Venezuela Maduro vows to raise gasoline price as Iranian tanker nears

MOSCOW (MRC) -- Venezuelan President Nicolas Maduro pledged to begin charging citizens for gasoline, as the fourth cargo of a five-tanker flotilla bringing fuel from Iran approached the South American nation’s exclusive economic zone, said Hydrocarbonprocessing.

Iran is providing the country with up to 1.53 million barrels of gasoline and components to help it ease an acute scarcity that has forced Venezuelans to wait in hours-long lines at service stations or pay steep prices on the black market.

With the arrival of the gasoline, Maduro said he would end the policy of providing fuel effectively for free after more than two decades of frozen pump prices. He provided no details. "Gasoline must be paid for,” Maduro said in a state television address, saying that the price increase would be part of a “normalization and regularization plan."

"I have Venezuela’s support and understanding,” Maduro said, blaming the shortages on the United States, which sanctioned state oil company PDVSA last year as part of a push to oust Maduro, whom the U.S. accuses of having rigged elections in 2018. Service stations have begun testing new payment systems, three people with knowledge of the matter said.

In recent weeks, more than 100 service stations across the country have received new equipment that would allow them to charge for gasoline and ration retail sales, though their operators have not yet received clear instructions from the government or PDVSA, said the people, who spoke on the condition of anonymity.

Maduro in 2018 had pledged to increase prices at the pump, but never went through with the plan. Ending fuel subsidies is seen as politically risky in Venezuela, where a 1989 effort to raise gasoline and transportation prices contributed to a deadly wave of riots and looting.

As it was said earlier, Rosneft, Russia’s largest state-owned oil company, announces the cessation of operations in Venezuela and the sale of assets related to activities in this country due to US sanctions. As a result of the execution of the agreement and the sale of assets, Rosneft will receive a 9.6% stake in its one of its 100% subsidiaries.The Russian government acquired assets from Venezuela from Rosneft. The owner became a company 100% owned by the Russian Federation.

As MRC informed earlier, Rosneft produces at its facilities and sells ethyl alcohol and acetone in Russia, which are used in the manufacture of antiseptics. 15 thousand tons of these substances are produced per month. On the day the quarterly report was published, Rosneft told how its work has changed in the context of the coronavirus epidemic.

Acetone, along with phenol, is the main raw material component for the production of bisphenol A (BPA, by condensation), which, in turn, is used to produce polycarbonate (PC).

According to ScanPlast of Market Report, the total estimated consumption of PC granules in the Russian market (excluding imports and exports to Belarus) amounted to 22.7 thousand tons in the first quarter compared to 17 thousand tons for the same period last year. Demand increased by 33%.

Braskem lowers production of ethylene in Brazil, PP in the US on drop in demand

MOSCOW (MRC) -- Braskem has given an update on the impact that the coronavirus disease 2019 (COVID-19) pandemic is having on the company and measures it is taking to tackle current challenges, said CHemweek.

It has reduced staffing levels at its facilities to the minimum and cut by 50% the number of industrial workers and contractors at its sites. The company says that plant utilization rates in Brazil and the US were reduced in response to lower demand and inventory effects in the petrochemical and plastics production chain.

Utilization rates will be adjusted according to market demand and the potential opportunities for export to other regions, especially with the resumption of activities in Asia, the company says. In Brazil, adjustments so far included reduction in ethylene production to about 65% of its total capacity, which is 3.6 million metric tons/year (MMt/y), while in the US the company reduced its polypropylene (PP) production to about 85% of the 1.6 MMt/y total capacity.

Measures to preserve liquidity and maintain financial strength include disbursement of a revolving credit facility of USD1 billion; reduction of administrative expenses by approximately 10%; reduction of planned investments for 2020 from USD721 million to USD600 million; and working capital optimizations.

As MRC informed earlier, Brazil’s sole polyethylene (PE) producer Braskem will raise LDPE and PP prices for the rest of May by Real 150/mt (USD26.61/mt), according to industry sources, while HDPE and LLDPE prices will remain unchanged. Braskem is currently renegotiating its naphtha contract with Petrobras, as prices in North America have edged up on higher crude. The Brazilian petrochemical company’s JV with Idesa in Mexico also has limited feedstock supply. In the beginning of May, the company reduced the price of all PE grades in May to address falling demand and a decline in international feedstock prices.

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.
Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).

OxyChem conducted PVC turnaround in Texas in May

MOSCOW (MRC) -- OxyChem, the chemical division of Occidental Petroleum, had planned for a turnaround at its polyvinyl cloride (PVC) plant in Pasadena, Texas, in April, but the work was pushed to May, reported S&P Global with reference to a source familiar with company operations.

The turnaround is slated to last seven to 10 days.

This plant's production capacity is 1 million mt/year.

Initially, the company planned to conduct seven-day maintenance works at this plant in April, 2020.

As MRC wrote before, OxyChem's La Porte complex has 1,250,000 tpa of vinyl chloride monomer (VCM) production capacity, which suffered a production upset in late June, 2015. VCM is an intermediate material that is later transformed into PVC.

According to MRC's ScanPlast report, Russian producers of unmixed PVC decreased capacity utilisation in April. However, Russia's overall PVC output totalled 351,000 tonnes in January-April 2020, up by 2% year on year.

Occidental Petroleum Corporation (OxyChem) is a California-based oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America. Oxychem is Oxy"s Texas-based subsidiary which manufacture polyvinyl chloride (PVC) resins, chlorine and caustic soda used in plastics, pharmaceuticals and water treatment chemicals.

Flurry of US crude export fixtures offers glimmer of hope

MOSCOW (MRC) -- A flurry of tentative bookings to export US crude oil from the Gulf Coast suggests demand is edging up after the coronavirus slammed energy consumption worldwide, reported Reuters.

BP, Trafigura and Equinor have all tentatively fixed vessels this past week to carry US crude to global destinations over the coming month, according to Refinitiv Eikon data and shipping sources.

Commodities merchant Trafigura and Occidental Petroleum are among companies looking to book vessels to ship crude from the US Gulf Coast to Asia, one shipbroker said. The US Gulf export market was particularly active last week, with around six ships confirmed with June loading dates, another shipping source said.

Occidental, Equinor and BP declined comment. Trafigura did not immediately respond to requests for comment.

US crude exports plunged as the coronavirus pandemic eroded global demand by 30% in April. Exports dipped to 3.2 million barrels per day (bpd) last week, lowest in a month, the US Energy Information Administration said.

While US crude’s discount to Brent is still narrow, freight rates for supertankers from the US Gulf to Singapore plunged more than 80% from early April to the lowest since August 2019 this month, Refinitiv Eikon data showed. Those rates are currently near USD5.75 million after peaking around USD20 million in late March, sources said.

"Vessel freight rates have been coming down over the last couple of weeks which is re-igniting interest in export opportunities," said Andy Lipow, president of consultants Lipow Oil Associates. He said demand in China and India is expected to keep rising as the countries contain the spread of COVID-19.

Taiwanese refiner CPC Corp purchased 6 million barrels of US West Texas Intermediate (WTI) Midland crude for delivery in August, traders said on Tuesday.

Markets are concerned about rising US-China tensions, traders said, specifically that Washington could slap trade sanctions on China following Beijing’s move to impose a new security law on Hong Kong.

As MRC wrote previously, CPC Corporation shut its No. 3 cracker for a scheduled maintenance turnaround in mid-February 2020. The cracker remained off-stream for around two months. Located at Kaohsiung, Taiwan, the No. 3 cracker has an ethylene capacity of 720,000 mt/year and propylene capacity of 370,000 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.

Dow and Orrion to begin recycling polyurethane foam in 2021

MOSCOW (MRC) -- Dow has announced plans to install an "industrial-scale" facility for the chemical recycling of polyurethane mattress foam at Orrion Chemicals Orgaform’s site in Semoy, France, reported Chemweek.

The facility will produce polyols employing process technology developed in collaboration with H&S Anlagentechnik. Dow expects to begin producing the recycled polyols, which will be marketed under the tradename Renuva, during the first half of 2021.

About 30 million mattresses are discarded in Europe each year, says Dow.

"This development will represent a significant step towards achieving circularity for a product which traditionally poses significant challenges for recycling," says Ana Carolina Haracemiv, commercial director/Europe, Middle East, Africa, India at Dow Polyurethanes.

As MRC informed earlier, in mid-May 2020, USA based Dow Chemical announced plans to shut three polyethylene (PE) plants in the USA and Argentina to avoid piling inventories amid sluggish global demand conditions due to the COVID-19 related lockdown.

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.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene, polypropylene, and synthetic rubber.