Hengli boosts Saudi oil buys as new refinery ramps up

MOSCOW (MRC) -- China’s privately owned Hengli Petrochemical has increased its Saudi Arabian crude imports for April and May as it prepares to bring a new refinery in northeastern China to full capacity, reported Reuters with reference to officials and ship tracking data.

The purchases have kept Saudi crude exports to China elevated so far in the second quarter despite lower global demand during peak refinery maintenance season. Saudi oil exports to China averaged at 1.37 million barrels per day (bpd) in the first four months this year, up from 1.01 million bpd in the same period of 2018, Refinitiv trade flow data showed.

Hengli is expected to lift 6 million to 8 million barrels of Saudi crude in May (194,000 bpd to 258,000 bpd), after loading about 8 million barrels in April, the highest monthly intake since it started trial runs at its 400,000-bpd refinery in December, one of the sources said.

"The plant is now running at 85 to 90 percent capacity. It can reach full capacity very, very soon," said a company executive with direct knowledge of the plant’s operation.

A second company source said the plant is targeting May 20 for full operations.

A company spokesman confirmed that Hengli aims to bring the plant - located in the port city of Dalian - to full operation sometime later this month, without giving further details.

From June onwards, Hengli’s Saudi oil intake will average around 4 million to 6 million barrels per month, while the remaining supplies will be made up of Iraq’s Basra Light crude and Brazil’s Marlim grade, said the company executive.

"We like Saudi oil in general, as it yields fairly good margins for the plant," the executive said.

Hengli has signed on to buy 130,000 bpd of crude from Saudi Aramco, a deal that started in the second-half of 2018.

Hengli loaded about 2 million barrels per month of Saudi oil in the first quarter, according to one of the sources and Refinitiv data, helping to keep the company’s total liftings so far this year within contractual volume.

Hengli said in March its plant successfully produced oil products and paraxylene, a petrochemical used to make textiles and bottles.

Saudi Arabia was China’s top oil supplier for a second straight month in March, overtaking Russia, and thanks to supply agreements with Hengli and another new privately controlled refiner Rongsheng Petrochemical.

Hengli, new to the refined fuel market, has deployed more than 200 employees for domestic marketing, with plans to lease storage space in Tianjin in north China, Yangzhou and Jiangyin in the eastern province of Jiangsu, and Dongguan in the southern province of Guangdong, said the second company official.

As MRC wrote before, in April 2017, LyondellBasell announced Hengli Petrochemical (Dalian) Chemical Co., Ltd. had selected LyondellBasell Hostalen ACP polyethylene (PE) process technology. The technology will be used for a 400 KTA high density polyethylene (HDPE) unit to be built in the Hengli Petrochemical Industrial Park (HPIP) on Changxing Island in Dalian, Liaoning Province, China.
MRC

MOSCOW (MRC) -- Pucheng Clean Energy Chemical Company has undertaken a planned shutdown at its Coal-to-olefins (CTO) plant, as per Apic-online.

A Polymerupdate source in China informed that the company has commenced turnaround at the plant on May 13, 2019. The plant is likely to resume production in the first week of June 2019.

Located at Weinan, Shaanxi, China, the CTO plant has an ethylene production capacity of 300,000 mt/year and propylene capacity of 400,000 mt/year.

As MRC reported earlier, on May 28, 2018, Pucheng Clean Energy restarted its PP plant following an unplanned shutdown. The plant remaind off-line for around one week owing to technical issues. Located at Shaanxi province in China, the plant has a PP production capacity of 400,000 mt/year.

Besides, Pucheng Clean Energy shut this PP plant for an unplanned maintenance from 21 October to 12 November, 2018.
MRC

MOSCOW (MRC) -- BASF plans to build an engineering plastics compounding plant and a thermoplastic polyurethane (TPU) plant at the company’s proposed integrated chemical production (“Verbund”) site in Zhanjiang, China. These will be the first production plants to come onstream at the site, said the company.

By 2022, the new engineering plastics compounding plant will supply an additional capacity of 60,000 metric tons per year of BASF engineering plastics compounds in China. This will bring the total BASF capacity of these products in Asia Pacific to 290,000 metric tons per year. As part of the company’s plan to implement a comprehensive smart manufacturing concept at the Verbund site based on cutting-edge technologies, the new plants will utilize automated packaging, high-tech control systems, and automated guided vehicles.

"Less than a year after we signed the first MoU, we are delighted to announce the first plants to be established at our smart Verbund site in Zhanjiang,” said Dr. Stephan Kothrade, President Functions Asia Pacific, President and Chairman Greater China, BASF. “The project is moving forward swiftly and customers in southern China will soon benefit from these innovative products to meet their immediate needs."

General facilities for the Zhanjiang Verbund site will also be built along with the two new plants. BASF Integrated Site (Guangdong) Co. Ltd (BIG), BASF’s new wholly-owned subsidiary, has been officially founded. This entity will oversee the operations of the new Verbund site, underlining BASF’s commitment to the southern China market.

"We want to improve our support for customers in the southern China market and around the world. We will do this by establishing the new plants close to growing customer industries, and through improvements in efficiency realized from our smart manufacturing approach. This will increase our speed of innovation and the efficiency of our services,” said Raimar Jahn, President of BASF’s Performance Materials division. “In particular, electric and electronics companies and automotive manufacturers are turning to BASF to help them address trends such as the electrification of cars and miniaturization of electronic devices."

The growth of the TPU market, in particular for high-end applications, is driven by several factors including increasing regulatory requirements and growing customer expectations for enhanced sustainability performance in such areas as e-mobility, lightweight and automation. BASF solutions support this growth with safety-enhanced cables and wires for automation and automotive, as well as lightweight materials for consumer goods. With customer needs evolving rapidly across the world, BASF is ramping up its investment in emerging markets to address local requirements while continuing to invest in developed economies.

BASF signed the first Memorandum of Understanding for the Verbund site with the Guangdong Provincial Government in Berlin in July 2018, and in January 2019 the company signed a Framework Agreement setting out further details of the plan. The Verbund site in Guangdong would be BASF’s largest investment, estimated up to USD10 billion upon completion, and would be operated under the sole responsibility of BASF. The integrated value chain will connect upstream and downstream plants from basic chemicals to more consumer-oriented products and solutions, serving growth sectors like consumer goods or transportation. The site would ultimately be the third-largest BASF site worldwide, following Ludwigshafen, Germany, and Antwerp, Belgium.

In 2017, BASF’s Coatings division inaugurated a new automotive coatings plant at its Bangpoo manufacturing site, Samutprakarn province, Thailand.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals.
MRC

MOSCOW (MRC) - Imports of polypropylene (PP) into Belarus slightly exceeded 24,600 tonnes in first three months of this year, up 7.1% year on year, compared to the same period of 2018. The greatest increase in imports occurred for homopolymer PP, according to MRC DataScope.

March PP imports to Belarus were about 8,600 tonnes, compared to 8,200 tonnes a month earlier, local companies raised their purchasing of propylene copolymer in Russia. Total PP imports into the country exceeded 24,600 tonnes in January-March, compared with 22,900 tonnes year on year. The demand for homopolymer PP increased significantly, but demand for propylene copolymers grew slightly.

The structure of PP imports by grades looked the following way over the stated period.

March imports of homopolymer PP into the country exceeded 6,000 tonnes, which is comparable to the figure a month earlier. Overall imports of homopolymer PP reached 17,400 tonnes in the first three months of the year, up by 10.3% year on year. Russian producers with the share of about 86% of the total shipments were the key suppliers.

March imports of propylene copolymers to Belarus were 2,600 tonnes versus 2,200 tonnes a month earlier, local companies decreased their procurement of injection moulding statistical copolymers (PP random copolymers) in Russia. Total imports of propylene copolymers in the country reached 7,200 tonnes in Jan-March 2019, up 0.3% year on year.


MRC

MOSCOW (MRC) -- With sales falling, German automaker Daimler AG’s Mercedes-Benz business has announced that it will discontinue sales of its full-electric Smart brand in Canada and the U.S. at the end of the current model year, as per Canplastics.

Once touted as the next big thing in urban mobility, Canadian sales of Smart vehicles fell 6.3 per cent to just 345 units in 2018 after the car went fully electric. U.S. Smart sales in 2018 were 1,276, a drop of 58 per cent.

Daimler ended sales of gasoline-fuelled Smart cars in 2017.

The Smart brand’s electric cars offered 93 kms of driving range per charge. In contrast, competing models such as the “mid-range” Tesla Model 3 offered an estimated range of 523 kms per charge.

In its statement, Daimler’s Mercedes-Benz brand cited “a number of factors” for the decision to end Smart’s run in Canada and the U.S., including a declining micro-car market in the two countries, combined with the costs required to bring the European-designed Smart in line with North American regulations.

Mercedes dealers will still offer parts and repairs for Smart cars, the company said.

Daimler has said it will enter into a joint venture with Zhejiang Geely Holding Group to build a new generation of Smart models in a purpose-built electric-car factory in China with global sales to begin in 2022.

As MRC informed earlier, Daimler said it will spend EUR3 B (USD3.35 B) to curtail diesel exhaust pollution levels by modifying its engines and exhaust treatment systems, including a software update for some Mercedes-Benz passenger cars.

Daimler AG is a German multinational automotive corporation. Daimler AG is headquartered in Stuttgart, Baden-Wurttemberg, Germany. As of 2014, Daimler owns or has shares in a number of car, bus, truck and motorcycle brands including Mercedes-Benz, Mercedes-AMG, Smart Automobile, Freightliner, Western Star, Thomas Built Buses, Setra, BharatBenz, Mitsubishi Fuso, MV Agusta as well as shares in Denza, KAMAZ, Beijing Automotive Group, and Renault-Nissan Alliance. In 2015 Daimler sold 2.9 million vehicles. By unit sales, Daimler is the thirteenth-largest car manufacturer and second-largest truck manufacturer in the world.
MRC