Crude oil futures continue rising in Asia on tightening supply outlook

Crude oil futures continue rising in Asia on tightening supply outlook

MOSCOW (MRC) -- Crude oil futures extended an uptrend into mid-morning trade in Asia Oct. 11 on a tightening supply outlook, and as a weaker-than-expected US jobs report creates a potential headwind to a recent hawkish change in US Federal Reserve monetary policy, reported S&P Global.

At 10:25 am Singapore time (0225 GMT), the ICE December Brent futures contract was up 78 cents/b (0.95%) from the previous close at USD83.17/b, while the NYMEX November light sweet crude contract was USD1.18/b (1.49%) higher at USD80.53/b.

"WTI crude futures topped USD80/b [Oct. 8] for the first time since November 2014 amid a global energy crisis while OPEC+ producers kept to their supply discipline," UOB market research analysts said in a note Oct. 11.

ANZ research analysts said in a note Oct. 11: "Crude oil gained amid a broader rally in the energy sector as fears of strong demand and supply shortage continue to grip the market. Saudi Aramco warned that high natural gas prices are already boosting oil demand for power generation and heating."

US non-farm payrolls rose 194,000 jobs in September, easing from a 366,000 increase in August, US Department of Labor data released Oct. 8 showed, and well below market expectations of a 500,000 increase.

Oil futures paradoxically moved higher following the report, as the weak growth may add headwinds to a recent hawkish pivot in US Federal Reserve monetary policy, analysts said.

"The jobs report came in well below expectations, questioning the timing of a well-telegraphed November taper, as well easing some enthusiasm about Fed hikes in 2022," TD Securities analysts said in a note. "Energy markets are solidifying at the upper end of recent trading ranges as the fear factor and right tail risks become more embedded heading into the winter months that could exacerbate the energy crisis in Europe and Asia," the TD Securities analysts added.

OCBC Treasury Research said in a note that crude oil was undeterred by the seemingly poor US non-farm payrolls numbers, and noted that Brent had closed above $80/b for a week and may remain above that support level for the time being.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

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.
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DDSM Engineering Materials aims to cut emissions by 50% by 2030

DDSM Engineering Materials aims to cut emissions by 50% by 2030

MOSCOW (MRC) -- DSM Engineering Materials has announced that it is further enabling its customers to achieve their sustainability targets by accelerating its carbon footprint and greenhouse gas emission reduction journey, as per the company's press release.

Thus, the company aims to reduce its total greenhouse gas emissions (including Scope 1, 2, 3 upstream) and the carbon footprint of its products by 50% by 2030, from a 2016 baseline.

It also targets to use 100% renewable electricity in all production plants by 2025 (was 70% in 2020) and to achieve Net Zero Scope 1 and 2 greenhouse gas emissions by 2040 on the way to Net Zero across all value chains by 2050.

This announcements align with and reinforce DSM Engineering Material’s wider sustainability roadmap. In June, DSM announced it has successfully halved the carbon footprint of Akulon PA6, and is also developing greenhouse gas reduction roadmaps for Stanyl PA46 and Arnitel TPC. In its drive toward 100% renewable electricity, DSM Engineering Materials plants in Europe and China are already fully powered by renewable electricity. In addition, DSM Engineering Materials has committed to developing and rolling out bio- and/or recycled-based alternatives for its entire portfolio by 2030; specific grades are already available for all major product lines.

Overall, all these initiatives – including the move toward bio- and recycled-based alternatives – will help DSM Engineering Materials to achieve Net Zero greenhouse gas emissions (of direct production and via renewable electricity) by 2040 on the journey to Net Zero across all value chains by 2050.

As MRC reported earlier, in April 2021, DSM said it had completed the sale of the resins & functional materials businesses to Covestro for EUR1.6 billion (USD1.9 billion), including EUR1.4 billion in cash. It included DSM Niaga, DSM additive manufacturing, and the coatings activities of the DSM advanced solar business, which together represented EUR1.01 billion of DSM’s 2019 total annual net sales and EUR133 million of DSM’s 2019 total EBITDA.

We remind that Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market were almost 56,000 tonnes in January-July 2021, down by 3% year on year (58,000 tonnes).

Royal DSM, commonly known as DSM, is a Dutch multinational corporation active in the fields of health, nutrition and materials. The Materials cluster is made up of DSM Engineering Materials, DSM Protective Materials and DSM Resins & Functional Materials. DSM Engineering Materials’ specialty plastics are used in components for the electrical and electronics, automotive, flexible food packaging and consumer goods industries.
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Nouryon starts production at new facility in Ningbo to meet growing demand for polymers in Asia

Nouryon starts production at new facility in Ningbo to meet growing demand for polymers in Asia

MOSCOW (MRC) -- Nouryon (formely AkzoNobel Specialy Chemicals), a global specialty chemicals leader, has started production at a new manufacturing facility located at its site in Ningbo, China, to meet increasing demand in the Asia region for polymers used in the Packaging, Paints and Coatings and Construction end-markets, as per the company's press release.

The facility, which began development in 2020, has an annual capacity of 35,000 tons and will produce two key intermediates - tert-Butyl hydroperoxide (TBHP) and tert-Butyl alcohol (TBA) - which are essential ingredients in the production of polymers and composites.

"Nouryon is pleased to further support our customers across Asia now that operations are up and running at our new China facility,” said Alain Rynwalt, Vice President of Polymer Specialties at Nouryon. “This investment supports Nouryon’s commitment to meet the growing needs of our customers in the region for products such as safe and hygienic food packaging, paint resins and PVC pipes."

Sobers Sethi, Senior Vice President of Emerging Markets and China at Nouryon, said: "Asia is a key region for Nouryon and the Ningbo site plays a pivotal role in achieving our growth targets. The investment in this new facility underlines our strategy of strengthening our presence in attractive high-growth markets."

Nouryon’s Ningbo site is comprised of six manufacturing facilities that produce chelating agents, organic peroxides, ethylene amines, cellulose ethers and surfactants. In Asia, Nouryon produces organic peroxides in Ningbo and Tianjin, China; Asa, Japan; and Mahad, India.

As MRC reported earlier, in April 2021, Nouryon and Atul successfully started production at Anaven, a new joint venture in Gujarat, India, that will help meet the rapidly growing demand in India’s agricultural, personal care and pharmaceutical markets.

We remind that in January 2021, Nouryon said it had decided to rename its industrial chemicals subsidiary Nobian as part of the company's global growth and branding strategies. The branding change will allow Nobian to develop its integrated European value chain for base chemicals under its own name and brand, the company says. It will also enable Nouryon to focus on growing its worldwide position in specialty chemicals, the company says.

Nouryon was officially formed in October 2018 after separating from AkzoNobel. The company manufactures everyday products, such as paper, plastics, building materials, food, pharmaceuticals, and personal care items. The company operates in over 80 countries around the world and its portfolio of industry-leading brands includes Eka, Dissolvine, Trigonox and Berol.
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Dangote refinery will cut West Africa fuel imports

MOSCOW (MRC) -- Dangote’s 650,000 barrels per day (BPD) oil refinery project has been identified as one of the oil distillation companies that would boost global refining capacity by 6.9 million barrels per day between 2021 and 2026, said the company.

The Organisation of the Petroleum Exporting Countries (OPEC), which made this disclosure in its 2021 World Oil Outlook released recently, said Africa’s medium-term outlook appears more optimistic with 1.2 million barrels-per-day (mb/d) of new capacity expected by 2026; half of which is to be accounted for by the 650,000 BPD Dangote Oil Refinery project in Nigeria, which is likely to come on stream in 2022.

The oil cartel identified these projects, which are located mostly in Nigeria, Angola and Ghana, to include a number of pre-fabricated modular facilities. “Once commissioned, these projects will help to reduce product imports to Nigeria and West Africa and will, in turn, increase the use of local crude. In North Africa, refinery capacity expansions are likely in Algeria and Egypt,” it said.

Similar to previous outlooks, OPEC said refinery additions are concentrated in developing regions, such as the Asia-Pacific, the Middle East and Africa. OPEC added that the total medium-term capacity additions of 6.9 mb/d are composed of projects in different development stages.

“Around 3.5 mb/d of capacity is under construction or close to this stage; hence, these are the projects with the highest certainty to materialize in the medium-term. There are also projects totalling 3.4 mb/d that are mostly in early stages of development, but still advanced enough in terms of financing and engineering to be considered ‘firm’ medium-term additions,” the global organisation stated.

These regions, it noted, account for almost 90% of the additions in the period 2021–2026. “The medium-term outlook contains several large projects, many of which have petrochemical integration as well. These developments are in line with expected oil demand growth,” it added.

Speaking on investments in refinery projects, OPEC puts the total global estimated required investments at USD1.5 trillion in the 2021-2045 period. It noted that these include investments of nearly USD450 billion in new refinery projects and expansions of existing units located mostly in developing countries, including those in the Middle East, Asia-Pacific, Africa and Latin America.

OPEC stated, “Required investments in the midstream sector are estimated at around USD1.1 billion in the same time horizon and are attributed to the expansion of the infrastructure for refining, storage and pipeline systems, predominantly in developing regions, but also in large oil-exporting regions (e.g. the US & Canada and the Russia & Caspian). Thus, globally, oil-related investment needs in the long term are estimated at USD11.8 trillion.

“Long-term (2021–2045) capacity additions are expected at 14 mb/d, mostly in developing countries. However, the Reference Case projects a significant slowdown in the rate of additions. Africa and Other Asia-Pacific are the regions where significant incremental capacities are expected, even after 2030. The report said, “The continent of Africa is home to an abundance of energy resources, including about 10 per cent of the world’s oil reserves; however, it still has difficulty in harnessing these precious resources to meet its energy demand.

This, in turn, hinders efforts to provide affordable and reliable energy required for economic growth and development. “Africa has yet to unlock its huge potential in the energy sector, although its ever-increasing population growth and economic prospects require more energy. This drawback is mostly due to regional uncertainties, as well as government policies and regulatory frameworks guiding the energy sector, and more recently, the efficiencies required to reduce CO2 emissions in exploration and production activities.

These challenges have made it increasingly difficult to secure much-needed financing for E&P from foreign investors."

The report noted that the impacts of the COVID-19 pandemic had also been a major setback, especially for those countries depending heavily on revenue from fossil fuels for their economic growth and development.

As per MRC, in May this year, Four oil firms including Nigeria's state-oil company approached Dangote Industries to acquire a stake in Africa's largest oil refinery.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year.
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Air Products brings liquid hydrogen plant onstream in La Porte

Air Products brings liquid hydrogen plant onstream in La Porte

MOSCOW (MRC) -- Air Products, the leading global hydrogen provider, announced that its new liquid hydrogen plant at its La Porte, Texas facility is onstream to supply increasing demand in several customer markets, said Gasworld.

The new La Porte liquid hydrogen plant produces approximately 30 tons per day and will draw its hydrogen to be liquefied from Air Products' existing Gulf Coast hydrogen pipeline network, the world's largest hydrogen plant and pipeline system.

"We invested in this new liquid hydrogen production facility in Texas to show our commitment to our customers and to help meet current and future demand. The addition of this new capacity also will allow us to target the increased growth we anticipate from several markets, namely the hydrogen for mobility market. The La Porte facility's location and operational benefits provide us with numerous supply options from this plant. We look forward to providing this new reliable source of liquid hydrogen, which is very important to manufacturing and other operations in several states," said Francesco Maione, president, Americas at Air Products.

Maione added that Air Products also plans to build a green liquid hydrogen production facility in the Southwest U.S. The zero-carbon facility will produce liquid hydrogen to be sold to the hydrogen for mobility market in California and other locations requiring zero-carbon hydrogen fuel.

From its newest commercial facility at La Porte, the hydrogen will be delivered in trailers to customers in industries including: electronics, chemical and petrochemical, metals, material handling, float glass, edible fats and oils, utilities, and the rapidly-developing hydrogen for mobility market. Air Products recently announced its intent to begin the process of converting its global fleet of approximately 2,000 distribution vehicles to hydrogen fuel cell zero emission vehicles starting in 2022.

Air Products also has liquid hydrogen production plants operating in New Orleans, Louisiana; Sacramento, California; Sarnia, Ontario, Canada; and Rotterdam in The Netherlands.

The new plant at La Porte will join Air Products' existing hydrogen and syngas production operations, as well as an air separation unit at the site. The liquid hydrogen plant will connect to, and draw hydrogen to be liquefied from, Air Products' Gulf Coast Pipeline (GCP), an approximately 700-mile pipeline stretching from the Houston Ship Channel in Texas to New Orleans, Louisiana, and capable of supplying customers with over 1.9 billion feet of hydrogen per day from 25 hydrogen production facilities. The vast pipeline includes the supply of blue hydrogen from Air Products' Port Arthur, Texas facility where approximately one million tons of carbon dioxide (CO2) has been captured annually since 2013, transported via pipeline, and used in enhanced oil recovery operations.

Pipelines offer a safe, robust and reliable supply of hydrogen to industries around the world. Globally, Air Products' pipeline operational expertise is evidenced by its network of systems. Besides the GCP, Air Products also has hydrogen pipelines in California in the U.S., in Sarnia, Ontario and Alberta, Canada, and in Rotterdam, the Netherlands.

As per MRC, Aramco, Air Products, ACWA Power and Air Products Qudra have signed a deal for the asset acquisition and project financing of a USD12bn air separation unit (ASU)/gasification/power joint venture (JV) at Jazan Economic City in Saudi Arabia.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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