Ethylene overbuild mitigated by operating conditions

MOSCOW (MRC) -- Even before the arrival of coronavirus disease 2019 (COVID-19), world ethylene production capacity was set to grow far ahead of demand during 2020-22, and now the excess could swell by another 6 million metric tons/year (MMt/y) or more, according to Chemweek.

However, the outlook for producers may not be as gloomy as it seems. Although a first look at the data suggests a global nameplate operating rate of just 86% in 2020, a deeper look into actual operations shows that the effective operating rate could be as high as 95%, says Steve Lewandowski, vice president/olefins at IHS Markit. Lewandowski recorded his analysis for the IHS Markit World Petrochemical Conference 2020 Online, which runs Friday, 3 April to 17 April.

"I remain a bit more bullish than most because of the way the economics and the assets run," he says.

IHS Markit has sharply reduced its forecast for 2020 ethylene demand growth from 6–7 MMt/y to just 1 MMt/y or so. By contrast, the forecast for new production capacity has changed little. "We have pulled back a little bit of these projects because of the virus, but still some 12.5 MMt/y are expected to be onstream by the end of 2020," says Lewandowski.

Not all of this capacity will be available, however, owing to delays in start-up and ramp-up success. A heavy turnaround schedule will cut into the existing production base.

Feedstock availability is also a problem in some regions. "The advantage of importing ethane is reduced more and more," notes Lewandowski. "Will that capacity really be available to run?" Those steam crackers that can shift to heavier feedslates will not be able to produce as much ethylene.

China's coal-to-olefin (CTO) and methanol-to-olefin (MTO) units will be difficult to operate profitably, and integrated producers may choose to purchase ethylene for their downstream operations. "With the drop in oil price, the advantage of producing derivatives via methanol is really economically out of the money," says Lewandowski.

Each of these factors will boost operating rates above the forecast nameplate of 86%. "When I take out start-up and ramp-up, and I take out some of these feed limitations, the operating rate moves up to 89%," says Lewandowski. "When I go through the next tranche - derating because of feed switching, taking MTOs out, some capacity rationalization - I go to 93%. And going further down in MTO and CTO, I can move up to 95% operating rates."

We remind that, as MRC informed earlier, Sinopec Zhongyuan Petrochemical restarted its methanol-to-olefins (MTO) plant in China in mid-February 2019, following an unplanned outage. The was shut on November 5, 2018 owing to bearish market conditions. Located at Henan in China, the MTO plant has an ethylene and propylene capacity of 100,000 mt/year each.

Besides, Jiutai Energy Group undertook an emergency shutdown at its methanol-to-olefins (MTO) plant in Erods, Inner Mongolia on July 21, 2019 owing to mechanical issues. The plant remained off-line for about 4-5 days. Located in Inner Mongolia, the MTO plant has an ethylene capacity of 150,000 mt/year and propylene capacity of 200,000 mt/year.

Ethylene is the main feedstock for the production of polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim.
MRC

MOSCOW (MRC) -- April contract price of propylene was settled in Europe down by EUR175/tonne from the previous month. However, European producers are not going to cut export PP price proportionally for shipments to the CIS markets, according to ICIS-MRC Price Report.

Negotiations over April prices of European PP began at the mid of last week. All market participants said that European producers have made a significant reduction in the export prices of propylene polymers for shipments in the current month, but the price reduction does not exceed EUR100/tonne, while propylene fell by EUR175/tonne in the current month in Europe.

Deals for April shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR840 - 900/tonne FCA, down by EUR80-90/tonne from March. Deals for block copolymers of propylene (PP block copolymers) were negotiated in the range of EUR940-980/tonne FCA, up by EUR90-100/tonne from the previous month.

Some producers have export restrictions due to scheduled maintenance works of capacities. But they are not critical for most buyers. Consumers partially met their needs in PP due to cheaper shipments from the Middle East.
MRC

MOSCOW (MRC) -- A coalition initiated by 3D printing company Stratasys (Eden Prairie, Minnesota / USA) is ramping up production of disposable face shields for use by medical personnel in response to the Covid-19 pandemic, said Plasteurope.

Stratasys said the number of companies and universities involved in the coalition now exceeds 150 and members include Toyota, Boeing and medical technology company Medtronic (Minneapolis, Minnesota). Requests from hospitals and other organisations for the shields, which include a 3D-printed frame and a clear plastic shield covering the entire face, now exceed 350,000 shields.

Stratasys said the first hospital shipment was received on 25 March, and by 27 March the coalition had exceeded its initial goal to produce 5,000 face shields. The coalition was expecting to produce more than 11,000 the following week. So far, it is serving the needs of more than 30 different health systems, covering hospitals, clinics, academic medical centers and nursing homes.

“Any 3D printing shop in the USA that wishes to help print plastic frames, can fill out an online form to be invited to join the effort,” Stratasys said. Details of the printing and assembly instructions are available on the company’s Covid-19 response page. In the US, Stratasys is using its “GrabCAD” shop work order management software to assign orders from healthcare systems to each coalition member. In Europe, the company said it is serving as a hub to connect service bureaus with those requesting help and has fielded offers and requests in most of the larger countries.

“I have never seen collaboration across our industry the way I’ve been seeing it over the last couple weeks,” said Stratasys healthcare segment leader Scott Drikakis, who is directing the company’s Covid-19 response in the Americas. “The need is dire, but we are getting the kind of commitments from our coalition partners that will make a real difference and help buy time to scale up the manufacturing of shields and other essential supplies."

Stratasys said it is producing thousands of visors itself at its US direct manufacturing facilities, located in Eden Prairie, in and around Austin, Texas, and in Valencia, California. It has also made free the material licenses on many of its high-end printers used to make the visors during this time.“We see additive manufacturing as an essential part of the response to the Covid-19 global epidemic,” said Stratasys CEO Yoav Zeif.

The company is also supporting an initiative led by anaesthetists at Massachusetts General Hospital to develop a new rapidly deployable ventilator for patients with Covid-19-related, ventilator-dependent lung injury. The anaesthesiology residents are calling on designers and engineers to design the ventilator using Stratasys’ GrabCAD platform, as part of an eight-week initiative launched on 1 April 2020. Other sponsors of the “CoVent-19 Challenge” include product development company Ximedica (Providence, Rhode Island / USA) and engineering software company Valispace (Bremen / Germany).

Finalists will work with Stratasys and the CoVent-19 Challenge team to turn their designs into prototypes for testing. The 3D printing company said the CoVent-19 team is working with private and public sector partners to be able to expedite US government approval for a winning design.

As MRC informed earlier, the demand impact from widespread lockdowns causes an immediate demand headache. But longer-term structural obstacles remain, said Hydrocarbonprocessing. пїЅThe prospects for European gasoline look particularly grim at the moment.пїЅ So says Chris Judge, vice-president, crude and oil products at price reporting agency Argus Media and an analyst of European refined products markets for well over 20 years. Or, rather said. As, to put into context the scale of both the short and longer-term challenges facing the European refining sector, Judge uttered these words in late February, before the extent of the impact of the Covid-19 pandemic on European and global products demand was clear.

We also remind that the COVID-19 outbreak has led Shell Chemical to temporarily suspend construction on the massive plastics and petrochemicals site it's building in Monaca, Pa, USA.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

MRC

MOSCOW (MRC) -- The Polish arm of German speciality chemicals distributor Bodo Moller Chemie (Offenbach) has moved into its new headquarters at Suchy Las, said Plasteurope.

“With the new site, we have more pleasant work conditions with a simultaneous increase of space,” says Maciej Nawrot, managing director for Czech Republic, Poland and Slovakia. “In the future, this will offer us additional space for expansion not available in the overcrowded city of Poznan."

The new location has a 1,000 m? storage facility with 600 regular and 25 chilled pallet spaces. According to Nawrot, it also has logistics benefits. The company’s adhesives competence centre and lab will remain at the previous site at Poznan’s “High Technology Incubators Complex”. Bodo Moller Chemie’s Polish branch was established in 2005.

As MRC informed earlier, Bodo Moller Chemie is now an official distributor for Huntsman Advanced Materials in Eastern Europe. Through the new partnership, the specialty chemicals company is stepping up its commercial activities in the Eastern European growth markets.

Bodo Moller Chemie distributes more than 30 years formulated systems, adhesives, composite and model making materials and resins and compounds for electronic applications made by Huntsman. "This partnership has been tested and is constantly being expanded," says Haug. The most recent example is the new partnership in Denmark. The end of 2014 the Danish Bodo Moller Chemie subsidiary Kemi Danmark Aps had taken over the existing commercial sales of products of Huntsman Advanced Materials by the company Nortec-Cannon A / S.
MRC

MOSCOW (MRC) -- German pipe systems producer Egeplast (Greven) has bought a 75% stake in Swedish polyethylene pipe manufacturer Extena (Norsjo) for an undisclosed sum, said the company.

With a workforce of around 40, Extena generated sales of approximately EUR 17m in 2019. The Swedish company’s previous majority shareholder, family-owned investment firm Treac (Skelleftea), will retain a 25% stake, while Extena’s managing director Peter Falk will remain in the role.

Egeplast said the acquisition, which due to the ongoing coronavirus pandemic was completed via video conference, would boost its business across Scandinavia. Unlike other European countries, Sweden has yet to lock down its citizens, although there have been increasing calls for restrictions on people’s movements and economic activity as the country’s death toll from Covid-19 rises. Sweden has nearly 6,500 confirmed cases of coronavirus and more than 370 deaths. Germany, which has imposed limited movement, has had over 1,300 deaths from nearly 92,000 confirmed cases.

In a statement, Extena said it was still business as usual. "At present, we do not see any impact on our production or delivery capacity. Production as well as imports and exports are normal, and we are taking the necessary measures to protect both our staff and the transporters who visit us."

As it was written earlier, ENERGOMASHKOMPLEKT is the official representative of the Egeplast factory (Turkey) in Russia. The factory was established in 1950, specializes in the production of plastic products, and is the fourth largest plastic pipe in the world. Egeplast holds a leading position as an inventor and innovator in the high-tech industry in products made from PVC, HDPE, MDPE, LDPE, PP and PPRC.

As per ICIS-MRC Price Report, the largest petrochemical plant in Ukraine - Karpatneftekhim (Kalush, Ivano-Frankivsk region) - resumed production of low-pressure polyethylene (HDPE) after prolonged and forced downtime. According to the representative and customers of the enterprise, the Ukrainian manufacturer launched the production of HDPE by March 23rd. The stoppage of production of polyethylene (PE) was forced and took place in early January due to the high cost of raw materials at low prices for PE.

Egeplast is an manufacturer of plastic pipe systems, and has been setting benchmarks for decades. Customers in over 30 countries rely on egeplast consultancy solutions and quality products for transporting water, gas and data. The customers of the owner-run enterprise include some of the largest and most demanding utility companies and network operators in the world.
MRC