European PP for CIS markets fell in December, but not proportionally to propylene price reduction

MOSCOW (MRC) -- December contract price of propylene in Europe was settled down by EUR100/tonne from November. Taking it into account, all European producers announced a decrease in export prices of polypropylene (PP) for deliveries to the markets of the CIS countries in December. But price cuts are not proportional to the fall in monomer prices, according to ICIS-MRC Price Report.

Negotiations over December prices of European PP began last week. All market participants reported the desire of producers to limit the decline in export prices of propylene polymers to a value less than the decline in monomer prices. In fact, we are talking about lowering prices by only EUR40-60/tonne.

December deals for homopolymer PP were agreed in the range of EUR1,125-1,180/tonne FCA, down on average by EUR60/tonne from November. Some producers still had significant restrictions on this month's shipments.

Deals for block propylene copolymers (PP block copolymers) were done in the range of EUR1,210-1,270/tonne FCA, while in November deals were done in the range of EUR1,250-1,310/tonne FCA.
MRC

MOSCOW (MRC) - Asian jet fuel price discounts stand at their lowest December levels in nine years as a supply glut offsets consumption even as the region’s aviation sector booms, as per Hydrocabonprocessing.

The slump is a mirror image of the steep gains Asian aviation fuel price differentials saw in the first quarter of this year. Then, tight supply lifted them to their highest seasonal levels in a decade.

The cash differentials for jet fuel in the Asian trading hub of Singapore were at a discount of $1.06 a barrel below benchmark quotes on Monday JET-SIN-DIF, the weakest for this time of year since 2009, according to Refinitiv Eikon data.

Cash differentials represent the price buyers are prepared to pay for fuel over or below benchmark values published daily by price reporting agencies. “Clearly the physical market does not believe that the high prices of jet paper (contracts) are justified,” said Sukrit Vijayakar, director of energy consultancy Trifecta. “That is what is causing the weakness in the cash differentials."

The weakness also comes as winter in the northern hemisphere has seen a mild start: The outlook is largely for an unusually mild season because of an El Nino weather pattern. That’s especially the case in Japan, where kerosene - almost identical to jet fuel - is commonly used for heating.

The low kerosene consumption and high yields for churning out jet fuel are luring refiners to pump out more of the latter, market sources said, weighing on the price traders are willing to buy it for. And the low cash prices are starting to weigh on refinery margins, traders said.

Refining margins, also known as cracks, for jet fuel were at USD15.66 a barrel over Dubai crude during Asian trading hours on Monday - down 19 percent in the last four weeks.

Despite that, jet cracks remain comparatively high - the peak of USD19.34 a barrel on Nov. 15 was a near four-year high - and seasonally adjusted refinery cracks for jet fuel are still at their strongest levels for this time of the year since 2014.
MRC

MOSCOW (MRC) - Taiwan’s Formosa Petrochemical Corp has finalized its term contracts to sell diesel and jet fuel for loading in 2019, at volumes and price levels mostly steady from this year, trade sources said, as per Hydrocarbonprocessing.

The refiner has sealed its one-year term contract for diesel with 10 parts per million (ppm) sulfur at a premium of 15 to 25 cents a barrel to Singapore quotes, they said.

That compares to a premium of 22 cents a barrel premium for 2018 term contracts, they added. Formosa has also finalized its 500 ppm sulfur gasoil for 2019 at a discount of 50 cents to 60 cents a barrel to Singapore quotes versus this year’s discount of 65 cents a barrel.

The prices for gasoil contracts vary depending on whether the buyer lifts it monthly or quarterly, two of the sources said.

For jet fuel, it finalised the term contracts at a premium of 5 cents a barrel to Singapore quotes, down 3 cents from this year’s term contract, the sources said.

Volumes were generally close to this year’s term deals, the sources added.

A Formosa spokesman could not be immediately reached for comment.
MRC

MOSCOW (MRC) -- Production at Total SA’s 225,500 barrel-per-day-capacity Port Arthur, Texas, refinery was cut on Sunday by the outage of Sulfur Recovery Unit 3, reducing the plant’s ability to process acid gas, reported Reuters with reference to sources familiar with plant operations.

Production was cut by 40 percent of capacity in November when SRU 3 was shut.

As MRC informed earlier, in April 2015, Total announced that its proposed new ethane cracker near its refinery in Port Arthur, Texas, is being designed to have a capacity of 1 million tpy.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- Leading styrenics suppliers Ineos Styrolution, Total SA, Trinseo and Versalis have joined forces to work together on recycling styrenics, said Plasticsnews.

The four companies announced that they had founded Styrenics Circular Solutions (SCS) on Dec. 10 to use innovative technologies to "unlock" polystyrene’s circularity potential.

"Game-changing technologies will enable polystyrene, [expanded PS] and other styrenics-based plastics to be fully recycled so that they can be used again … in high-quality applications, ultimately also for food contact," the companies said in a news release.

The newly incorporated platform will also seek the inclusion of new members across the styrenics value chain and waste management stream to further the cause — including recyclers, waste management companies, converters and brand owners — to join them to link waste streams to “innovative recycling technologies."

According to its website, the platform aims to accelerate the development and roll-out of the "game-changing technologies" that convert used styrene-based products back to high-quality applications, ultimately also suitable for food contact.

It also intends to "mobilize" regional waste collection and sorting partners to push more styrene-based products into recycling, creating a “pull” and clear business case.

The platform, said the statement, will place a strong focus on engaging with waste collection and sorting partners to recover more polystyrene and EPS-based products.

“Today’s signing marks an important milestone of our voluntary pledge,” said Jens Kathmann, secretary general of SCS.

Polystyrene, he went on to say, “has an unparalleled capacity for closed-loop recycling, when properly collected and sorted."
MRC