Chinese Shandong province seeks to curb fuel production by ordering teapots not to trade crude oil quotas

MOSCOW (MRC) -- China's Shandong province stepped up efforts to curb fuel production by ordering independent refineries to promise not to trade crude oil quotas, according to three industry sources and a document reviewed by Reuters.

The move follows a crackdown by Beijing in April which found several independent refiners had traded quotas, including selling quotas to plants not registered to process imported crude, defying efforts to ease a fuel surplus that has hurt state-owned refiners' profits.

That led the government to reduce a second batch of quotas issued in June and cut imports by the world's largest oil importer.

The independent refiners, known as teapots, handle roughly one fifth of China's crude imports.

The provincial government of Shandong province, China's independent oil refining hub, asked 30 refiners to each sign a letter of guarantee by the end of Wednesday pledging that they will neither resell their crude import quotas nor try to purchase such allocations.

The refiners were also asked to promise not to resell or relocate older processing units they earlier pledged to demolish in order to be qualified to process imported crude oil, according to the document and two of the sources.

"The government has stepped up checks on teapots in recent months, inspecting whether they have shut old units as promised, whether they are operating at the capacity previously agreed with the government," said an official with one Shandong-based refiner.

China, the world's top crude oil buyer, manages its crude oil imports via a quota system, issuing permits several times in a year.

As MRC informed previously, China Petrochemical Corp, or Sinopec, said in early July it started building a carbon capture, utilization and storage (CCUS) project in east China, the largest of its kind in the country, as part of the refiner's goal to be carbon-neutral by 2050.

We remind that Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) have recently entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

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) -- Austria-based OMV reported utilization of 83% at its European refineries in H1, 2021, down by 3% on the year yet "relatively resilient in light of the COVID-19 impact," reported S&P Global.

It expects the utilization rates at its European refineries to remain at the 2020 level this year. Last year its refineries reported 86% utilization. The company's refineries in Europe ran at 85% utilization in Q2, up from 81% in the year-ago quarter.

OMV Petrom said its Petrobrazi refinery operated at 93% utilization in H1 2021, compared with 92% in the year-ago period and "significantly above the European average". Its Q2 utilization was 91%, compared with 89% in Q2 20. The 2021 utilization rate is expected above 95% compared with 92% in 2020.

As MRC wrote before, OMV is investing EUR40 million (USD48 million) to expand and modernize a steam cracker and associated units at its refining and petrochemicals complex at Burghausen, Germany. The upgrade will increase the site’s ethylene and propylene production capacity by 50,000 metric tons/year. Following a planned turnaround of the refinery, the revamped cracker and petchem units are expected to start operations in the third quarter of 2022. Initial groundwork is already underway ahead of the upgrade.

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.

OMV produces and markets oil and gas, innovative energy and high-end petrochemical solutions – in a responsible way. With Group sales of EUR 23 bn and a workforce of around 20,000 employees in 2019, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies.
MRC

MOSCOW (MRC) -- Shintech, a subsidiary of Shin-Etsu Chemical Co. and the largest US polyvinyl chloride (PVC) producer, has replaced a damaged transformer at its Plaquemine, Louisiana, complex and the units were running at normal rates on July 26, reported S&P Global with reference to sources familiar with company operations.

One of two transformers at the complex was hit by lightning and caught fire July 2, prompting the company to shut multiple units. Thus, one unit with the capacity of 445,000 mt/year of PVC was shut on 2 July, 2021.

Shintech slowly restarted shut plants days later, but ran them at reduced rates while working to replace the damaged transformer, the sources said.

At present, all the works are completed, and all the units "now back in full running," one of the sources said.

Shintech did not respond to a request for comment.

The company's overall production capacity for PVC at its Plaquemine site is 1.606 mln mt/year.

Market sources said earlier that the interruption has reduced Shintech's August export volume availability.

As MRC informed earlier, in late Marchl, 2020, Shintech shut its PVC facility in Freeport, Texas for a turnaround. The complany ended maintenance works at its 1.4 million mt/year PVC complex in Freeport in early May, 2020.

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.

Shintech Inc. is the world's largest producer of polyvinyl chloride (PVC). PVC is a general-use resin that is finding wide application in goods used in daily life and a significant number of industrial materials. Shintech is committed to operating safe and environmentally responsible facilities
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN) in Europe, according to the company's press release as of August 3.

Effective August 1, 2021, or as existing contract terms allow, the contract and spot prices for the products listed below rose, as follows:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR45 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR60 per metric ton;
- MAGNUM ABS resins - by EUR130 per metric ton;
- TYRIL SAN resins - by EUR90 per metric ton.

As MRC reported earlier, Trinseo reduced its prices for PS grades on July 1, 2021, as stated below:

- STYRON GPPS -- by EUR190 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech HIPS - by EUR170 per metric ton.

According to ICIS-MRC Price report, Russian market players expected August prices for Nizhnekamskneftekhim's material to be announced last week. By the end of last week, Nizhnekamskneftekhim reported a reduction of Rb5,000/tonne in its next month's PS prices, said several major market players.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.
MRC

1. Phillips 66 posts first profit in a year on rebound of fuel demand due to easing of pandemic-related travel curbs

MOSCOW (MRC) -- US refiner Phillips 66 posted an adjusted quarterly profit, its first in a year, benefiting from a rebound in fuel demand due to the easing of pandemic-related travel curbs, reported Reuters. Adjusted earnings came in at USD329 million, or 74 cents per share, for the three months ended June 30, compared with a loss of USD509 million, or USD1.16 per share, in the first quarter.

MRC