Chemplast Sanmar expects to commission paste PVC expansion project in current FY

Chemplast Sanmar expects to commission its Paste PVC expansion project by the fourth quarter of the current financial year (FY). The 41-ktpa project is expected to start commercial production in Q4/FY24, said Projectstoday.

The company's custom-manufactured chemicals Phase-II expansion project is expected to be completed in Q1/ FY25. Moreover, its other chemicals business is also expected to witness improvement over the next three to four quarters as supply gets absorbed by the market. This would further cement its position as producer of Paste PVC in the country.

The company is assured of long-term potential of all its businesses and is strengthening capabilities to achieve sustainable growth.

We remind, Mexico's Orbia has decided to put a pause on the expansion plans for its polyvinyl chloride (PVC) production capacity due to a challenging market situation that adversely impacted its profits in 2023. The company's polymer division, which includes PVC, faced a substantial setback in the fourth quarter of the previous year, reporting a 54% year-on-year decline in earnings before interest, taxes, depreciation, and amortization (EBITDA), amounting to USD47 million. Additionally, sales within this division experienced a 21% year-on-year decrease, reaching USD577 million.

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U.S. production of major plastic resins totaled 8.0 billion pounds during January 2024, a decrease of 5.6 percent compared to the prior month, and a decrease of 0.9 percent compared to the same month in 2023, according to statistics released by the American Chemistry Council (ACC).

Sales and captive (internal) use of major plastic resins totaled 8.4 billion pounds during January 2024, an increase of 2.9 percent compared to the prior month, and an increase of 8.3 percent from the same month one year earlier.

We remind, the European Chemical Industry Council (Cefic) said it sees the European Commission’s Strategy on Advanced Materials for Industrial Leadership as a pivotal step toward addressing the challenges posed by the green and digital transition, adding that the chemical industry has an important role to play as the primary source of advanced materials’ value chains.

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Imports of fuel oil bound for the U.S. Gulf Coast fell to a five-year low last month as refiners ran more cheap, heavy Canadian crude and geopolitical tensions in the Middle East pressured fuel oil flows, said Hydrocarbonprocessing.

Fuel oil deliveries to the Gulf Coast dwindled in February to just 318,000 barrels per day (bpd), a 20% drop from the prior month and marking their lowest level since February 2019, data from tanker tracking firm, Kpler showed.

Heavy fuel oil feedstocks like high sulfur fuel oil and other heavy residues are used to make higher value products like gasoline and diesel.

Refiners can offset their need to import them by doubling the amount of fuel oil they produce themselves with a heavier crude slate rather than processing lighter blends, according to refining data provider Refinery Calculator.

U.S. refineries have been running more heavy Canadian crude because of its ample supply, with Gulf Coast refiners ramping up their intake by around 10% on the year, according to data from Refinery Calculator.

Western Canadian Select crude (WCS)traded at the Houston hub has carried a wide discount to the global Brent benchmark, hitting $11.92 per barrel in the fourth quarter of last year from $9.78 per barrel in the third quarter, according to a note from TPH&CO.

WCSbecame more readily available this month after BP's BP.L 435,000 bpd Whiting refinery, the largest plant in the Midwest and a key buyer of the Canadian grade, went offline after an unplanned outage on Feb. 1.

As a result, domestic residual fuel oil production climbed to a more than four-year high in the week to Feb. 16, at 462,000 bpd, up from 350,000 bpd from the previous week, according to weekly data from the Energy Information Agency (EIA).

U.S. Gulf Coast fuel oil imports have also been curtailed following attacks by Houthi rebels in the Red Sea, which have disrupted trade flows and driven up shipping costs by diverting vessels away from the Suez Canal.

This has weighed particularly on imports from the Middle East, including Iraqi and Fujairah high sulfur fuel oil loadings, Energy Aspects analyst Royston Huan said. And a European fuel oil supply squeeze has pushed more barrels to Europe, where prices are higher, according to Energy Aspects.

"It looks like all roads lead to Europe", said Steve Sinos, a managing partner at Blue Lacy Advisors. The arbitrage is closed for European and Asian high sulfur fuel oil deliveries to the Gulf Coast said Sinos, adding that moving this grade from Europe to the Gulf Coast could result in a $40 per ton loss due to current freight rates.

We remind, SIBUR began construction of a research and technology scaling center in Kazan, which will provide for a full cycle of creating new synthetic materials for key sectors of the Russian economy, the company's press service said in a statement. The key areas of operation for SIBUR's R&D center will be the development and scaling of new polyolefin and heterogeneous catalysts, synthesis and piloting of new products for the development of the company's existing chains and creation of fundamentally new materials, process modeling and engineering, development of new technologies, implementation of projects aimed at decarbonization, a closed cycle economy and digital initiatives.

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Russia has significantly increased its fuel exports to Senegal this year on rising bunker demand, as more companies are diverting cargoes around Africa instead of using Red Sea routes, traders said and LSEG data showed, said Hydrocarbonprocessing.

Russian fuel oil supplies to Senegal in the first two months of 2024 reached 550,000 metric tons compared with 1.08 million tons in the whole of 2023 and 0.37 million tons in 2022, replacing oil product supplies from Rotterdam, the data showed.

"Senegal has strong growth in bunkering," one trader said. "The bunker fuel suppliers are benefitting from the situation in Suez."

Since December last year, many shipping companies have instructed their vessels to sail around southern Africa instead of using the Red Sea due to attacks by Houthi militants, leading to bunker fuel demand growth.

Fuel oil is widely used for fueling ships, or bunkering. Senegal may also use it for power generation, market sources said. Senegalese oil minister Antoine Felix Abdoulaye Diome did not respond to requests for comment when contacted by Reuters.

The bulk of Russian fuel oil supplies to Senegal are shipped from the Russian Baltic port of Vysotsk, and also from the ports of Ust-Luga and St. Petersburg. Russia has also exported about 0.2 million metric tons of diesel to Senegal since the start of this year, versus 0.8 million tons in 2023.

Most of those volumes are of high-sulphur gasoil loaded at the Black Sea port of Novorossiisk, according to LSEG data. "You could also take bunker fuel to Nigeria, but there is more piracy risk, so it's better to take it north," the trader continued, adding that he would expect further bunker demand growth in African countries because of the Red Sea situation.

The European Union's full embargo on Russian oil products came into effect in February 2023, and the bulk of Russia's fuel oil and VGO was redirected to other regions, mostly Asia and African countries.

We remind, Russia ordered a six-month ban on gasoline exports from March 1 to keep prices stable amid rising demand from consumers and farmers and to allow for maintenance of refineries in the world's second largest oil exporter. The ban, first reported by Russia's RBC, was confirmed by a spokeswoman for Deputy Prime Minister Alexander Novak, President Vladimir Putin's point man for Russia's vast energy sector.

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Covestro has published its climate neutrality targets for scope 3 emissions, completing its climate strategy for reducing greenhouse gas emissions, said the company.

As a short-term goal, the company plans to reduce greenhouse gases by 10 million metric tons by 2035. This corresponds to a drop in emissions of 30 percent compared to the base year 2021, with some growth-related emissions through 2035 included in the calculation. In the long-term, Covestro plans to be climate-neutral in terms of scope 3 emissions by 2050.

Covestro previously published ambitious targets for scope 1 and scope 2 emissions in 2022, which included achieving operational climate neutrality by 2035. Scope 1 emissions come from Covestro's own production processes, while scope 2 emissions result from purchased energy sources. Scope 3 emissions include all other greenhouse gases produced in the upstream and downstream supply chains. These make up around 80 percent of the company's total greenhouse gas emissions. Raw materials purchased by Covestro are responsible for the greatest share of scope 3 emissions.

We remind, Covestro and Siemens have concluded a strategic supplier agreement for the next five years, said the company. This framework agreement is the basis for all future business relationships that exist between the two companies in many different areas. The agreement is worth a high double-digit million euro amount and enables much faster and easier collaboration. Until now, Covestro and Siemens have always concluded individual supply agreements for different material groups and services.

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