Ukraine increased import of injection moulding PET chips by 8% in January-April

MOSCOW (MRC) -- Imports of bottle grade polyethylene terephthalate (PET) in Ukraine increased by 8% year on year to 51,500 tonnes in the four months of the year from 47,800 tonnes a year earlier, according to MRC's DataScope report.

April imports amounted to 16,600 tonnes, 26% more than the previous month. External supplies of material were at the level of 14,100 tonnes in April last year. The volume of supplies of bottle grade PET from China to Ukraine over the fur months of the year fell almost three times: from 36,400 tonnes in January-April 2019 to 12,200 tonnes.

Nevertheless, the supply of Chinese PET chips to the Ukrainian market almost almost doubled in April and amounted to 5,500 tonnes compared to 2,900 tonnes a month earlier, compared to April last year, imports decreased by 45%. The share of imports from China in the total volume amounted to 33% in April against 22% a month earlier and 21% in April 2019.

The share of Chinese material decreased from 76% in the first four months of last year to 24%. The key suppliers of injection moulding Chinese PET chips to the Ukrainian market were producers Dragon, China Resources Chemicals and Yisheng Petrochemical.

At the same time, import of injection moulding PET chips from Lithuania grew three times in the four months of this year and amounted to 30,900 tonnes. This figure was at 10,100 tonnes in January- April 2019. The volume of foreign deliveries from Lithuania to Ukraine increased by 23% in April compared to March to 8,900 tonnes against 7,200 tonnes. In April of the previous year, imports of PET chips were 4,000 tonnes.

The volume of Lithuanian imports to the country in the total supply volume increased to 60% in he first four months of this year against 21% in January - April 2019. The main supplier of Lithuanian material is the manufacturer Neo Group (30,800 tonnes). The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.

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Enbridge Line 3 oil pipeline replacement faces new delay

MOSCOW (MRC) -- A Minnesota pollution regulator said that it will hold a public hearing this summer on Enbridge Inc’s plan to replace its Line 3 oil pipeline, adding a potential two-month delay and pushing the bulk of construction to next year, according to Hydrocarbonprocessing.

The Minnesota Pollution Control Agency (MPCA) said the hearing will focus on how Enbridge intends to protect streams and wetlands that the pipeline crosses.

As MRC wrote previously, in late December 2019, Enterprise Products Partners and Enbridge agreed to jointly develop a deepwater crude oil export terminal offshore Houston, the latest sign of consolidation in the crowded field of US Gulf Coast export projects.

We also remind that Enterprise Products Partners' Mont Belvieu propane dehydrogenation unit in Texas restarted from planned maintenance in the first week of December, 2019. The PDH unit went offline for maintenance on November 13. That day, the company said in a filing with the Texas Commission on Environmental Quality that the RAC "B" turbine shut down, which resulted in flaring. The flaring was estimated to last 72 hours. The unit has a capacity of 750,000 mt/year, according to Platts data.

Propylene is the main feedstock for producing polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
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Sinopec fuel sales rebound, but records biggest quarterly loss in first quarter

MOSCOW (MRC) -- China Petroleum & Chemical Corp (Sinopec) said its daily sales of refined oil products have resumed to more than 90% of levels seen before the coronavirus outbreak, after it announced the worst quarterly loss on record a day earlier, reported Reuters.

Diesel sales match the level of a year ago, while sales of gasoline have rebounded to 90% and petrochemical products to 86%, of the levels seen last year.

“Fuel and chemical products consumption is expected to further improve with the acceleration of production resumption at companies in China. Supply and demand will be balanced again,” the company said in a statement.

The listed branch of Sinopec on reported a 19.782 billion yuan (USD2.80 billion) net loss in first-quarter earnings under Chinese accounting standards, as the coronavirus pandemic walloped fuel consumption and led to collapsing oil prices.

That was the state-owned oil company’s first quarterly loss since the fourth quarter of 2014 and was the biggest quarterly loss since it went public in 2003, according to Refinitiv Eikon’s records.

The loss compared with net profits in the first quarter of 2019 of 14.76 billion yuan and 14.31 billion yuan in the fourth quarter last year.

Sinopec said its refinery throughput fell 13% year-on-year to 53.74 million tonnes, or about 4.31 million barrels per day (bpd), as the coronavirus curtailed demand for refined oil products.

Its oil refining sector suffered a 25.8 billion yuan loss in the first three months of 2020.

The company said last month it expected lower refining runs for the full year of 2020, but for refined oil consumption to return to normal in the third and fourth quarters.

Utilisation rates at its refineries have been resuming after touching as low as 66% in February.

Crude oil production in the first quarter at Sinopec dipped 0.2% from a year earlier to 70.65 million barrels, while natural gas output fell 2.4% to 249.68 billion cubic feet.

Its realised crude oil prices were USD49.15 per barrel, down 14.8% on year, following the drop in global oil prices triggered by a price war between Saudi Arabia and Russia.

Realised natural gas prices were USD6.43 per thousand cubic feet, down 9.2% from a year ago, it reported.

As MRC informed earlier, Sinopec Corp is expected to start commercial operations at its oil refining and petrochemical complex in Zhanjiang at the end of July. The refinery is capable of processing 200,000 barrels per day (bpd) of crude oil and the petrochemical plant will produce 800,000 tonnes per year of ethylene. The project, with first phase investment of 40 billion yuan ($5.59 billion), is located in southern China’s Guangdong province. The refinery received its first crude oil cargo of 128,900 tonnes from a very large crude carrier (VLCC) that arrived at the plant’s 300,000-tonne capacity berth in early May, Sinopec said on May 9.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
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COVID-19 - News digest as of 05.06.2020

1. BP slashes capital spending in 2020 due to COVID-19, expects outbreak to hurt downstream results

MOSCOW (MRC) -- BP says it will reduce its planned organic capital spending in 2020 to about USD12 billion as part of its response to the coronavirus disease 2019 (COVID-19) pandemic, down 25% compared with the company's prior full-year guidance, with an expected spending cut of about USD1 billion in its downstream business segment, which includes petrochemicals, reported Chemweek. No further details on the cut in downstream expenditure have been given by BP’s CEO, Bernard Looney, who says that despite the company's actions to reduce spending and costs, "the challenging environment is expected to have an impact on our first-quarter results and there is uncertainty around how long current depressed commodity pricing and weakness in product demand will continue." Market conditions are "currently volatile and extremely challenging," says Looney.


MRC

Chemicals firm BASF biggest beneficiary of UK coronavirus loan scheme

MOSCOW (MRC) -- The German chemicals company BASF has emerged as the biggest beneficiary of the Bank of England’s emergency coronavirus loan scheme, borrowing GBP1bn in cheap government-backed funding, reported The Guardian.

Threadneedle Street revealed for the first time the names of 53 big companies that have borrowed GBP16.2bn between them, amid rising pressure on the government to place tougher conditions on firms that receive state-backed support.

The list of businesses benefiting from the cheap funding, which is designed to help businesses weather the economic storm caused by the coronavirus pandemic, included many with a sizeable carbon footprint.

According to campaigners, about a fifth of the emergency loans were made to firms with heavy carbon emissions in aviation, oil and car manufacturing, prompting criticism for the government.

Ministers’ have previously made assurances that the government would prioritise a green economic recovery from the coronavirus crisis.

Alongside BASF the list of major overseas companies receiving support backed by the British state also included the German pharmaceuticals company Bayer, the French luxury brand Chanel and the Japanese carmakers Toyota, Nissan and Mitsubishi.

BASF employs about 850 people in Britain at eight plants across the country, producing farming pesticides and chemicals for the car industry.

As MRC wrote previously, BASF says it has successfully issued corporate bonds with a total volume of EUR2.0 billion (USD2.28 billion) on the capital market, including its first-ever placement of a green bond that will be used purely to finance sustainable products and projects.

We remind that BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
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