Shintech to start up first phase of its PVC expansion project in Louisiana in September

MOSCOW (MRC) -- Shintech, a subsidiary of Shin-Etsu Chemical Co. and the largest US polyvinyl chloride (PVC) producer, will start up the first phase of an expansion across the PVC production chain at its Louisiana complex in September, according to Yasuhiko Saitoh, president of Shintech's Japanese parent Shin-Etsu, reported S&P Global.

Saitoh's comments were in a transcript of discussions stemming from Shin-Etsu's Q2 2021 earnings posted on the company's website Aug. 5. Shin-Etsu reported quarterly earnings July 27, but typically posts transcripts of discussion related to results days later.

"We plan to start up the new plant in September," he said, referring to the first phase of the expansion.

"The housing shortage in major countries is serious, and demand for PVC is increasing not only as a housing construction material, but also as an infrastructure material for residential land," Saitoh said.

Saitoh said the company had hoped to report full operation status by mid-2021, but construction was interrupted and delayed because of COVID-19 protocols enacted in 2020, as well as hurricanes and cold snaps.

"We expect the demand itself will remain strong and therefore believe that the slight delay in the launch will not be a problem at all," he said. "We are making careful preparations for the maximum production from the startup."

US PVC supply has been tight throughout 2021, pushing prices to record highs. Supply entered 2021 tight after two hurricanes hit Louisiana in 2020, and then a deep freeze hit the US Gulf Coast in mid-February, forcing widespread weeks-long petrochemical shutdowns.

PVC demand cratered in April 2020 at the height of COVID-19 shutdowns, but began rebounding when those restrictions eased. US housing construction entered a boom that is ongoing, fueled by consumers seeking more space while working from home amid the pandemic.

Shintech is the largest US producer of PVC, which is a construction staple used to make pipes, window frames, vinyl siding and other products.

The project had originally been slated for completion by the end of 2020, with startup in Q1 2021. Completion was pushed to mid-2021, with startup in Q3 that could stretch into Q4.

The USD1.49 billion first phase of a two-phase expansion will increase output at Shintech's current PVC unit at the Plaquemine complex by 48% to 890,000 mt/year. The first phase also involves increasing upstream vinyl chloride monomer output by 34% to 2.37 million mt/year, and caustic soda output by 21% to 1.55 million mt/year.

The USD1.25 billion second phase involves building a new 380,000 PVC plant and an additional 580,000 mt/year of VCM capacity and another 390,000 mt/year of caustic soda capacity. That phase is slated for completion in 2023.

Shintech also has permits that allow for an additional 680,000 mt/year in ethylene dichloride capacity across both phases. EDC is the direct precursor to VCM, which is the precursor to PVC.

As MRC wrote previously, Shintech replaced a damaged transformer at its Plaquemine, Louisiana, complex and the units were running at normal rates on July 26. 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 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) -- Chevron Phillips Chemical will make a final investment decision on a new cracker in far southeast Texas in 2022, followed by an FID in 2023 on an USD8 billion joint venture petrochemical complex along the US Gulf Coast in 2023, reported S&P Global with reference to Phillips 66 CEO Greg Garland's statement in early August.

An analyst asked during Phillips 66's second-quarter earnings call about the status of the projects, each of which include a new cracker.

He said during the company's Q2 2021 earnings call that CP Chem was "looking at FID next year" for a possible new cracker on the US Gulf Coast, "and the Qatar project is about a year behind that."

Garland said market fundamentals have "improved dramatically" since the company initiated the projects in 2019, and it would take about four years from FID to startup.

"We've got our foot forward on these," he said. "We are ready to move, and we're working with contractors to make sure that we're getting the capital costs right."

While global markets are seen improving after coronavirus' worst effects in 2020, Garland noted some disruption remains in the world economy. The delta variant's spread has increased uncertainty amid uneven vaccination rates worldwide.

"We'd like to see a little clearer path to a fully resolved economic recovery from COVID. Get the delta variant and any other variants behind us," Garland said. "But we are leaning in and ready to move with FID on that project next year."

The potential southeastern Texas cracker project, with at least one derivative unit, has an estimated cost of $2.9 billion, according to documents dated December 2018 that were made public by the Texas Comptroller's Office in January 2019.

The documents did not reveal capacities for the plants or further details but noted that the company was evaluating other proposed sites in Texas and Louisiana.

The CP Chem and Qatar Petroleum in July 2019 announced plans to build their USD8 billion joint venture on the US Gulf Coast, without further specifying a location. That project's proposed 2 million mt/year cracker would be one of the two largest crackers in the world, along with Dow Chemical's 2 million mt/year facility at its Freeport, Texas, complex. The complex also would, as proposed, including two 1 million mt/year high density polyethylene (HDPE) plants.

As MRC informed earlier, Phillips 66 in July 2020 announced that FID on the joint venture was deferred from 2021, but did not specify a new FID target date at that time.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

CP Chem is a joint venture of Phillips 66 and Chevron.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

MOSCOW (MRC) -- MEGlobal has announced its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in September 2021, according to the company's press release.

Thus, on 11 August, the company said ACP for MEG would be at USD870/MT CFR Asian main ports for arrival in September 2021, up by USD30/tonne from the previous month.

The August 2021 ACP reflects the short term supply/demand situation in the Asian market.

As MRC reported earlier, MEGlobal announced its August ACP for MEG at USD840/MT CFR Asian main ports, up by USD10/tonne from July.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to ICIS-MRC Price report, Russian producers raised their July contract PET prices to the range of Rb102,000-114,000/tonne CPT Moscow, including VAT. In the absence of sharp fluctuations in the rouble exchange rate in August, contract prices are likely to continue rising in September.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).
MRC

MOSCOW (MRC) -- A terminal at China's second-busiest container port, Ningbo Zhoushan, suspended operations Aug. 11 after a port worker tested positive for COVID-19, fueling worries that export cargoes will be further delayed heading into the August-November peak season for shipments to the US and Europe, reported S&P Global.

Meidong Container Terminal halted inbound and unloading services from 3:30 a.m. local time Aug. 11. A similar outbreak at Shenzhen's Yantian port in May curtailed operations for a month, contributing to severe congestion at nearly all major North American ports in early August as Yantian ramped up operations to clear backlogs of cargo.

"With this sudden suspension, we expect a delay in planned sailings that might affect your cargo planning," German shipping firm Hapag-Lloyd said in an advisory Aug. 11. "Please know that we are working on alternatives and hope for your understanding on a matter that is beyond our control."

Meidong terminal is part of the Meishan bonded area used regularly by Ocean Alliance members Cosco, Evergreen and CMA CGM.

A US-based freight forwarder noted that any halt of Ningbo port operations is likely spill over to the world's busiest container port complex at Shanghai, which sits just opposite of Ningbo in the Hangzhou Bay in East China and is the likely alternative for some export cargoes that were planned to depart from Ningbo, as well as many arriving ships.

"Shippers are already getting very antsy about Black Friday coming up," a US-based freight forwarder said, referring to the typical late-November start of the year-end holiday shopping season. "We are all dreading any further canceled sailings."

As MRC informed earlier, China's crude oil imports rebounded in July from a six-month low as state-backed refiners ramped up output after returning from maintenance, though independent refineries slowed restocking amid probes by Beijing into trading and taxes.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

MOSCOW (MRC) -- Limetree Bay refinery can get another USD10 million in debtor-in-possession (DIP) financing this month, a Houston bankruptcy court judge said, cash that will go toward unwinding operations, reported Reuters.

The St. Croix, US Virgin Islands, refinery filed for bankruptcy in July after investors poured USD4.1 billion into an unsuccessful revival of the aging facility. An initial restart had to be abandoned after its stacks spewed oil on homes and contaminated drinking water.

The 210,000 barrel per day refinery is due to receive up to USD25 million in interim financing while seeking to restructure nearly USD2 billion in debt. It thus far has received USD5.5 million from DIP lender Arena Investors LP.

On Monday, Jefferies Financial Group Inc said it has not found a buyer for the facility despite reaching out to several parties. But Jefferies co-head of US restructuring, Michael O’Hara, said if a buyer was found, there were parties available to replace BP Plc as the facility’s crude oil provider.

The company sought cash to pay workers to remove oil from the nearly-shuttered facility and to reimburse former employees for travel costs.

US prosecutors are investigating potential criminal violations of the Clean Air Act, Limetree bankruptcy counsel Elizabeth Green said on Monday. The investigation has deterred potential investors, Limetree’s lawyers have said.

Judge Jones, who is a veteran of refinery restructurings in the Southern District of Texas court, said in July he was concerned about Limetree’s ability to through Chapter 11 with the existing DIP loan.

The process of decommissioning the refinery will take several months, the company’s owner, a consortium led by EIG Global Energy Partners, told the Texas court this month.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC