Sinopec weighs output cuts due to freight rate surge

MOSCOW (MRC) -- Asia’s largest refiner, Sinopec, is weighing plans to cut oil imports in December and reduce output at its refineries after a surge in global tanker freight rates hit margins, reported Reuters with reference to four sources.

The cost of shipping crude to Asia has surged in the past two weeks after companies stopped using nearly 300 tankers for fear of violating US sanctions against Iran and Venezuela.

Refining margins have yet to catch up with the jump in freight rates, forcing refiners to absorb the costs for now.

"Refineries are facing strong pressure as spot premiums are high and freight rates have jumped, so it’s not economical to import crude," one of the sources said, adding that Sinopec was considering drawing down crude inventories to manage its needs.

A second source said Sinopec was studying whether it could reduce import volumes and see which cargoes from suppliers in the Americas, Europe, Africa and the Middle East it could cut among those due to arrive in China in December.

"The cargoes have been purchased so it’s still unsure whether the volume, especially for long-haul cargoes, can be cut," he said.

"Freight rates have jumped to USD8-USD9 a barrel, up by USD7 a barrel. It’s eaten up a chunk of the (refining) margins," he added.

In a sign the company was already trying to unload some excess supply in the spot market, Sinopec’s trading arm Unipec UK offered four west African crude cargoes last week, but failed to sell them, traders said.

Sinopec declined to comment.

As MRC wrote earlier, in mid-September 2019, SIBUR Holding (SIBUR) and China Petroleum & Chemical Corporation (Sinopec) signed a framework cooperation agreement to produce SEBS (styrene, ethylene and butylene-based block copolymers). SEBS is a pelletised modifier for thermoplastics used to impart elasticity to plastic materials or as a primary polymer to produce elastic components. SEBS boasts excellent durability and is leveraged across a variety of industries such as plastics and bitumen modification, adhesives, modification compounds, and toys. Under the agreement, SIBUR and Sinopec will establish a 50/50 joint venture (JV) in Russia to produce at least 20 ktpa of SEBS.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001. Sinopec Group, the parent company of Sinopec Corp., is ranked the 5th in Fortune Global 500 in 2012.

Clariant partners with ExxonMobil and Plastivaloire to expand palette of colors for auto interiors

MOSCOW (MRC) -- Collaboration between Clariant Masterbatches, polymer producer ExxonMobil, and Plastivaloire Group, a specialist in automobile interior design, has produced a huge new family of colors that can be expected to change the look of car interiors dramatically in the next few years, said the company.

The colors are being introduced during a special technical presentation on the ExxonMobil stand (Hall 10 / 10.1 ) at K 2019, the international plastics trade fair being held October 16 – 23 at Messe Dusseldorf in Germany. Presentations are scheduled for October 16, 17 and 22, at noon, 15:00 and noon, respectively.

Xavier Clement, Regional Sales and Project Manager – Automotive at Clariant, says the idea for the collaboration came during an automotive fair where he met Valerie Martin Maillet, a color expert for performance polyolefins (PP compounds) at ExxonMobil and Aurelie Nangniot, a designer from Plastivaloire. “We each recognized that vehicle design would be changing fundamentally in the coming years,” says Clement. “Especially given the trend toward shared cars or self-driving vehicles, drivers and passengers will want to decorate the interior of their car the same way they decorate their living rooms. We realized that, alone, we could not provide a real solution but, if we collaborate, we would be able to better serve car manufacturers and automotive designers."

ExxonMobil was already working on a new family of performance polyolefins. With 8% lower density than previous-generation materials, its Exxtral™ performance polyolefins are lightweight, an important factor in reducing CO2 emissions. They also provide better impact strength and flow characteristics so they can be molded in thinner section, and they are non-tacky as well as scratch and UV resistant. To be successful in the market, however, they also need to be easy to color for outstanding aesthetics. That’s when the other partners stepped in.

At Plastivaloire, Aurelie Nangniot, was creating a new, exciting spectrum of accent colors that would work in harmony in automotive interiors. She and the experts at Clariant developed a warm color palette based on natural materials like leather, copper, cork or wood, and a cool spectrum was inspired by fashion and interior design. Warm colors provide a human touch in response to the trend toward higher comfort standards in car interiors, while cool colors reflect the higher technology of multiple screens and connected devices that will characterize the autonomous cars of the future.

A total of 23 different hues were eventually selected and molded samples were assembled in a presentation box for easy evaluation.

As MRC informed earlier, Clariant announced that it has been awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The Dongguan plant will be one of the largest single-train dehydrogenation units in the world. Clariant's technology partner CB&I will base the plant's design on its Catofin® catalytic dehydrogenation technology, which uses Clariant's tailor-made Catofin catalyst and Heat Generating Material (HGM).

Propylene is the main feedstock for producing polyprolypele (PP).

According to MRC's ScanPlast report, the estimated consumption of PP in the Russian market totalled 694,210 tonnes in January-June 2019, up by 14% year on year. The supply of propylene block copolymers (PP-block) and propylene homopolymers (PP-homo) increased.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.

Lanxess opens high-tech plastics plant in Changzhou, China

MOSCOW (MRC) -- Lanxess, specialty chemicals company, recently inaugurated a plant in Changzhou, China, which will act as a compounding facility to produce Durethan and Pocan branded high-tech plastics, said Autotechreview.

These materials will be focussed especially for the automotive sector, as well as the electrical and electronics industry.

The entire production system at the new Lanxess Changzhou facility has been designed to be intelligent - from batching, hot melting, mixing, cooling, granulating, pellet cooling to palletizing. The batching system adopts multiple continuous loss-in-weight feeders to realise continuous production, while the pellet processing system can conduct feeding and convey in a fully automated manner. The company also said that the high-temperature plastic strands from the extruder can automatically enter a cooling bath for full cooling, before being sent to the automatic conveyor, and then to the pelletizer for granulation.

Lanxess has also equipped this plant with state-of-the-art technologies with regard to environmental standards, as is the case with all its new production sites. The Changzhou plant incorporates various innovative measures in environmental protection. It includes latest mixers with high performance, low energy consumption and efficient wastewater; waste gas and dust treatment systems for clean production process with low energy consumption; low material consumption and fewer pollutants.

Hubert Fink, Member, Board of Management, Lanxess, said this facility was built to address several strategically vital markets. In the automotive industry, lightweight materials become ever more important in new mobility, he added. Fink noted that at the same time, the electrical and electronics sector sees an increasing need for best-in-class flame retardant, easy flow and easily processable grades.

With the new plant, the company is responding to the trend towards the increased use of lightweight materials, noted Michael Zobel, Head, High Performance Materials business unit, Lanxess. He said Lanxess is committed to this long-term development.

As MRC reported earlier, in December 2017, Lanxess announced the expansion of its Additives segment and plans to acquire the phosphorus chemicals business with a US production site from Belgian chemical group Solvay. Both companies signed an agreement to this effect.

Lanxess is a leading specialty chemicals company with about 19,200 employees in 25 countries. The company is currently represented at 74 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics. Through Arlanxeo, the joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber.

Hengli Petrochemical shuts No.1 PTA in Dalian for maintenance

MOSCOW (MRC) -- Hengli Petrochemical has taken off-stream its No. 1 purified terephthalic acid (PTA) plant for a turnaround, as per Apic-online.

A Polymerupdate source in China informed that the company has halted operations at the plant on October 7, 2019. The plant is likely to remain under maintenance for around two weeks.

Located in Dalian, China, the No. 1 PTA plant has a production capacity of 2.2 million mt/year.

As MRC informed before, in 2018, Hengli Petrochemical restarted operations at its no.1 PTA plant at Dalian on August 14, following a planned maintenance turnaround. The plant was taken off-stream on August 1, 2018.

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.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.

Aruba ends contract with Citgo to operate island refinery

MOSCOW (MRC) -- Aruba reached an agreement with U.S. based Citgo Petroleum Corp. to end its contract to refurbish and operate the island’s refinery, said Reuters, citing a statement from the island’s prime minister.

The Caribbean nation plans to pursue outside candidates to take over the 209,000 barrel per day refinery, said Prime Minister Evelyn Wever-Croes. The refinery has been idled due to U.S. sanctions on Citgo’s parent Venezuelan state oil firm PDVSA.

Aruba had awarded CITGO a 25-year lease in 2016 to operate the refinery, which had been shut down and converted into a refined products terminal four years earlier by previous owner Valero. The refinery had been expected to restart in 2020.

As it was written earlier, in May 2019, Citgo restrted larger reformer at its US Corpus Christi 52,000 bbl/day refinery with capacity 225,000 benzene; 180,000 toluene tonnes/year.

Benzene is a feedstock for the production of styrene monomer (SM), which, in its turn, is a feedstock for manufacturing polystyrene (PS).

As MRC MRC's ScanPlast report, Russian plants reduced their output of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) in August 2019 by 19% year on year to 27,280 tonnes. This figure was at 33,5400 tonnes in August 2018. Russia's August GPPS and HIPS production decreased by 15% from July 2019. PS production slightly increased in the Russian market in January-August 2019. Thus, the increase was 1% year on year: 251,690 tonnes versus 248,150 tonnes a year earlier.