Fujian Meide Petrochemical delays start-up of its new PDH unit in Fujian to September

MOSCOW (MRC) -- China's Fujian Meide Petrochemical, a wholly owned subsidiary of China Flexible Packing Group,
is planning to start up its newly-built propane dehydrogenation (PDH) plant in Jiangyin, Fujian province, around September this year, reported S&P Global with reference to a company source.

The new PDH with the capacity of 660,000 mt/year was originally scheduled to start up in the first half of February, 2020, then - in the second half of February. High cost of feedstock propane was the cause of the delay.

Afterwards, the company postponed the start until June and then - July, 2020.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Zhejiang Petrochemical Co Ltd is running its new acrylonitrile (ACN) plant at 80% operating rate and is likely to maintain this rate for the rest of July, reported S&P Global.

The company started up new ACN plant on 23 June, 2020, and produced on specification material in the week ended 4 July.

Based in Zhejiang, China, this plant is able to produce 260,000 tons/year of ACN. Initially, the company planned to begin operations at this production in early May, but then postponed the start to the second half of May. Zhejiang Petrochemical last announced mid-June to be the start.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December 2019 and its polyolefin plants in late December 2019-January 2020.

Market sources reported then that one of its polypropylene (PP) plant with capacity of 450,000 tons/year started up by 30 December 2019, followed by another line with same capacity by 15 January 2020.

Meanwhile its 450,000 tons/year of linear low density polyethylene (LLDPE) and 300,000 tons/year of high density polyethylene (HDPE) were launched around similar time with PP plants.

ACN is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, Russia's ABS output was 780 tonnes in May 2020. Production of Russian ABS plastics totalled 4,240 tonnes in January-May 2020, down by 17% year on year.
MRC

MOSCOW (MRC) -- Hengli Petrochemical Co Ltd ramped up the operation rate of its new No. 5 purified terephthalic acid (PTA) line at Dalian to around 85% over the weekend, reported S&P Global with reference to two sources familiar with the matter.

The company managed to produce prime grade PTA cargoes at its new PTA line in China on 30 June.

This line was successfully launched on 28 June, 2020.

Based in Dalian, China, the company has 5 PTA plants with combined production capacity of 11.6 million tons/year, making Hengli Group the world's largest PTA producer, as each PTA plant has production capacity of 2.5 million tons/year.

A source closed to the company informed that the team has working hard to ensure the plant startup progress, whereby they spent only around 14 months from ground breaking to plant startup.

As MRC reported earlier, Hengli Petrochemical (Dalian) Co. reached full rate at its No. 4 PTA line in Dalian City in mid-March, 2020. The 2.5-million-t/y PTA line, which came online in January 2020, utilizes Invista's P8 PTA technology. The line also produces benzoic acid, using Invista's RP2PR technology.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

As per MRC's ScanPlast report, May estimated PET consumption in Russia amounted to 70,170 tonnes, which corresponds to the level of consumption last year (70,450 tonnes). In total for the period January - May of this year, the estimated PET consumption in the Russian Federation amounted to 304,310 tonnes of material. This is 3% lower than the same indicator in 2019.

Hengli Petrochemical Co., Ltd. manufactures chemical fibers. The Company researches, produces, and sells polyester filament and chips for consumer and industry products. Hengli Petrochemical markets it products worldwide.
MRC

MOSCOW (MRC) -- China's Oriental Energy plans to start up its new propane dehydrogenation (PDH) plant in Ningbo around September-October, after it was delayed from late June, reported S&P Glboal.

The new PDH plant has the capacity to produce 660,000 mt/year of propylene.

And the company will bring on stream two downstream 400,000 mt/year polypropylene (PP) plants at the same venue.

Oriental Energy already operates PDH plant in Ningbo with the same production capacity.

As MRC wrote before, Oriental Energy Ningbo restarted its PDH unit in end-September, 2018, following an unplanned outage. The unit was shut owing to technical glitch in mid-September, 2018.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- S&P Global Ratings lowered its rating for Braskem to speculative grade because the company's debt is expected to exceed the previous estimates of the credit agency, said the company.

The rating now stands at BB+, down from BBB-. The outlook is stable. By the end of 2020, Braskem could report a net debt ratio of 3.5x-4.5x in relation to earnings before interest, tax, depreciation and amortisation (EBITDA), S&P said. That compares with the agency's earlier estimate of 3.0x-3.5x.

The higher debt ratio reflects the fall in demand for petrochemicals around the world, a decline caused by the coronavirus (Covid-19). Given the effects of the pandemic, Braskem's utilisation rates for its crackers fell to 70-75%, S&P said. Based on those lower rates, S&P expects Braskem's volumes to fall by 5-10% in 2020.

At the same time, Braskem could continue to spend money to address damage linked to a former salt mine in the Brazilian state of Alagoas. A report from the Brazilian Geological Service (CPRM) said the mine caused subsidence that damaged nearby neighbourhoods. Already, Braskem reached an agreement with prosecutors worth hundreds of millions of dollars.

With that, S&P expects Braskem to report 2020 EBITDA of USD1.25bn-1.35bn, excluding any income from its Braskem Idesa joint venture. That would be 20-30% higher than in 2019. In 2021, S&P expects petrochemical volumes to increase gradually. Markets should continue to be oversupplied until at least mid-2021 and oil prices should rebound. A rise in oil prices could compress Braskem's margins.

S&P noted the commitment of Braskem's management to lower the company's debt ratio. Given that commitment, S&P expects Braskem's net debt/EBITDA to reach 3.0x-4.0x by the end of 2021. Braskem acknowledged the downgrade in a statement. The company said it has maintained a solid cash position and its debt has long maturity dates.

The company stressed its commitment to maintain liquidity and cost discipline while continuing to adopt measures to reduce its debt ratio at a level corresponding to investment grade.

Braskem makes polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC).

As MRC informed earlier, in H2 June, 2020, Braskem announced it had completed construction of its newest PP production facility at La Porte, Texas. The new plant has the capability to produce the entire PP portfolio including homopolymer, impact copolymer and random copolymers. The plant added 50 permanent full-time jobs to support long-term commercial production.

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

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).
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