiked in much of Asia, Europe, Australia and Africa, with Indonesia becoming a major new hot spot, while US COVID-19 cases surged by about 70% last week, fueled by the delta variant.

As MRC informed earlier, 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.
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LG Chem to invest 10 trillion Korean won by 2025 for eco-friendly materials

LG Chem to invest 10 trillion Korean won by 2025 for eco-friendly materials

MOSCOW (MRC) -- Shin Hak-chul, vice chairman of LG Chem, announced a large-scale investment plan worth 10 trillion Korean won in sustainable growth based on ESG, said Koreaittimes.

At a press conference held online on July 14, Vice Chairman Shin said that he plans to invest 10 trillion won by 2025, selecting eco-friendly sustainability business, battery-oriented e-Mobility, and develop new global innovation medicine. "Now, the criteria for measuring competitiveness in the business world should be based on 'Sustainability' in sales and operating profit," said Vice Chairman Shin. "This should be reflected in all business processes, strategies, investments, etc. From this perspective, we will innovate our business portfolio based on ESG and pursue sustainable growth."

Based on ESG, LG Chem selected three new growth engines to maximize growth potential of current businesses. The three new growth engines are bio materials, recycling, and renewable energy industrial materials, which will be invested 3 trillion Korean won in Sustainability businesses to foster them as future growth pillars of the petrochemical business.

LG Chem is planning to start full-scale production of the world's first Bio-balanced SAP product certified by ISCC Plus starting this month and supply it to global customers such as the U.S. and Europe. Bio-balanced SAP is an eco-friendly product that uses plant bio-renewable raw materials such as waste oil from Neste, Finland, and fossil fuels as basic raw materials.

As the bio-plastic market is expected to grow rapidly from 12 trillion Korean won in 2020 to 31 trillion Korean won in 2025, the company is also pushing for joint venture with Korean and foreign raw material companies to secure eco-friendly materials stably.

LG Chemicals is going to establish an eco-platform that provides eco-friendly packaging solutions and a virtuous cycle of plastic resources for cosmetics containers starting from the second half of this year. It is also pushing for joint research to apply recycled plastic materials such as Post Consumer Recycling (PCR) ABS to cosmetics containers.

The company is also planning to actively explore new business opportunities in markets for renewable energy industries such as POE/EVA for solar panels. To become the world's No. 1 comprehensive battery material company, it is planning to invest 6 trillion Korean won and foster a wide portfolio of products.

In the field of cathode materials business, it plans to start construction of a 60,000-ton Gumi plant annually in December this year with the aim of becoming a global leading company. The Life Science Business Headquarters will invest more than 1 trillion Korean won in the new medicine business with the goal of becoming a global medicine company with more than two innovative new medicines by 2030.

As it was said earlier, LG Chem announced on April 19 that it has obtained International Sustainability and Carbon Certification (ISCC) Plus certification for Bio-balanced products that were made from renewable plant materials such as waste oil and palm oil.

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

Basic Chemical Industries eyes 49% of Union Chlorine

Basic Chemical Industries eyes 49% of Union Chlorine

MOSCOW (MRC) -- Basic Chemical Industries (BCI) has signed a non-binding letter of intent with Union Chlorine's owners to acquire 49% of that company's ownership, said Argaam.

According to Arabiya Net, BCI said in a statement that Union Chlorine is a manufacturer of chlor-alkali based in the United Arab Emirates - Abu Dhabi.It added that it had signed a letter of intent with the companies owning Union Chlorine, namely Oman Chlorine, Horizon Energy, MS Union Chlorine and the Oman Industrial Development Company.

It clarified that the purpose of the letter of intent was to facilitate discussions and reach a final agreement to acquire 49% of the ownership of Union Chlorine for Basic Chemical Industries. Basic Chemical Industries said it would conduct due diligence to determine the financial impact of the acquisition on Basic Chemicals.

The deal aims to diversify BIC's product and market base by adding the UAE as a production market, and accessing Union Chlorine's extensive export base.It also aims to increase the productivity of BCI's core products such as caustic soda and hydrochloric acid, as well as add a new product calcium chloride to BCI's portfolio.

As per MRC, chlorine production in Europe increased 3.3% year on year (YOY) in January to 855,883 metric tons, with the average daily rate of 27,609 metric tons also rising 6% month on month from December’s daily rate of 26,045 metric tons, or 807,438 metric tons in total. It is the fourth consecutive monthly rise YOY in output, and the highest monthly total for two years, according to data from Euro Chlor, the European chlor-alkali industry association.

As per MRC ScanPlast, Russia's overall calculated consumption of caustic soda totalled 431,400 tonnes in January-May 2020. Demand for caustic this year increased by 7% compared with the same period last year (403,200 tonnes). Russia's imports of solid caustic soda have grown by 84% and reached 16,800 tonnes in the first five months of 2020 against 9,100 tonnes a year earlier.

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