SIBUR DOTP receives European Pharmacopoeia certification and is used in medical items

MOSCOW (MRC) -- Dioctyl terephthalate (DOTP) made at SIBUR-Khimprom in Perm has been certified under the European Pharmacopoeia standards for the medical and pharmacological industries, said the company.

The corresponding certificate allowed SIBUR to expand into the segment of medical compounds abroad. Given the COVID-19 pandemic and enormous rise in demand for disposable protective medical items and equipment, many processors have switched from technical compounds to medical ones.

For instance, a Serbian company that is also a customer of SIBUR started producing medical compounds for surgical masks to be used by hospital staff treating coronavirus patients. The mask body is made from a medical compound based on SIBUR's PVC and DOTP. Such masks come with a replaceable filter and can be used up to five times. In May, they have been shipped to the UK, Croatia, Montenegro, Bulgaria and Romania.

An Eastern European company has set up one of its production lines to make medical compounds using SIBUR’s DOTP. Following successful tests in a customer laboratory, the compound is now being supplied to ventilator mask manufacturers in Western Europe.

In Russia, DOTP is a popular product that has been replacing the previously-used DOP plasticiser thanks to its superior medical properties, such as zero phthalate content, low volatility, and absence of smell. For example, it is used to make plastic containers for transfusion of blood and its components. The Russian-made medical compound and items based on it have been certified by the country's Federal Service for Surveillance in Healthcare (Roszdravnadzor), which attests to the high quality of SIBUR's DOTP plasticiser. Medical items produced in Russia using this plasticiser have gained incredible traction, especially amid the pandemic. SIBUR plans to promote the use of DOTP in medical items, building on its European success.

As MRC informed earlier, SIBUR Holdinghas shut its polyethylene (PE) plants for a planned maintenance since 23 May 2020. Based in Russia, the turnaround includes both old and new PE plants of SIBUR which consists of Tomskneftekhim with 270,000 tons/year of low density polyethylene (LDPE) unit, as well as ZapSibNeftekhim with a 700,000 tons/year high density polyethylene (HDPE) unit and 800,000 tons/year linear low density polyethylene (LLDPE)/HDPE swing plant. All PE plants are expected to remain off-stream for about 20 days.

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.

SIBUR is the largest integrated petrochemicals company in Russia. The Group sells its petrochemical products on the Russian and international markets in two business segments: Olefins & Polyolefins (polypropylene, polyethylene, BOPP films, etc.) Plastics, Elastomers & Intermediates (synthetic rubbers, EPS, PET, etc.). SIBUR’s petrochemicals business utilises mainly own feedstock, which is produced by the Midstream segment using by-products purchased from oil and gas companies. More than 26,000 employees working in SIBUR contribute to the success of customers engaged in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide. In 2018, SIBUR reported revenue of USD 9.1 billion and adjusted EBITDA of USD 3.3 billion.
MRC

MOSCOW (MRC) -- ExxonMobil and INNIO have signed a long-term extension to their global lubricant collaboration agreement for INNIO’s Jenbacher Type 2, 3, 4, 6 and 9 natural gas engines, said Hydrocarbonprocessing.

Working side by side, the companies will draw on their joint expertise in meeting the evolving needs of natural gas engine lubrication, resulting in the release of a new co-branded gas engine oil and other products in the future.

"We’re pleased to build on our co-engineering working relationship with ExxonMobil,” said Andreas Lippert, Chief Technology Officer at INNIO Group. “Together, we continue to co-develop a range of high-performance gas engine oil technologies for our reliable and highly efficient Jenbacher Type 2, 3, 4, 6 and 9 natural gas engines, helping our customers achieve their business goals in the global energy transformation."

"This collaboration with INNIO enables us to further strengthen our understanding of the application issues that customers face, in order to develop the right lubrication solution,” said Henning Feller, EAME Sales Manager Finished Lubricants.

"By combining our lubrication expertise with INNIO’s 90 years of gas engine innovation expertise, we can achieve one shared goal: to help INNIO’s Jenbacher gas engine customers improve their operational reliability, productivity, profitability and sustainability."

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- Japan's estimated gasoline demand in May fell to the lowest monthly level in 37 years as consumers refrained from traveling at the beginning of the month, a period when driving activity typically peaks due to public holidays, reported S&P Global.

Local refiners and traders remained cautious on the gasoline demand recovery prospect in June as people may not actively go out amid concerns over the coronavirus infection despite the recent lifting of the state of emergency.
"We expect the coronavirus pandemic to have an impact [on the gasoline demand] for around a year and the demand is likely to continue making large drops from a year ago," a trader said Thursday. "With the summer demand season approaching, we expect to see a gradual demand recovery."

Japan on May 25 lifted the remaining state of emergency measures for Tokyo, Chiba, Saitama, Kanagawa in the east and Hokkaido in the north, ahead of their May 31 expiry after the state of emergency was first declared April 7.

"The lifting of the last five prefectures from the state of emergency early this week should provide some support to gasoil demand as they account for about a third of the country's GDP," S&P Global Platts Analytics said in a note on Wednesday. "Still, our current base case assumes a contraction in 2020 GDP by 4.5% and gasoil demand is likely to stay weak."

While Japanese refiners are keeping their gasoline output relatively short over the ailing domestic demand, at least one refiner said it does not rule out the possibility of importing the motor fuel should the recovery exceed its expectations.

"Following the lifting of the state of emergency, we expect the (gasoline) demand to recover gradually from June," a source with the Japanese refiner said Thursday. "We do not expect to see a need for imports from a V-shape recovery but we do not rule out an option for the product import if the demand recovery exceeds our expectation."

Japan's gasoline demand in May is estimated at 2.92 million kl, or 592,459 b/d, down 27% year on year, with gasoil demand estimated down 11% year on year to 2.4 million kl, or 486,952 b/d, JXTG Nippon Oil & Energy, the country's largest refiner, said Thursday.

That would put gasoline demand at the lowest for the month since 1983, when domestic gasoline sales stood at 2.88 million kl, and gasoil demand at the lowest for the month since 2010, when sales stood at 2.37 million kl, according to the Ministry of Economy, Trade and Industry data.

JXTG attributed the drop in gasoline demand to the state of emergency measures that had requested the public to refrain from going out during the Golden Week national holidays over late April to early May. The gasoil demand also slid as the restraint measures reduced the fuel demand for public buses and construction activity.

Specifically over the Golden Week national holidays, Japanese gasoline demand plunged 34% year on year while gasoil demand increased slightly from a year earlier because of greater demand for home delivery despite less demand for holiday travel, according to Tsutomu Sugimori, president of JXTG Holdings, the parent of the refining unit.

A potential increase in Japanese appetite for imports is considered supportive to the Asian gasoline complex, with buyers potentially looking to purchase barrels in the wider region to fill their requirements, market sources said.

South Korean refiners – which are the nearest source of cargoes for Japan -- are slated to go into a period of heavy maintenance in June.

"Hopefully the increased demand will spill over to here (Singapore), and help us absorb some supply," a Singapore-based source said. Of late, the Asian gasoline complex has seen a fresh wave of bearishness as participants questioned the extent of the regional demand recovery.

The FOB Singapore 92 RON gasoline crack against front-month ICE Brent crude futures was even assessed at minus $1.89/b at the 0830 GMT Asian close Wednesday, despite momentarily recovering to positive territory on March 19 and March 20, according to Platts data.

The Asian gasoil market has rebounded from record lows, with the strength primarily stemming from tighter supply balances in the region. As such, traders said the region is able to tackle excess supplies by slowly digesting volumes thanks to the bursts of demand that have emerged following the rollback of some coronavirus-related containment measures in Asian countries.

At the Asian close Wednesday, the cash differential for FOB Singapore 10 ppm sulfur gasoil cargoes was assessed up 31 cents/b at a two-month high of minus 29 cents/b to the Mean of Platts Singapore gasoil assessments.

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 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) -- Crude futures fell Wednesday as the focus turned to a lack of consensus among OPEC+ members ahead of the group's next meeting on June 8-10, reported S&P Global.

NYMEX July crude settled at USD32.81/b, down USD1.54, while ICE July Brent settled at USD34.74/b, down USD1.43.

"Oil's rally stalled out after Russia signaled they want to unwind productions in July, a sign that the battle for market share will resume as crude demand improves," said OANDA analyst Edward Moya. "Russia's comments on easing cuts in July served as a reminder that higher prices and improved crude demand will likely see OPEC+ compliance go out the window."

While news that Russia's oil ministry said global oil markets would balance in June or July pulled prices lower, subsequent news Wednesday that Russia's President Vladimir Putin agreed with Saudi Arabian Crown Prince Mohammed bin Salman on the need for "close coordination" put a floor in futures.

"Both sides noted the importance of joint efforts in achieving OPEC+ agreements in April to limit oil production," said a statement from the Kremlin. "They agreed that further close coordination on this issue should take place between energy ministers."

The OPEC+ alliance agreed in April to reduce output by 9.7 million b/d in May and June in response to plummeting demand caused by the coronavirus pandemic. Saudi Arabia has since said it will cut a further 1 million b/d in June.

Crude futures remained in contango, but the curve has flattened, reflecting a tighter supply/demand balance. The market appears less concerned that inventories will reach storage capacity, notably at the Cushing, Oklahoma delivery point for NYMEX futures.

Producers in the US and Canada have announced output cuts totaling roughly 2.7 million b/d. The coronavirus has also hit oil production in Latin America.

The market is hardly bullish. But the cuts may present a risk to supply down the road, according to the International Energy Agency.

Global energy investment is expected to plunge by 20%, or almost USD400 billion, in 2020, the agency said Wednesday.

The US shale sector is set to be hit hardest, with investment in shale forecast to fall by 50% in 2020 as investor confidence and access to capital has now "dried up," the IEA said.

In refined products, NYMEX June RBOB settled at 99.33 cents/gal Wednesday, down 5.56 cents, while June ULSD settled 1.87 cents lower at 97.21 cents/gal.

Refined products demand is expected to increase in the near term as more countries ease lockdown restrictions.

In the US, restrictions on non-essential travel have been eased or lifted in all 50 states, though major metro areas, including Los Angeles and New York City, remain on lockdown.

Likewise, some Asian countries are starting to ease restrictions, boosting gasoline demand.

According to S&P Global Platts Analytics, Apple Mobility Index data suggests "a recovery in driving activity is now underway among Asian countries outside China, with Malaysia, Thailand and Vietnam improving the most."

RBOB crack spreads have weakened over the past two trading days, however, likely reflecting some demand optimism fading from the market.

The NYMEX July RBOB crack spread against ICE Brent ended Wednesday at around USD8.07/b, down from USD9.07b Friday.

While US refinery runs are expected to have risen, but unemployment remains high, and export demand sluggish, which is putting a cap on RBOB cracks.

Kpler vessel tracking software shows roughly 19.4 million barrels of clean products being exported from the US to Latin America so far in May, down from a total of 33.5 million barrels in April, and 67.2 million barrels in March.

As MRC informed 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 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 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) -- Volgograd Kaustik, Russia's fourth largest polyvinyl chloride (PVC) producer, resumed its polyvinyl chloride (PVC) production capacities after a scheduled turnaround, according to ICIS-MRC Price report.

Representative of Kaustuk Volgograd said PVC production had been resumed by 27 May. The shutdown will be quite long and lasted until 1 May. The plant's PVC production capacity is 90,000 tonnes/year.

It is also worth noting that next shutdowns for maintenance at Russian PVC plants are scheduled in June - July.
SayanskKhimPlast and RusVinyl, which annual capacities are 350,000 tonnes and 330,000 tonnes, respectively, will take next off-stream their production capacities for maintenance. SayanskKhimPlast wiil stop from 2 July for one month.

PVC production at Volgograd Kaustik was launched in December 1972 with the assistance of the Japanese firm Kureh's specialists. Nikokhim Group is one of the leaders of the Russian chemical industry, the main production assets of which are located in the southern industrial hub of Volgograd.

The holding company includes: JSC Kaustik is the principal plant of the group, manufactures basic products - caustic soda, chloroparaffins, synthetic hydrochloric acid, chlorine trademark, polyvinyl chloride, sodium hypochlorite, etc .; CJSC NikoMag - production of anti-icing materials, magnesium chloride, magnesium oxide and hydroxide; Zirax, Ltd. - production of high-purity reagents for various industries and JSC Poligran - the production of plastic compounds and rigid PVC compounds.
MRC