India lockdown adds uncertainty for PVC exports

MOSCOW (MRC) -- This week India's Prime Minister Narendra Modi announced a nationwide lockdown from Wednesday for 21 days in an effort to slow the spread of the coronavirus in the world's second-most populous country, which has 1.3 billion people. The lockdown applies to ports, which will slow imports of all kinds of goods, including polyvinyl chloride (PVC), to a country that was dependent on PVC imports to meet demand before the pandemic gripped the globe, reported S&P Global.

Other countries and regions have similar lockdowns in place with exceptions for critical infrastructure, which includes chemical plants and ports. Those include Italy, which is among the global epicenters of the disease, and Spain. Germany was expected to issue similar stay-at-home orders as well, sources said.

In the US, several states, including hard-hit California and New York, have issued similar orders. Louisiana, home to major oil, natural gas and chemicals infrastructure, has an order in place, while Texas does not, although on Tuesday Houston and Harris County issued their own stay-at-home orders with similar critical infrastructure exemptions.

While construction is among those exemptions, US sources said coronavirus uncertainty was siphoning export demand and could do the same for domestic demand ahead of the peak summer season.

"Nobody wants to buy anything additional, especially for early April shipments," a market source said. "Some people are being cautious and canceling part of their orders, but not so much, both domestic and export."

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.
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Formosa postpones turnaround at its PVC plant in Lousiana

MOSCOW (MRC) -- Formosa Plastics USA, part of Formosa Petrochemical, has postponed a May polyvinyl chloride (PVC) turnaround at its facility in Baton Rouge, Louisiana to this summer, reported S&P Global with reference to the source familiar with the company's operations.

Meanwhile, the target start date of this plant with the capacity of 513,000 mt/year after maintenance works is yet to be determined, the souce said.

As MRC wrote earlier, Formosa Plastics USA has restarted its PVC plant in Point Comfort, Texas, after planned maintenance works. Formosa's Point Comfort plant with the capacit of 798,000 mt/year was expected to reach normal rates by early April, a source close to the company said.

Formosa's resumption of output at Point Comfort comes at an uncertain time for PVC producers and traders, as demand grows more uncertain amid the global coronavirus pandemic. Market sources said some customers that regularly buy US PVC exports have canceled or rescheduled orders, unsure of what demand will be like in the coming weeks and months.

"We ... face a lot of requests for cancellation and shipment rescheduling," a market source said. "We may be at the moment to stop to move forward."

PVC, a construction staple used to make pipes, window frames, vinyl siding and flooring and other products, is closely tied to economic health and GDP growth. About 60% of PVC output is used to make construction supplies, and the rest is used to manufacture other goods, such as intravenous fluid bags and medical tubing.

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.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
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Shintech started maintenance works at its PVC complex in Texas

MOSCOW (MRC) -- Shintech, a subsidiary of Shin-Etsu Chemical Co., has launched a turnaround at its 1.4 million mt/year polyvinyl chloride (PVC) complex, also in Texas, reported S&P Global with reference to sources familiar with the companies' operations.

Shintech's planned work on one of the trains at its Freeport complex was underway on Wednesday, 25 March, and expected to last through most of April, the source familiar with that company's operations said.

Shintech did not respond to a request for comment.

Previously, market sources had expected the turnaround to occur in March, as is typical, but the source said earlier this month it was planned for April. The planned work had prompted the company to stockpile PVC to meet domestic and contract demand, limiting export volume availability for March and April.

As MRC informed previously, in July 2018, Shintech began to construct a new integrated plant to PVC from salt. The new plant will be on industrial site developed by Shintech, located next to Shintech's existing plant in Plaquemine, Louisiana.

Shintech obtained permits to build a plant capable of producing 1.9 billion pounds (860 thousand tons) per year of vinyl chloride monomer (VCM), the raw material of PVC, and 660 thousand tons per year of caustic soda, and has commenced construction of the first phase of the plan. The first phase will increase production capacity by 640 million pounds (290 thousand tons) of PVC per year and 270 thousand tons of caustic soda per year. The amount of this investment is expected to be $1.49 billion, which Shintech will fund by itself. Completion of the construction is targeted for the end of 2020. Annual production capacity after the completion of the first phase will be 7.14 billion pounds (3,240 thousand tons per year) of PVC and 1,570 thousand tons of caustic soda per year.

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.
MRC

Formosa Plastics resumes operations at PVC plant in Point Comfort after turnaround

MOSCOW (MRC) -- Formosa Plastics USA, part of Formosa Petrochemical, has restarted its polyvinyl chloride (PVC) plant in Point Comfort, Texas, after planned maintenance works, reported S&P Global.

Formosa's Point Comfort plant with the capacit of 798,000 mt/year was expected to reach normal rates by early April, a source close to the company said.

The company did not immediately respond to a request for comment.

As MRC wrote before, the PVC work at Point Comfort had been slated to wrap up by the end of February, but was still ongoing in early March 2020.

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.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Covestro signs EUR 225 million loan facility with EIB for R&D activities

MOSCOW (MRC) -- Covestro has agreed a loan with the European Investment Bank (EIB) for EUR 225 million, said the producer in its press release.

The loan will provide medium term funding to strengthen Covestro’s research and development (R&D) work in the areas of sustainability and circular economy within the European Union (EU).

Discussions with EIB started already in 2019 to identify R&D projects which would be compatible with the financing requirements of the EIB. These require that funding is applied to projects which meet high standards of technical, ecological and social responsibility.

"The core of our R&D activity is innovation" said Dr. Thomas Toepfer, CFO of Covestro. "This loan provides us with additional financial flexibility to push forward our strategic focus in the areas of sustainability and the circular economy."

EIB Vice-President Ambroise Fayolle, responsible for the bank's operations in Germany and innovation, said: "In times when Member States and EU institutions are putting in place multi-billion euro programmes in response to the crisis caused by COVID-19, it is also important to demonstrate that we are continuing our regular business in support of companies. I am therefore very pleased that we have just signed this loan with circular economy pioneer Covestro, as support for the climate and environment is among the EIB's top priorities."

In autumn 2019, Covestro published a global strategic program to establish the theme of circular economy throughout all areas of the company. The main principles are to improve recycling from plastic waste, alongside the development of innovative technical and production methods in the use of alternative raw materials.

The EIB loan provides a further commitment of Covestro to sustainability. It complements the recently renewed syndicated revolving credit facility of EUR2.5 billion, whose interest rate is linked to the company’s Environment, Social Governance (ESG) rating.

As MRC reported earlier, Covestro successfully closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's DataScope report, overall imports of PC granules to Russia (excluding shipments from Belarus) grew in the first month of 2020 more than by 3 times year on year to 2,590 tonnes. Imports of material into the country were 740 tonnes in January 2019. December 2019 imports of material to Belarus reached 2,850 tonnes. Sabic Innovative Plastics and Covestro were the main import suppliers of PC granules. Both producers significantly increased their shipments in the first month of the year. Thus, imports of Sabic's material grew from 400 tonnes (5% of the total imports) in January 2019 to 1,590 tonnes (62% of the total imports). Covestro's shipments also rose significantly - to 770 tonnes from 580 tonnes (excluding Belarusian imports) a year earlier.

With 2019 sales of EUR 12.4 billion, Covestro is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, construction, wood processing and furniture, and electrical and electronics industries. Other sectors include sports and leisure, cosmetics, health and the chemical industry itself. Covestro has 30 production sites worldwide and employs approximately 17,200 people (calculated as full-time equivalents) at the end of 2019.
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