PE imports to Russia up by 7% in the first seven months of 2017

MOSCOW (MRC) -- Overall imports of polyethylene (PE) into the Russian market increased in January-July of 2017 by 7% year on year to 320,000 tonnes. Imports of high density polyethylene (HDPE) and ethylene-vinyl-acetate (EVA) grew significantly, according to MRC's DataScope Report.

Last month's PE shipments to the Russian market dropped to 45,000 tonnes from 49,800 tonnes in June, with HDPE from Uzbekistan accounting for the main decrease in supplies.Overall PE imports reached 320,000 tonnes in January-July 2017, compared to 300,100 tonnes a year earlier. The HDPE and EVA segments accounted for the increase in imports, whereas other PE grades accounted for the decrease in import shipments.

The structure of PE imports looked the following way over the stated period.

Last month's HDPE imports fell to 15,000 tonnes from 21,000 tons in June, local companies reduced their purchasing of film grade and blow moulding HDPE in Uzbekistan. Overall HDPE imports reached 118,100 tonnes in the first seven months of 2017 versus 79,200 tonnes a year earlier.

July imports of linear low density polyethylene (LLDPE) were 14,400 tonnes, compared to 13,000 tonnes a month earlier, shipments of film grade PE increased, whereas demand for PE for rotational moulding of large items decreased. LLDPE imports totalled 101,600 tonnes in the first seven months of the year, compared to 124,000 tonnes a year earlier. An increase in the domestic output, particularly, by Nizhnekamskneftekhim, helped to reduce imports.

Last month's imports of low density polyethylene (LDPE) grew to 7,800 tonnes from 7,400 tonnes in June, shipments of PE for paper lamination from Europe increased. Overall LDPE imports decreased to 37,600 tonnes in January-July 2017 from 44,400 tonnes a year earlier.

July EVA imports were about 3,000 tonnes, compared to 3,800 tonnes a month earlier, demand subsided from footwear and cable and wire producers. Imports of this ethylene copolymer grade grew by 30% over the stated period to 22,200 tonnes.

Imports of other ethylene polymers totalled 25,200 tonnes, compared to 21,100 tonnes a year earlier.

MRC

MOSCOW (MRC) -- South Korea's crude oil imports from Iran rose 26.5% in July from a year ago, driven by Seoul's strong appetite for competitively priced Iranian light oil as Tehran looks to boost market share, reported Reuters.

Korea, one of Iran's major Asian customers, shipped in 1.40 MMt of crude from Tehran in July, or 330,151 bpd, up from 1.10 MMt last year, customs data showed on Tuesday.

The worlds' fifth-biggest crude importer brought in 10.67 MMt of Iranian crude in the first seven months of this year, or 368,952 bpd, up 47.7% from 7.22 MMt over the same period last year, the data showed.

South Korea mainly imports Iranian condensate, an ultra-light oil used to produce more expensive fuels like naphtha. No breakdown of imports was available.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC) is exempt from the oil cartel's deal to limit production to drain a global supply glut. The country is seeking to regain market share lost during the years it was under western sanctions over its nuclear program.

In July, the Middle Eastern country exported 2.2 MMbpd of oil to Asian and European markets, with its exports to Asia up by 100,000 bpd.

South Korea's intake of crude oil from top exporter Saudi Arabia fell 9.3% to 3.69 MMt, or 873,656 bpd, a year ago.

OPEC's July oil production rose further by 173,000 bpd to 32.87 MMbpd, in the latest sign the oil producer club's joint efforts to cap output are weak.

Overall, South Korea's total July crude imports increased 3.2% to 12.44 MMt, or 2.94 MMbpd, from a year ago, the data showed.

In the January-July of 2017, South Korea imported 84.68 MMt of crude, or 2.93 MMbpd, up 2.0% from 83.04 MMt in the same period last year.

South Korea's final data for July crude oil imports by state-run Korea National Oil Corp (KNOC) is due later this month.

We remind that, as MRC wrote previously, South Korean conglomerate Lotte Group plans to list its Malaysian petrochemical unit in the third quarter, company filings show, in an initial public offering that sources say could raise as much as USD1.5 billion. The listing could be one of the biggest IPOs in years in Malaysia, which has not seen any listing of USD1 billion and above since the USD1.5 billion IPO of Astro Malaysia Holdings in 2012.
MRC

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Russia reached about 39,400 tonnes in the first seven months of the year, down 37% year on year. Low demand from the domestic market and growth in domestic production volumes have become the main reason for the reduction of external supplies, according to MRC DataScope.

July SPVC imports into the country decreased to 7,300 tonnes, compared with 8,600 tonnes in June. Local companies reduced their acetylene resin purchasing in China on the back of lower prices of Russian PVC. Thus, January-July SPVC imports into the country totalled about 39,400 tonnes compared with 62,300 tonnes year on year; the peak of imports in 2017 was seen in May with 11,800 tonnes imported.

A significant increase in domestic production made it possible to notably reduce the dependence on imports of PVC, even in the period of high seasonal demand. Chinese producers traditionally have been the key foreign PVC suppliers for the past several years.

July imports of Chinese acetylene PVC decreased to 7,000 tonnes, compared with 8,300 tonnes in June. Total imports of Chinese PVC were 37,100 tonnes in the first seven months of the year, compared with 49,700 tonnes year on year. A further reduction of imports of acetylene PVC from China is expected to be in August - September on a serious increase in export prices from local producers.

Small volumes of the suspension were supplied by European producers, the total imports of European PVC for the period under review decreased to 1,900 tonnes against 3,800 tonnes a year earlier.

Deliveries of the SPVC from the USA since the beginning of the year amounted to about 154 tonnes, while a year earlier this figure was 7,300 tonnes.

mrcplast.com

MOSCOW (MRC) -- State-owned refiner China National Petroleum Corp (CNPC) said it will complete mandatory mixed-ownership reforms before the end of November, as part of government efforts to make state firms more efficient and market-oriented, said Reuters.

CNPC, the state-owned parent of PetroChina, said on Monday it has established a special working group to complete the reform process, which aims to restructure firms into limited liability corporations and cut direct government interference in their business operations.

China has ordered all state-run enterprises to modernize their ownership structures and introduce private capital as part of a reform program for its debt-ravaged state sector.

The total liabilities of state firms reached USD14.11 T by the end of June, up 11.4% from a year ago, according to the most recent data.

The government promised at the end of last year that it would make substantial progress in bringing mixed ownership reforms to the electricity, oil, natural gas, railway, civil aviation, telecommunications and military industries in 2017.

By the middle of June, it had already completed 48 deals allowing private capital to invest in government-run firms, state media said.

While China is keen to make its lumbering state sector more responsive to the market, senior leaders have urged firms to avoid "erroneous" notions like privatization and to reinforce the role of the Communist Party.
MRC

MOSCOW (MRC) -- Asia would be the biggest beneficiary of any potential sanctions by the United States on Venezuela's oil sector, said traders and analysts, as exports from the South American OPEC member could be redirected to the region, filling a vacuum left by producer supply cuts, said Reuters.

Washington is considering sanctions on Venezuela's oil industry in response to the ruling Socialist Party's crackdown on officials and parties opposed to the government. An embargo against Venezuelan crude could block imports of about 740,000 barrels per day to the US.

Asian refiners would welcome the so-called heavy, or higher density, crude since production cuts by the Organization of Petroleum Exporting Countries (OPEC) have mainly curtailed this type of oil. At the same time, the start-up of new refining capacity is boosting demand.

China and India, the two biggest buyers of Venezuelan crude after the United States, have room to increase imports while other north Asian refiners, with equipment sophisticated enough to handle heavy Venezuelan oil, are seeking opportunities to tap this supply, analysts and traders said.

"Whatever oil that the United States doesn't want will find its way into the global market," a trader with a north Asian refiner said, adding that Venezuelan oil could be a good fit for the company's plant. A trader with another north Asian refiner said he is also looking for opportunities to import Venezuelan crude if the US imposes sanctions. The sources spoke on the condition of anonymity because they were not authorized to speak to media.

Venezuela's main creditors China and Russia will have first priority to its oil if sanctions are imposed, the sources and analysts said, and the countries would likely make the surplus cargoes available in the spot market.

In the first quarter of 2017, Venezuela delivered to Chinese companies about 485,000 bpd of crude and oil products to repay loans extended since 2007, according to internal documents from state-run oil company PDVSA reviewed by Reuters.

Russian oil firms Rosneft and Lukoil are also receiving about 250,000 bpd to repay loans, according to the PDVSA reports. PDVSA has cut sales to US refining unit Citgo Petroleum since May to increase its supply to Rosneft in order to catch up on overdue Russian deliveries.

Rosneft may ship Venezuelan crude to its newly acquired Essar Oil refinery in India, said one trader based in Asia who deals with Venezuelan crude, adding any surplus could be re-sold by Russian companies to other Asian buyers.

"The realignment of trade flows to push Venezuelan crude to Asia...would entail substantial logistical challenges that would on the margin be bullish (for) sour crude markets, but not necessarily sustainably bullish (for) crude prices," RBC Capital analyst Mike Tran wrote in a note last month.
MRC