BASF manufactures and donates hand sanitizer to support the fight against COVID-19 in Canada

MOSCOW (MRC) -- With the goal of helping overcome current and future bottlenecks for hand sanitizer resulting from a significant increase in demand, BASF has started production of hand sanitizers in Canada, said the producer in its press release.

This safe and high-quality sanitizing product manufactured at BASF’s Windsor facility, will be donated to hospitals, care facilities and other institutions in areas of high need, identified in collaboration with the provincial governments of Quebec, Ontario and Alberta.

Between the amount of hand sanitizer produced in Canada and imported from BASF’s Wyandotte, Michigan facility, the company expects to donate more than 10,000 liters over the next few days and will assess future production and supply in the near term.

"The novel coronavirus outbreak has had a tremendous impact to our society. At BASF Canada, we have considered how our businesses and local footprint could positively respond to these challenges and support those who are particularly in need now and in the immediate future: healthcare facilities and essential service professionals," said Marcelo Lu, President of BASF Canada. "I am extremely proud of our Canadian colleagues for their fast response to the crisis. They worked diligently and in close collaboration with Health Canada, other government departments and our supplying partners to obtain approvals and pivot our production to hand sanitizers. We thank both federal and provincial government’s rapid response in collaborating with industry as we work together to provide solutions for the COVID-19 pandemic and supply shortages."

BASF’s Windsor site, where the hand sanitizer is being produced, is a key coatings supplier in several automotive OEM and refinish applications. "Given the slower demand from the automotive sector, we were happy to adjust and contribute to the fight against COVID-19,” said Jeff Klevering, Site Director for the Windsor facility. “We have an amazing team who wanted to rally around this cause and generate a positive impact."

In the past days, BASF Canada has also donated other key supplies to the healthcare sector across Canada such as disinfectants, hand soap, masks, gloves and protective suits.

Another area where BASF Canada is contributing, both directly and indirectly, is the country’s food supply. BASF has a strong presence in the agricultural sector in Canada and is working closely with farmers to ensure they have the tools they need to produce a healthy, sustainable crop this season. Moreover, BASF Canada’s Agricultural Solutions team has launched a virtual food drive in partnership with Food Banks Canada to help maintain Canadian’s access to healthy, safe food during this time. For every dollar employees raise, BASF will match up to a combined total of $100,000.

Globally, BASF Group currently supplies around 175,000 liters of hand sanitizer weekly free of charge and has recently donated over 100 million protective masks.

As MRC reported previously, BASF said in late April it will not be able to meet full-year sales and earnings guidance issued on 28 February and withdrew its outlook in advance of its first-quarter earnings report.

We remind that BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

BASF Canada, headquartered in Mississauga, Ontario, has over 1,200 employees at production facilities and offices located across Canada. BASF Canada is a subsidiary of BASF SE, and an affiliate of BASF Corporation.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
MRC

Pemex increased oil production, refining in March

MOSCOW (MRC) -- Mexico’s state oil company Petroleos Mexicanos increased crude production to 1.745 million barrels per day (bpd) in March while processing more at its domestic refineries, according to official data seen by Reuters.

Mexico agreed to a 100,000-bpd output cut as part of an initiative by the OPEC+ group to push up plummeting oil prices by withdrawing barrels from an oversupplied market. The cuts will be put in place this month.

Mexico’s energy minister, Rocio Nahle, said the nation would cut output only during May and June.

The reduction is expected to mostly affect newly drilled oilfields while a larger portion of shallow-water production by Pemex, as the company is known, would be used for domestic refining.

Pemex’s crude production has consistently grown this year from 1.724 million bpd in January, including shared oilfields, official figures showed. Last week, the company reported a massive loss of nearly USD24 billion in the first quarter and announced a USD1.9 billion cut in its investment budget.

Pemex’s crude processing at its refineries rose to almost 600,000 bpd in March from 464,018 bpd the previous month, the official data showed. Pemex said its total production of fuel averaged 717,400 bpd last month.

As MRC wrote previously, Petroleos Mexicanos posted a USD18.3 billion net loss for 2019, nearly doubling the previous year’s loss and dealing a major blow to the Mexican president’s quest to revive the heavily-indebted state oil company.

We also remind that in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.

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.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

COVID-19 - News digest as of 07.05.2020

1. Aramco responds to COVID-19 with support for our people and communities

MOSCOW (MRC) -- Aramco provided an update on how the company is keeping its people and communities safe from COVID-19, while continuing to supply the world the energy it needs, said Hydrocarbonprocessing. In our response to COVID-19 we have prioritized the safety, health and wellbeing of our employees, as well as our communities, around the world. We have implemented measures to reduce the risk of infection and to mitigate the virus’s impact on our people and our business. The company and its employees have also supported community efforts to combat the spread of COVID-19.


MRC

European PVC producers reduce export prices for May shipments to CIS countries

MOSCOW (MRC) -- Negotiations on prices of European polyvinyl chloride (PVC) for May shipments to the CIS markets started at the beginning of the week. Ethylene prices continued to go down in Europe, and as a result, European producers were forced to reduce their export PVC prices for May shipments, according to ICIS-MRC Price report.

The May contract price of ethylene was agreed down by EUR100/tonne from the previous month, which theoretically allows to talk about a reduction of EUR50/tonne in net cost of PVC. However, some European producers intend to reduce their export PVC prices by a greater amount due to a major fall in demand from export markets. A decrease of EUR40-75/tonne in export PVC prices for May shipments to the CIS markets has been discussed.

Demand for PVC subsided further month on month from consumers in the CIS countries in May due to the quarantine measures undertaken by local authorities. The quarantine has been extended in Russia and Ukraine to, at least, the middle of the month. However, some consumers still intend to purchase resin in Europe in May.

Overall, deals for May shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of €575-660/tonne FCA, whereas last month's deals were done in the range of €650-700/tonne FCA.
MRC

US crude oil inventories are approaching record-high levels

MOSCOW (MRC) -- Recent declines in demand for petroleum products have contributed to record increases in US commercial crude oil inventories, reported Hydrocarbonprocessing.

Transportation fuel demand has decreased as a result of reduced economic activity and stay-at-home orders aimed at slowing the spread of the 2019 novel coronavirus disease (COVID-19). Refiners have been able to reduce the amount of material they run through refineries (as measured by gross inputs, which includes crude oil, unfinished oils, and natural gas plant liquids) relatively quickly in response to falling demand, but crude oil production has not responded as quickly, leading to large crude oil inventory increases.

From March 13 (when a national emergency was declared in the United States) to April 24, U.S. commercial crude oil inventories increased by 74 million barrels (16%) and are now 8 million barrels below the record-high value set in March 2017, according to data in the U.S. Energy Information Administration’s (EIA) weekly series that dates back to 1982. Commercial crude oil inventories for the week ending April 10 increased by 19.2 million barrels, the largest weekly change in EIA’s data.

The US Gulf Coast region, home to more than half of U.S. refining capacity, typically has the most crude oil inventories. From March 13 to April 24, Gulf Coast inventories increased by 36.4 million barrels (20%) to 221.6 million barrels. The increase of 10.2 million barrels in the week ending April 10 was the fourth-largest increase in the Gulf Coast region on record.

Inventories in the crude oil storage hub in Cushing, Oklahoma, increased by 24.9 million barrels (69%) from March 13 to April 24. The weekly inventory builds in Cushing for the weeks ending April 3, 10, and 17 are the three largest weekly inventory builds on record. Because market participants that hold West Texas Intermediate (WTI) futures contracts to expiration must take physical delivery of WTI crude oil in Cushing, the availability of crude oil storage there is important to facilitate the physical transfer. On April 20, 2020, the scarcity of available crude oil storage at Cushing meant several market participants sold their futures contracts at negative prices, in effect paying counterparties to close out of their contracts for them. Another important factor is that a portion of unused space at terminals is required for normal functioning of petroleum storage and transportation systems, and the unused space could be held for incoming crude oil or other operational considerations.

To help stakeholders better assess crude oil storage and capacity, EIA began providing weekly estimates of US crude oil storage capacity utilization in the Weekly Petroleum Status Report (WPSR). EIA surveys inventory levels weekly, but because capacities rarely change, crude oil storage capacities are surveyed less often. EIA’s most recent Working and Net Available Shell Storage Capacity Report was released in November 2019 with data through September 2019; the next release will be on May 29, 2020, with data through March 2020.

In EIA’s Weekly Petroleum Status Report published yesterday, U.S. crude oil storage has reached 61% of working capacity, up from 60% the previous week. In the Gulf Coast and Midwest, storage capacity utilization rose to 60% and 65%, respectively. Within the Midwest region, storage utilization at Cushing, Oklahoma, rose to 81%.

As MRC informed earlier, 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

We remind that 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