COVID-19 - News digest as of 10.12.2021

1. Crude oil prices fall as China developer downgrades add to fears of demand outlook and on new restrictions to fight Omricon

MOSCOW (MRC) - Oil prices fell on Thursday on fears about the economic outlook in the world’s biggest oil importer following ratings downgrades to two Chinese property developers, and after some governments took measures to fight the Omicron varaint of the coronavirus, reported Reuters. Brent crude futures fell USD1.01, or 1.3%, to USD74.81 a barrel by 12:05 p.m. EDT (1705 GMT), backing off a session high of USD76.70. US West Texas Intermediate (WTI) crude futures were down USD1.00, or 1.4%, at USD71.36 after hitting a peak of USD73.34. On Thursday, ratings agency Fitch downgraded property developers China Evergrande Group and Kaisa Group to “restricted default” status, saying they had defaulted on offshore bonds, while a source said that Kaisa had started work on restructuring its USD12 billion offshore debt.

MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN) in Europe, according to the company's press release as of December 2.

Effective December 1, 2021, or as existing contract terms allow, the contract and spot prices for the products listed below rose, as follows:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR50 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR50 per metric ton;
- MAGNUM ABS resins - by EUR50 per metric ton;
- TYRIL SAN resins - by EUR50 per metric ton.

As MRC reported earlier, Trinseo raised its prices for all PS, ABS and SAN grades on November 1, 2021, as stated below:

- STYRON GPPS -- by EUR290 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech HIPS - by EUR290 per metric ton;
- MAGNUM ABS resins - by EUR230 per metric ton;
- TYRIL SAN resins - by EUR240 per metric ton.

According to ICIS-MRC Price report, in Russia, for large- and middle-sized buyers, December prices of Nizhnekamskneftekhim's GPPS were in the range of roubles (Rb) 172,750-183,700/tonne CPT Moscow, including VAT, whereas HIPS prices were at Rb178,750-189,000/tonne CPT Moscow, including VAT. Penoplex's limited December GPPS quantities were contracted at Rb195,000-197,000/tonne CPT Moscow, including VAT, in early December. The producer reported the absence of available quantities until the end of the month. Prices of Gazprom neftekhim Salavat's GPPS were at Rb172,500-181,000/tonne CPT Moscow, including VAT, this week.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.
MRC

MOSCOW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for December shipments to the CIS countries started in the middle of last week. Ethylene prices decreased slightly in the region, so European producers rolled over November PVC export prices for December shipments, according to the ICIS-MRC Price Report.

December contract price of ethylene was agreed down by EUR10/tonne from the previous month, which theoretically allows to talk about an decrease of EUR4/tonne in the net cost of PVC production compared with November. But good demand for PVC, including from the domestic market, allows to keep high prices.

Most producers rolled over November export PVC prices for December shipments. The planned shutdowns of facilities in Europe have actually come to an end, and the supply of PVC is gradually increasing in the market, but the market is still far from saturation. In addition, interruptions in the work of some producers remain.

In particular, according to market participants, the Polish Anwil stopped production due to technical problems.
All these factors allow European producers to maintain record high price levels for both the domestic and export markets over the past few years.

In general, deals on December shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were held in the range of EUR1,650-1,710/tonne FCA, which practically corresponds to the November level.

MRC

MOSCOW (MRC) - Scheduled maintenance works of several production facilities in the second half of October led to an increase in polypropylene (PP) prices on the Russian market. The shutdowns have finished, but PP prices remained steady, according to the ICIS-MRC Price Report.

Three Russian producers shut their capacities for maintenance works in September - November. In parallel, the prices of polypropylene were growing in some export directions. As a result, because of a limited supply of PP in the domestic market and the situation in foreign markets in the second half of October, Russian producers increased prices on average by roubles (Rb) 3,000/tonne.

The shutdowns ended by the second half of November, but this factor did not affect prices. The last maintenance works at Russian plants ended on 11 November, Stavrolen resumed its work after almost a month's downtime, the annual capacity of which is 120,000 tonnes.

Ufaorgsintez and Poliom stopped their production for maintenance works in September - October. Nevertheless, supply of Russian homopolymer PP remained.

Stavrolen again stopped its production from 2 December for a week due to technological issues, and the producer plans to cut production of homopolymer PP in favour of propylene copolymers. Due to technical problems, Ufaorgsintez reduced capacity utilisation, and there is a high likelihood of restrictions on homopolymer PP supplies to the domestic market in December.

Some market participants reported tight supply of PP from other producers. But there has been no need to talk about a deficit of homopolymer PP sin the Russian market so far. The demand for polymer from several consumption segments seasonally decreased, with the most noticeable decrease in processing volumes was in the construction sector.

Also, a fairly large number of converters have sufficient PP stocks from the past months. Foreign market have not affected Russian PP prices; due to a some factors, a decrease in prices was seen in a number of export directions.
As a result, Russian producers decreased export PP prices significantly in December.

Domestic prices of homopolymer PP have been steady since the second half of October, with the greatest fluctuations from some sellers. This week's spot deals for homopolymer PP raffia grade were done at Rb155,000-158,000/tonne CPT Moscow, including VAT. Prices for injection moulding homopolymer PP were heard at Rb157,000 - 160,000/tonne CPT Moscow, including VAT.

MRC

MOSCOW (MRC) -- Koch Modular Process Systems, LLC (Koch Modular), a market leading provider of engineered and fabricated modular mass transfer systems for the chemical processing industry, has announced its fabricated process modules have been installed in support of the first manufacturing plant for Origin Materials (Origin), located in Sarnia, Canada, according to Hydrocarbonprocssing.

Installation of the key production modules of the plant (Origin 1) was completed in October of 2021, six months ahead of their schedule.

Koch Modular was engaged early in the process by Origin because of the company’s demonstrated expertise in reaction, distillation, and filtration unit operations. The front end of Origin’s process was a primary focus, converting biomass to sustainable materials including chloromethylfurfural (CMF) and hydrothermal carbon (HTC). Downstream of Koch Modular’s system, Origin’s process involved the conversion of CMF into polyethylene terephthalate (PET); a strong and lightweight thermoplastic material commonly used in packaging, textiles, and many other products.

Koch Modular designed and manufactured the plant’s 17 core process modules which were delivered to site on schedule. Module installation of Origin 1 was set to be completed by the end of Q4 of 2021 as announced in April 2021.

Module installation took place well ahead of schedule, in October 2021, significantly de-risking the project. The plant remains on track for completion by the end of 2022, with commissioning and production start-up thereafter.

As MRC reported earlier, in April 2021, Origin Materials, Inc., the world’s leading carbon negative materials company, and Mitsubishi Gas Chemical, Inc., a global leader in basic and fine chemicals and advanced materials, announced a partnership to industrialize and manufacture advanced chemicals and materials built on the Origin Materials technology platform.

According to MRC's ScanPlast report, the estimated PET consumption in Russia increased to 67,970 tonnes in October 2021, up by 17% year on year (58,030 tonnes in October 2020). Russia's overall PET consumption reached 661,830 tonnes in the ten months of 2021, up by 13% year on year.
MRC