PVC production in Russia up by 3% in Jan-Nov 2019

MOSCOW (MRC) -- Russia's overall production of polyvinyl chloride (PVC) reached 893,600 tonnes in the first eleven months of 2019, up by 3% year on year. At the same time, not all Russian producers raised their output of HDPE, according to MRC's ScanPlast report.

November total production of unmixed PVC was about 84,600 tonnes versus 88,500 tonnes a month earlier, SayanskKhimPlast and Kaustik Volgograd decreased their capacity utilisation last month. Overall PVC production reached 893,600 tonnes in January-November 2019, compared to 871,000 tonnes a year earlier. All plants raised their output, except for Kaustik Volgograd.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (JV of SIBUR and SolVin) produced about 30,200 tonnes of PVC in November, with emulsion polyvinyl chloride (EPVC) accounting for 2,700 tonnes, compared to 29,500 tonnes a month earlier. Overall PVC production at RusVinyl was 316,700 tonnes in January-November 2019, up by 4% year on year. Such a significant increase in production indicators was primarily due to the absence of long scheduled maintenance works in the current year, which was traditionally carried out in April - May.

SayanskKhimPlast produced 25,600 tonnes of suspension PVC (SPVC) last month, whereas this figure was 27,800 tonnes in October. The Sayansk plant managed to produce about 266,600 tonnes of resin in January-November, compared to 251,600 tonnes a year earlier.

Baskhir Soda Company produced about 23,000 tonnes of SPVC in November versus 23,800 tonnes a month earlier. Total SPVC production at Baskhir Soda Company increased to 239,100 tonnes in the first eleven months of this year, compared to 229,700 tonnes in the same period in 2018.

Kaustik (Volgograd) produced about 5,800 tonnes of SPVC in November, compared with 7,400 tonnes in October. The decline in production in November was due to work to modernise production. The plant's overall output of PVC exceeded 71,100 tonnes in the first ten months of 2019 versus 84,500 tonnes a year earlier. The Volgograd's lower production was caused by a shutdown for maintenance in May-June.

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MOSCOW (MRC) -- The European Commission has approved the proposed acquisition of Lotte Chemical UK Ltd by petrochemicals giant Alpek, part of Mexican conglomerate Alfa Group, said Plasticsnewseurope.

In its decision, announced 4 Dec, the European Commission concluded that the proposed transaction would raise no competition concerns given the limited horizontal and vertical overlaps between the activities of the companies.

Lotte UK is active in the manufacture of polyethylene terephthalate (PET) resin while Alpek’s activities cover a range of areas including polyester, plastics and chemicals, aluminium auto components, refrigerated foods, and IT & telecoms.

Under the deal, wich was disclosed late October, Alpek will acquire the UK subsidiary of Lotte Chemical Corp., including its 350 kilotonne-per-annum (ktpa) polyethylene terephthalate (PET) facility in Wilton, in south-eastern UK.

The terms of the agreement have not been disclosed. The move marks the Mexican firm’s first acquisition outside the Americas, raising the company’s PET capacity to 2.8 million tonnes a year.

According to Gordon Haire, research director at London consulting firm Wood Mackenzie, the change of ownership also marked the exit of Lotte Chemical from PET manufacturing in Europe.

The deal is also significant as it could have significant implications for regional PTA trade flows. Lotte Chemical, Haire explained, exported around 110 ktpa of PTA from Korea to the UK over the last few years, while Alpek is also a long-established supplier into the European PTA market.

Alpek is a leading petrochemical company operating two business segments of polyesters (PTA, PET and polyester fibres), and plastics & chemicals (polypropylene, expandable polystyrene, and other speciality and industrial chemicals).

The company is an integrated producer of PTA and PET in North America, with annual sales of USD6.9bn. It operates 27 plants in the US, Mexico, Canada, Brazil, Argentina and Chile, and employs more than 5,700 people.

According to MRC's ScanPlast report, Russia's estimated PET consumption dropped in September 2019 by 10% year on year, totalling 58,210 tonnes. Overall, 551,320 tonnes of PET was processed in Russia in the first nine months of 2019, up 9% year on year.
MRC

MOSCOW (MRC) -- Venezuela’s state oil company PDVSA will operate Curacao’s 335,000 barrel-per-day Isla refinery for up to a year more, a spokesman for Curacao’s state refining company, Refineria di Koursou (RdK), said Reuters.

PDVSA’s contract to operate the refinery was set to expire at the end of this year. The spokesman described the agreement as a “transition” measure as RdK continued efforts to find a new operator. RdK said in September that it had opened exclusive talks with industrial commodities conglomerate Klesch Group to operate the refinery.

RdK said at the time that a definitive agreement would be reached by the end of November. Talks with Klesch are ongoing, the spokesman said.

Leaving Isla would be a further blow to PDVSA which has seen its crude output plunge by more than half since 2016 due to underinvestment and mismanagement, and more recently due to U.S. sanctions intended to force out Venezuelan President Nicolas Maduro.

PDVSA President Manuel Quevedo, also Venezuela’s oil minister, visited Curacao in July to discuss the possibility of the company staying on to operate the refinery.

RdK officials met with Quevedo in Caracas on Saturday to discuss the transition arrangement, the company said in a statement, adding that the parties discussed the possibility of doing maintenance work on the refinery.

Neither PDVSA nor Venezuela’s oil ministry immediately responded to requests for comment. In May, the U.S. government issued a license allowing Curacao’s refinery to keep working with PDVSA through January 2020 despite the sanctions.

RdK said in the statement that the license allowed for an additional transition period of up to a year during which the company can generate the revenue needed to maintain refining operations and pay workers, but not turn a profit.

As MRC informed earlier, Curacao’s state-owned Isla oil refinery, which is operated by Venezuelan state-run company PDVSA, has received an exemption from U.S. sanctions on PDVSA.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
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MOSCOW (MRC) -- Crude imports for China's independent refineries fell 14.4% in November to 11.9 million mt, or 2.91 million b/d, from the record high of 13.9 million mt in October, according to monthly survey by S&P Global.

Crude imports for China's independent refineries fell 14.4% in November to 11.9 million mt, or 2.91 million b/d, from the record high of 13.9 million mt in October, a monthly survey by S&P Global Platts showed Thursday.

Despite the declines, including the 0.2% year-on-year decrease, the November volume remained the second highest monthly level in 2019.

Meanwhile, a higher average run rate in the sector than in October suggested a stock draw.

The latest survey of 44 independent refineries in Shandong conducted by local information provider JLC showed that the sector's November operation rate was around 69.8%, about three percentage points higher from October.

"The refining margins for most refineries are still good," said an analyst with JLC. Refining margins were supported by the low-pour point gasoil demand in winter, although the driving demand for gasoline have waned slightly, refinery sources revealed.

Total crude oil imports for the sector stood at 118.14 million mt, up 26.8% year on year, Platts data showed.

While looking for December, it is likely the total imports will stay unchanged or slightly lower in the coming months, sources said.

"Refineries still booked heavily for December arrival cargoes in order to use up crude oil import quota by year-end, so it's likely the arrivals will keep high," said a trade source in Shandong.

Crude imports by Haike Petrochemical posted a monthly rise of 23.1% amid restocking activity, pushing the company into the ranking of top third importers in November.

Haike received various crude grades, including Lula and Mero from Brazil, Murban from the Middle East, and ESPO from Russia, totaling 789,000 mt.

That compared with just 268,000 mt a year earlier and 641,000 mt in October.

Meanwhile, the imports by Chambroad have seen the biggest increase of 207.9% from October, to 665,000 mt, making it the top fifth importer last month.

Crude grades imported by the refinery were mostly heavier, with 270,000 mt of Basrah Heavy crude in two cargoes, and 135,000 mt of Lenghun Blend. The specifications of Lenghun Blend looks quite similar to Merey crude from Venezuela.

In addition, Chambroad also imported 130,000 mt of Iracema and 130,000 mt of Lula crude.

Besides those two new comers in the top five importers, the rest three are regular big buyers - Hengli, ChemChina, and Dongming Petrochemical.

Hengli has received five VLCC cargoes of crudes, with one from Iraq and the rest all from Saudi Arabia, stable on the month. It competes with ChemChina for the top rank position from time to time.

ChemChina last month imported about 1.33 million mt of crudes, about 9.3% lower from the previous month.

Russian grades, including 500,000 mt of ESPO and 330,000 mt of Urals, accounts for about 62% of ChemChina's total imports. The rest are 233,000 mt of Nemina crudes from Malaysia, 132,000 mt of Murban crude, and 135,000 mt of Lula grade.

Crude imports by the fourth importer, Dongming Petrochemical, have decreased by 45.6% on month to around 683,000 mt in November.

Dongming favors heavy grades, with 273,000 mt of Castilla crude, 260,000 mt of Oman, and 150,000 mt of Napo crude from Ecuador.

Crude shipment arrivals via Qingdao port, with Dongjiakou port included, decreased 1.2% on the month to 5.34 million mt in November, or 45% of the independent sector's total intake during the month. That compared with a 39% of the total in the previous month.

"The expected arrivals into Qingdao will probably remain considerable in December, as some refineries still prefer to use up the quotas by year end," said a port official.

Apart from all those cargoes discharged over the month, two cargoes of crude, which arrived in late October, got held up in Qingdao port. The reason is not immediately known.

The two cargoes, loaded via 150,000-dwt vessels Samsara and Smyrni, were originally designated for Shengxing Petrochemical, according to sources.

The Platts November survey covers crude barrels imported by 38 refineries with import quotas, as well as others without quotas, through ports mostly in Shandong province, as well as Tianjin, Zhoushan and Dalian for the sector.

The barrels include those imported directly by the refiners, as well as cargoes bought by trading companies on behalf of the independent refiners.

The 38 refiners had been awarded a combined total of 133.65 million mt of import quotas until the end of October, accounting for 84% of the county's total allocations for independent refineries in three batches.

As MRC informed before, in late November 2019, Zhejiang Hengli Petrochemical was ready to launch its Phase II PP plant, completing both phases of the newly constructed petrochemical complex. The Phase II PP unit has an annual capacity of 400,000 tons/year and would rely on spot propylene for the trial period while waiting for the new PDH unit to come online. Hengli started up the 450,000 tons/year Phase I PP plant in May 2019 and at the moment, spot cargoes from this unit are widely available in the domestic ground. The producer is also offering BOPP cargoes to the Indonesia market, sources said.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
MRC

MOSCOW (MRC) -- The chief executive of Brazilian state-run oil firm Petroleo Brasileiro said on Friday he wants to sell the company's stake in petrochemical company Braskem within 12 months, adding that he strongly disagreed with reported plans to delay the sale, as per the company's press release.

On Monday, Reuters reported that creditors of corruption-ensnared construction conglomerate Odebrecht SA, which also has a large stake in Braskem, were in advanced talks to delay a sale for up to two years.

"To me, it means they do not want to sell anything," CEO Roberto Castello Branco said during a meeting with investors in London.

As MRC informed before, Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
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