Japanese refiners facing stagnant market may cut capacity

MOSCOW (MRC) -- Japanese refineries may be forced to shut down capacity once again unless they see a strong recovery from the coronavirus pandemic, reported Reuters.

They’ve been hit by declining use for fuel at home, competition from newer refineries in China and South Korea dominating in other markets, as well.

Idemitsu Kosan on Tuesday reported an annual loss, like its competitors have done in recent days.

Executive Officer Noriaki Sakai said Japan’s second-biggest refiner expects fuel sales to fall 30% in the year through March 2021 while President Shunichi Kito said the company “may need to consider some measures (to consolidate refineries) in the mid-2020s”.

Tsutomu Sugimori, president of JXTG Holdings, Japan’s biggest refiner, told an earnings conference last week: “We have been considering consolidation of refineries since our merger in 2017. We will adjust our production facilities to reflect weakening demand.”

JXTG, which accounts for about half of the market, has already decided to shut a refinery in Osaka with partner PetroChina and shut its Muroran refinery in Hokkaido.

Japan’s oil refining capacity peaked at 5.6 million barrels per day (bpd) in 1982, data from the BP Statistical Review of Energy shows.

It currently has about 3.4 million bpd of capacity in mostly aging refineries and industry ministry estimates suggest that could fall to 2.3 million bpd by the end of the decade.

As MRC wrote before, JXTG Nippon Oil and Energy is in plans to restart its cracker following an unplanned outage. The company is likely to resume operations at the cracker early this week. The cracker was shut owing to technical issues on May 4, 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.

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

MOSCOW (MRC) -- LyondellBasell, the world’s largest licensor of polyolefin technologies, today announced that Sinopec Hainan Refining & Chemical Co., LTD. (Sinopec) will use the LyondellBasell Hostalen “Advanced Cascade Process” (Hostalen ACP) technology for a new facility, said the company.

The process technology will be used for a 300 KTA high density polyethylene (HDPE) facility to be built in Yangpu, Hainan Province, P.R. China.

“Multi-modal HDPE resins play a key role in addressing the growing demand for higher value polyethylene products,” said Neil Nadalin, Director of Licensing at LyondellBasell. Nadalin added: “The Hostalen ACP process is the leading low-pressure technology to deliver those benchmark polymer products."

With these new capacity additions, LyondellBasell has licensed over 8500 KTA of benchmark multi-modal HDPE resins. The Hostalen ACP low-pressure slurry process technology manufactures high performance, multi-modal HDPE resins with an increased stiffness/toughness balance, impact resistance and high stress-cracking resistance used in pressure pipe, film and blow-molding applications.

The Sinopec Hainan HDPE plant will commence operations using Avant Z501 and Avant Z509 catalysts to produce a full range of multi-modal HDPE products.

New licensees can take advantage of LyondellBasell’s in-house expertise of continuous process, operating and product improvements by optionally joining our Technical Service program.

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.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges?like?enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world's largest producer of polymer compounds and the largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) -- Overall imports of acrylonitrile-butadiene-styrene (ABS) to the Belarusian market dropped in the first quarter of 2020 by 15% year on year to 1,360 tonnes, according to MRC's DataScope report.

This figure was at 1,590 tonnes in January-March 2019.

March ABS imports to Belarus decreased by 31% year on year. Thus, imports of material into the country were 457 tonnes over the stated period versus 667 tonnes in March 2019. Imports were at 467 tonnes in February 2020.

Belgium, Russia and South Korea are the main countries-importers of ABS to Belarus.

Imports of material from Belgium increased in the first three months of 2020 by 23% year on year: from 446 tonnes to 550 tonnes. The share of Belgian material imports in the total shipments was 41%, compared to 33% in the first quarter of 2019. However, March ABS imports from Belgium fell by 22% from February, totalling 154 tonnes.

Deliveries of Russian material decreased in the first quarter of 2020 by 16% year on year: from 468 tonnes to 392 tonnes. The share of Russian companies' ABS in the total imports to the country remained in January-March 2020 at the last year's level - 29%. Shipments of Russian material to Belarus reached 169 tonnes in March 2020 versus 116 tonnes a month earlier, whereas imports of Russian material were 134 tonnes in March 2019.

Imports of Korean material to the Belarusian market slumped in January-March 2020 by 56% year on year: to 231 tonnes from 522 tonnes a year earlier. The share of ABS imports from South Korea in the total shipments to the country decreased in the first quarter of 2020 to 17% from 33% a year earlier. March 2020 shipments of Korean ABS into the Republic of Belarus were 169 tonnes versus 115 tonnes in February, whereas imports of material were 134 tonnes in March 2019.

MRC

1. Crude hits 10-week high as economic restarts prompt demand optimism

MOSCOW (MRC) -- Crude futures settled higher amid signs that the continued reopening of economies in the US and Europe could bring balance to oversupplied oil markets in coming weeks, reported S&P Global. NYMEX July WTI settled USD1.10 higher at USD24.35/b and ICE July Brent climbed 64 cents on the day to finish at USD36.17/b. Front-month WTI and Brent was last higher on March 10. Oil demand outlooks continue to improve as more state and local governments ease restrictions on non-essential travel and trade aimed at slowing the COVID-19 coronavirus pandemic.


MRC

MOSCOW (MRC) -- Japanese producer Toho Titanium is considering further output cuts at its sponge titanium plants in Japan and Saudi Arabia in response to weaker demand, particularly from the aircraft industry, brought on by the Covid-19 outbreak, said Chemweek.

The Covid-19 pandemic has taken has taken its toll on the aircraft industry, which is scaling back production of commercial planes in the face of a slump in global air travel demand.

Toho Titanium said it has been notified by some customers to reduce delivery volumes of contracted sponge titanium used in aircraft manufacturing. Demand from other manufacturing sectors is also expected to remain sluggish over the months to come, it added.

The company has reduced sponge titanium production by 10pc since May but is considering whether to curb output further amid falling demand. It has a combined 25,200 t/yr of sponge titanium production capacity at its Chigasaki and Wakamatsu plants in Japan, in addition to its joint-venture plant in Saudi Arabia.

Toho Titanium is negotiating with Saudi sponge titanium venture partner Advanced Metal Industries Cluster to review plans for the Yanbu plant, which started commercial production in September last year. The Advanced Metal Industries Cluster and Toho Titanium Metal venture was originally targeting to increase output to a full 15,600 t/yr by the end of 2020.

Toho Titanium is a 50.38pc-owned subsidiary of Japanese resource firm JXTG. The company is planning to start output at a new nickel powder production line at Wakamatsu in April next year.

As MRC informed earlier, JXTG Nippon Oil and Energy, is in plans to restart its cracker following an unplanned outage. The company is likely to resume operations at the cracker early this week. The cracker was shut owing to technical issues on May 4, 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.

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