Crude oil futures rise in Asia as markets regained some calm after new COVID-19 variant sent oil prices plunging

MOSCOW (MRC) -- Crude oil futures were sharply higher in mid-morning trade in Asia Nov. 29 as markets regained some calm after the new Omicron variant of the coronavirus sent oil prices plunging by more than 10% on Nov. 26, according to S&P Global.

At 9:41 am Singapore time (0141 GMT), the ICE January Brent futures contract was up USD3.24/b (4.46%) from the previous close at USD75.96/b, while the NYMEX January light sweet crude contract was USD3.44/b (5.05%) higher at USD71.59/b.

Investors were returning to buy the dip after markets plunged by more than 10% Nov. 26 on reports of a new COVID-19 variant from South Africa that appeared to be more transmissible and better able to evade immune responses.

However, analysts cautioned Nov. 29 that the impact of the new variant was still unclear.

"It's early days, with a lot more concern than facts. The virus may well be more transmissible, but it's hard to be sure yet. The symptoms are different from Delta, and seem to be mild in vaccinated young people (primarily fatigue), but it's fair to say that vaccinated young people have not been the most vulnerable group in the pandemic so far," ANZ analysts Brian Martin and Daniel Hynes said in a note.

The emergence of the new variant may dampen hopes of a swift economic recovery after the coronavirus that causes COVID-19 first appeared in end 2019 and sent the global economy into a tailspin.

Several countries have already announced bans on flights from South Africa and neighboring countries, while Israel has become the first country to ban entry to all foreigners for 14 days from Nov. 28.

We remind that, as MRC informed before, earlier this month, TotalEnergies and Daimler Truck AG signed an agreement on their joint commitment to the decarbonization of the road freight in the European Union. The partners will collaborate in the development of ecosystems for heavy-duty trucks running on hydrogen, with the intent to demonstrate the attractiveness and effectiveness of trucking powered by clean hydrogen and the ambition to play a lead role in kickstarting the rollout of hydrogen infrastructure for transportation.

We also remind that TotalEnergies has recently inaugurated the extension of Synova in Normandy, the French leader in recycled polypropylene (PP) production. TotalEnergies is therefore doubling its mechanical recycling production capacity for recycled polymers, to meet growing demand for sustainable polymers from customers, such as Automotive Manufacturer (Auto OEM) and the construction industry.

According to MRC's ScanPlast report, 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) - Hyundai Chemical, a JV between South Korea’s Lotte Chemical and Hyundai Oilbank, has started to market cargoes from the new polypropylene (PP) plant in Daesan in mid-November, according to CommoPlast with reference to market sources.

Chinese customers informed CommoPlast of having received offers for on-spec cargoes of homopolymer of propylene (homopolymer PP) from its newly launched plant.

Thus, offer prices for these consignments were heard at USD1160/ton CFR China, which are relatively competitive. It is reported that several thousand tons have already been sold.

At the same time, off-grade PP cargoes were offered by the producer for shipments to Vietnam.

It is expected that more quantities from the producer would emerge in the near term.

Hyundai Chemical's petrochemical complex houses a cracker with an annual output of 900,000 mt/year of ethylene and 300,000 mt/year of propylene. whereas downstream units include an 850,000 mt/year polyethylene (PE) plant and a 500,000 mt/year PP plant.

As MRC reported earlier, Hyundai Oilbank shut its one crude distillation (CDU) unit, a residual desulphurises and a fluid catalytic cracker (FCC) unit at its Daesan refinery for a maintenance turnaround on April 8, 2020. The refinery remained off-stream for around 30-45 days. Located at Daesan in South Korea, the refinery has a crude processing capacity of 395,000 bpd.

According to MRC's ScanPlast report, 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.

Hyundai Chemical is a joint venture between South Korea’s Lotte Chemical and Hyundai Oilbank
MRC

MOSCOW (MRC) -- A fire broke out at Sinopec Guangzhou Petrochemical's No. 4 refinery unit on 27 November 2021 night, according to CommoPlast.

It took the fire department nearly two hours to extinguish the fire at the company's refinery, located in Guangzhou, China.

The cause of the fire was preliminarily determined as leakage of coking gasoline when the company attempted to restart the unit from maintenance work.

Apparently, there are no damages caused to the company's downstream polypropylene (PP) and polyethylene (PE) plants.

Sinopec Guangzhou's petrochemical complex houses two PP lines with a combined capacity of 400,000 tons/year.

As MRC reported earlier, No. 2 PP line was shut for scheduled maintenance during the incident.

Meanwhile, No.1 PP line with the capacity of 200,000 tons/year and PE plant with the capacity of 200,000 tons/year have been operating normally.

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.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) -- The Tamil Nadu government has categorised chemicals and petrochemicals as sunrise sectors to extend financial support through additional incentives. It has also leveraged investments for setting up of three large petrochemical projects in Thoothukudi, Nagapattinam and Cuddalore, according to Industries Minister Thangam Thennarasu, according to The New Indian Express.

Speaking at the summit on ‘Global Chemical and Petrochemical Manufacturing Hubs in India’, the minister said the three projects will position the State as a petrochemical investment destination.

Stating that the investment promotion agency, Guidance, is interacting continuously with all chemical associations to address their requirements, he said the State aims to establish sector-specific clusters for electronics, foods, furniture, chemicals and petrochemicals by identifying new industrial zones and industrial land banks.

Among the three projects is an oil refinery complex to be established at Thoothukudi with a whopping investment of around Rs 40,000 crore by Middle East-based Al Kharafi. Also, a nine-million-metric-tonne per annum refinery is being set up at Nagapattinam by Chennai Petroleum Corporation Ltd (CPCL), a subsidiary of the Indian Oil Corporation Ltd (IOCL). The estimated investment in the CPCL-IOCL project, which will also have a petrochemical complex, is Rs 31,580 crore. The third project pertains to TCG group, which operates Haldia Petrochemicals in Bengal, setting up a petrochemicals project of international scale at Cuddalore.

The Thoothkudi project is awaiting clearance from the Ministry of Environment, said official sources. The project ran into trouble after Ministry of Petroleum and Natural Gas (refinery division) directed the Chief Secretary of Tamil Nadu to take appropriate action on complaints against ongoing land acquisition at Allikulam and surrounding villages in Thoothukudi.

In May 2020, the Expert Appraisal Committee (EAC) of the Ministry of Environment Forest & Climate Change, said such a polluting industry cannot be allowed close to dense residential areas. It was suggested that SIPCOT find a place at least 25 km away from the town and 10 km from any habitation and ecologically-important areas. Official sources said the project will get clearance after consultations with people.

Similarly, the other two projects are facing opposition and the previous government had cancelled its notification on constituting a Petroleum, Chemical and Petrochemical Investment Region (PCPIR), encompassing 45 villages in Cuddalore and Nagapattinam districts. The State Assembly had also adopted a Bill declaring the Cauvery delta area as a protected agricultural zone.

Meanwhile, the minister said the State has established a Polymer Park spread across 306 acres near Chennai to cater to the needs of plastic manufacturing and logistics industries. “We have proposed to establish a pharmaceutical park and a textile park in the State,” he added.

As MRC wrote before, in August, 2021, McDermott International announced a contract award for the engineering, procurement, construction and commissioning (EPCC) of a new naptha hydrotreating unit and a new isomerization unit with associated facilities for the Barauni Refinery Expansion Project in Bihar, India, for Indian Oil Corporation Limited.

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) -- The board of directors of Thailand-based Indorama Ventures (IVL), a large producer of recycled polyethylene terephthalate (rPET) for beverage bottles, has approved the purchase of land, buildings and utility machinery from Aurus Specialty to utilize for a proposed PET recycling facility in Thailand, according to Apic-online.

The assets, valued at a total of 112.90-million baht, will be acquired by Indorama Polyester Industries and Indorama Holdings, direct subsidiaries of IVL.

Subject to approval from the board of investment, the transaction is expected to be com-pleted in the first quarter of 2022.

The project will also comprise a preform manufacturing unit and a solar power facility to form a comprehensive green and sustainable recycling solution, IVL noted.

As MRC reported before, in July 2021, IVL has announced plans to build a facility in Karawang, Indonesia, to recycle almost 2 billion plastic bottles a year in support of the Indonesian government’s plan to reduce ocean debris. The facility, which is planned to open in 2023, will recycle 1.92 billion PET bottles annually and will employ 217 people.
The plant will provide the washed and shredded postconsumer bottles as PET flake feedstock to produce recycled resin that is suitable for food-contact use.

According to MRC's ScanPlast report, September estimated PET consumption in Russia increased to 56,960 tonnes, up by 10% year on year. Russia's overall PET consumption reached 592,560 tonnes in the first nine months of 2021, up by 12% year on year.

Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB), is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Africa, Asia Pacific, Europe and Americas. The company’s portfolio comprises Integrated PET, Olefins, Fibers, Packaging and Specialty Chemicals. Indorama Ventures products serve major FMCG and automotive sectors, i.e. beverages, hygiene, personal care, tire and safety segments. Indorama Ventures has approx. 24,000 employees worldwide and consolidated revenue of US$ 11.4 billion in 2019. The Company is listed in the Dow Jones Emerging Markets and World Sustainability Indices (DJSI).
MRC