New issue of SIBUR for Clients focuses on COVID-19 and its impact on petrochemical market

MOSCOW (MRC) -- A new issue of SIBUR for Clients is now available on the Company's website. The main topic is the situation in the petrochemical market during the COVID-19 pandemic, said the company.

An increase in crude oil supply, the growing coronavirus pandemic, and lockdown measures across the world have sent global markets into a tailspin. Under the circumstances, manufacturers worldwide are trying to repurpose their factories to make more useful products, such as medical equipment. Plastic is once again gaining ground in many markets as the most hygienic material helping to contain the spread of the virus. Companies, including SIBUR, are making every effort to protect their employees and partners while striving to fulfil their obligations.

Sergey Komyshan, SIBUR’s Management Board member and Executive Director:
“We are living in unprecedented times when two crises have coincided to create a perfect storm. The oil crisis and coronavirus outbreak have hit the industry hard, with the pandemic threatening the health and life of people worldwide. Most companies are suspending operations or allowing employees to work remotely during the quarantine and self-isolation.

Despite the challenging circumstances, SIBUR is making every possible effort to fulfil all of its obligations and meet the needs of its clients and partners. I know that our clients are taking the same approach in relation to their customers. We are all in this together. Unity, responsible action and mutual support have never been more important. Take care of yourself and your loved ones! Family is the most valuable thing we have, and the Company gives the health of our employees and their families the highest priority – especially now."

Also in this issue:
China as the first country to be hit by the coronavirus and also the first to curb the outbreak: a firsthand account by SIBUR employees.
How the three ESG pillars are coming into focus of forward-thinking companies.
Myths and misconceptions about plastics: the most common customer misconceptions about plastics.
Leveraging digital marketing to promote construction materials.

Earlier it was reported that SIBUR Holding on March 25 will early pay off bonds of the 12th series for 10 billion rubles. In particular, SIBUR Holding PJSC decided to early repay the 12th series bonds in the amount of 10 billion rubles, the company said. The repayment will take place on March 25, at the end date of the 7th coupon period.

SIBUR Holding PJSC is the largest petrochemical company in Russia and Eastern Europe with full coverage of the industry cycle from gas processing, production of monomers, plastics and synthetic rubbers to plastics processing. The main shareholder of SIBUR Leonid Mikhelson controls 48.48% of the company, Gennady Timchenko - 17%, Kirill Shamalov - 3.88%, the current and former management of the company (including SIBUR chairman of the board Dmitry Konov and head of Gazprom Neft Alexander Dyukov) - 10.6%, Chinese Sinopec and the Silk Road Fund - 10% each.
MRC

MOSCOW (MRC) -- Vietnam’s Binh Son Refining and Petrochemical Co will delay maintenance at its Dung Quat refinery until July 27-September 16 due to the coronavirus pandemic, according to Hydrocarbonprocessing with reference to the company's statement.

It was scheduled to conduct maintenance at the 130,000-barrel-per-day refinery from June 12 to August 1.

The company said in a statement late on Monday that travel curbs due to the coronavirus pandemic had affected its preparation for the maintenance.

Binh Son reported a net loss of 2.33 trillion dong ($99.32 million) in the first quarter of this year, it said.

As MRC informed earlier, Binh Son Refining and Petrochemical took its polypropylene (PP) plant off-stream for a maintenance turnaround in June 2017 for a period of around 7 weeks. The exact date shutdown could not be ascertained. Located in Vietnam,the plant has a production capacity of 150,000 mt/year.

According to MRC's ScanPlast report, 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) -- Indonesia’s oil and gas company PT Pertamina is reducing new drilling amid weak demand for oil and is cutting the output target this year by 3%, reported Reuters with reference to chief executive Nicke Widyawati's made to members of parliament.

Crude and gas output is now targeted at 894,000 barrels of oil equivalent per day (boepd), from the previous 923,000, she said.

Meanwhile, Pertamina expects to fully shutdown Balikpapan refinery in early May. Operations at the refinery have been gradually reduced this month.

As MRC informed before, PT Pertamina shut its cracker in Indonesia for maintenance works from 18 March, 2020 to 18 April, 2020. This cracker has a production capacity of 578,000 tons.

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).

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
MRC

MOSCOW (MRC) -- Research and Production Enterprise “POLYPLASTIC” was included into the list of strategic enterprises for the Russian economy and continues its industrial activity, said the company.

Shipments of polymer compounds from warehouses in Engels, Togliatti and Moscow continue in their usual manner. The company carries out all of its obligations to consumers in full.

Personnel ensuring the continuity of production processes as well as employees working out of office will carry out their work in accordance with personnel health and safety objectives to prevent spread of the coronavirus infection. All employees not included in the continuous production process during the period from April 6 to April 30 will continue to stay at home in self-imposed isolation.

As MRC informed earlier, R&P POLYPLASTIC takes strong actions to prevent the coronavirus infection from spreading and closely follows all World Health Organization and competent government authorities’ guidelines. All company employees who have recently returned from countries with a large number of infected people are in self-imposed isolation and conduct their job functions from home as a preventive measure. Additionally, R&P POLYPLASTIC headquarters and production sites are equipped with state of the art non-contact thermal imaging cameras. Temperature of all employees and visitors is measured on a daily basis.

MRC

MOSCOW (MRC) -- US crude oil futures turned negative on Monday for the first time in history as storage space was filling up, discouraging buyers as weak economic data from Germany and Japan cast doubt on when fuel consumption will recover, reported Reuters.

Physical demand for crude has dried up, creating a global supply glut as billions of people stay home to slow the spread of the novel coronavirus.

The May US WTI contract fell USD19.06, or 104.3%, to a discount of 79 cents a barrel at 2:09 p.m (1809 GMT) after touching an all-time low of - USD1.43 a barrel. Brent was down USD1.85, or 6.6%, at USD26.23 a barrel.

The June WTI contract is trading more actively at a much higher level of USD21.6 a barrel. The spread between May and June was more than USD23, the widest in history for the two nearest monthly contracts.

Investors bailed out of the May contract ahead of expiry later on Monday because of lack of demand for the actual oil. When a futures contract expires, traders must decide whether to take delivery of the oil or roll their positions into another futures contract for a later month.

As MRC wrote previously, global oil consumption cut by up to a third. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We also remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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