COVID-19 - News digest as of 23.07.2021

1. Chandra Asri to supply distributes liquid oxygen to several hospitals in DKI Jakarta and Banten

MOSCOW (MRC) -- PT Chandra Asri Tbk (TPIA), a petrochemical company, distributes 210 tons of liquid oxygen to several hospitals in DKI Jakarta and Banten, said the company. This supply would answer the demand for liquid oxygen regarding the COVID-19 pandemic response. Erwin Ciputra, President Director of Chandra Asri, claims that the liquid oxygen provision is a way of the company helping the COVID-19 patients in hospitals. “This relief would be channelled to Mayapada Hospitals in Jakarta and Banten, which are a part of Indonesia Regional Hospitals Association,” Ciputra explains in a press conference. According to Ciputra, the overflowing liquid oxygen demand rises following the surge in COVID-19 cases. As a result, the government is boosting liquid oxygen production up to 922.9 tons per day from its current maximum production capacity of 1,700 tons per day.

MRC

Crude oil drops in Asia on profit-taking activity

Crude oil drops in Asia on profit-taking activity

MOSCOW (MRC) -- Crude oil ticked lower during the mid-morning trade in Asia July 23 on profit-taking activity, following a recent rally that saw futures prices claw back losses from a selloff at the start of the week, reported S&P Global.

At 10:45 am Singapore time (0245 GMT), the ICE September Brent futures contract was down 23 cents/b (0.31%) from the previous close at USD73.56/b, while the NYMEX September light sweet crude contract was down 23 cents/b (0.32%) at USD71.68/b.

The downtick in prices during the morning trade comes as the market cools off after a rally that saw the front-month ICE Brent and NYMEX light sweet crude markers rising roughly 8% over July 20-22, paring back losses from a selloff that saw both markers plummet at the beginning of the week on July 19.

Despite the slight fall in prices, analysts remain optimistic that the oil market is in the middle of a recovery. Concerns over the spread of the highly transmissible delta variant of the coronavirus have taken a backseat, supplanted by optimism over rising oil demand as the world fuels its economic recovery.

The Energy Information Administration report, released late July 21, showed implied downstream oil products demand rising 6.62% on the week to 20.6 million b/d in the week ended July 16. This trend is also seen in Europe, where road activity and air travel are both on the rise.

As the rising demand trend defies the surge in COVID-19 infections, there are now concerns that supply may not be able to keep up.

The OPEC+ coalition had, on July 18, reached a deal to increase its production quotas 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, with the production rises also expected to continue next year.

However, with the supply-side response from US shale producers likely to remain conservative, as highlighted by oil services provider Baker Hughes in its second-quarter earnings call, there are concerns in the market that the OPEC+ output increase may fall short of the amount needed to balance the market.

As MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.

We remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.

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

Westlake PVC output in the USA remains reduced in July

Westlake PVC output in the USA remains reduced in July

MOSCOW (MRC) -- Westlake Chemical, US petrochemical major, has maintained its July polyvinyl chloride (PVC) output at lower level in the USA with the continued shutdown of an upstream vinyl chloride monomer (VCM) plant at its Lake Charles, Louisiana, complex, reported S&P Global with reference to market sources.

The company's plant in Lake Charles can produce 460,000 mt/year of VCM.

Sources said domestic demand for PVC remains strong in the region.

As MRC informed earlier, Westlake Chemical has lifted its force majeure (FM) on US PVC and upstream VCM, the company announced in a customer letter dated May 17. The letter said the company was "formally lifting the systemwide force majeure condition for PVC and VCM manufactured and shipped from its North American operations that was originally declared on Feb. 19" as a result of mid-February's deep freeze that "resulted in a shutdown/curtailment of our plant operations."

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 515,900 tonnes in the first half of 2021, up by 1% year on year. At the same time, two producers reduced their output.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

Lotte Chemical to Invest USD3.8 bln in hydrogen business by 2030

Lotte Chemical to Invest USD3.8 bln in hydrogen business by 2030

MOSCOW (MRC) -- Lotte Chemical Co., a South Korean petrochemical major, said it will invest 4.4 trillion won (USD3.8 billion) in the hydrogen business by 2030 to cut its carbon emissions and foster the new growth driver, according to Kemicalinfo.

Under its hydrogen growth roadmap, Green Promise 2030, Lotte Chemical said through the investment it aims to generate annual sales of 3 trillion won (USD2.6 billion) with an operating profit margin of over 10% in its hydrogen-related business alone by the 2030 pledge date.

Lotte Chemical is the latest company to pinpoint hydrogen as a future growth engine. In terms of hydrogen production, companies in these fields have an advantage because hydrogen is a natural byproduct in their factories.

The company said it will establish blue hydrogen facilities with an annual production capacity of 160,000 tons by 2025. It also plans to generate green hydrogen at overseas facilities and bring it to Korea for industrial use, with a target of 440,000 tons a year of green hydrogen by 2030.

Overall, Lotte aims to launch facilities with an annual hydrogen production capacity of 600,000 tons by 2030.

As MRC informed before, Lotte Chemical shut its naphtha-fed steam cracker in Daesan for an annual maintenance on 15 May, 2021. This cracker with the capacity of 1.1 million mt/year of ethylene and 550,000 mt/year of propylene resumed production on 23 June, 2021.

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.

Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the southwestern city of Yeosu.
MRC

Russia to capture deal with Japanese firm in a move to make Sakhalin carbon neutral by 2025

MOSCOW (MRC) -- The Russian Pacific island of Sakhalin is close to a cooperation agreement with a Japanese company on carbon capture and storage technology as it moves to carbon neutrality by 2025, the regional governor told Reuters.

Russia aims to make Sakhalin carbon neutral by 2025, the first region to do so in the country, and as the island needs to move quickly in adding renewable resources amid depleting fossil fuels.

"The regional government is preparing to sign a cooperation agreement with a well-known Japanese company," Valery Limarenko said in emailed comments. He did not provide other details.

Sakhalin is home to Russia's first plant to produce LNG, operated by Sakhalin Energy. The company has worked out an "ecological LNG" strategy, Limarenko said, to cut its carbon footprint and supply carbon-neutral fuel.

The region would introduce quotas for greenhouse gas emissions from two dozen companies operating on the island, in two steps: businesses with annual emissions of over 50,000 tonnes of CO2 equivalent would be targeted from 2023 and those emitting over 20,000 tonnes to follow from 2025.

The region aims to generate 28% of energy from renewable sources by 2025 thanks to the construction of wind, solar, geothermal and small-sized hydro-electric power stations, mainly on the Kuril Islands. The region will introduce 10,000 electric-powered vehicles and 1,000 charging stations by 2025 and plans to switch domestic heating boilers to using natural gas and LNG, including on the Kuril islands.

Sakhalin's oil output, led by ExxonMobil and Rosneft , is set to fall to 15.2 million tonnes this year (300,000 barrels of oil per day) from 18.4 million tonnes in 2020, declining further to 14 million tonnes as its reserves dwindle, the governor said.

Gas production, a feedstock for the Sakhalin-2 LNG plant, is seen stable at over 30 billion cubic metres per year.

As MRC informed earlier, PKN Orlen (Plock, Poland), the country’s largest petrochemicals producer, will receive 3.6 million tons of crude oil per year from Russia’s Rosneft under a new two-year supply contract signed in March 2021. Rosneft suspended oil deliveries to Poland in February after failing to agree on new contract terms with PKN Orlen when the previous agreement expired on January 31. The previous deal had envisaged deliveries of 5.4 million to 6.6 million tons a year.

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