Crude oil futures down after strong mid-week gains on prospect of increased supply in the US and fresh COVID-19 outbreak in China

Crude oil futures down after strong mid-week gains on prospect of increased supply in the US and fresh COVID-19 outbreak in China

MOSCOW (MRC) -- Crude oil futures edged lower in mid-morning trade in Asia Sept. 17 amid profit-taking by investors after strong mid-week gains, and as markets assessed the prospect of returning supply in the US Gulf Coast and a fresh COVID-19 outbreak in China, reported S&P Global.

At 10:41 am Singapore time (0241 GMT), the ICE November Brent futures contract was down 16 cents/b (0.21%) from the previous close at USD75.51/b, while the NYMEX October light sweet crude contract was 15 cents/b (0.21%) lower at USD72.46/b.

Demand concerns have resurfaced as China battles a fresh outbreak of COVID-19 cases in southern Fujian province. The country's National Health Commission recorded 49 locally transmitted cases Sept. 15 and 50 the day before.

Supply from the US Gulf Coast was also gradually returning to normal after 95% of US Gulf oil and gas production was shut in late August due to Category 4 Hurricane Ida; 513,878 b/d of crude or 28.2% remained offline as of Sept. 16, according to the US Bureau of Safety and Environmental Enforcement.

"With the oil industry still recovering from Hurricane Ida, the arrival of Hurricane Nicholas this week stoked fears of further disruptions. However, that risk appears to have abated, with companies reporting little disruption in Texas," ANZ Research analysts said in a note.

Nonetheless, crude prices recorded strong gains mid-week, with both benchmarks on track to settle higher by at least 3.5% on the week.

Commercial crude oil stocks in the US have fallen for six straight weeks, with the most recent report from the US Energy Information Administration showing a 6.42 million-barrel draw to 417.45 million barrels last week. US crude oil stocks now looked set to push past pre-pandemic lows of 416.07 million barrels for 2019.

As informed earlier, Shell said earlier this month 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 then it was 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

Air Liquide partners to study decarbonization of refinery

Air Liquide partners to study decarbonization of refinery

MOSCOW (MRC) -- Italy's Saras has agreed to team up with French firm Air Liquide to study plans for the possible decarbonization of its Sarroch refinery in Sardinia, the two companies said.

The companies will assess the feasibility of using carbon capture and storage technology to cut emissions at the plant on the Mediterranean island.

"This agreement is an important step in Saras's commitment to tackle the energy transition challenge, guaranteeing the sustainability of our plant in the medium-long term," said Saras CEO Dario Scaffardi.

In addition to the CCS partnership with Air Liquide, Saras has defined a series of projects which will focus on the reduction of CO2 emissions and preparation for the energy transition.

Commenting on the partnership, Dario Scaffardi, CEO, Saras, said that the agreement is an ‘important step’ in Saras’ commitment to address the challenge of the energy transition.

As per MRC, Air Liquide has signed a new long-term contract with Russian steel producer Severstal to supply oxygen to its CherMK site in Cherepovets, Russia. PJSC Severstal and Air Liquide signed a new long-term contract for the supply of oxygen, nitrogen and argon to Cherepovets. Air Liquide is investing about 50 million euros in the construction of a modern air separation unit (ASU), which will increase energy efficiency and reduce the complex impact of Severstal's production processes on the environment.

As per MRC, Air Liquide, one of the world's leading industrial gas companies, has three long-term gas supply contracts with BASF in Antwerp, Belgium. The company has signed a new 15-year agreement to resume air gas supplies to existing plants operated by BASF in the area, as well as to a new ethylene oxide plant being built by BASF.

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

Formosa to pay nearly USD3 mln for Clean Air Act violations

Formosa to pay nearly USD3 mln for Clean Air Act violations

MOSCOW (MRC) -- Formosa Plastics Corp., part of Formosa Petrochemical - the world's petrochemical major, has agreed to pay nearly USD3 million in civil penalties for violating the Clean Air Act, reported Reuters with reference to the US Department of Justice announced.

The Texas plastics company also agreed to improve its risk management program at its petrochemical plant in Point Comfort.

The US Environmental Protection Agency began investigating Formosa after a series of fires, explosions and accidental releases at the plant in Point Comfort, a city on the Gulf Coast about 105 miles (170 kilometers) southwest of Houston.

Workers suffered burns and inhaled chlorine as a result of those accidents, which happened from 2013 to 2016, the DOJ said.

“Formosa repeatedly failed to comply with the chemical accident prevention provisions of the Clean Air Act at the Point Comfort plant, repeatedly placing their workers, neighbors and the environment in danger,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division.

The company said it has added a team of health and safety professionals to help ensure similar accidents don't happen in the future. Formosa has also increased staffing in its process safety management department, according to Ken Mounger, executive vice president.

In 2019, Formosa agreed to pay USD50 million to settle a lawsuit brought by Texas residents over allegations that the company spilled tons of pellets into waterways near the Gulf of Mexico.

As MRC informed previously, Formosa Plastics USA partially restarted its Baton Rouge operations, which include a 513,000 mt/year polyvinyl chloride (PVC) plant, post-Ida on September 7, 2021. Meanwhile, the company is awaiting full restoration of normal industrial gas feedstock supply.

We remind that Formosa Plastics USA has postponed the start-up of its expanded PVC production capacities at its existing plant in Baton Rouge, Louisiana, to Q4 2022. Initially, the company planned to launch the expanded capacities at its 513,000 mt/year of PVC plant in Q4 2021. Formosa did not respond to inquiries about the delay. The company intends to debottleneck production at this plant, adding 130,077 mt/year of PVC capacity, according to permitting documents.

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 580,500 tonnes in the first seven months of 2021, up by 4% year on year. At the same time, one producer reduced its output.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Indian Srichakra Polyplast commissions food-grade plastic recycling facility

Indian Srichakra Polyplast commissions food-grade plastic recycling facility

MOSCOW (MRC) -- Srichakra Polyplast has commissioned a food-grade quality recycled polyethylene terephthalate (PET) pellet facility and a new polyolefins recycling facility to produce deodorised bottle-to-bottle grade quality polyolefin pellets, according to The Hindu BusinessLine.

The Hyderabad-based plastic recycling and waste management company has invested USD10 million to strengthen its recycling capabilities for high grade recycled plastic to customers in India and global markets such as Europe and the United States.

The company’s new facility features US Food and Drug Administration-approved technology provided by Starlinger.

The company produces food-grade quality PET pellets, which can be used to produce food and beverage packaging such as water, carbonated soft drink and juice bottles as well as takeaway containers, and high quality deodorised polyolefin pellets, which can be used in home and personal care product packaging such as lotion, shampoo and detergent bottles.

Ravindra Venkata, CEO and Co-founder of Srichakra, said, “The new facility enables us to produce food-grade quality recycled plastic for customers and also gives locally-sourced plastic a new life, preventing it from entering the environment.”

We remind that, as MRC reported earlier, in October 2020, ALPLA Group, a global specialist for packaging solutions and recycling, acquired a facility in Western India for the production of preforms for PET bottles from the packaging company Amcor. ALPLA Group had taken over a plant for rigid plastics in India from the global packaging specialist Amcor with effect from September 28, 2020. The plant in Alandi, West India, is in the immediate vicinity of the metropolis of Pune. It manufactures preforms for the production of PET bottles for the beverage industry. Customers include Coca-Cola and the Indian dairy company Amul.

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.
MRC

Axalta Coating Systems completes acquisition of U-POL

Axalta Coating Systems completes acquisition of U-POL

MOSCOW (MRC) -- Axalta Coating Systems, a leading global supplier of liquid and powder coatings, has announced that it has successfully completed the previously announced acquisition of U-POL Holdings Limited (U-POL), as per the company's press release.

The acquisition of U-POL, a leading supplier of paint, protective coatings and accessories primarily for the automotive aftermarket, strengthens Axalta's global refinish leadership position and supports its broader growth strategy.

"The acquisition of U-POL is another step in Axalta's growth strategy and strengthens our global leadership position in the refinish coatings segment," said Robert Bryant, Axalta's Chief Executive Officer. "The addition of U-POL's team, industry expertise, and operations strengthen our capabilities and provide a strong platform for future growth. We'll work to make the integration of U-POL as seamless as possible, while maintaining high levels of service to our customers. I'm pleased to welcome our newest team members to the Axalta family and look forward to all we can accomplish together as one Axalta."

U-POL's portfolio of high-quality automotive refinishing products and accessories include fillers, coatings, aerosols, adhesives, and paint related products as well as other automotive aftermarket protective coatings. The addition of these offerings will expand Axalta's addressable market into the important and growing mainstream and economy refinish segments. Axalta will accelerate the growth of U-POL's product portfolios by increasing market access through Axalta's existing sales and distribution channels while leveraging U-POL's distribution channels to extend the reach of Axalta's refinish coatings portfolio to new customers.

As MRC reported earlier, Wanhua Chemical, a global leader in the production and marketing of polyurethanes, petrochemicals and fine chemicals, has recently received the inaugural “Excellence Award” from Axalta. The Excellence Award is given to suppliers, who exhibit progressively exceptional overall quality, service, technology and total capacity performance for three consecutive years or longer. The Excellence Award winner also demonstrates an exceptional commitment to helping Axalta achieve its strategic initiatives.

We remind that in January, 2020 Wanhua Chemical Group disclosed plans for a second ethylene cracker project at its Yantai, China, site with local government officials. The project will include a 1.2-million metric tons/year (MMt/y) ethylene unit; pyrolysis gasoline hydrogenation; aromatics extraction; and production facilities for butadiene, high density polyethylene (HDPE), low density polyethylene (LDPE), polyethylene (PE) plastomers and elastomers, polypropylene (PP), and other derivatives. Timing and other details were not disclosed. The second ethylene project will use naphtha and C4s as feedstock.

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.

Axalta is a global leader in the coatings industry, providing customers with innovative, colorful, beautiful and sustainable coatings solutions. From light vehicles, commercial vehicles and refinish applications to electric motors, building facades and other industrial applications, our coatings are designed to prevent corrosion, increase productivity and enhance durability. With more than 150 years of experience in the coatings industry, the global team at Axalta continues to find ways to serve our more than 100,000 customers in over 130 countries better every day with the finest coatings, application systems and technology.
MRC