COVID-19 - News digest as of 31.08.2021

1. Asian recyclers of film grade HDPE operate at low rates due to COVID-19

MOSCOW (MRC) -- Recyclers in Southeast Asia were heard operating with low capacity utilisation in the film grade high density polyethylene (HDPE) market due to COVID-19-led lockdown measures, reported S&P Global. Market sources also said persistent bottlenecks at ports in Asia and some maintenance-related plant closures are likely to hurt the supply of petrochemicals during the week of Aug. 30-Sept. 3.

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Asian recyclers of film grade HDPE operate at low rates due to COVID-19

Asian recyclers of film grade HDPE operate at low rates due to COVID-19

MOSCOW (MRC) -- Recyclers in Southeast Asia were heard operating with low capacity utilisation in the film grade high density polyethylene (HDPE) market due to COVID-19-led lockdown measures, reported S&P Global.

Market sources also said persistent bottlenecks at ports in Asia and some maintenance-related plant closures are likely to hurt the supply of petrochemicals during the week of Aug. 30-Sept. 3.

As MRC informed earlier, Southeast Asian polyethylene terephthalate (PET) recycling companies will continue facing challenges with the availability of raw materials, due to the low collecting and processing rate, as a result of the COVID-19 pandemic.

According to MRC's ScanPlast report, June estimated HDPE consumption in Russia decreased to 125,900 tonnes from 128,300 tonnes a month earlier. Domestic producers raised their exports, while some producers' output decreased. Russia's overall HDPE shipments to the Russian market totalled 675,670 tonnes in the first six months of 2021, down by 6% year on year. Production increased by 12%, whereas imports fell by 33%.
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Already tight US East Coast gasoline supplies face more pressure from Hurricane Ida

Already tight US East Coast gasoline supplies face more pressure from Hurricane Ida

MOSCOW (MRC) -- Tight supplies of gasoline on the US East Coast are being pressured by refinery outages from Hurricane Ida and the shutdown of a major pipeline that supplies fuel to the Southeast, reported Reuters.

At least nine refineries in Louisiana that account for 13% of US processing capacity on Monday had reduced or halted production, according to the US Department of Energy. Those plants process 2.3 million barrels per day of crude oil into gasoline and other fuels.

US retail gasoline prices could rise between 5 and 15 cents a gallon, estimated Patrick DeHaan, petroleum analyst at fuel tracker GasBuddy.

How much prices increase depends on how quickly refiners and the Colonial Pipeline, the largest fuel pipeline in the United States, can restore operations. Colonial on Sunday halted fuel transport from Houston to Greensboro, North Carolina.

The pipeline company said on Monday, as MRC wrote earlier, it expects to resume full service once the company assesses the impact of Hurricane Ida on operations. It is releasing fuel from storage terminals along the supply route to the Southeast.

Traders are monitoring Ida's effect on East Coast fuel markets. Gasoline stocks are 15% lower than the five-year average. "No amount of barrels of fuel the US can import can fill the gap of the Colonial pipeline," one fuel trader said.

Refiners said they have cut processing in part due to the power utility losses. Utilities across Louisiana and Mississippi cut power to nearly 1.2 million homes and businesses, according to tracking service PowerOutage.com.

As MRC informed previously, six refineries that process 1.92 million barrels per day of oil into gasoline and other petroleum products, either shut or curtailed some production, sources. That includes two Valero Energy plants in Louisiana that combined process 335,000 barrels per day and Phillips 66's 255,000 bpd Alliance, Louisiana, refinery.

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.
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Colonial Pipeline preparing to restart after Hurricane Ida in late August

Colonial Pipeline preparing to restart after Hurricane Ida in late August

MOSCOW (MRC) -- Colonial Pipeline plans to restart fuel flows late Aug. 30 after completing safety assessments in the aftermath of Hurricane Ida, restoring the nation's primary fuel artery for much of the Southeast and the East Coast, reported S&P Global.

Colonial Pipeline had temporarily shut down its Lines 1 and 2 systems from Houston to Greensboro, North Carolina ahead of Category 4 Ida. Colonial's Lines 3 and 4 from North Carolina to New Jersey never ceased operations.
Colonial said service to Lines 1 and 2 should be restored the evening of Aug. 30, pending successfully completion of all restart protocols, one day after Ida swept through Louisiana.

"We want to express our sympathy and concern for the many people who have suffered tremendously because of this hurricane," said Wes Dunbar, Colonial vice president of operations, in a statement. "I also want to thank those who are helping get Colonial back in service as quickly and safely as possible. We know the fuels delivered by our pipeline are important to emergency responders, as well as to our daily lives. We are thankful for the coordination from our local, state and federal partners for their assistance as we work to restore our pipeline into service."

Colonial Pipeline typically delivers more than 100 million gal/d of fuels. Colonial stretches more than 5,500 miles from the Houston refining hub to New York Harbor, supplying about 45% of all the gasoline and diesel fuel consumed on the East Coast. Product typically moves at 3 to 5 mph through the pipeline.

Assuming Colonial comes back online as scheduled, there will not be any fuel shortages unless supplies are exacerbated by panic buying, said fuel analyst Patrick DeHaan of GasBuddy.com.

Category 4 Hurricane Ida devastated much of southern Louisiana and Mississippi on Aug. 29, leaving well more than 1 million electricity customers without power for the foreseeable future.

In advance of the storm, about 95% of the US Gulf's oil and gas production was shut-in, and roughly 2.2 million b/d of oil refining capacity was closed.

We remind that, as MRC informed before, the fourth-largest US refiner Phillips 66 said earlier this month that it put the smaller of its two Louisiana refineries up for sale amid continued losses and an uncertain future for motor fuels. The company is holding talks with a potential buyer on the sale of its 255,600 barrel-per-day (bpd) Alliance refinery in Belle Chasse, Louisiana, according to two people familiar with the matter. The identity of the potential buyer could not immediately be learned. US refiners have closed or sold oil processing plants as the COVID-19 pandemic slashed demand for gasoline and jet fuel, generating losses for the industry.

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.
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Mexican Pemex restores oil production after recent fire at offshore platform

Mexican Pemex restores oil production after recent fire at offshore platform

MOSCOW (MRC) -- Mexican state oil firm Petroleos Mexicanos (Pemex) resumed 421,000 barrels per day in oil production and brought back online 125 wells following a deadly fire at an offshore platform on Aug. 22, reported Reuters.

The accident in the southern Gulf of Mexico at the offshore platform that is part of Pemex's most productive oil field Ku-Maloob-Zaap, knocked out about 25% of Mexico's total production.

As MRC informed before, Pemex Petroquimica, a subsidiary of the Mexican state oil company Pemex, has resumed production of high density polyethylene (LDPE) on No. 2 line in Cangrejera, Mexico after an unscheduled repairs. Pemex postponed the restart of this line with a capacity of 200,000 mt/year of LDPE until August 10, 2021. It was originally planned that the launch of this production will begin at the end of July. The line was shut on July 10, 2021.

According to MRC's ScanPlast report, June estimated LDPE consumption in Russia dropped to 45,190 tonnes from 47,780 tonnes a month earlier. Russian producers increased their export PE sales. Russia's estimated LDPE consumption totalled about 280,850 tonnes in the first six months of 2021, down by 2% year on year. PE production decreased, whereas exports increased.

Petroleos Mexicanos (Pemex) is a Mexican state-owned oil and gas and petrochemical company. Since the nationalization of the Mexican oil industry in 1938, Pemex has remained a state-owned company and, by law, has exclusive rights to explore and produce oil in the country. Almost 60% of the company's revenues go to the state budget. Petrochemical products include, but are not limited to, polyethylene, polyvinyl chloride.
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