November prices of European PVC rise by EUR95/tonne and higher for CIS markets

MOSCOW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for November shipments to the CIS countries began in the middle of last week. Given a major increase in ethylene prices and the cost of electricity in the region, European producers raised their export prices by EUR95/tonne, and in rare cases, there was even a price rise of EUR150/tonne, according to ICIS-MRC Price report.

The November contract price of ethylene was agreed up by EUR92,5/tonne from the previous month, which theoretically allows to talk about an increase of EUR47/tonne from October in the net cost of PVC production. Electricity prices have also grown significantly for the past few months. All these factors amid an acute and long shortage led to another wave of growth in European producers' PVC prices. Producers raised their export prices by EUR95-100/tonne for November shipments.

Disruptions in operations and scheduled shutdowns for maintenance at production capacities in Europe, as well as low PVC imports from the United States seen for a long time, have negatively affected the balance of the European PVC market, including exports. As a result, some buyers from the CIS countries reported an almost complete absence of PVC for them from some European producers for the past three months.

Overall, deals for November shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were discussed in the range of EUR1,650-1,710/tonne FCA, whereas the previous month's deals were negotiated at EUR1,500-1,615/tonne FCA.
MRC

MOSCOW (MRC) -- Oil prices rose on Monday after Saudi Arabia's state-owned oil producer Aramco raised the official selling price for its crude, suggesting demand remains strong at a time of tighter supplies, said Hydrocarbonprocessing.

Brent crude was up by 90 cents or 1.1% at USD83.64 a barrel, after dropping nearly 2% last week. U.S. oil gained 87 cents or 1.1% to USD82.14, having declined almost 3% through Friday.

Aramco late on Friday raised its December official selling price to Asia for its Arab light crude to USD2.70 a barrel versus Oman/Dubai crude, up USD1.40 from this month.

The move by Aramco suggests "demand remains strong" as the OPEC producer and other major oil exporters keep the reins on supply, ANZ Research said in a note.

The Organization of the Petroleum Exporting Countries and allies such as Russia, together known as OPEC+, agreed last week to stick to their plan to raise oil output by 400,000 bpd from December.

U.S. President Joe Biden had called on OPEC+ to produce more barrels to dampen rising prices and on Saturday said his administration has "other tools" to deal with the higher price of oil.

Elsewhere, China's oil imports slumped in October to the lowest in three yr, as state-owned refiners withheld purchases due to higher prices, while independent refiners were restrained by limited quotas for bringing in crude.

As per MRC, crude oil futures edged higher in mid-morning trade in Asia Nov. 8, extending gains from the previous session amid a broad risk-on sentiment in financial markets following a strong US jobs report and news of Pfizer's antiviral drug. At 10:10 am Singapore time (0210 GMT), the ICE January Brent futures contract was up USD1.03/b (1.24%) from the previous close at USD83.75/b, while the NYMEX December light sweet crude contract rose USD1.02/b (1.26%) at USD82.29/b. Both benchmarks had settled higher by 2.7%-3.1% in the last session Nov. 5.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

MOSCOW (MRC) -- Polymir, part of JSC "Naftan", has resumed some of its low density polyethylene (LDPE) production capacities after a scheduled shutdown for maintenance, according to ICIS-MRC Price report.

The plant's customers said the Belarusian producer had resumed production at its second LDPE line (158 grade polyethylene) by 8 November, after the scheduled turnaround. The outage began on 1 October. The second line's annual production capacity is 65,000 tonnes.

Polymir (part of Naftan) is Belarus' largest petrochemical company, producing a wide range of chemical products, such as low density polyethylene (LDPE), acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. Polymir was founded in 1968. The producer uses technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), as well as the developments of scientific research institutes and design institutes of the CIS countries. The plant's annual production capacity is 130,000 tonnes.
MRC

MOSCOW (MRC) -- US President Joe Biden's administration on Friday set a goal for driving down the cost of removing CO2 from the atmosphere, as part of a US plan to decarbonize the economy by 2050, reported Reuters.

The Department of Energy's Carbon Negative Earthshot seeks to slash the cost of carbon removal to USD100 a ton by the end of the decade, either through Direct Air Capture (DAC) or helping forests and other natural systems capture and store the gas.

It is the department's third "Earthshot", meant to help achieve Biden's climate goals, by driving innovations in the toughest technologies to crack. The first two set goals on lowering costs of green hydrogen and long-term utility scale battery storage of energy from renewables.

"We have already poisoned the atmosphere, we have to repair and heal the Earth and the only way to do that is to remove carbon dioxide permanently," Energy Secretary Jennifer Granholm said while introducing the initiative at the COP26 U.N. climate talks in Glasgow, Scotland.

Fatih Birol, head of the Paris-based International Energy Agency, praised the initiative as an example of how governments can help push down technology costs that energy markets cannot do alone. "We need governments to push the magic button of innovation," he said.

Jennifer Wilcox, head of the DOE's office of fossil energy and carbon management, said using natural systems to remove carbon must surpass hurdles, such as making sure forest fires or future farming do not simply return carbon back to the atmosphere. "Part of this work will be defining what metrics (are) in order to monitor and verify storage on a long term scale" for nature-based approaches, Wilcox said.

The carbon negative initiative will be funded through the Energy Department's annual appropriations. In addition, the bipartisan infrastructure bill has about USD3.5 B in incentives for DAC demonstration projects. That bill has already passed the US Senate and that the House of Representatives could vote on it as soon as Friday.

As MRC informed previously, in October 2021, ExxonMobil initiated the process for engineering, procurement and construction contracts as part of its plans to expand carbon capture and storage (CCS) at its LaBarge, Wyoming facility, which has already captured more CO2 than any other facility in the world. The expansion project will capture up to 1 MM metric tons of CO2, in addition to the 6-7 MM metric tons already captured at LaBarge each year.

We remind that ExxonMobil plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022. The new facility follows validation of ExxonMobil’s initial trial of its proprietary process for converting plastic waste into raw materials. To date, the trial has successfully recycled more than 1,000 metric tons of plastic waste, the equivalent of 200 million grocery bags, and has demonstrated the capability of processing 50 metric tons per day.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

MOSCOW (MRC) -- Crude oil tanks at the Cushing, Oklahoma storage hub are more depleted than they have been in the last three years, and prices of further dated oil contracts suggest they will stay lower for months, said Reuters.

U.S. demand for crude among refiners making gasoline and diesel has surged as the economy has recovered from the worst of the pandemic. Demand across the globe means other countries have looked to the United States for crude barrels, also boosting draws out of Cushing.

Analysts expect the draw on inventories to continue in the short-term, which could further boost U.S. crude prices that have already climbed by about 25% in the last two months. The discount on U.S. crude futures to the international Brent benchmark should stay narrow. "Storage at Cushing alone has the potential to really rally the market to the moon," said Bob Yawger, director of energy futures at Mizuho.

Cushing stockpiles have dropped to 31.2 MM barrels, the lowest since October 2018, the Energy Information Administration said last week, or about half of where inventories were at this time a yr ago. Inventories have fallen because of a ramp-up in U.S. demand, which has encouraged domestic refiners to keep crude at home to provide fuel such as gasoline and distillates to U.S. consumers, said Reid I'Anson, senior commodity analyst at Kpler.

In addition, U.S. production has been slow to recover from declines seen in 2020. At the end of 2019, the nation was producing roughly 13 MM barrels of oil per day (bpd), but in recent weeks has been less than 11.5 MMbpd. At the same time, product supplied by refineries - a proxy for demand - is about just 1% below pre-pandemic peaks.

As a result, the spread between U.S. crude and international benchmark Brent, has collapsed. The spread between U.S. crude delivered to Cushing and Brent narrowed to roughly USD1.09 a barrel this week from USD4.47 earlier this month, which had been about the widest spread since May 2020.

In an additional sign of high short-term demand for U.S. crude, the premium for U.S. crude delivered this December versus December 2022 reached a high this week of USD12.48 per barrel, most since at least 2014, according to Refinitiv Eikon data. In the next three months, Rystad Energy expects refinery runs in the United States to increase by 500,000 to 600,000 bpd. This would outpace production gains of 300,000-400,000 bpd, and keep the WTI/Brent spread narrow.

"Only if OPEC (the Organization of the Petroleum Exporting Countries) intervenes with more supply of crude or if COVID rears its ugly head again, curbing demand, this high volatility will come off," said Mukesh Sahdev, senior vice president and head of downstream at Rystad Energy.

As per MRC, crude oil futures edged higher in mid-morning trade in Asia Nov. 8, extending gains from the previous session amid a broad risk-on sentiment in financial markets following a strong US jobs report and news of Pfizer's antiviral drug. At 10:10 am Singapore time (0210 GMT), the ICE January Brent futures contract was up USD1.03/b (1.24%) from the previous close at USD83.75/b, while the NYMEX December light sweet crude contract rose USD1.02/b (1.26%) at USD82.29/b. Both benchmarks had settled higher by 2.7%-3.1% in the last session Nov. 5.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC