Record high HDPE prices remain in the Russian market

MOSCOW (MRC) -- Negotiations over December prices of high density polyethylene (HDPE) began in Russia late last week. Some sellers announced a price increase of Rb5,000/tonne, and others intend to maintain their prices at the level as of the second half of November, according to ICIS-MRC Price report.

HDPE supply has been increasing gradually in the Russian market after the end of the producers' shutdowns for maintenance and higher capacity utilisation. But there has been no need to talk about an oversupply so far. Moreover, the devaluation of the rouble against the dollar significantly reduced the ability to increase imports. As a result, some sellers rolled over their polyethylene (PE) prices as of the second half of November for December deliveries, and in some cases, buyers even reported a price rise of Rb5,000/tonne.

Gazprom neftekhim Salavat and Kazanorgsintez finished their turnarounds in September-October. By the third decade of November, Stavrolen had resumed its HDPE production with the annual capacity of 300,000 tonnes after a long shutdown for maintenance. Thus, the period of this year's scheduled shutdowns for repairs at Russian plants came to an end.

Supply of PE has been increasing gradually in the market, and demand has been subsiding in some consumption segments due to seasonal factors. In addition, record high prices have been putting a major pressure on demand for the past few months.

This year's HDPE imports are 20% lower than last year. Some market participants reported a slight increase in imports from Iran. But the current devaluation of the rouble against the dollar blocks all the prospects for the growth of HDPE imports.

In the spot market, some sellers announced their December offer prices for film grade HDPE in the range of Rb150,000-156,000/tonne, including VAT and delivery. The spread of blow moulding PE prices was wider and ranged between Rb150,000-167,000/tonne FCA, including VAT and delivery.
MRC

MOSCOW (MRC) -- A fire broke out at the Eni refinery in Stagno, in the municipality of Collesalvetti, near Livorno, which triggered the alarm throughout the province, especially for the black smoke and exhalations released, according to L'Unione Sarda.

The local fire services teams from Pisa, Lucca, and Florence were called to the site in Collesalvetti at around 14:30 local time to tackle the fire. After hours of work, the firefighters managed to put out the fire.

The fire, which also triggered an explosion, involved the "hot oil furnace" inside the plant and after the fire extinguishing operations, cooling and reclamation operations have been started.

No injuries were reported.

The investigations on the incident started. Based on a first hypothesis, the plant was under maintenance and perhaps there were hydrocarbon residues that caught fire.

As MRC wrote earlier, Eni is evaluating conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality by 2050.

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 the first nine months of 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 PP random copolymers decreased significantly.

Eni, abbreviation of Ente Nazionale Idrocarburi, in full Eni SpA, Italian energy company operating primarily in petroleum, natural gas, and petrochemicals. Established in 1953, it is one of Europe's largest oil companies in terms of sales.
MRC

MOSCOW (MRC) -- A national security review has delayed the sale of Royal Dutch Shell's controlling interest in a Texas refinery to Mexico's national oil company Petroleos Mexicanos (Pemex), said Hydrocarbonprocessing.

Shell in May disclosed a sale of its 50% interest in the 302,800 bpd Deer Park, Texas, refinery outside Houston to partner Pemex for about USD596 MM. Approval by the powerful federal Committee on Foreign Investment in the United States (CFIUS) is last hurdle to transfer full control of the Texas refinery to Pemex, said people familiar with the matter.

Pemex did not immediately reply to a request for comment. A spokesperson for CFIUS declined to comment."There's no new closing date," one of the people familiar with the matter said. "Could be next week. Could be early next year."

U.S. Representative Brian Babin, a Republican representing southeast Texas, in June said he had "significant concerns" about the deal and called upon U.S. Treasury and Energy departments to do a full review of the sale.

"This transaction creates a tangible public health and environmental risk to the Texas residents who work at and live in proximity to the Deer Park facility, as well as an economic risk to those with a stake in the financial well-being of the company," Babin wrote in a letter to two departments. Babin said he was "not confident Pemex has the corporate wherewithal to operate such a facility in the United States," according to his June 21 letter to Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm.

Under the sale agreement announced in May, Shell will retain control of its the Deer Park facility's chemical plant and the company will have only one refinery in the United States, the 230,611-bpd plant in Norco, Louisiana.

As MRC informed previously, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Global jet fuel markets stayed under pressure on Tuesday as more countries expanded border restrictions to keep the new Omicron coronavirus variant at bay, prompting travelers to reconsider their plans, reported Reuters.

Jet fuel demand - the biggest laggard in the oil complex - had been forecast to post the strongest growth of 550,000 bpd to 5.9 MMbpd in fourth quarter, according to the International Energy Agency in its Nov. 16 report.

But now Omicron poses the greatest risk to jet fuel consumption. Hong Kong expanded a ban on entry for non-residents from several countries, the latest to expand travel curbs after Israel and Japan have already announced border closures to all foreign travelers.

Britain and Australia have tightened rules for all arrivals in response to the new variant while hundreds and thousands of would-be travelers are now considering to cancel or delay their trips in response to renewed restrictions.

"The real risk from the new variant is ... the reimposition of more widespread flight restrictions during the winter and again reducing current global jet fuel demand of some 6 MMbpd significantly," energy consultancy FGE said in a note.

Asian refining margins for jet fuel slumped to their lowest in more that two months on Monday at USD6.92 a bbl, while the front-month time spread for the aviation fuel in Singapore flipped to a contango for the first time since end-September.

"Current jet demand levels are just 1 MMbpd above last winter, when cases and hospitalizations were far higher and before any widespread vaccinations," Goldman Sachs analysts said in a Nov. 26 note.

"While a worst case outcome could be a return to last winter's levels, 0.5 MMbpd downside to our current base-case until 2Q22 would be a conservative assumption given what we know at present."

As MRC informed earlier, the Omicron coronavirus variant kicked oil prices lower late last week and has sapped refining margins, but with crude futures rallying on Monday, the impact could be limited. Oil prices plunged more than 10% on Friday - their largest daily drop since April 2020 - but recovered some of those losses on Monday, standing up nearly 5% on the day. Analysts said the Friday sell-off had been excessive. Refining margins fell further, increasing the impact of new coronavirus curbs that had already been rolled out in Europe.

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 expansion of electromobility is progressing, and the need for charging stations is growing accordingly, said the company.

The European Green Deal fixes a target of one million public charging points to be available by 2025. They will be needed to power the 13 million electric cars then expected on European roads. Covestro is driving the transition to electromobility with innovative material solutions and has been cooperating for more than ten years with EVBox Group, a leading Dutch full-service provider for electric car charging. By using Makrolon® RE, the ISCC PLUS-certified mass-balanced polycarbonate, both companies aim to achieve an even more sustainable solution.

The objective is to set a new standard for charging infrastructure: while electric vehicles no longer require fossil fuels for power, both partners are now looking to conserve resources for charging stations as well and equip them with more sustainable materials. Joint developments are just beginning, but ISCC PLUS-certified Makrolon® RE has already cleared one important hurdle: it meets the technical requirements of charging station manufacturers.

As MRC informed previously, earlier this month, DSM completed the sale of the resins & functional materials businesses to Covestro for EUR1.6 billion (USD1.9 billion), including EUR1.4 billion in cash.

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.

With 2020 sales of EUR 10.7 billion, Covestro is among the world’s leading polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative, sustainable solutions for products used in many areas of daily life. In doing so, Covestro is fully committed to the circular economy. The main industries served are the automotive and transportation industries, construction, furniture and wood processing, as well as electrical, electronics, and household appliances industries. Other sectors include sports and leisure, cosmetics, health and the chemical industry itself. At the end of 2020, Covestro has 33 production sites worldwide and employs approximately 16,500 people (calculated as full-time equivalents).
MRC