PTT No. 2 cracker to fully restart this week after a planned turnaround

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) is expected to fully restart its No. 2 cracker in Map Ta Phut this week after a planned turnaround, according to S&P Global.

The company started resuming operations at the cracker by end-February, 2020. The cracker was shut for maintenance on January 20, 2020.

Located at Map Ta Phut, Thailand, the No. 2 cracker has an ethylene production capacity of 400,000 mt/year.

The company also operates No. 1 cracker at the same site with a capacity of 515,000 tonnes of ethylene and 310,000 tonnes of propylene per year, which was also shut on 23 January, 2020, for a 40-day turnaround.

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).

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.

Russian PVC prices to rise in March

MOSCOW (MRC) -- Negotiations over March shipments of suspension polyvinyl chloride (SPVC) began in the Russian market on Wednesday. Because of small stocks and a weakening rouble, domestic producers announced price increases for the next month, according to the ICIS-MRC Price Report.

Good export sales helped Russian producers to balance the domestic PVC market, and making stocks insignificant in March. In addition, the weakening of the rouble against the dollar has reduced the attractiveness of exports for local producers. Russian producers said they intend to achieve an increase of roubles (Rb) 2,000-3,000/tonne from February in contract prices.

Small converters reported supply restrictions from some producers in mid-February. Some local companies have already shut all their deals for February shipments. And as a result, producers entered March with non-critical stocks, despite the fact that the demand for PVC from converters was growing from month to month.

It is also worth considering that RusVinyl (in April for two weeks) and Kaustik Volgograd (in May) will shut down production for turnaround, with an annual capacity of 330,000 tonnes/year and 90,000 tonnes/year, respectively.
There is essentially no import alternative to Russian PVC.

Export prices for PVC in Europe and the USA significantly increased, and in March they can hardly be expected to decline. Chinese producers reduced the export prices of acetylene PVC in the last two weeks of the month, but the question of the quick of shipments remains open. Due to the situation with coronavirus, it is highly likely that the shipment of PVC to Russia will be seriously delayed.

The Russian rouble weakened noticeably against the dollar and the euro in the past two weeks. And this factor eliminates all chances of Russian producers for cheap imported PVC. Most of the converters understand that it will not be possible to avoid raising the contract prices of domestic PVC, the only question is the magnitude of the growth.

Overall, deals for March shipments of Russian resin with K64/67 PVC were negotiated in the range of Rb 74,000-76,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes. Resin with K70 was offered by Rb1,000-2,000/tonnes higher.

GPPS and HIPS imports to Russian market up by 50% in January 2020

MOSCOW (MRC) -- Overall imports of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) to Russia rose in the first month of 2020 by 50% year on year to 4,340 tonnes, according to MRC's DataScope report.

This figure was at 2,880 tonnes in January 2019.

GPPS and HIPS imports into the country were at 3,520 tonnes in December 2019.

At the same time, Russian companies increased their GPPS imports by 76% last month: from 1,680 tonnes in January 2019 to 2,960 tonnes, imports were 2,470 tonnes a month earlier.

January 2020 HIPS shipments rose by 14% to 1,370 tonnes from 1,200 tonnes a year earlier. Imports of material were at 1,050 tonnes in December 2019.

European material of Styrolution accounted for about 90% of GPPS shipments and 71% of HIPS deliveries.

Thus, Styrolution' GPPS imports rose in January 2020 by 2.5 times year on year, reaching 2,660 tonnes versus 1,050 tonnes a year earlier.

January HIPS imports also grew by 39% year on year: from 700 tonnes to 980 tonnes.

Iranian material has not been imported into the country since last October.


ExxonMobil CEO promised turnaround sapped by chemicals, refining

MOSCOW (MRC) -- At Exxon Mobil Corp, CEO Darren Woods’ plan to revive earnings at the largest US oil and gas company is being sidetracked by the two businesses he knows best: chemicals and refining, reported Reuters.

Another year of poor profit could require Exxon to re-evaluate its bold spending plans or weaken its ability to weather the next oil-price downturn, say oil analysts. Exxon already must borrow or sell assets to help cover shareholder dividends.

The world’s biggest publicly traded oil firm after Saudi Arabian Oil Co, Exxon was long considered one of the best-managed majors and most capable of coping with volatile prices due to its size.

Those advantages have slipped in recent years, however, with the drop in once-steady earnings from chemicals. Its total shareholder returns of negative 13% in the five years through this month compare with a 25% gain at Chevron Corp and 82% at BP Plc, according to Refinitiv.

Two years ago, CEO Woods promised to restore flagging earnings by heavily investing in operations even as rivals cut spending. The plan to crank up chemicals, refining and increase oil output pushes capital expenditures to as much as $35 billion this year, up from USD19 billion in 2016, the year before Woods took over as CEO after running Exxon’s refining and chemical businesses.

Last March, he forecast potential earnings could hit USD25 billion this year and nearly USD31 billion in 2021, close to the USD32.5 billion it earned in 2014 before the oil-price collapse.

The hoped-for payoff, however, has run headlong into a global chemicals glut, tariffs on US exports to China, and lower margins in fuels. Exxon’s refining profit last year fell on equipment outages.

The company declined to comment ahead of quarterly earnings, expected on Friday.

On Monday, Exxon shares traded under USD65 - close to their level of 10 years ago.

The company recently telegraphed weak fourth-quarter results because of chemicals and refining businesses. Wall Street cut profit forecasts through 2021 on the sour outlook for both. Exxon “seems to be tracking way behind their own expectations,” said Evercore ISI analyst Doug Terreson, who slashed his quarterly forecast by a third, to 55 cents a share.

In chemicals, Woods expanded the company’s output of polyethylene (PE), a business where it has 9% of global production capacity, to benefit from demand for plastic bags, food packaging and consumer goods. Output rose last summer at the depth of the US-China trade dispute, and industry margins for a key polyethylene fell 30% compared with levels between 2016 and 2018, said James Wilson, analyst at pricing provider ICIS.

"The industry ended up overbuilding," said Pavel Molchanov, an analyst with investment firm Raymond James. "Exxon, of course, is among the companies that led that build-out."

In refining, outages and higher maintenance costs at Exxon refineries in the United States, Canada and Saudi Arabia hurt profit, according to regulatory filings.

Crude oil prices and slack global demand from the trade dispute are squeezing profit across the industry, said Garfield Miller, chief executive at Aegis Energy Advisors.

This month, an Exxon regulatory filing implied a loss in chemicals of about USD200 million for the fourth quarter, and refining earnings of just USD400 million.

In contrast, chemicals and refining delivered USD7 billion to USD11 billion annually for Exxon between 2013 and 2018. In the first nine months of last year, the combined profit was USD2.37 billion. Exxon’s regulatory filing indicates 2019 earnings for the two at about USD2.52 billion, the lowest in at least a decade.

Woods has halted the company’s oil output declines by ramping up in shale. Oil volume has risen year-over-year for five straight quarters, reversing annual declines between 2016 and 2018.

Ending the trade dispute represents the biggest challenge. Global demand for the plastic resins and pellets that Exxon makes is rising, said Marc Levine, chief executive of Plantgistix, which provides logistics for US plastic manufacturers.

"This is the first time in my lifetime and in the plastics industry’s lifetime where we make plastics resin for export,” said Levine.

China in 2018 placed an additional 25% tariff on U.S. polyethylene imports, a move that helped send North American margins to the lowest levels since 2011, said Joel Morales, a polymers analyst at consultancy IHS Markit.

"Imagine having a lot of something and your biggest, easiest consumer you can’t do business with," Morales said.

The January US-China agreement does not remove Chinese or US tariffs on chemicals, plastics or oil.

Exxon has ramped up asset sales, aiming to collect USD15 billion by next year to balance spending. So far, results have been tepid. It expects to receive about USD3.6 billion from selling Norwegian oil and gas production assets.

Weak demand for those assets comes as rivals have written off the value of their own properties. BP, Chevron, Equinor ASA, Repsol SA and Royal Dutch Shell Plc last year cut a total of USD22 billion primarily on US assets due to sharply lower gas prices. Exxon has not signaled whether it expects any writedowns.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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).

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.

Polynt plants in Italy running smoothly, despite news on coronavirus

MOSCOW (MRC) -- Polymt, an Intalian petrochemical producer, has announced that all its sites and activities in Italy are running smoothly and according to plan, despite the recent news about the Italian situation related to the spreading of the coronavirus in the country, said the producer on its site.

No disruption has been suffered by our operations, and none is expected given the current situation.

None of the Italian sites and offices of the company is located into or close to the zones where the authorities have enforced restrictive measures for activities and accessibility and nobody in Polynt's workforce lives in the restricted zones.

Production is running in full in all the Italian sites, and the manning of the plants is regular, including the personnel devoted to the maintenance, to the quality control and to the ancillary manufacturing activities. No production volumes got lost for the coronavirus so far, and no disruption is foreseen in the future. The company confirmed that it is perfectly able to supply its customers with the material they need.

Polynt runs two maleic anhydride (MA) plants in northern Italy, including Bergamo’s 36,000 tonne unit in Lombardy and Ravenna’s 60,000 tonne plant on the east coast. The bigger production line at Ravenna had been operating at a reduced rate since March 2019 due to technical issues, the firm previously said. A new reactor ordered is expected to be operational in 2021.

Polynt also produces phthalic anhydride at Bergamo and its San Giovanni Valdarno site, as well as plasticizers at San Giovanni Valdarno.

Maleic anhydride is a feedstock for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids and a number of chemicals for agriculture.

Plasticizers are substances introduced into a polymeric material to give it elasticity and plasticity during processing and operation. In particular, plasticizers are used to produce polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

According to MRC's ScanPlast report, contrary to seasonal factors, Russian producers of unmixed PVC have maintained a high level of capacity utilisation. Russia's overal PVC output totalled 91,700 tonnes in January 2020, up by 4% year on year. January production of unmixed PVC was 91,700 tonnes versus 87,760 tonnes in January 2019 and 81,400 tonnes in December 2019. Thus, despite relatively weak demand for resin from the domestic market, the average capacity utilisation exceeded 95% last month. Russia's overall PVC production reached 975,000 tonnes in 2019, compared to 958,600 tonnes a year earlier.