COVID-19 - News digest as of 17.01.2022

1. Crude oil prices hit their highest in more than three years on supply worries, limited Omicron impact

Oil prices rose on Monday, with Brent futures touching their highest in more than three years, as investors bet supply will remain tight amid restrained output by major producers with global demand unperturbed by the Omicron coronavirus variant, reported Reuters. Brent crude futures gained 40 cents, or 0.5%, to USD86.46 a barrel by 0641 GMT. Earlier in the session, the contract touched its highest since Oct. 3, 2018 at USD86.71. US West Texas Intermediate crude was up 58 cents, or 0.7%, at USD84.40 a barrel, after hitting USD84.78, the highest since Nov. 10, 2021, earlier in the session. The gains followed a rally last week when Brent rose more than 5% and WTI climbed over 6%.

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LG Chem reduces capacity utilisation at its steam crackers in South Korea on weak margins

LG Chem reduces capacity utilisation at its steam crackers in South Korea on weak margins

MOSCOW (MRC) -- LG Chema, South Korean petrochemical major, reduced run rates at all of its three naphtha crackers in Deasan and Yeosu, South Korea to approximately 80% on 5 January, 2021, on the back of weak demand and highly volatile upstream naphtha costs, according to CommoPlast with reference to market sources.

All three crackers with a combined capacity of 3.25 million tons of ethylene and 1.48 million tons of propylene would operate at reduced rates throughout the month of January.

It is reported that the producer would ramp up the production in February, however, it is unclear on the exact schedule.

As MRC reported earlier, LG Chem increased the capacity utilisation at its naphtha cracker in Daesan to 50% by 25 November, 2021, after restart and ramped up the operating rates to 100% on 26 November. LG Chem restarted this cracker on 22 November 2021 after a couple of delay due to a trouble at the cooling tower. The unit was taken offline in late September, 2021, for a routine maintenance. And on 23 November, it received commercial production. LG Chem’s Daesan cracker has an annual output of 1.2 million tons/year of ethylene and 600,000 tons/year of propylene.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
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CPC to restart is No. 4 cracker this week

CPC to restart is No. 4 cracker this week

MOSCOW (MRC) -- CPC Corporation is in plans to restart its No. 4 steam cracker in Linyuan, Taiwan in the third week of January, 2022, according to CommoPlast with reference to market sources.

Thus, the company has postponed the restart of htis cracker by 15 days after a small fire struck the offline unit on 6 January 2022, .

This cracker with an annual output of 380,000 tons/year of ethylene and 193,000 tons/year of propylene was shut on 8 November 2021 for a scheduled tunraround. The producer initially planned to bring the unit online on 6 January 2022.

As MRC informed earlier, Taiwan's CPC Corporation unexpectedly shut is No. 4 cracker due to technical glitches on 2 July, 2020. The shutdown period lasted for around 7 days.

The company also operates another cracker at the same site - No. 3 cracker, which has an ethylene capacity of 720,000 mt/year and propylene capacity of 370,000 mt/year.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
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Agilyx and Toyo Styrene partner on chemical recycling plant in Japan

Agilyx and Toyo Styrene partner on chemical recycling plant in Japan

MOSCOW (MRC) -- Agilyx announced that the construction phase of the Toyo Styrene Co, LTD polystyrene (PS) chemical recycling facility has begun in Chiba, Japan, said Plasticstoday.

Agilyx and Toyo Styrene Co. have started construction on a chemical recycling plant in Japan. The facility ultimately will have the capacity to recycle 10 tonnes of post-use polystyrene per day.

With operations in Oregon and Switzerland, Agilyx specializes in processing difficult-to-recycle plastics. Toyo Styrene is a Tokyo-based polystyrene resin manufacturer.

The new Japanese plant will rely on Agilyx’s molecular recycling technology, which uses pyrolysis without a catalyst. The facility will depolymerize post-consumer polystyrene waste, including take-out food boxes and other consumer goods packaging, and the resulting styrene monomer will be purified using a proprietary process developed by Toyo Styrene.

The virgin-quality styrene is suitable for manufacturing high-value polystyrene products such as food packaging and tires, which will have a much lower carbon footprint than similar products manufactured with virgin polymer.

"As the first step toward the circular economy, we will construct a chemical recycling plant for this project, collect post-industrial materials for the time being, and start a chemical recycling business,” said Sanshiro Matsushita, President of Toyo Styrene, in a prepared statement.

Matsushita added that "to build a carbon-free society through chemical recycling in Japan, we are also planning to participate in a platform that integrates citizens, businesses, and local government." That initiative is occurring in Ichihara City, Chiba Prefecture, Japan.

As per MRC, Agilyx Corp. has licensed its technology to Toyo Styrene Co. for use in a new facility to be built in Japan that will recycle post-use polystyrene (PS) back to styrene monomer (SM). The plant, which will be located near Toyo Styrene's existing facility in China Prefecture, will have a processing capacity of up to 10 t/d of post-use PS. Agilyx and Toyo have begun engineering and development of the project. Operations are expected to begin in early 2022.

As MRC reported before, earlier this month, Agilyx Corp., Tigard, Oregon, and Toyo Styrene Co. Ltd., a Toyko-based affiliate of Denka Co. Ltd., announced they are 30% complete with the final phase of developing the front-end loading design to deploy Agilyx's technology near Toyo Styrene’s facility in the Chiba prefecture of Japan. According to a news release from Agilyx, the facility will focus on recycling postuse polystyrene (PS) plastic back to a styrene monomer. In April, Agilyx had announced the licensing of its technology to Toyo Styrene.

Agilyx (AGLX), is a pioneer in the advanced recycling of difficult-to-recycle post-use plastic streams. With Agilyx's chemical recycling technology and intelligent feedstock management system, mixed plastic waste can be converted to new virgin-equivalent plastics, as well as chemical products and fuels – creating the opportunity for true circularity. The company has not only developed these first-to-market products, but has also developed a feedstock management company Cyclyx International, Inc. and is working with many waste service providers, municipalities, petrochemical, and brand and retail companies to develop closed-loop advance recycling solutions for mixed waste plastics.

MRC

Petrobras to sell Braskem stake by February

Petrobras to sell Braskem stake by February

MOSCOW (MRC) -- Brazilian state-run oil company Petrobras has announced it expects to sell 100% of its preferred stake in petrochemical producer Braskem SA by February, reported Reuters.

The detailed timeframe came after Petrobras announced earlier in the day that the move was planned for the first quarter of 2022.

Petroleo Brasileiro SA, as the company is formally known, also reiterated in a securities filing that the move will be conducted through a joint follow-on share offering with conglomerate Novonor.

Petrobras had repeatedly expressed its intention to sell its 36.1% stake in the petrochemical company. Novonor, formerly known as Odebrecht, holds a 38.3% stake in Braskem.

As MRC wrote previously, in August 2021, Petrobras hired JPMorgan Chase & Co as an advisor to sell its stake in the petrochemical company Braskem SA.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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