U.S. chemical production fell in November

MOSCOW (MRC) -- According to the American Chemistry Council (ACC; Washington, D.C), the U.S. Chemical Production Regional Index (U.S. CPRI) fell by 0.8% in November after gains the previous three months, said Chemengonline.

During November, chemical output declined across all regions, ACC says. Chemical production was mixed over the three-month period. There were gains in the production three-month moving average (3MMA) output trend of fertilizers, chlor-alkali, coatings, synthetic dyes and pigments, and industrial gases. These gains were offset by declines in the output of synthetic rubber, miscellaneous inorganic chemicals, pesticides, organic chemicals, consumer products, adhesives, other specialty chemicals, and manufactured fibers.

Nearly all manufactured goods are produced using chemistry in some form. Thus, manufacturing activity is an important indicator for chemical production. On a 3MMA basis, manufacturing activity edged lower for a third month in November, off by 0.1 percent. Output expanded in several chemistry-intensive manufacturing industries, including food and beverages, aerospace, computers, semiconductors, iron and steel products, oil and gas extraction, paper, structural panels, printing, and textile mill products.

Compared with November 2018, U.S. chemical production was off by 1.9 percent on a year-over-year basis, the sixth consecutive month of Y/Y decline. Chemical production was lower than a year ago in all regions, with the largest year-ago declines in the Gulf Coast and Midwest regions, ACC says.

As MRC informed earlier, Russia's output of chemical products dropped by 3.2% in November 2019 month on month.
However, production of basic chemicals increased by 3.6% in the first eleven months of 2019, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.

US crude stock draw likely extends amid strong exports, refinery runs

MOSCOW (MRC) -- US crude oil inventories likely extended their slide last week amid an uptick in refinery demand and strong export activity, S&P Global analysis showed Monday.

Commercial crude stocks are expected to have fallen 3 million barrels to around 443.8 million barrels during the week ended December 20, according to analysts surveyed by Platts Monday. The draw would pare the nationwide supply overhang for a second week, leaving stocks around 2.4% above the five-year average of US Energy Information Administration data.

The EIA inventory report is delayed until Friday due to the midweek Christmas holiday.

Crude inventories typically decline this time of year as refiners come back from fall turnaround work. But refiner activity has been historically weak lately, and instead recent crude draws have been predicated in large part on exports.

Refiners are expected to have raised utilization rates around 0.5 percentage point to 91.1% of total capacity last week, analysts said. The expected uptick would still leave run rates 2.4% below the EIA five-year average and more than 4% under year-ago levels. Approximately 1.34 million b/d of crude distillation capacity was slated to be offline last week for turnaround work, up from just 862,000 b/d offline during the same period last year, S&P Global Platts Analytics data showed.

Exports are expected to remain steady at around 3.6 million b/d last week, data from cFlow, Platts trade flow software showed. US exports were at an eight-week high 3.63 million b/d during the week prior, EIA data showed.

Export volumes to Europe slipped 4.84 million barrels to 8.47 million barrels last week, snapping three consecutive weeks of higher transatlantic flows, cFlow data showed. This decline was mostly matched by a 3.25 million-barrel uptick in Asia-bound volumes to 8.48 million barrels.

US exports to Singapore jumped to 2.77 million barrels last week, up from zero the week prior, according to cFlow. Exports to Singapore have significantly strengthened in the final weeks of 2019. To date in December they just shy of 4 million barrels to date in December and reached 4.33 million barrels in November, according to cFlow, compared with zero barrels in October and just 721,000 barrels in September.

Attractive refining margins for US light sweet crudes in Singapore is likely to support continued exports to the Asian refinery hub in the coming weeks. Margins for Platts WTI MEH and Eagle Ford crudes in Singapore have averaged at USD2.74/b and USD2.77/b to date in December, according to Platts Analytics data, compared with minus USD2.96/b for North Sea Forties and minus USD3.92/b for Arab Light.

Analysts expect nationwide gasoline stocks to have risen 1.5 million barrels last week to 238.8 million barrels, and distillate inventories to edge about 200,000 barrels higher to 125.3 million barrels. The expected build would leave gasoline stocks about 5.2% above the five-year average, while distillate inventories are expected to hold at around 7.4% under the five-year average.

Product stocks have steadily built as refiners have returned from maintenance, but so far this growth has been tempered by strong demand. Total refined product supplied during the week ended December 13 jumped 3.4 million b/d to 21.8 million b/d, EIA date showed, around 3.3% stronger than the five-year average for this time of year.

Sumitomo Chemical completes construction of new catalyst manufacturing lines at its Chiba

MOSCOW (MRC) -- Sumitomo Chemical has completed construction of two catalyst manufacturing lines in its Chiba Works location (Ichihara, Chiba) to meet the demand of companies licensing its polypropylene (PP) and propylene oxide (PO) manufacturing technology, in order to enhance its licensing business, said the company.

Sumitomo Chemical’s PP production technology has a proven track record of successful operations at various locations in the world, such as the Company’s Chiba Works in Japan and licensee companies overseas, including its affiliates, namely, The Polyolefin Company (Singapore) Pte Ltd and Petro Rabigh in Saudi Arabia, offering high quality products while maintaining stable plant operation over a period of time. As far as PO is concerned, the Company's production technology is based on a PO-only process, in which PO alone is manufactured without any accompanying coproducts by recycling cumene. The cumene method, which Sumitomo Chemical was the first in the world to commercialize, has the distinct advantage of achieving a high PO yield, when combined with the use of the Company's proprietary high-performance epoxidation catalyst, while ensuring superior stability in plant operation. It was licensed to S-OIL Corp. of South Korea and a subsidiary of PTT Global Chemical Public Company Limited of Thailand, in addition to the company’s affiliate Petro Rabigh. Furthermore the company signed a technology licensing agreement with Bharat Petroleum Corporation Limited of India in July 2019.

Sales of catalysts to licensing partners are expected to generate stable revenue that is unlikely to be affected by the market environment, as demand increases as more technology licensing agreements are signed. Sumitomo Chemical is committed to sustaining revenue by not only obtaining one-time technology licensing fees, but also through the sale of catalysts and providing technical support after licensing.

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.

Sumitomo Chemical intends to work with its global licensing partners and expand the business portfolios in its Petrochemicals & Plastics Sector.

MTBE unit taken off-stream by Shandong Chengtai

MOSCOW (MRC) -- Shandong Chengtai Chemical has shut its methyl tertiary butyl ether (MTBE) unit for a brief maintenance, according to Apic-online.

A Polymerupdate source in China informed that the company has halted operations at the plant on December 17, 2019. The unit is likely to restart on December 24, 2019.

Located at Jinshanwei, Shanghai, China, the MTBE unit has a production capacity of 135,000 mt/year.

Shandong Chengtai Chemical Co., Ltd. is based in China. The head office is in Weifang. The enterprise operates in the Other Chemical Product and Preparation Manufacturing industry. The company was established on April 02, 2011. It currently has a total number of 291 (2018) employees. From the latest financial highlights, Shandong Chengtai Chemical Co., Ltd. reported a net sales revenue increase of 12.83% in 2018. Its’ total assets recorded a negative growth of 25.57%.

Gazprom and Sinopec discuss potential avenues for cooperation

MOSCOW (MRC) -- Gazprom and Sinopec discuss potential avenues for cooperation, said the company on its website.

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Li Yong, Vice President of China Petrochemical Corporation (Sinopec Group), took place in St. Petersburg.

The parties discussed their potential areas of cooperation.

Gazprom and China Petrochemical Corp (Sinopec) are the top spenders among global oil and gas companies, in terms of new build capital expenditure (capex) to be spent on planned and announced projects across the oil and gas value chain during 2018–2025.

As MRC informed earlier, Gazprom Neft and the Abu Dhabi National Oil Company (ADNOC) have entered into a Framework Agreement on Strategic Cooperation. The companies will explore opportunities for implementing joint projects in the upstream and downstream sectors, as well as in information technologies, artificial intelligence, and other areas.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.