Global chemicals output falls in April

MOSCOW (MRC) – Data collected and tabulated by the American Chemistry Council (ACC) show that with stabilizing activity in China partially offsetting widespread weakness due to COVID-19, global chemicals production fell 1.3 percent in April, an improvement from the 3.3 percent decline in March and 2.1 percent decline in February, said Americanchemistry.

During April, chemical production fell in every region. Headline global production was off 5.8 percent year-over-year (Y/Y) on a three-month moving average (3MMA) basis and stood at 110.2 percent of its average 2012 levels.

During April, global capacity rose by 0.2 percent and was up 3.3 percent Y/Y. With the decline in production, capacity utilization in the global chemical industry fell 1.2 points, to 75.6 percent. This is down from 82.8 percent last April, below the long-term (1987-2017) average of 86.5 percent, and is the lowest level since April 2009.

Among chemical industry segments, April results were negative across most segments, with some gains in plastic resins, synthetic rubber, and manufactured fibers – primarily in China. Considering year-earlier comparisons, growth was present only in synthetic rubber.

ACC’s Global Chemical Production Regional Index (Global CPRI) measures the production volume of the chemical industry for 33 key nations, sub-regions, and regions, all aggregated to the world total. The index is comparable to the Federal Reserve Board (FRB) production indices and features a similar base year where 2012=100. This index is developed from government industrial production indices for chemicals from more than 65 nations accounting for about 98 percent of the total global chemical industry. This data set is the only timely source of market trends for the global chemical industry and is comparable to the U.S. CPRI data, a timely source of U.S. regional chemical production.

As MRC informed earlier, Russia's output of products from polymers grew in April 2020 by 11.2% year on year due to quarantine restrictions. However, this figure increased by 3.4% year on year in the first four months of 2020. According to the Russian Federal State Statistics Service, April production of unreinforced and non-combined films decreased to 107,000 tonnes from 110,400 tonnes a month earlier. Output of films products grew in the first four months of 2020 by 12.5% year on year to 402,800 tonnes.
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MOSCOW (MRC) -- Iraq's oil exports, excluding those from the semi-autonomous Kurdish region, fell 6.6% in May, according to the oil ministry, indicating that OPEC's second-biggest oil producer may have struggled to cut its output by about 23% in accordance with the new OPEC+ agreement, reported S&P Global.

Iraq's oil exports in May averaged 3.212 million b/d, the ministry said in a statement on June 1. In April, exports were 3.438 million b/d.

Iraq had agreed to trim its output by 1.061 million b/d in May and June as part of a broader OPEC+ pact to cut production by a historic 9.7 million b/d during these two months. Iraq, which does not publish its production figures, has a quota of 3.59 million b/d for May and June under the new OPEC+ agreement.

The country struggled for most of last year to comply with its old OPEC+ quota. Iraq and Saudi Arabia affirmed on May 23 their commitment to the OPEC+ agreement during a visit by Iraq's acting oil minister Ali Allawi to the Gulf state.

Iraqi exports from the southern oil terminals reached 3.098 million b/d and from Turkey's Ceyhan 114,000 b/d, the ministry said.

In April, average exports from the southern terminals stood at 3.351 million b/d, from Ceyhan 76,000 b/d and to Jordan 11,000 b/d.

The OPEC producer raked in USD2.09 billion in May by selling its oil at an average price of USD21/b, compared with USD1.4 billion in April at an average of USD13.8/b.

As MRC informed previously, Iraq's oil-rig count has tumbled by almost two-thirds this year after international oil companies were ordered to cut spending because of the oil crash and OPEC's second-largest producer agreed to stringent new OPEC+ cuts.

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.
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MOSCOW (MRC) -- Braskem announced the selection of Charleston, South Carolina for its new global export hub facility to serve international customers, said Chemweek.

The hub will provide packaging, warehousing and export shipping services to support Braskem's polypropylene (PP) production facilities in the United States. With the design and development phase well underway, the new global export hub is expected to be completed by the third quarter of 2020 and will have a capacity to support export shipments of up to 204,000 metric tons/year of PP and specialty polymers.

Braskem is partnering with the Port of Charleston and warehouse provider Frontier Logistics, which will construct, lease and provide services to Braskem under a five-year agreement. Ahead of the facility's completion, the company plans to continue to leverage its existing international export capabilities out of Houston, Texas, which will also be maintained following the launch of the new Charleston hub. The announcement of the new South Carolina facility complements Braskem's existing network of global export hubs which include facilities in North and South America and Europe.

Mark Nikolich, Braskem America CEO said, "As the largest polyolefins producer in the Americas and the leading producer of polypropylene in the United States, Braskem is focused on reinvesting in its business and leadership positions to support our clients worldwide. The build out of our new global export hub in South Carolina allows us to leverage our feedstock advantaged, polymer production assets in the US Gulf Coast, Pennsylvania and West Virginia, to best meet our international clients’ needs."

The new export hub facility is being developed as Braskem works to complete Delta, its new PP production line at La Porte, Texas, which is nearing completion and is scheduled for the launch of commercial production in the third quarter of 2020.

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).
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MOSCOW (MRC) -- Trinseo, a global materials solutions provider and manufacturer of plastics, latex binders and synthetic rubber, has restarted its acrylonitrile butadiene styrene (ABS) plant following an unplanned outage, as per Apic-online.

A Polymerupdate source in the US informed that, the company has resumed operations at the plant on May 25, 2020. The plant was shut on May 20, 2020 owing to a flooding caused heavy rains in the region.

Located at Midland, Michigan in the US, the ABS plant has a production capacity of 95,000 mt/year.

As MRC wrote before, Trinseo (Berwyn, Pennsylvania) has joined the growing ranks of chemical companies providing financial and operational updates in response to the coronavirus disease 2019 (COVID-19) pandemic. Like many of its peers, the company announced that it is drawing USD100 million on a revolving credit facility "out of an abundance of caution." Trinseo says all of its manufacturing facilities remain online except the API Plastics site in Mussolente, Italy, which has been closed by the government as a nonessential business.

According to MRC's DataScope report, overall ABS imports to the Russian market increased in the first four months of 2020 by 5% year on year to 10,900 tonnes. This figure was at 10,400 tonnes in January-April 2019. April imports of material to the Russian Federation rose by 5% to 3,300 tonnes from 3,100 tonnes a year earlier. March ABS imports into the country were 2,800 tonnes.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015.
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1. Rosneft finds extended oil cuts painful

MOSCOW (MRC) -- Rosneft does not have enough crude to ship to buyers with which it has long-term supply deals, making it hard for the Russian company to continue with record oil cuts beyond June, four sources familiar with the matter told Reuters. Rosneft has told the energy ministry it would be difficult to maintain cuts to the end of the year, as it has had to cut shipments to major buyers, such as Glencore and Trafigura, despite good demand, two sources close to the talks said on condition of anonymity. "There is no doubt Rosneft will strictly fulfil all obligations under supply contracts with its foreign and Russian counterparties despite output cuts made by the company as a part of OPEC+ deal,” Rosneft CEO Igor Sechin said in a statement on Friday. Glencore and Trafigura declined to comment. Russia’s Energy Ministry did not respond to Reuters’ request for comment. President Vladimir Putin, who decides on oil policy, spoke with Saudi Crown Prince Mohammed bin Salman on Wednesday about “close coordination” on output cuts, agreed in April to tackle oil market weakness because of the coronavirus pandemic.



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