ACCrReleases February 2020 resin production and sales statistics

MOSCOW (MRC) -- U.S. production of major plastic resins totaled 7.2 billion pounds during February 2020, an increase of 8.1 percent compared to the same month in 2019, according to statistics released today by the American Chemistry Council (ACC). Year-to-date production was 15.1 billion pounds, a 6.7 percent increase as compared to the same period in 2018, said Americanchemistry.

Sales and captive (internal) use of major plastic resins totaled 7.2 billion pounds during February 2020, an increase of 3.1 percent from the same month one year earlier. Year-to-date sales and captive use was 15.0 billion pounds, a 5.0 percent increase as compared to the same period in 2019.

As MRC informed earlier, in February of this year, the index of production of chemicals in the Russian Federation grew by 9% compared with the same period a year earlier. Thus, the cumulative release for the first two months of 2020, the release of basic chemicals showed an increase of 6%, follows from Rosstat materials. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes in January - February came from polymers in primary form.
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MOSCOW (MRC) -- At a Strategy Update meeting on April 2, Arkema (Paris:AKE) presents its ambition to become a world leader in Specialty Materials realigned around three coherent businesses with attractive growth prospects: Adhesive Solutions, Advanced Materials, and Coating Solutions, said the company.

The Group unveils its roadmap and its objectives for 2024 at this event. In the context of Covid-19, Arkema also provides an update on the management and the consequences of this unprecedented health crisis.

While the management of the crisis related to Covid-19 requires everybody to be mobilized -priority being given to the health and safety of its employees while supporting its customers and its other stakeholders to the best of its abilities-, Arkema decided to maintain its Strategy Update meeting today to share its vision and unveil its strong ambitions for the mid-term.

Since 2006, the Group has undertaken an in-depth transformation that has enabled it to progressively develop leading positions in Specialty Materials through targeted investments, an innovation policy focused on the major sustainable development trends, and pro-active portfolio management. These activities now account for almost 80% of its sales.

Today, Arkema is entering a new phase in this transformation. This is based on three coherent and complementary divisions focused on Specialty Materials, namely Adhesive Solutions, Advanced Materials, and Coating Solutions. In a world in which demand for sustainable and high performance materials is growing, Arkema enjoys a unique positioning around those three growth platforms. These combine real in-house innovation expertise, strong commercial and industrial synergies, and a common approach to serving customers in sustainable and growing markets.

Last October, Arkema announced the proposed divestment of the business to SK for an enterprise value of 335-million. Part of the PMMA (polymethyl methacrylate) business unit, functional polyolefins comprises ethylene, copolymers and terpolymers.

As MRC wrote before, South Koreaпї's SK Global Chemical had restarted its naphtha cracker in late January 2018, after a brief but unplanned one-day shutdown. The 660,000 tonnes-per-year (tpy) naphtha cracker was expected to be operating normally the following day after the restart. Located in Ulsan, South Korea, the No. 2 cracker has a production capacity of 690,000 mt/year. SK Global Chemical also operates a smaller 200,000 tpy cracker.

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).
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MOSCOW (MRC) -- US carbon black producer Cabot (Boston, Massachusetts) apparently has to put restrictions in place, at least to a certain extent. The company says its coronavirus emergency plans have taken effect to ensure that only personnel critical to production are still working at its European and North American facilities, said Plasteurope.

However, a spokesperson told Plasteurope that there will be no allocations, as the company expects to have sufficient capacities to supply all customer requests.

CEO Sean Keohane is anticipating solid figures for the first quarter. The low demand in China between January and March was balanced out by strong order activity in the rest of the world.

However, due to the challenging situation in the next weeks as well as the accompanying insecurity in demand, Keohane has revised the full-year outlook, which had previously not taken the virus pandemic into account. He expects decreases in both sales and earnings in the third quarter, presumably among other things because of the falling oil prices that will reduce raw material costs – see Plasteurope.com of 19.12.2019.

Apart from the initiated takeover of carbon nanotube producer Shenzhen Sanshun Nano New Materials, which is set to be complete in April 2020, Cabot intends to reduce capital expenditures. Dividend payouts, however, will not be suspended.

Carbon black is used in plastics, among other things.

As MRC informed earlier, Cabot Corporation has announced a planned investment in new capacity to enhance its production capabilities for plastic formulations specifically for conductive compounds and masterbatches for engineering thermoplastic applications.

As MRC informed earlier, in February of this year, the index of production of chemicals in the Russian Federation grew by 9% compared with the same period a year earlier. Thus, the cumulative release for the first two months of 2020, the release of basic chemicals showed an increase of 6%, follows from Rosstat materials. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes in January - February came from polymers in primary form.

Cabot Corporation is an American specialty chemicals and performance materials company headquartered in Boston, Massachusetts. The company operates in over 20 countries with 36 manufacturing plants, eight research and development facilities and 28 sales offices.
MRC

MOSCOW (MRC) -- European refiners have requested less Russian oil via the Druzhba pipeline for April as they cut output due to sharp falls in demand for fuel amid the coronavirus outbreak, reported Reuters with reference to four traders.

The Druzhba pipeline, which can pump 1 million barrels per day (bpd), connects Russian oil fields with refinery plants in Germany, Poland, Czech Republic, Hungary and Slovakia.

Refiners in Eastern Europe connected to the Druzhba pipeline, including Total’s Leuna refinery in Germany and Rosneft’s Schwedt as well as Poland’s PKN Orlen and Mol’s Slovnaft, have cut their runs in the last two weeks by 20-30% from normal throughput, which resulted in lower purchases of oil via the pipeline, traders said.

‘Now 20-30% run cuts are ‘norma’ for most of refineries in Europe. Wonder how it will look in May’, a trader with a major said.

Total and MOL Group declined requests to comment on the figures. MOL added that ‘group refineries are running to ensure the safe supply of their operating countries’.

PKN Orlen and Rosneft did not respond to requests for comment.

Germany and Poland, both connected to the northern Druzhba route, have been in quarantine for several weeks now, which resulted in a sharp fall in demand for oil products, traders said.

The Schwedt refinery owned by Russia’s Rosneft has cut runs by some 70,000 bpd, nearly third of its capacity, according to two traders.

Total’s 241,000-barrel-per-day Leuna refinery cut its production by some 25%, another market source familiar with the cut told Reuters.

According to the sources both refineries cut their request for April by 100,000-200,000 tonnes from normal intake.

Poland’s PKN Orlen refinery in Plock has also decreased runs by 25%, two traders familiar with the refining data said. It was not clear if PKN Orlen adjusted its requests for Urals supplies via Druzhba in April. At the same time PKN refused to purchase extra Saudi crude oil for April loading.

‘We are all running as low as we can to operate normally, but to produce less’, a source with a major oil refinery in Europe said.

Hungary’s Mol, which receives oil via southern route of Druzhba pipeline, cut its oil purchases by some 30% from its normal level for its refineries in Hungary and Slovakia for April, two industry sources said.

“They bought some 200,000 tonnes less for April than we expected. It was not a dramatic slash, but lower,” one of the sources said.

Traders said that although April looks more or less understandable in terms of oil placement, they are bracing themselves for May as the spread of the virus suggests more production cuts by the refineries, while oil supply is only expected to rise.

“We are watching fuel sales closely. If they fall more, we’ll have to consider turning off one of the CDU (crude distillation) units,” a source with a European refiner which buys Urals told Reuters.

As MRC reported before, Total is evaluating new gas cracker project in South Korea as part of petchems growth strategy.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

MOSCOW (MRC) -- U.S. gasoline consumption fell to its slowest rate for more than a quarter of a century last week as epidemic controls brought much of the economy and transportation system to a sudden stop, reported Reuters.

Estimates for the volume of gasoline and other petroleum products supplied to the domestic market, published on Wednesday, provide the first clue to the epidemic’s impact on the oil market.

Gasoline supplied fell to 6.66 million barrels per day (bpd), down from 9.70 million bpd two weeks earlier, and the slowest rate since 1994, data from the U.S. Energy Information Administration (EIA) showed.

Gasoline supplied, a proxy for the amount consumed by motorists, is very volatile from one week to the next, which is why the EIA recommends focusing on the four-week running average.

But the decline in gasoline supplied over the last two weeks is unequalled in the three decades since the EIA started estimating this series, and is almost certainly unequalled in the history of the oil industry.

The two-week decline in the volume of gasoline supplied between March 13 and March 27 was equivalent to more than eight times the typical change over a similar period.

Gasoline was the hardest hit of the main petroleum products in the United States, but there was also a substantial decline in the volume of jet fuel supplied and smaller declines in some other products including diesel.

The total volume of petroleum products supplied decreased by 3.6 million bpd over the two-week period, the largest drop for more than 30 years, and equivalent to more than 4 standard deviations.

The collapse in fuel consumption is causing petroleum stocks to build all along the supply chain, with large increases in both crude and products being stored at refineries and tank farms around the country.

Total U.S. stocks of crude and petroleum products, excluding the government’s strategic petroleum reserve, jumped by 21 million barrels last week.

It was the third-largest increase in the last 30 years, a rise that has been exceeded on average only once in every 800 weeks.

With much of the economy at a standstill because of restrictions introduced to control the spread of the new coronavirus, while production has yet to fall significantly, stocks are likely to continue rising rapidly.

U.S. gasoline consumption accounts for almost one in every ten barrels of oil consumed each day around the world.

But the U.S. experience is almost certainly replicated across the major refining and consumption centres of Europe and Asia, though data for those areas will not become available for another couple of months.

Rising global stocks of crude and products are likely to exhaust available storage capacity within the next few months, unless oil production and refining is curbed, or travel restrictions are eased.

“The global oil industry is experiencing a shock like no other in its history,” the International Energy Agency wrote in a note published on Wednesday.

“The scale of the collapse in oil demand ... is well in excess of the oil industry’s capacity to adjust.”

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).
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