COVID-19 - News digest as of 19.01.2022

1. Crude oil prices hit 7-year highs on tight supply

MOSCOW (MRC) -- Oil prices on Tuesday climbed to their highest since 2014 as investors worried about global political tensions involving major producers such as the United Arab Emirates and Russia that could exacerbate the already tight supply outlook, reported Reuters. The risk added a premium to prices during the session. Brent crude futures rose USD1.03, or 1.2%, to settle at USD87.51 a barrel. US West Texas Intermediate (WTI) crude futures ended USD1.61, or 1.9%, higher at USD85.43 a barrel. Both benchmarks touched their highest since October 2014, and some OPEC sources say USD100-per-barrel oil is not out of reach. Supply concerns mounted this week after Yemen's Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition.


MRC

MOSCOW (MRC) -- Mura Technology (Mura), the UK-based plastics recycling technology pioneer, has completed an equity investment from LG Chem, a leading global chemical producer, according to Hydrocarbonprocessing.

The investment bolsters Mura’s plans to develop and deploy industrial-scale advanced recycling capacity across the world, with LG Chem joining the growing list of strategic partners adopting Mura’s technology.

In addition to becoming a shareholder in Mura, LG Chem has purchased a process license from KBR, Mura’s exclusive global licensing partner. This license will be a key driver in the continued international roll-out of Mura’s innovative recycling process, HydroPRT (Hydrothermal Plastic Recycling Technology), and LG Chem plans to construct a hydrothermal upgrading facility to initially recycle up to 25,000 tons of plastic waste annually.

Once the facility, which will be the first in South Korea to use supercritical water, is operational, LG Chem plans to review the potential for constructing additional sites. This will continue to drive Mura’s global impact following the recent announcement of its first US-based HydroPRT site near Seattle. Construction is already underway on Mura’s UK-based plant located in Teesside, which will be operational in 2022.

South Korea is one of the world’s leaders in plastic consumption per capita, and a crucial market for deploying HydroPRT. Post-use plastic from both the commercial and industrial sectors contributes significantly to increased levels of waste in South Korea, however capacity for recycling at scale remains low, particularly in high-traffic, urban areas, despite the country’s aim to reduce its plastic waste by 20% by 2025. Successful deployment of HydroPRT will dramatically increase the potential recycling capacity in South Korea and will also serve as a blueprint for other countries around the world with similarly ambitious waste reduction targets.

As MRC reported earlier, 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. 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.

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.
MRC

MOSCOW (MRC) -- Saudi Aramco signed 10 agreements with South Korean firms to advance its downstream strategy and support the development of low-carbon energy solutions, while creating new financing options for the company, said Argaam.

The agreements include memorandum of understanding (MoU) agreements with Korean energy companies KEPCO, S-Oil, POSCO, Hyundai Oilbank, H2Korea and Lotte Chemical to explore potential collaboration in the supply, transportation, utilisation and certification of hydrogen and ammonia.

The companies also plan to study the feasibility of converting exported ammonia into hydrogen - a process known as ammonia back-cracking. This represents a first step towards a potential large-scale production facility for hydrogen and ammonia in Saudi Arabia, which would also include a carbon capture and storage (CCS) facility.

Furthermore, Aramco signed an agreement with Korea’s Doosan Heavy Industries & Construction and the Saudi Arabian Industrial Investments Co (Dussur) to establish a casting and forging facility in Saudi Arabia. The facility could supply the Kingdom’s manufacturers with industrial and process equipment such as valves, pumps, compressors, wellheads, flanges, heat exchangers, and gas and wind turbines. The signings took place at the Saudi-Korean Investment Forum in Riyadh, Saudi Arabia.

As MRC informed before, in June 2020, Aramco finalized its USD69 billion acquisition of a 70% stake in Saudi Basic Industries Corp., the Middle East's biggest petrochemical maker. SABIC reported more than a fivefold year-on-year increase in its Q3 net profit to USD1.49 billion thanks to higher average sales prices.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- China's diesel exports in December sank to their lowest monthly level since March 2015, bringing the 2021 total to the lowest since 2016 at 17.21 MM tons, reported Reuters with reference to released data on Tuesday.

December exports of diesel slumped to 330,000 tons, down 78% from a year earlier, amid diminishing export quotas and as refiners curbed runs in response to a slowdown in domestic demand, data from the General Administration of Customs showed.

Total refined fuel, including diesel, gasoline, aviation fuel and low-sulfur fuel oil, fell 45% from a year earlier to 3.23 MM tons last month, the lowest monthly level since July 2020.

A diesel crunch triggered by power rationing in the third quarter proved short-lived and the domestic market flipped back into a surplus, analysts said, as reflected in national refinery output, which fell last month by nearly 5% from November and 2% from a year earlier.

Gasoline exports were 940,000 tons, rising from November's 810,000 tons but down 35% from the same period last year. Annual exports fell 9% to 14.54 MM tons, a three-year low. December jet fuel exports were 590,000 tons, down from November's 940,000 tons.

Rigid border controls and expanding lockdowns in parts of the country to contain a resurgence of coronavirus infections and fend off the highly contagious Omicron variant dampened demand for gasoline and jet fuel.

China's annual refined fuel exports dropped 2.4% over 2020 to 60.31 MM tons, as the government tightened export quotas to discourage excessive domestic refinery production.

Tuesday's data showed imports of LNG at 7.63 MM tons in December, versus 6.9 MM tons in November but up just 1.6% versus the year-earlier level as stubbornly high Asian spot prices hurt import appetite.

An all-time monthly record high was set in Jan 2021 at 8.49 MM tons. Imports for the whole year totaled a record 78.93 MM tons, up 18.3% from 2020, making the country the world's largest buyer of the super-chilled fuel.

Piped gas imports last month also set a record at 4.02 MM tons, up nearly 11% over a year earlier, data showed, as Russian supplies ramped up.

As MRC wrote previously, China's refinery output hit a fresh high in 2021, up 4.3% from a year earlier on robust fuel demand especially in the first half of the year, and as refiners ramped up processing to fill a supply gap after a hefty new tax closed loopholes in blending fuel imports. Total refinery throughput last year reached 703.55 MM tons, or 14.07 MMbpd, data from the National Bureau of Statistics showed on Monday, roughly 620,000 bpd above the 2020 level.

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.
MRC

MOSCOW (MRC) -- SABIC plans to build a petrochemicals plant in the city of Jubail on the gulf coast in the Eastern Province, after a similar plant in South Korea starts production by year-end, reported Reuters with reference to CEO Yousef Abdullah al-Benyan's statement on Asharq TV on Tuesday.

Al-Benyan added that the company views the Korean market as an opportunity to expand in Asia.

As MRC informed before, earlier this month, SABIC started up its new polypropylene (PP) compounding line in Genk, Belgium. The new line is an addition to the company’s existing production capacity for SABIC PP compounds at the Genk site, and will use raw materials from SABIC’s PP plants at Gelsenkirchen, Germany, and Geleen, The Netherlands.

According to MRC's ScanPlast report, 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.

SABIC is a diversified company manufacturing chemicals, industrial polymers, fertilizers and metals. It is the largest state-owned company in Saudi Arabia. Sabic is currently the world's second largest ethylene glycol producer, the third largest polyethylene producer, and the fourth largest polypropylene producer. Sabic cut its 2015 net profit by 7% to SR23.43 billion (Saudi reais), equivalent to USD6.24 billion, amid lower average selling prices and increased sales.
MRC