Mexican Orbia offers vinyls buisness sale

MOSCOW (MRC) -- Mexican conglomerate Orbia Advance, a major international polyvinyl chloride (PVC) producer, has admitted that it could sell its vinyl business following reports that it received offers for USD4 billion to part ways with its German subsidiary Vestolit, reported LatinFinance.

"Orbia is in the process of analyzing potential divestment alternatives or strategic alliances with respect to our vinyl business without, to date, having any certainty or approval of the execution of any transaction," the company said in a securities filing.

Orbia made the filing with the Mexican Stock Exchange (BMV) in response to an article from Bloomberg.

Possible buyers include Apollo Management, INEOS and Westlake Chemical, according to analysts, who quoted the Bloomberg article.

The company's vinyl business represents 32.6% of the sales and 30.0% of the EBITDA of Orbia during the past 12 months, Monex said in a research note. The Vinyl business includes Vestolit and AlphaGary.

In addition to the company's vinyl business, Orbia also owns the Fluent business group, which makes pipe. Fluent includes Wavin, Amanco, Dura-Line and Netafim. Orbia's Fluor business mines fluorite and produces fluorochemicals.

Orbia was previously known as Mexichem. It owns emulsion and suspension PVC plants in Mexico, Colombia and the US.

As MRC wrote before, in August 2019, Mexican plastic pipe and chemicals company Mexichem changed its name to Orbia Advance Corporation under a restructuring and reorganization plan.

We also remind that in 2014, Mexichem SAB de CV agreed to buy German PVC paste producer Vestolit GmbH from investment company Strategic Value Partners LLC (SVP Global) for EUR219 million (USD293 million).

As MRC wrote before, Russia's estimated consumption of unmixed PVC was 857,450 tonnes in January-November 2019, up 4% year on year. Emulsion and suspension PVC markets showed an increase in supplies. November estimated consumption of SPVC (excluding exports to Belarus) in the Russian market decreased to 70,620 tonnes from 71,720 tonnes in October. Some producers reduced PVC production in November, which affected export sales. Overall shipments of suspension to the Russian market totalled 736,570 tonnes in the first eleven months of 2019, up by 3% year on year. Local producers managed to increase suspension output by 3%, while exports grew by 24%.

Oriba, of Tlalnepantla, an industrial municipality close to Mexico City, is Latin America’s largest manufacturer of PVC pipe, vinyl resins and compounds.

PE imports into Ukraine rose by 10% in 2019

MOSCOW (MRC) - Imports of polyethylene (PE) into Ukraine increased to about 268,700 tonnes in 2019, up 10% compared to the figures in 2018. The greatest increase in demand occurred for high density polyethylene (HDPE), according to MRC DataScope.

Last month's PE imports to Ukraine dropped to 20,300 tonnes from 24,300 tonnes in November, shipments of all ethylene polymers decreased.
Overall PE imports reached 268,700 tonnes in January-December 2019, compared to 244,400 tonnes a year earlier. The highest supply of HDPE increased most, while imports of ethylene copolymers declined.

The supply structure by PE grades looked the following way over the stated period.

December imports of high density polyethylene decreased to 7,400 tonnes compared with 8,200 tonnes in November. Ukrainian companies decreased their imports of blow moulding and injection moulding grade HDPE. Overall HDPE imports exceeded 95,000 tonnes last year, compared to 79,300 tonnes a year earlier, PE shipments to all consumption sectors increased.

December imports of low density polyethylene (LDPE) into Ukraine were about 5,800 tonnes against 7,800 tonnes a month earlier. Overall LDPE imports reached 79,700 tonnes over the stated period, up by 5% year on year.

Last month's imports of linear low density polyethylene (LLDPE) were about 6,000 tonnes, compared to 7,400 tonnes in November.
Last year's overall LLDPE imports grew to 81,500 tonnes from 73,700 tonnes a year earlier. Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 12,500 tonnes over the stated period, compared to 15,100 tonnes a year earlier.

Asia naphtha premiums remain high amid demand loss from cracker cuts

MOSCOW (MRC) -- Asia will lose more than 300,000 tonnes of naphtha demand this month as petrochemical makers cut output to combat weak margins, but refinery maintenance is reducing supply of the plastics and chemicals building block, holding premiums steady, reported Reuters.

Run cuts at crackers - units that break down naphtha into components to make plastics and chemicals - have historically pulled spot prices for the feedstock into discounts to benchmark prices in Japan. The last time petrochemical makers took such a step was during the 2008 financial crisis.

But a number of refineries are now in turnaround in the Middle East, Asia’s top naphtha supplier, underpinning prices for the product.

"The several refinery turnarounds in Saudi Arabia and (United Arab Emirates) will lower (Middle Eastern) exports and offset some of the demand reduction due to cuts in crackers runs," said Matthew Chew, principal oil analyst at IHS Markit.

Saudi Aramco Total Refining and Petrochemical Company (SATORP), for example, has said it will conduct scheduled maintenance on Train 2 units from Jan. 13 to Feb. 29.

Abu Dhabi National Oil Company (Adnoc) as well said in a statement last month that its Ruwais facility would undergo routine maintenance in early 2020.

Naphtha traders have said at least two more facilities in Saudi Arabia, Rabigh and Ras Tanura, are also scheduled to undergo maintenance in the first quarter. This could not be confirmed with Saudi Aramco, which has declined to comment.

The effect of these turnarounds is reflected in data from Refinitiv Oil Research showing that Middle East naphtha slated to arrive in North Asia and Singapore in February is about 1.8 million tonnes so far, sharply lower from January’s scheduled volumes of almost 2.3 million tonnes.

That has helped to hold naphtha spot premiums relatively high, with benchmark open-specification grade sold to Yeosu, South Korea, last week at about USD18.50 a tonne to Japan quotes on a cost-and-freight (C&F) basis.

Although this was down nearly 40% from multi-year highs of USD30 a tonne in October, it was more than 18 times higher versus the same period in 2019.

"People often say the naphtha market is weak. But South Korea paid an USD18.50-a-tonne premium ... how is that weak?" said an industry source who tracks deals.

Naphtha crackers across Asia, including in South Korea, Japan, Indonesia, Singapore and Malaysia, have cut runs by 5%-10%. The Philippines has decided to extend the shutdown of its sole cracker following planned maintenance.

This translates to a net demand loss of 300,000 to 350,000 tonnes for January, said Sri Paravaikkarasu, director for Asia oil at consulting firm FGE.

Chew of IHS estimated the demand loss this month at 100,000 to 200,000 barrels per day (bpd) (approximately 11,100 tonnes to 22,200 tonnes per day).

As MRC informed earlier, in July 2018, SATORP selected Axens to evaluate, develop, and implement an Advanced Process Control (APC) system for its aromatics complex ParamaX producing high purity paraxylene and benzene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

One dead after huge explosion at chemical plant near Barcelona

MOSCOW (MRC) -- A massive explosion at a petrochemical plant in northeastern Spain killed one person and gravely injured at least six others on Tuesday, reported The Telegraph with reference to regional authorities' statement.

A local government spokesman for the port city of Tarragona, where the plant is located, said a preliminary investigation indicated the force of the blast killed an individual in a nearby neighborhood.

The spokesman said he had no further details. He spoke on condition of anonymity in keeping with City Hall regulations.

The interior minister of Spain's Catalonia region, Miquel Buch, tweeted that the explosion caused one death and left six people injured while one person remained missing.

The civil protection agency in the Catalonia region called the blast a "chemical accident" and warned people in parts of the city of 800,000 and in nearby towns to refrain from going outside as a precaution.

Emergency services said that two of the injured were being treated for major burns.

Buch said the smoke from the resulting fire was not toxic but he also advised residents to remain inside.

The blast took place on the premises of Iqoxe, according to a woman who answered the phone at the company and who quickly hung up the phone without giving her name.

According to the company's website, Iqoxe is Spain's sole producer of ethylene oxide, a chemical compound used for making detergents, solvents and other products, as well as glycol, one of the main raw materials in the production of plastics.

Local residents posted videos showing the aftermath of the blast, with flames and a big column of black smoke emerging from an area dotted with big industrial tanks.

Fire departments sent 24 brigades to the area, the regional emergency service said.

Some local residents told Tarragona Radio that the blast could be heard from miles away.

Tarragona is located 115 kilometers (71 miles) southwest of Barcelona, the regional capital of Spain's Catalonia region.

Since 2015, the city has housed a 1,200-hectare (2,965-acre) "chemical hub," ChemMed, that was described as the largest of its kind in southern Europe.

The government said Prime Minister Pedro Sanchez had been in contact with the regional president of Catalonia, Quim Torra to inquire about the blast and offer any help needed.

Tuesday's explosion comes just over a month after a Dec. 11 blaze at a solvent and industrial residues recycling plant in the northeastern town of Montornes del Valles. After that blast, which caused no casualties, authorities had to cordon off an area of some 500 meters (550 yards) in radius around the plant.

As per MRC's ScanPlast reported, imports of PET chips into Russia increased by 13% year on year in the first eleven months of 2019, reaching 130,800 tonnes, versus 116,100 tonnes a year earlier (excluding shipments from Belarus). Russia's PET imports almost doubled to 12,300 tonnes in November 2019 from 6,300 tonnes in October 2019, imports of material were 8,200 tonnes in November 2018. The share of Chinese material was 78% (9,600 tonnes) in November versus 92% (5,800 tonnes) a month earlier.

IQOXE (part of PlastiVerd Group, Barcelona) produces ethylene oxide (EO) and monoethyleneglycol (MEG). The company’s plants serve for two lines of production and a set of services needed for it to function. One production plant is used to manufacture ethylene oxide and glycols on a continuous basis. It can produce up to 140,000 t/y of EO of which 80,000 t/y can be used to transform 106,000 t/y of MEG-F. Three batchtype production plants are used to fabricate ethylene oxide and propylene oxid: PEG, polyols and ethoxylates.

Sasol shut LDPE plant after explosion

MOSCOW (MRC) -- It is reported that Sasol has taken its newly constructed low density polyethylene (LDPE) plant in Lake Charles off-stream following an explosion and fire occurred on 13 January 2020, reported CommoPlast.

The unit was under trial operation at the time of the incident and has yet to reach on-spec cargoes.

The LDPE plant has an annual capacity of 420,000 tons/year and at the time of this report, the company has not announced the restart schedule.

Meanwhile, other units at the same site including the ethane cracker and the linear low density polyethylene (LLDPE) lines are not affected by the fire and currently operating at the normal rates.

As MRC wrote before, Sasol announced that its world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. Sasol’s new cracker, the heart of its Lake Charles Chemicals Project (LCCP), is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to our six new derivative units at the company's Lake Charles multi-asset site.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.