GNFC undertakes unscheduled shutdown at TDI plant in India

MOSCOW (MRC) -- Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC), has shut its toluene diisocyanate (TDI) units at Bharuch & Dahej, according to Apic-online.

A Polymerupdate source in India informed that, the company has halted operations at the units last week owing to a nation-wide lockdown caused by the COVID-19 outbreak. Further details on duration of the shutdown could not be ascertained.

Located in Gujarat, India, the Bharuch unit has a production capacity of 50,000 mt/year and the Dahej unit has a production capacity of 17,000 mt/year.

TDI is a chemical used in the production of polyurethanes, primarily for flexible foam applications including furniture, bedding and carpet underlay, as well as packaging applications. TDI is also used in the manufacture of coatings, sealants, adhesives and elastomers.

As MRC wrote previously, India lockdown adds uncertainty for polyvinyl chloride (PVC) exports. Last 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 PVC, to a country that was dependent on PVC imports to meet demand before the pandemic gripped the globe.

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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Indian downstream plants affected by nationwide lockdown

MOSCOW (MRC) -- In India, downstream operations have been affected by the 21-day nationwide lockdown, which orders 1.3 billion people to stay at their homes, reported NCT.

Accordingly, sources close to the company reported that India’s DCW shut its 150,000 polyvinyl chloride (PVC) plant in Tamil Nadu, India. The restart date was not disclosed at the time of publication.

Furthermore, Chemplast Sanmar has declared force majeure on its PVC supplies from Tamil Nadu unit, sources familiar with the matter said. The plant has an emulsion PVC capacity of 44,000 tons/year, while it produces 22,000 tons/year of suspension PVC.

On the other hand, Indian major Reliance Industries is reportedly operating smoothly despite the lockdown. A source reported that only non-essential factories have been affected by the situation.

As a side note, India has no plans to extend the lockdown, the government said on Monday, as the country struggles to keep essential supplies flowing and prevent out-of-work citizens fleeing to the countryside, said media sources.

As MRC informed earlier, India lockdown adds uncertainty for PVC exports. Last 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 PVC, to a country that was dependent on PVC imports to meet demand before the pandemic gripped the globe

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

In oil markets, it's back to 1998 crisis pricing

MOSCOW (MRC) -- Brent oil futures may be trading at $27 per barrel but oil producers are selling their crude in the physical market at lower prices not seen since the aftermath of the Asian financial crisis of the late 1990s, said Hydrocarbonprocesing.

Most are offloading their oil for below $20 a barrel as the coronavirus pandemic savages demand and global supply rises amid a battle between Saudi Arabia and Russia for market share, according to traders, state oil firms, major refiners and prices quoted in physical markets.

While some crude grades typically sell at a discount to Brent, the market environment is making that gap even wider and other grades that usually cost more than the European benchmark are now cheaper for the most time ever.

The discounting is leaving revenue per barrel at a fraction of the prices factored into many 2020 budgets, which is likely to put even more pressure on government finances in some oil producing countries.

In extreme cases, once discounts and other costs have been applied, the value of some producers’ oil is close to $10 a barrel while Venezuela’s Merey crude sold for as little as $8 last week, according to Refinitiv data and traders.

While all types of crude have been hit, so-called light and medium sweet grades are the least in demand, meaning the outlook is bleaker for countries such as Azerbaijan, Kazakhstan and Nigeria, according to traders in oil from those countries.

Light grades with low density and sulphur are mostly used to make naphtha, gasoline and jet fuel, refined products that are both out of favour because of the economic fallout from the pandemic and also hard to store for long.

While Moscow and Riyadh remain locked in their battle, physical oil traders say a glut might push prices even lower as more countries lock down and trade slows.

This week, Russia got as little as $18 per barrel for its benchmark export grade medium sour Urals while Saudi Arabia was selling its Arab Light in Europe for $16, according to Reuters calculations based on official Saudi prices and Urals deals.

Canada’s key Western Canada Select grade was worth $15 a barrel on March 16, the last day of its monthly trading cycle, and will now probably sell closer to USD10 if its last discount of USD13.6 to the U.S. WTI benchmark is applied.

Traders said the pressure on prices and the desire on the part of sellers to offload crude quickly was evident in the way deals were being struck at the moment.

“Normally, we used to discuss cargoes at bid versus offer spreads of around 10 to 20 cents for several weeks before we closed a deal,” one trader at a major refining firm said.

As MRC informed earlier, North Atlantic Refining Ltd’s Come-by-Chance refinery in Canada will be the first to close in North America due to the coronavirus pandemic as refineries worldwide cut back operations. The company confirmed on Monday that it told stakeholders it was pausing production because of concerns about worker safety as the virus spreads.

As MRC informed earlier, US-based Phillips 66 is delaying three sizeable scheduled shutdowns at its refineries this year, the company said last week, because of concerns that coronavirus could spread among the refineries' workers if the maintenance goes ahead.

We also reminad that Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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

Hexion CEO on leave due to coronavirus

MOSCOW (MRC) -- Hexion CEO and chairman Craig Rogerson has taken a medical leave of absence after showing signs of coronavirus, said the company.

The company has appointed the company’s CFO George Knight as interim CEO until Rogerson returns from his leave of absence. Knight has served in his current role since January 2016 and has been continuously employed by the company or its predecessor in various roles since 1997.

Earlier it was reported that Hexion in mid-January announced force majeure for the supply of BPA from the plant in Deer Park (Deer Park, Texas, USA). It was expected that this enterprise with a capacity of 140 thousand tons of BPA per year will resume its work in mid-February.

Large manufacturers of BPA and epoxy in the United States are companies such as Hexion, Huntsman and Olin.

Bisphenol A is used as a hardener in the manufacture of plastics, as well as plastic-based products. It is one of the key monomers in the production of epoxy resins and polycarbonate (PC).

According to the ICIS-MRC Price Report, in December last year, imports of PCs and compositions to Russia excluding supplies from Belarus amounted to 1,400 tonnes compared to 1,520 tonnes a month earlier and 1,110 tonnes in December 2017. According to the results of last year, in general, imports of PCs and compositions to Russia excluding Belarus grew by 13% to 16,200 tonnes against 14,300 tonnes in 2017.

Based in Columbus, Ohio, Hexion Inc. is a global leader in thermoset resins. Hexion Inc. serves the global adhesive, coatings, composites and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries.
MRC

Refiner operating at minimum rates due to COVID-19 hit

MOSCOW (MRC) -- PBF Energy Inc said it was operating its refineries at minimum rates, with throughput about 30% lower than the refiner’s expectations, as coronavirus-driven travel curbs hit fuel demand, said Reuters.

The company also announced sweeping cost-cutting measures, including scrapping its dividend, to tackle the demand shock from the virus pandemic as travel restrictions have led to grounding of flights and fewer vehicles on roads.

The refiner announced pay cuts taken by company executives and employees, with Chief Executive Officer Thomas Nimbley taking a 67% cut, while the board and executive leadership have halved their compensation.

The refiner expects to lower 2020 operating expenses by about $125 million and will reduce capital expenditure for the year by $240 million or 35%, including spending on the newly acquired Martinez refinery.

The company also withdrew its throughput outlook for the first quarter and 2020, and said it was suspending its quarterly dividend of USD0.30 per share.PBF also agreed to sell five hydrogen plants to Air Products and Chemicals Inc for USD530 million in cash.

As MRC informed earlier, US refiner PBF Energy has completed its acquisition of Shell’s 157,000 bbl/day Martinez refinery near San Francisco, California. The USD1bn deal, agreed in June 2019, was completed effective 1 February 2020.

PBF Energy and Shell have agreed to jointly move forward with reviewing the feasibility of building a proposed renewable diesel project which would repurpose existing idled equipment at the Martinez refinery to create a renewable fuels production facility. The detailed feasibility review and planning for this project is expected to continue after deal closing.

As MRC informed earlier, in March 2019, Mammoet safely completed a critical lift at Shell’s Pennsylvania Chemicals Project in Potter Township, utilizing its MSG80 to hoist a 2,000 ton quench tower into position. The facility is the first major US project of its kind to be built outside of the Gulf Coast region in 20 years. Once operational, the facility will boast an ethane cracker and three polyethylene units, and is expected to employ up to 600 employees.

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