Crude prices continue rising on weaker US dollar and tightening inventories

Crude prices continue rising on weaker US dollar and tightening inventories

MOSCOW (MRC) -- Crude prices extended their rally July 29, settling higher on the back of a weaker US dollar and tightening inventories, reported S&P Global.

NYMEX September WTI settled USD1.23 higher at USD73.62/b and ICE September Brent moved up USD1.31 to USD76.05/b.

Oil futures gleaned support from a weaker US dollar and rising risk appetite supported by a dovish tone taken by US Federal Reserve chairman Jerome Powell, analysts said.

"Oil prices are surging as risk appetite runs wild following disappointing economic data that solidifies the view that the Fed won't be slowing down its ultra-accommodative stance anytime soon," OANDA analysts said in a July 29 note.

"Strong earnings and a cautious US central bank bodes well for crude, which saw the rally slow heading into Fed day," they added. "The biggest downside risk to oil prices now is unsurprisingly the delta variant rapidly spreading and weighing on the economic recovery going into the end of the year."

NYMEX August RBOB settled 4.32 cents higher at USD2.3514/gal and August ULSD climbed 3.34 cents to USD2.1894/gal.

Powell, during a press conference following a July 28 Federal Open Markets Committee meeting, indicated the US economy had farther to go before easing the Fed's current supportive stance. The comments proved bearish for the US dollar, which in turn is supportive for crude prices.

The ICE US Dollar index fell to 91.86 in afternoon trading, on pace for the lowest close since June 25.

Meanwhile, US crude supply outlooks remain bullish following a 4.09 million-barrel inventory draw in the week ended July 23 and a decline in drilling activity.

"Sentiment was buoyed by falling inventories across several markets and an easing of fears that the recent surge in COVID-19 cases would hurt demand," ANZ analysts said in a July 29 note.

"The falls suggest the rise in cases of COVID's delta variant is having little impact on mobility. While health authorities remained concerned about its spread, the high level of vaccination has prevented widespread restrictions," the ANZ analysts said in the note.

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

North Huajin Refining and Petrochemical picks Lummus and Chevron Lummus Global for petrochemical complex in China

North Huajin Refining and Petrochemical picks Lummus and Chevron Lummus Global for petrochemical complex in China

MOSCOW (MRC) -- Lummus Technology and Chevron Lummus Global LLC (CLG) announced multiple technology contracts from North Huajin Refining and Petrochemical Co., Ltd. for a grassroots refinery and petrochemical complex in Liaoning Province, China, according to Hydrocarbonprocessing.

The complex will include one of the largest vacuum residue desulfurization (VRDS) units in China and one of the largest Novolen polypropylene (PP) plants. Lummus will provide the license and basic engineering for its Novolen PP technology, plus the associated catalysts. CLG will provide the license and basic engineering for the VRDS technology, plus proprietary reactor internals and catalysts.

Once complete, the VRDS unit will process 5 MMTPA of vacuum residue, providing hydrotreated feed for the downstream conversion unit while simultaneously producing low sulfur bunker oil that meets International Maritime Organization (IMO) specifications. The Novolen plant, embedded in a compact plot area, will produce 1,000 KTA of polypropylene homopolymers, random copolymers, and impact copolymers - making it one of the largest in China – with high-end products encompassing the complete portfolio.

As MRC informed before, in April, 2021, Lummus Technology was awarded a master licensor contract by PJSC Nizhnekamskneftekhim for its ethylbenzene, styrene monomer (SM), ethylene dimerization and olefins conversion technologies. These four plants will be part of the expansion of an olefins production facility in Nizhnekamsk, Russia. The dimerization and olefins conversion units will be the first in Russia.

According to MRC's ScanPlast report, 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

Hexion to cut carbon emissions by 20% by 2030

Hexion to cut carbon emissions by 20% by 2030

MOSCOW (MRC) -- Hexion Inc., a major American manufacturer of phenol and bisphenol A (BPA), has recently announced that in order to help address climate change, it has committed to reduce absolute carbon emissions by 20% by 2030, according to BusinessWire.

A leading producer of adhesives, coatings and composite resins, Hexion’s commitment encompasses “Scope 1” and “Scope 2” emissions, which are direct and indirect greenhouse emissions from operations and consumed energy. The reduction target is compared to 2017, the baseline year of operations.

Hexion is also reviewing its “Scope 3” emissions, which are those associated with all other aspects of the company' business, such as raw materials, product use and disposal, waste generation, business travel, and the impact of associate commuting, among others. The establishment of the greenhouse gas reduction commitment follows a 2020 materiality assessment where Hexion engaged with various internal and external stakeholders. From that assessment, the company determined its most important areas of focus, which included formalizing the following goals:

- Minimizing climate change impact - Hexion will strive to protect against climate change throughout its business lifecycle by efficiently using natural resources, optimizing existing processes and enhancing products and technologies through continuous innovation.
- Developing innovative sustainable products - Hexion is committed that by 2030, all new products will incorporate sustainable attributes.
- Enhancing worker safety/well-being - By 2022, Hexion will offer a voluntary well-being program that addresses associate physical, mental, and financial well-being with the goal of 50% associate participation in the program by 2025. Hexion also re-affirmed its commitment to continue to drive toward zero recordable injuries.
- Reducing spills and releases - Hexion has committed to reduce spill mass and releases by 80 percent by 2025.
- Maintaining product stewardship - Hexion remains committed to implementing the Responsible Care Product Safety Code and will continue to be transparent and communicate to key stakeholders regarding its stewardship programs such as risk reviews and reduction of substances of concern.

As further validation of its commitment to more sustainable operations, Hexion also recently received its first ENERGY STAR Partner of the Year award, one of the highest honors bestowed by the United States Environmental Protection Agency’s ENERGY STAR program. Hexion was recognized for numerous successes in waste reduction and energy efficiency throughout the company since 2014. In that time, Hexion has reduced global energy intensity by 28%, executed more than 250 sustainability projects, and produced water and energy savings of approximately USD14 million, including USD2 million in 2020 alone. Each year, the ENERGY STAR program honors a group of businesses and organizations that have made outstanding contributions to protecting the environment through superior energy achievements. ENERGY STAR Award Winners lead their industries in the production, sale, and adoption of energy-efficient products, services, and strategies. These efforts are essential to fighting the climate crisis and protecting public health.

As MRC informed before, Hexion shut down its BPA plant in the Netherlands for scheduled maintenance in early November, 2020. The turnaround at this plant with a capacity of 120,000 mtyear of BPA, located in Pernis, the Netherlands, lasted until the end of November, 2020.

Bisphenol A is used as a hardener in the production of plastics, as well as plastic-based products. It is one of the key monomers in the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in January-May 2021 by 8% year on year to 42,200 tonnes (38,900 tonnes a year earlier).

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
MRC

TechnipFMC to sell 9%-stake in Technip Energies

MOSCOW (MRC) -- TechnipFMC has announced the launch of the placement of 16 million Technip Energies shares, representing ca. 9% of Technip Energies’ issued and outstanding share capital, through a private placement by way of an accelerated bookbuild offering, according to Hydrocarbonprocessing.

Upon completion of the Placement, TechnipFMC would retain a direct stake of ca. 22% of Technip Energies’ issued and outstanding share capital.

TechnipFMC has agreed to a 60-day lock-up for its remaining shares in Technip Energies, subject to waiver from the Joint Global Coordinators and certain other customary exceptions, including transfer of shares to a subsidiary, granting and enforcement of security interests in connection with financing and derivative transactions and tender into any public tender offer for all or part of the shares.

The Placement is targeted at eligible institutional investors. There will be no public offering in any country.

The final terms of the Placement are expected to be announced on July 30 at the latest. Settlement for the Placement is expected to take place on or around August 3, 2021.

As MRC wrote previously, in June 2021, Technip Energies announced the initiation of an agreement with Agilyx Corporation, a wholly owned subsidiary of Agilyx AS and pioneer in the advanced recycling of post-use plastics. This collaboration aims to accelerate the implementation of Agilyx’s technology for the advanced recycling of post-use polystyrene (PS). Under this agreement, Technip Energies will market and license the integrated technologies of Agilyx depolymerization and Technip Energies purification technology, leveraging the expertise, resources, and global presence of respective companies. The technology is ready and available for licensing.

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 236,110 tonnes in the first five months of 2021, up by 27% year on year (172,360 tonnes). May estimated consumption was 48,880 tonnes, up by 66% year on year.
MRC

PP production in Russia grew by 13% in H1 2021

MOSCOW (MRC) - Russia's production of polypropylene (PP) increased to about 1.025 m tonnes in first six months of this year, up 13% year on year, compared with the same period of 2020. Only two producers increased their output, according to MRC's ScanPlast report.

Russian plants' total PP production increased to 173,800 tonnes in June from 158,000 tonnes a month earlier, ZapSibNeftekhim increased its capacity utilisation after the short turnaround in April-May. Russia's overall PP production reached 1.025 m tonnes in January-June 2021, compared with 905,900 tonnes a year earlier. Two out of seven producers increased their capacity utilisation, with SIBUR Tobolsk/ZapSibNeftekhim accounting for the greatest growth in the output.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk / Zapsibneftekhim increased capacity utilization in June, the total production of polypropylene reached 97,900 tonnes versus 76,900 tonnes a month earlier (in late April - early May, the company carried out preventive maintenance works). Tobolsk complex's PP overall output reached 537,200 tonnes in the first six months of 2021, up by 28% year on year.

Poliom kept high level of capacity utilisation in June, having produced about 17,200 tonnes of PP compared with 17,400 tonnes a month earlier. Overall, the Omsk plant produced about 104,000 tonnes of PP over the stated period, up by 11% year on year.

Nizhnekamskneftekhim produced a little less then 18,400 tonnes of propylene polymers in June versus 18,700 tonnes a month earlier.
The Nizhnekamsk plant's overall output of polymer reached 109,800 tonnes in January-June 2021, compared to 110,000 tonnes a year earlier.

Tomskneftekhim last month produced about 10,000 tonnes against 13,300 tonnes a month earlier. Total PP production by the producer increased to 74,700 tonnes in January-June 2021, up 3% year on year.

Ufaorgsintez's capacities were operated with a reduceloadingng in June, as well as in May, the final PP production reached about 9,300 tonnes. The Ufa plant's overall output of polymer reached 63,100 tonnes in the first six months of 2021, down by 5% year on year.

NPP Neftekhimiya (Kapotnya) produced about 12,400 tonnes last month, compared to 13,000 tonnes in May. The plant's overall PP output reached 75,300 tonnes over the stated period, which was the same as in 2020.

Stavrolen (Lukoil) produced slightly over 8,600 tonnes of propylene polymers in June versus 9,200 tonnes a month earlier. The Budenovsk plant's overall output of propylene polymers reached 60,800 tonnes in the first six months of 2021, up by 3% year on year.

MRC