Crude oil futures mixed in Asia amid Aramco price cuts and as weaker economic data put demand concerns back in focus

MOSCOW (MRC) -- Crude oil futures were seen mixed in midmorning trade in Asia Sept. 7 as weaker economic data put demand concerns back in focus and on spillover effects of Saudi Aramco's price cuts for Asian buyers, reported S&P Global.

At 10:55 am Singapore time (0255 GMT), ICE November Brent futures were 27 cents/b (0.37%) higher at USD72.49/b while the NYMEX October WTI contract was down 19 cents/b (0.27%) at USD69.10/b.

The Labor Day holiday Sept. 6 meant most US markets were closed.

"Oil prices have largely been trading in consolidation as investors digest a series of push and pull factors. On one end, the lackluster US jobs report last week and the price cuts from Saudi Arabia seems to bring some questions for oil demand outlook, while on the other end, supplies are capped by the ongoing impact from Hurricane Ida, which underpins oil prices near-term," IG Market Strategist Yeap Jun Rong told S&P Global Sept. 7.

Several analysts have said oil prices would be impacted by Saudi Arabia cutting prices for Asian buyers. The cuts suggest an uncertain demand outlook as COVID-19 cases are still on the rise in many countries, analysts from Phillip Futures said in a note.

Participants were reacting to physical crude market trends, as Aramco in its much-awaited monthly official selling price release Sept. 5 slashed prices for Asia.

For Asia-bound crude, Aramco cut October differentials versus an Oman/Dubai basis for Super Light and Light grades by USD1.30/b, Extra Light by USD1.20/b, and Medium and Heavy grades by USD1/b from September levels. The cuts were much deeper than the month-on-month drop of 13 cents/b in the Dubai futures cash/paper spread in August, which is said to be a key element in OSP calculations.

Elsewhere in China, the Caixin/Markit services Purchasing Managers' Index fell to 46.7 in August from 54.9 in July, its sharpest contraction in 16 months, while Eurozone retail sales in July also dipped 2.3% month on month.

Despite the slow demand growth in China, analysts said expectations of increased domestic air travel were picking up and a growing number of COVID-19 vaccinations could support the oil market.

Meanwhile, the damage on oil production facilities in the US Gulf of Mexico following Hurricane Ida continued to keep output largely halted, limiting price declines.

On Sept. 5, the US Bureau of Safety and Environmental Enforcement said 88.3%, or about 1.61 million b/d, of US Gulf crude output remained offline.

As informed earlier, Shell said it observed damage from Hurricane Ida to its transfer station West Delta-143 offshore facilities in the Gulf of Mexico. West Delta-143 serves as the transfer station for all production from its assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. Shell said it is not yet safe to send personnel offshore to learn the full extent of the damage and estimate the effect on production.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

MOSCOW (MRC) -- PetroChina Liaoyang Petrochemical, part of the Chinese petrochemical major - PetroChina, in which CNPC owns 80% of shares, is in plans to start up new high density polyethylene (HDPE) plant in Liaoyang, China, in September, 2021, according to CommoPlast with referemce to market sources.

The new plant will have a capacity of 400,000 mt/year of HDPE.

As MRC reported earlier, PetroChina Liaoyang Petrochemical successfully started up its new polypropylene (PP) plant in late August. Based in Liaoning City, Liaoyang Province, China, the new PP plant has a production capacity of 300,000 tons/year. Tthe construction of a new PP plant in Liaoning began in September, 2019, and was completed in early June, 2021.

According to MRC's ScanPlast report, Russia's overall HDPE production totalled slightly over 1 mln tonnes in the first half of 2021, up by 12% year on year. At the same time, only one producer increased its output.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation (CNPC), headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- September did not bring the long-awaited reduction in polyvinyl chloride (PVC) prices to Russian converters. A shortage still remained in the market, no producers reduced their prices for September shipments with one exception, according to ICIS-MRC Price report.

The last year's situation is repeated in the Russian PVC market. Converters expected prices to drop in September under the pressure of the end of shutdowns for maintenance and the approach of the "winter season". But as in the previous year, strong demand and insignificant imports allowed Russian producers to maintain record high prices in the domestic market. This month, two producers further raised their PVC prices, and only one producer reduced its prices.

Higher imports in August and stable operations of domestic producers did not lead to a surplus of resin in the market. Moreover, there were still restrictions on PVC supplies from several large producers. And these restrictions played a decisive role in pricing for September.

Demand for finished products from PVC fell in many sectors in August, and in some cases, companies reported a reduction in sales of up to 30%. However, even on the back of weaker demand for finished products, demand for resin still remained strong from most converters, whereas supply opportunities of several Russian producers were limited.

There will be the last shutdown for repairs among Russian producers in September, Kaustik, Volgograd will shut its production capacities for a three-week turnaround in the third decade of the month. The plant's annual production capacity is 90,000 tonnes.

PVC imports increased significantly in August, with North Chinese producers traditionally accounting for the bulk of shipments. But already in September, imports are expected to decrease partially because of temporary restrictions on freight rail transportation by the Chinese authorities on the back of a surge in COVID-19 diseases in the region.

In the summer months, negotiations over shipments of Russian PVC were held quite quickly, whereas discussions of September deals dragged on for several days. Converters were increasingly reluctant to agree deals at record prices. However, many producers said that they had virtually sold out all their September PVC quotas by the beginning of this week.

Over the past few months, the price range of Russian resin was quite large, deals for September shipments of PVC with K=64/67 were done in the following range: Rb155,000-201,000/tonne CPT Moscow, including VAT, for quantities less than 500 tonnes. Two producers raised their prices this month.

Two producers' prices of resin with К=58/70 also went up in September, whereas a producer, on the contrary, cut prices. Deals were done in the range of Rb178,000-216,000/tonne CPT Moscow, including VAT.
MRC

MOSCOW (MRC) -- ALPLA and Krones developed a returnable PET container that provides an optimal environment for sensitive ESL (Extended Shelf Life) products such as juice and milk in the cold chain, said the company.

Be it due to regulations, voluntary climate targets, or growing environmental awareness among consumers, sustainability issues are becoming an increasingly important factor in packaging choice. “Which type of packaging performs best from an ecological perspective depends on a number of factors and must be evaluated individually for each use case,” explains Martina Birk, who is responsible for the enviro sustainability programme at Krones. But returnable PET containers often don’t even enter into consideration in the first place. “And yet they can offer outstanding environmental performance, especially if they are distributed mainly regionally,” emphasises Birk.

The background: The production and recycling of returnable containers made of glass requires very high temperatures and causes significantly more emissions than the production of returnable PET containers. In addition, they are around six times heavier than comparable PET containers, which results in a significantly larger CO2e footprint during transport. Returnable PET containers also have practical advantages: They are light, stable and break-proof, making them more convenient for consumers to transport and safer to use.

ALPLA and Krones teamed up to make these benefits available for use for a wide range of beverages. "Until now, the main applications for returnable PET containers have been carbonated soft drinks and water,” explains Jorg Schwarzler, returnables expert and project lead at ALPLA. “But we were certain that, if we combined our expertise in materials science, preform design, container design, and systems engineering, we could find a solution for sensitive beverages like juices and dairy products. The option of using a 38-millimeter bottle neck offers particular advantages for sensitive returnable applications."

The partners dedicated particular attention to the container cleaning process because “PET is less heat-resistant than glass,” explains developer Ines Bradshaw. “So we had to find a way to ensure both a high level of microbiological safety and a high number of use cycles while cleaning at lower temperatures."

To obtain an objective and meaningful base of data, Krones’ development plant for washing technology in Flensburg carried out an elaborate series of tests, analysing the interaction of different bottle designs and cleaning processes. “The tests provided us with a very clear picture of the respective thermal, chemical, and mechanical factors,” says Bradshaw. “Among the findings: With the right combination of parameters – especially lye concentration, temperature, additive, and mechanical impact – temperatures around 60 °C are sufficient to reliably remove even dried protein, fat, and starch contamination from the containers."

A direct comparison of returnable PET and returnable glass brought to light another interesting discovery: Over the course of several cleaning cycles, the alkaline cleaning medium visibly roughened the surface of the glass bottle, whereas nothing comparable could be observed with the PET containers. “For the filling of sensitive beverages in particular, consistent container quality can be an advantage that should not be underestimated,” notes Ines Bradshaw.

As per MRC, ALPLA Group is purchasing the Wolf Plastics Group for an undisclosed amount in a move to expand the company's product portfolio in Central and Southeastern Europe. Headquartered in Kammern, Austria, Wolf also has production facilities in Hungary and Romania. The Austrian and Romanian competition authorities are currently examining the proposal, Alpla officials said in a news release. Closure of the deal is subject to regulatory approval.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.

Krones supplies customers in the international beverage and food industry with everything they need for their value creation. With its enviro sustainability programme, the group is driving the development of more energy- and media-efficient technologies and more environmentally friendly packaging.

Headquartered in Hard, Austria, ALPLA specializes in blow molded bottles and caps, injection molded parts, and preforms and tubes.
MRC

MOSCOW (MRC) -- BASF and Natural Machines announced their strategic partnership in developing a technology that enables customized face masks and eye patches produced in 3D printers, said the company.

Customization of personal care products is a global trend. To meet this growing need, a combination of product expertise and technical understanding is key. BASF, a leading supplier to the personal care industry, and Natural Machines, a solution provider for kitchen and personal care equipment, build upon their respective innovation know-how: a unique 3D printer and 3D printing knowledge from Natural Machines, and the personal care ingredients from BASF.

With this new solution users can obtain masks that are not only adaptable to individual face sizes, but also allow the incorporation of different benefits in various zones within the mask. "With this partnership we are expanding our personalized cosmetic technologies, and we very much look forward to working with Natural Machines in this promising area. We can build on their experience and expertise of 3D printing to bring this know-how into the personal care market", says Robert Parker, Director, New Business Development at Care Chemicals, BASF.

"Our initial tests proved the potential to print face masks and patches based on BASF ingredients. We continue to focus on adapting the technology, to establish a new approach for personalized face masks for our customers based on bio-based and biodegradable solutions”, says Christina Kohlmann, Senior Manager for Open Innovation Personal Care at Care Chemicals, BASF.

Through this strategic partnership, BASF will exclusively commercialize the technology as a holistic solution to the global personal care industry, comprising of a machine, cartridges, and ingredient mixtures. "Our partnership with BASF will help us to grow our portfolio from the food sector to include the cosmetics industry. We will benefit from BASF’s experience and latest developments in cosmetic ingredients, while leveraging the broad expertise we have built during the last eight years in 3D food printing. At the same time, BASF’s leading position in the personal care market gives us an extraordinary opportunity to commercialize the technology and the device in this space”, says Emilio Sepulveda, CEO of Natural Machines.

BASF and Natural Machines aim to introduce the technology to the market in 2022 globally.

As per MRC, BASF reported a better-than-expected second-quarter net profit as it managed to increase volumes and prices thanks to strong demand. Low commodity prices during the coronavirus pandemic weighed on BASF’s earnings last year, but the German group recorded a rapid recovery so far in 2021 as the global economy picked up faster than expected.

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.

BASF SE (headquartered in Ludwigshafen) - the world's largest manufacturer of chemical products for the industry, including the extraction and processing of oil and gas; has more than 150 production sites in the world, including a number of production lines in the Russian Federation.
MRC