BASF and Sinopec to further expand their Verbund site in Nanjing

BASF and Sinopec to further expand their Verbund site in Nanjing

MOSCOW (MRC) -- BASF and SINOPEC, the world's petrochemical majors, will further expand their Verbund site operated by BASF-YPC Co., Ltd. (BASF-YPC), a 50-50 joint venture of both companies in Nanjing, China, according to BASF's press release.

It includes the capacity expansion of several downstream chemical plants, including a new tert-butyl acrylate plant to support the growing Chinese market.

The partners will expand the production capacities of propionic acid, propionic aldehyde, ethyleneamines, ethanolamines and purified ethylene oxide, and build a new tert-butyl acrylate plant. The tert-butyl acrylate plant will be an extension to the downstream using acrylic acid and isobutene of the existing Verbund as feedstock, which marks the first time this advanced production technology is applied outside of Germany. The expanded and new plants are planned to come on stream in 2023.

“This is a substantial step forward since the signing of a Memorandum of Understanding in 2018 to further strengthen our long-term partnership with SINOPEC,” said Dr. Stephan Kothrade, President and Chairman of BASF Greater China. “With the envisioned investment bundle, we will introduce state-of-the-art technologies and use the Verbund advantages to the fullest.”

Propionic acid (PA) is used as a mold inhibitor for the preservation of food and feed grains. It offers strong economic and ecological benefits over preservation through drying or storage in air-tight silos. It is also used in the production of pharmaceuticals, crop protection agents, solvents and thermoplastics.

Ethyleneamines (EEA) and Ethanolamines (EOA) are intermediates used in the manufacture of crop protection agents, surfactants for personal and home care products, process chemicals for gas treatment, lubricants and cement additives, paper chemicals, and active pharmaceutical ingredients.

Propionic aldehyde (PALD) is an intermediate used as key raw material for propionic acid and n-propanol production. It is mainly used in the manufacture of pharmaceuticals, insecticides, fragrances and plastics.

Tert-butyl acrylate (TBA) is an acrylic acid ester for manufacturing polymers and is used as a feedstock for syntheses. As a specialty chemical it is used in paper sizing and emulsion applications.

Purified ethylene oxide (PEO) is a raw material for industrial applications and is often used in synthesis processes of chemical industry. It is used in the manufacturing of ethanolamines, glycol ethers and surfactants for washing and cleaning agents.

As MRC wrote before, in September 2020, BASF-YPC Co., Ltd. (BYC), a 50-50 joint venture between BASF and SINOPEC, expanded the production capacity of neopentylglycol (NPG) at the state-of-the-art Verbund site in Nanjing, China. The plant was established in 2015 with an annual capacity of 40,000 metric tons. With the completion of the expansion in August 2020, the annual capacity reached 80,000 metric tons.

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.

BASF-YPC Company Limited (BASF-YPC) is a 50-50 joint venture between BASF and Sinopec, founded in 2000, with a total investment of approximately USD5.5 billion. The integrated petrochemical site produces about three million tons of high-quality chemicals and polymers for the Chinese market annually. The products serve the rapid-growing demand in multiple industries, including agriculture, construction, electronics, pharmaceutical, hygiene, automotive and chemical manufacturing. All BASF-YPC plants are interconnected in order to use products, by-products and energy in the most efficient way, to save cost and to minimize the environmental impact. BASF-YPC posted sales of approximately CNY 19.6 billion in 2019 and employed 1,942 people as of the end of the year.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

COVID-19 - News digest as of 06.08.2021

1. OxyChem sees continued strong demand for PVC and caustic soda in H2 2021

MOSCOW (MRC) -- Occidental Petroleum sees continued strong demand for construction staple polyvinyl chloride (PVC) and caustic soda through the rest of 2021, driven largely by tight supply, homebuilding growth and continued global economic recovery from COVID-19 fallout, reported S&P Global with reference to CFO Robert Peterson's statement Aug. 4. Peterson said the company sees domestic PVC demand up 16% from Q2 2020, and up 13% from pre-pandemic 2019, he said during the company's Q2 2021 earnings call.




MRC

Crude oil futures steady in Asia as pandemic concerns in key oil-consuming economies remain at the forefront

Crude oil futures steady in Asia as pandemic concerns in key oil-consuming economies remain at the forefront

MOSCOW (MRC) -- Crude oil futures were steady during mid-morning trade in Asia Aug. 6, as the spread of the delta variant of the coronavirus in key oil-consuming economies continued to limit the market's upside and as participants await the upcoming US nonfarm payrolls data to gauge the country's economic conditions, reported S&P Global.

At 11:32 am Singapore time (0332 GMT), the ICE October Brent futures contract was up 14 cents/b (0.2%) from the previous close at USD71.48/b, while the NYMEX September light sweet crude contract rose 12 cents/b (0.17%) at USD69.21/b.

The front month Brent and NYMEX light sweet crude markers had settled 1.29% and 1.38% higher on Aug. 5, rising in tandem with the broader financial markets on risk-on sentiment following the release of a positive weekly unemployment claims report from the US Labor Department.

The oil rally, however, fizzled during this morning's Asian trading session, as investors remained concerned over the economic fallout from the region's battle against the pandemic.

The market has been especially anxious over the situation in China, where previously successful efforts to contain the pandemic had been thwarted by the spread of the more transmissible delta variant of the coronavirus.

"Oil has been under pressure this week as moves to reinstate travel restrictions in China reflected the situation across Asia. At least 46 cities have advised against travelling, and authorities have suspended flights and stopped public transport," ANZ analysts said in an Aug. 6 note.

Nervousness over the surge in the delta-driven COVID-19 infection numbers in the west, including in the US and major European economies, has also put a cap on oil prices.

The market nevertheless remains optimistic that oil demand in the US, and in the west, will defy the rise in COVID-19 cases, as higher vaccination rates may preclude the need for lockdown measures.

We remind that 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 also 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 density 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

August prices of European PVC up by EUR40-50/tonne for CIS markets

August prices of European PVC up by EUR40-50/tonne for CIS markets

MOSCOW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) to be shipped in August to the CIS countries began this week. The sentiment of European producers has remained unchanged for several months already, buyers reported another increase of EUR40-50/tonne in export prices, according to ICIS-MRC Price report.

The August contract price of ethylene was agreed up by EUR53/tonne from the previous month, which theoretically allows to talk about an increase of EUR27/tonne from July in the net cost of PVC. But feedstocks prices have not played the key role in the pricing of European producers for several months in a row. Scheduled and unscheduled shutdowns of production capacities in the region are going on, and on the back of this, an acute shortage of PVC also remained. And this factor determined the upward trend in the region. European producers announced an increase of EUR40-50/tonne in August export prices for the CIS countries.

The rise in export PVC prices in Europe has been going on for over a year now, and many buyers no longer believe that this can ever stop. Prices of resin have more than doubled over this long period.

As a month earlier, some buyers reported the absence of PVC export quotas for August shipments from some European producers because of scheduled maintenance works.

Overall, deals for August shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were discussed in the range of EUR1,440-1,500/tonne FCA, whereas the previous month's deals were negotiated at EUR1,390-1,460/tonne FCA.
MRC

HollyFrontier and its pipeline partner to purchase Sinclair Oil

HollyFrontier and its pipeline partner to purchase Sinclair Oil

MOSCOW (MRC) -- US refiner Hollyfrontier and its pipeline partner will buy almost all of Sinclair Oil's assets in two deals totaling around USD2.6 billion, the companies said, adding new refining, pipeline and storage assets to their portfolio, reported Reuters.

The deals come as US fuel demand continues to recover from last year's coronavirus-led record lows, with states starting to reopen and road travel trending toward pre-pandemic levels.

A new company, HF Sinclair Corp, will replace HollyFrontier as the public company trading on the New York Stock Exchange, it said in a statement.

HollyFrontier said that at the closing of the deal, expected in mid-2022, HollyFrontier shares will convert into shares of HF Sinclair on a one-for-one basis. HF Sinclair will then issue about 60.2 million shares to stockholders of The Sinclair Companies, Sinclair Oil's parent, giving them 26.75% of proforma ownership in the new company.

Sinclair earlier this year became embroiled in a controversy surrounding three last-minute biofuel waivers granted to it by the US Environmental Protection Agency (EPA) under the Trump administration.

The waivers were vacated by a US appeals court in May after a motion filed by the EPA in April, under the Joe Biden administration.

As part of the deal, HollyFrontier will buy Sinclair's branded marketing unit, renewable diesel unit and two Rocky Mountain-based refineries.

Holly Energy Partners (HEP.N), HollyFrontier's transportation business, will buy Sinclair's 1,200 miles of pipeline assets and storage terminals with around 4.5 million barrels of capacity.

The Holly Energy Partners deal is expected to be worth around USD758 million in cash and stock. Stockholders of The Sinclair Companies will own about 16.6% of Holly Energy after the deal closes.

The HollyFrontier deals will not include exploration and production assets owned by Sinclair Oil & Gas, the companies said.

As MRC reported earlier, HollyFrontier Corp said in May, 2021, it would purchase a 149,000-bpd refinery in Washington from Shell as part of the European company"s strategy to reduce its global refinery footprint. HollyFrontier will buy the Puget Sound refinery near Anacortes for USD350 million in cash, plus hydrocarbon inventory to be valued at closing with an estimated current value of USD150 MM-USD180 MM, the companies said. The transaction is expected to close in the fourth quarter of 2021, subject to regulatory clearance.

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