Linde starts up new air separation unit at Freeport, Texas

MOSCOW (MRC) -- Linde PLC announced it has commissioned a new air separation unit (ASU) in Freeport, Texas, as part of a long-term agreement to supply MEGlobal Americas Inc.’s new monoethylene glycol (MEG) plant at Oyster Creek petrochemical complex in Freeport, according to Kemicalinfo.

The new ASU will supply oxygen and nitrogen to MEGlobal Oyster Creek for use in its MEG manufacturing process. The ASU also will supply Linde’s industrial gas pipeline system, adding new argon capacity, Linde said.

In addition to the ASU, Linde started a new carbon dioxide (CO2) plant in Freeport that will recycle crude CO2 supplied from an unidentified MEGlobal process.

“The new ASU and the expansion of our Gulf Coast pipeline system further strengthen Linde’s ability to reliably supply customers throughout the region and positions us for future growth in the USGC,” said Jeff Barnhard, Linde’s vice-president for the US South region.

The details regarding capacities of either the ASU or CO2 plant were not disclosed.

As MRC reported earlier, MEGlobal Americas officially began production at its 750,000 ton per year MEG plant in October last year to meet the growing demand for ethylene glycol products in the US and Asia-Pacific markets, as well as its strategy to expand globally.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia decreased by 16% year on year in December 2019. Russia's overall estimated PET consumption totalled 696,810 tonnes in 2019, up by 1% year on year (690,130 tonnes in 2018).

MEGlobal Americas is a subsidiary of Equate Petrochemical Co. of Kuwait’s Dubai-based MEGlobal International FZE. Established in July 2004, MEGlobal is a world leader in the manufacture and marketing of merchant monoethylene glycol and diethylene glycol (EG).

Equate Petrochemical is an international JV of Kuwait’s state-owned Petrochemical Industries Co. (42.5%), Dow (42.5%), Boubyan Petrochemical Co. (9%) and Qurain Petrochemical Industries Co. (6%).
MRC

MOSCOW (MRC) -- China's independent refineries in eastern Shandong province have cut February run rates to a four-year-low of around 40% in February, down from 63.5% in January, as product sales slump due to the coronavirus outbreak, refinery sources and analysts told S&P Global Thursday.

Twelve refineries with a combined capacity of 39.6 million mt/year have shut since late January, resulting in the average run rate in the province falling to 40.9% in February, according to local energy information provider JLC.
These include ChemChina's 5 million mt/year Zhenghe Petrochemical refinery, which was taken offline earlier this week. The company's Changyi Petrochemical and Huaxing Petrochemical operations, with a combined capacity of 15 million mt/year, are also slated to close soon, a JLC analyst said.

The 12 shutdowns over late January-early February take the total number of refineries currently idled in JLC's monthly survey of 44 refineries to 20.

The 44 refineries have a total capacity of 172.4 million mt/year (3.4 million b/d) and account for 50%-60% of China's total independent refining capacity.

A number of refineries have also shut down secondary units in addition to lowering crude throughput, market sources said.

"The Shandong provincial government has restricted road transportation to limit the coronavirus spread, making it difficult to send out oil products and resulting to super high inventories," a refinery source in Shandong said.

"We all have to cut throughput, some even shut down, due to high product inventories amid bad logistics," a Weifang-based independent refinery source said.

In addition, demand for oil products that had been falling since late December was dampened further by the coronavirus outbreak in January as residents in several regions were placed under home isolation, reducing driving activity and halting major construction projects.

Oil product stocks surged 191.1% month on month to a record high 2.8 million mt in January from a 6-month high of 966,000 mt in December, JLC data showed.

Gasoline stocks comprised 1.06 million mt of the total and gasoil 1.75 million mt.

The average run rate at the 44 refineries had already hit a five-month low of 63.5% in January, sliding from 72.2% in December and a record high 73.9% in November, Platts' calculations based on JLC data showed. Feedstock consumption in January fell 12.1% on month to 9.1 million mt, or 2.16 million b/d, Platts calculations showed.

Of the refineries surveyed in January, 24 of the 36 operational refineries cut run rates and of the rest, a third raised run rates. The top five refineries cracked a combined 2.6 million mt of crude, comprising about 28.5% of the total crude consumption by the surveyed refineries.

Lula surpassed ESPO to top the crude list in January, with 1.42 million mt cracked. Oman crude rose to third place despite its consumption falling 11.8% from December.

A total 34 grades of imported crude were cracked by the surveyed refineries in January, compared with 37 in December.

Of the 10 most consumed grades in the month, Urals posted the biggest month-on-month spike of 27.3% to 420,000 mt. ChemChina's three refineries cracked the grade, along with Luqing Petrochemical and Wonfull Petrochemical. Urals typically competes with Oman when independent refineries choose feedstocks.

We remind that, as MRC wrote previously, Sinopec Guangzhou Petrochemical, part of China's petrochemical giant - Sinopec, resumed operations at its cracker in China on December 5, 2019, following a turnaround. The cracker was shut for maintenance on October 12, 2019. Located in the Guangzhou province of China, the cracker has an ethylene production capacity of 260,000 mt/year and propylene production capacity of 150,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

MOSCOW (MRC) - After several months of the decrease of the price of low density polyethylene (LDPE) in the Russian market, they began to stabilise. Prices ceased to decline, and for some positions even a rise in prices was recorded this week, according to the ICIS-MRC Price Report.

The decrease in LDPE prices in the Russian market began in October due to excess supply and a seasonal decrease in demand. The dynamics of the price cuts of polyethylene increased in November - December, and only by mid-February was it possible to achieve relative stability by reducing supply and stable demand. Prices rose slightly for some grades of LDPE.

Some producers said that some LDPE grades reached such a level in January that they border the cost of production.
Producers did not resort to shutdowns but they reduced loading. In particular, Gazprom neftekhim Salavat and Kazanorgsintez reduced their output.

LDPE imports from Belarus were also reduced due to the shutdowns of part of the capacities from January. Thus, LDPE market is not oversupplied in February, although there was no need to talk about the deficit. At the same time, some companies still reported temporary restrictions in LDPE supplies.

According to the company's customers, Ufaorgsintez has temporary restrictions on shipments of the 108 LDPE, there are practically no stocks of this polyethylene, and shipments are made exclusively from the production.

A similar situation with LDPE is with Gazprom Neftekhim Salavat. The Salavatian producer reduced capacity utilisation in favour of a more profitable sale of ethylene.

In the first half of February, the company ships exclusively on contractual obligations; LDPE supplies will only begin next week on the spot market. Overall, spot prices of 108 grade LDPE have been stabilised in the range of Rb61,000-65,500/tonne CPT Moscow, including VAT, by mid-February.

And some sellers were in no hurry to sell their stocks. Prices for 158 LDPE have slightly increased, a slight increase in the prices of Ufa polyethylene was recorded, prices start from the level of Rb68,500/tonne CPT Moscow, including VAT, while a week earlier they were Rb1,000-1,500/tonne cheaper.
MRC

MOSCOW (MRC) -- Shintech's new 500,000 mt/year Louisiana cracker has begun producing ethylene after more than 18 months of delays, reported S&P Global with reference to the contractor for the polyvinyl chloride (PVC) producer's statement Thursday.

Japan's Toyo Engineering and its US subsidiary, Toyo USA, said construction on the cracker was finished and the plant has "started production of ethylene," according to a statement on the company's website.

Shintech did not respond to requests for comment.

The new cracker at Shintech's Plaquemine, Louisiana, PVC complex expands Shintech's in-house feedstock output while reducing spot ethylene purchases.

The cracker is the last of eight to bring a cumulative 9.74 million mt/year in new ethylene capacity online since 2017. That total rises to 10.68 million mt/year when including Indorama Ventures' revamped 440,000 mt/year Louisiana cracker and a 500,000 mt/year expansion of Dow Chemical's 1.5 million mt/year cracker in Texas that started up in September 2017.

Another 8.3 million mt/year of new ethylene capacity is under construction or planned to come online through the 2020s.

All are part of more than USD200 billion in new petrochemical infrastructure to emerge from plentiful cheap ethane unearthed by the US natural gas shale boom.

Late last month Shintech's parent, Japan's Shin-Etsu, said during a quarterly earnings presentation that the cracker was "actually on the verge of starting operation" and was expected to begin cracking ethane in the first week of February.

However, the cracker had faced repeated lengthy startup delays. Contractor issues in the summer of 2018 caused a construction slowdown on the USD1.4 billion project that delayed its original targeted startup that summer. The company then pushed startup to the end of 2018, followed by more than a year of repeated delays amid continued commissioning.

Sasol saw similar delays with its 1.5 million mt/year cracker in Lake Charles, Louisiana, which reached commercial production last month, more than a year after the initial December 2018 startup target.

As MRC wrote previously, originally, Shintech's cracker was slated to start up in summer 2018, Shintech delayed that milestone to December 2018, then to the first half of last year, and again to December 2018.

Ethylene is a feedstock for the production of PVC.

According to MRC's ScanPlast report, January prices of Russian emulsions and suspensions for domestic consumers remained at the level of December. Russia's estimated consumption of unmixed PVC was about 972,920 tonnes in January-December 2019, up by 4% year on year. The Russian emulsion and suspension PVC markets showed an increase in supplies. Last month's estimated consumption of SPVC (excluding exports to Belarus) decreased to 64,430 tonnes from 67,430 tonnes in November.
MRC

MOSCOW (MRC) -- Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, has recently announces the completion of the acquisition of a 100% interest in specialty dairy solutions provider Koninklijke CSK Food Enrichment C.V. (CSK) for a cash consideration of about EUR150 million, as per the company's press release.

The acquisition of CSK was first announced on November 18, 2019.

The highly complementary combination of DSM’s dairy business and CSK’s business greatly strengthens DSM’s ability to serve the needs of dairy industries worldwide, and makes the company well-placed to address the fast-growing and attractive dairy cultures markets.

As MRC informed earlier, in June 2019, Royal DSM announced the strengthening of its leadership in high-performance specialty polymers with the operational launch of a new production line for Arnitel in Emmen, the Netherlands.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Royal DSM is a global science-based company active in health, nutrition and materials. DSM delivers innovative solutions that nourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, pharmaceuticals, medical devices, automotive, paints, electrical and electronics, life protection, alternative energy and bio-based materials.
MRC