First product from Chinese Zhejiang new PP plant due in Nov

MOSCOW (MRC) -- Zhejiang Petrochemical is expected to start production at its new PP plant in November, reported NCT with reference to a source close to the company.

Located in Zhejiang, China, the new plant will have a production capacity of 900,000 tons/year of PP.

As MRC wrote previously, China's greenfield Zhejiang Petrochemical will use a range of process technology from Honeywell UOP for the second phase of its integrated refining and petrochemical complex in Zhoushan, Zhejiang province. The second phase of the complex by itself will process 20 million tons per year of crude oil and produce another six million tons per year of aromatics when completed. With an overall project cost of Yuan 160 billion (USD25.8 billion), Zhejiang Petrochemical plans to ultimately build up 40 million mt/year of crude processing capacity on Yushan Island of Zhoushan city in eastern China's Zhejiang province.

Phase I, revolving around 20 million mt/year of primarily crude processing capacity, will be able to produce 4 million mt/year of paraxylene, along with 8.5 million mt/year of gasoline, gasoil and jet fuel. Zhejiang Petrochemical has plans to start trial operations in February on its crude distillation unit and vacuum distillation unit at the phase I project, a source close to the company said this week. Construction of the second phase will begin after the full start-up of phase I.

According to MRC's ScanPlast report, 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.
MRC

MOSCOW (MRC) -- Negotiations over November shipments of suspension polyvinyl chloride (SPVC) began in the Russian market this week. Some producers significantly decreased prices, in some cases up to roubles (Rb) 4,000/tonne, according to the ICIS-MRC Price Report.

Strong demand from the domestic market and a decline in imports helped Russian producers to keep a sufficiently high level of PVC prices in the domestic market in October. However, producers had to cut prices for November delivery, both under the pressure of a seasonal decline in demand and under the pressure of lower prices in foreign markets.

Some producers discussed reduction in PVC prices by Rb4,000/tonne, compared with the level of October.
Demand for finished PVC products in October was at a good level, which also affected the volumes of PVC purchases from the domestic market.

Although some of the converters nevertheless reduced the volume of PVC procurement, starting the process of optimising the stock of finished goods and raw materials. And, as a result, some producers increased export sales in order to balance the domestic market.

The seasonal factor traditionally has a greater affect on demand in November, and most converters plan to reduce purchases further. At the same time, some converters reported that they planned to keep the October level of PVC purchases or to go on a slight decrease in purchases.

Also, import has put pressure on prices of Russian producers in recent months. PVC prices in October in foreign markets in some areas, taking into account delivery and tax burden, were slightly lower than prices of Russian producers.

Some external suppliers announced price cuts for November delivery, and this factor could not go unnoticed by Russian producers.

November deals for K64/67 PVC were negotiated in the range of Rb72,000-74,000/tonne CPT Moscow, including VAT, for lots of less than 500 tonnes. K70 PVC was contracted at the prices, which were by on average of Rb1,000/tonnes higher.
MRC

MOSCOW (MRC) -- Participants of the Russian polystyrene (PS) market continued to report a shortage of domestic PS in October, according to ICIS-MRC Price report.

The shortage was not as acute in the general purpose polystyrene (GPPS) segment, as in the high impact polystyrene (HIPS) market.

Converters reported other market participants' requests to resell HIPS. A major XPS boards producer also reported strong demand for GPPS in the market and absence of available quantities of material.

On the other hand, large converters were provided with material according to their needs, and the fact that demand exceeded supply was not critical for the market as a whole. On the back of this, small-sized buyers were forced to search for free quantities of material and to pay a higher price for them.

As reported earlier, October is traditionally a season of stronger demand for PS and finished products in Russia. In mid-October, Penoplex and Gazprom neftekhim Salavat did not have available quantities for shipping material to the market.
MRC

MOSCOW (MRC) -- Some 4.7 million tons/year of new polyethylene (PP) capacity is due to come on stream in China in the fourth quarter, to add to supply from plant restarts after maintenance while the market battles weak demand, reported NCT.

At least 10 new plants are due to start production during the quarter in the country, with the biggest being 800,000 tons/year coal-to-olefins unit built by Ningbo Fuji, according to the ChemOrbis Production database. Other major projects are three 600,000 tons/year plants built by Bao Lai Petrochemical, Tianjin Bohai and Donghua Energy respectively.

The new capacities coming onstream in the fourth quarter constitute for more than half of around 8 million tons of PP capacity built in China in 2019, compared to only two plants with a combined capacity of 650,000 tons in 2018.

Another 6 plants with a combined capacity of 2.9 million tons/year are due in 2020, with the biggest being 700,000 tons/year unit by SK.

As MRC informed earlier, due to an unspecified technical issue at the upstream propane dehydrogenation (PDH) unit, Ningbo Fortune Petrochemical Co Ltd (Fuji) was forced to take both the PDH and the downstream PP plants offline on 5 October 2019. Repair works are taking place, however, sources said that both plants might need to remain shut for at least 30 days. Ningbo Fortune Petrochemical Co Ltd (Fuji) is a subsidiary of Oriental Energy Co Ltd (Dong Hua). Its plant in Ningbo houses a PDH unit with an annual capacity of 660,000 tons of propylene/year. Meanwhile, the PP unit produces 400,000 tons/year.

According to MRC's ScanPlast report, 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.
MRC

MOSCOW (MRC) -- Dow is not planning to proceed with the polyethylene (PE) expansion project in Europe, reported NCT with reference to the company’s CEO Jim Fitterling, who was quoted as saying in the earnings call transcript.

The CEO pointed to the current state of demand and the market outlook in Europe and said that they didn’t see a reason to push the project forward to any final investment decisions.

Dow first announced plans to construction of a world-scale 450,000 tons/year PE facility in Europe in May 2017. The additional capacity was intended to maximize the value of Dow’s ethylene integration in Europe and serve the growing demand for high-performance pressure pipes, fittings, caps and closures applications.

Meanwhile, the company reported a total quarterly net income of USD347 million versus USD714 million in the year-ago period. The company’s third-quarter net sales were USD10.8 billion, down 15% from the year-ago period, driven by lower local prices primarily due to declines in global energy prices.

The company’s packaging and specialty plastics segment also reported lower net sales for the third quarter. The segment’s net sales were USD5.1 billion, down USD1.1 billion versus the year-ago period, while volume declined and local price declined 4% and 13%, respectively, on a yearly basis.

As MRC informed before, Dow Chemical's propylene dehydrogenation (PDH) unit in Freeport, Texas, is offline for a turnaround. The PDH unit went offline for scheduled maintenance September 26, and the work is expected to last 45-60 days. Originally, sources expected the turnaround to begin in early September, but then learned it had been delayed.

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.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
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