Zhejiang Petrochemical delays start up of new ACN plant until H2 May 2020

MOSCOW (MRC) -- Zhejiang Petrochemical Co Ltd has postponed the start of its new acrylonitrile (ACN) plant to the second half of May, 2020, reported S&P Global.

Based in Zhejiang, China, this plant is able to produce 260,000 tons/year of ACN. Initially, the company planned to begin operations at this production last week.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December 2019 and its polyolefin plants in late December 2019-January 2020.

Market sources reported then that one of its polypropylene (PP) plant with capacity of 450,000 tons/year started up by 30 December 2019, followed by another line with same capacity by 15 January 2020.

Meanwhile its 450,000 tons/year of linear low density polyethylene (LLDPE) and 300,000 tons/year of high density polyethylene (HDPE) were launched around similar time with PP plants.

We also remind that China's greenfield Zhejiang Petrochemical will use a range of process technology from Honeywell UOP for the second phase of its integrated refining and petrochemical complex in Zhoushan, Zhejiang province, according to a document, quoting a senior Honeywell official. "This second phase of the complex by itself will process 20 million tons per year of crude oil and produce another six million tons per year of aromatics when completed," Bryan Glover, vice president and general manager, Process Technology and Equipment, at Honeywell UOP, stated in the document as of January 2019.

ACN is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's DataScope report, overall ABS imports to the Russian market increased in the first two months of 2020 by 8% year on year to 4,800 tonnes. This figure was at 4,500 tonnes in January-February 2019. February imports of material into the Russian Federation rose by 48% year on year to 2,500 tonnes from 2,700 tonnes a year earlier. Imports were 2,300 tonnes in January 2020.
MRC

Tianjin Bohai plans to run its PDH plant in China at full capacity utilisation this week

MOSCOW (MRC) -- Tianjin Bohai Chemical is expected to reach 100% capacity utilisation at its propane dehydrogenation (PDH) plant within this week, reported S&P Global.

The company unexpectedly shut down this plant on 22 April, 2020, and initially planned to resume its operations in late April, but this PDH unit was restarted on 7 May, 2020.

Located in Tianjin, China, the PDH plant has a propylene capacity of 600,000 mt/year.

As MRC informed before, Tianjin Bohai Chemical last restarted its PDH plant in late March, 2020. Previously, in early February, the company decided to postpone the restart of its PDH plant by another 19 days to February 29 due to sluggish demand for propylene. This came after the facility, located in northeastern China, had delayed the restart of its 600,000 mt/year propylene plant to February 10, from February 6, extending the Lunar New Year holidays in the wake of the coronavirus outbreak. Tianjin Bohai uses 720,000 mt/year of propane when at full capacity.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Tianjin Bohai is a state owned enterprise, with over 100 subsidiaries and 35,000 employees. It has joint venture relationships with a number of foreign partners, including: LG Chem, Solvay, Akzo Nobel, Clariant, Veolia, Air Liquide and Vopak.
MRC

Hit by oil crash, Indonesia set to delay B40 biodiesel

MOSCOW (MRC) -- Indonesia is likely to delay plans to raise bio-content in palm oil-based biodiesel to 40%, and keep going with an already ambitious 30% content, a senior official said, amid speculation that low crude prices could force a government re-think, said Hydrocarbonprocessing.

The biodiesel programme is a key part of the government’s strategy to soak up excess supplies of palm oil and curb expensive fuel imports, one of the main contributors to the country’s current account deficit problem. Some traders had questioned whether it was still viable for the government to continue its programme following the historic drop in crude oil prices earlier this year.

But Musdhalifah Machmud, a deputy minister at the Coordinating Ministry of Economic Affairs said on Friday the policies were under discussions and would soon be disclosed by President Joko Widodo. “It will not be a single policy, but there will be several policies that are interrelated to one another,” Machmud said.

Late last year, Indonesia raised the bio-content in its biofuel mandate to 30% (B30), the highest palm-based content in biodiesel ever used. Machmud said the policies are aimed at keeping B30 going until 2021, while the plan to increase the bio-content to 40% (B40) will likely be delayed to 2022 due to disruption to world fuel demand caused by the coronavirus pandemic.

"We were preparing for B40, but the current situation is not conducive for investment in processing B40,” she said. “B40 will be delayed to 2022." In January, the energy ministry had planned to start road tests for B40 in April and had looked at rolling out the upgrade as early as next year.

“The schedule has been disrupted by work-from-home and movement restriction policies. We are waiting for conditions to return to normal to resume testing,” Dadan Kusdiana, head of research and development at the energy ministry, told Reuters.

Indonesia reported its first COVID-19 cases early in March and since then many areas, including the capital Jakarta, has imposed movement restrictions. In February, the government has said it was planning to raise palm oil export levies to support the biodiesel programme as the price gap between biodiesel and standard gasoil - as diesel is called in Asia - had widened.

Indonesia collects levies to help finance its palm oil programmes, including biodiesel subsidies and replanting programmes for smallholders. The Estate Crop Fund, an agency in charge of collecting and managing the levies, disburses funds to subsidise biodiesel makers.

Ethylene and propylene are feedstocks for producing PE and 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

JXTG Nippon Oil restarts Kawasaki cracker after mantenance

MOSCOW (MRC) -- JXTG Nippon Oil and Energy has brought on-stream its cracker following a turnaround, according to Apic-online.

A Polymerupdate source in Japan informed that, the company resumed operations at the cracker on April 28, 2020. The cracker was shut for maintenance on February 27, 2020.

Located at Kawasaki in Japan, the cracker has an ethylene production capacity of 460,000 mt/year and propylene production capacity of 235,000 mt/year.

As MRC reported earlier, JXTG Nippon Oil & Energy shut its cracker in Kawasaki on June 8, 2018 owing to technical issues. The cracker remained off-line for around 10 days. Located at Kawasaki in Japan, the cracker has an ethylene production capacity of 448,000 mt/year and propylene production capacity of 273,000 mt/year.

Besides, it was taken off-line on December 10, 2018 for maintenance work. The cracker is likely to remain off-line for around 8-10 days.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
MRC

Three Indian refiners cut Mideast oil imports in May

MOSCOW (MRC) -- At least three Indian refiners have curbed oil imports from Middle East producers, including Saudi Arabia, for May because of storage constraints as local fuel demand slumped following the coronavirus outbreak, reported Reuters with reference to company officials' statement.

This is the second consecutive month that Indian refiners have cut their long-term crude imports as space to store excess oil is running out because companies are cutting their processing as stay-home measures to curb the spread of the virus have slashed fuel demand.

One of the refinery officials said his company has cut May purchases from Saudi Arabia by about 80%, while an official at a second company said it will take 66% less oil from Saudi Arabia in May compared with their average monthly purchases from the country.

For crude supplied by Abu Dhabi National Oil Co, the first refinery official said his company will take just one cargo in May instead of an average of two each month, while the second refinery official plans to receive some deferred cargoes from April and has nominated only one cargo for May.

ADNOC has already reduced crude supplies for May after OPEC+ decided to cut output.

Both officials said their companies will take about 75% less crude from Kuwait Petroleum Corp (KPC) in May compared to their average monthly purchases.

"There is no demand, so purchases are low," said the source at the first refiner.

A source at the second Indian refiner said that Saudi Arabia is willing to accommodate demand for extra oil although his company doesn’t want more for May.

Iraq is also offering one less cargo than the second Indian refiner, which had a monthly requirement of three to four cargoes, a source at the company said.

An official from a third Indian refinery said his company would be taking less oil from the Middle East in May than their typical monthly average as demand has dwindled, without disclosing the volume.

"There is no demand...our tanks are full and crude processing has declined due to low demand," the source said.

State-run refiners have sold excess cargoes to the federal government for filling strategic reserves.

Many Indian refiners have issued prompt tenders to export fuel and have almost halved refinery runs after local demand slumped. India’s fuel demand fell by about 50% in the first half of April.

The Indian refinery sources declined to be named because of the sensitivity of the matter. Saudi Aramco and ADNOC declined to comment and KPC and Iraq’s oil marketing company SOMO did not respond to Reuters’ request seeking comments.

A source from one of the Middle East producers confirmed the lower demand for crude in India.

"Some Indian refiners have cancelled their shipments for April and May. They will take these cargoes in the later part of the year to meet their annual commitment," said the source.

"Some losses we will bear and some (losses) they (the buyers) have to share," he said.

Revenues of key oil producers have crashed after a plunge in oil prices as demand has shrunk due to lockdowns and economic slowdowns during the coronavirus pandemic. The Organization of the Petroleum Exporting Countries and its allies, including Russia, announced sweeping cuts in production, amounting to almost 10% of global supplies. Demand has dropped as much as 30%.

As MRC informed earlier, India to consider imposing a 15% "Covid-19" import tax on chemicals to help protect its domestic industry from major exporting nations in East and SE Asia. The domestic industry has been badly affected by a major demand slump as a result of nationwide coronavirus lockdown. The proposed tax will be added in addition to current import duties. The committee is also proposing that all duties and taxes on exports be refunded for domestic manufacturers.

With possible exemptions for ethylene, paraxylene (PX), ethylene dichloride (EDC) and vinyl chloride monomer (VCM), the recommendation covers all other chemicals and petrochemicals imported by India.

India is a major chemicals importer, including polymers, monomers and solvents. If introduced, the new tax would impact domestic importers and distributors.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
MRC