Sinopec Zhongke starts trial run at new PP plant in China

MOSCOW (MRC) -- Zhongke Refinery and Petrochemical Complex, part of Sinopec Group, has successfully conducted trial runs at its new 350,000 tons/year polypropylene PP unit on 9 June, 2020, reported CommoPlast with reference to market sources.

Based in Zhenjiang, China, the complex consists of two PP lines with combined production capacity of 550,000 tons/year, a 100,000 tons/year low density polyethylene (LDPE) plant and a 350,000 tons/year high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) plant.

All lines are expected to startup within July-August 2020 period.

As MRC informed earlier, the Sinopec venture, situated in coastal city of Zhanjiang, comprises a 200,000 barrel per day (bpd) crude oil refinery and an 800,000 tonne-per-year ethylene facility, built at a cost of 44 billion yuan (USD6.2 billion).

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.

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 19.06.2020

1. Russian oil refineries cut gasoline output to 15-year low in May

MOSCOW (MRC) -- Russian oil refineries cut gasoline output to a 15-year low of 2.477 million tons in May amid a global deal to curb crude supplies and coronavirus-related lockdowns, energy ministry data and Reuters calculations showed. They also showed that volumes of primary oil processing REF-RU-TPUT declined to a seven-year low of 21 million tons last month. Demand for fuel has been dented by the economic fallout from the COVID-19 pandemic and lockdowns to combat it.





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Crude futures pare back overnight gains amid fresh COVID-19 outbreaks

MOSCOW (MRC) -- Crude oil futures were trading lower in mid-morning trade in Asia June 17, after settling higher overnight, as reports of fresh COVID-19 outbreaks continued to weigh on hopes of economic recovery, reported S&P Global.

At 10 am Singapore time (0200 GMT), ICE Brent August crude futures were down 64 cents/b (1.56%) from the June 16 settle at USD40.32/b, while the NYMEX July light sweet crude contract was 78 cents/b (2.03%) lower at USD37.60/b.

Both benchmarks had settled more than USD1.20/b higher June 16 after the release of bullish demand projections by the International Energy Agency and stronger-than-expected US retail sales data for May.

"However, the rally was capped by concerns about a second wave of COVID-19 cases. Beijing shut its schools and lifted its emergency response to level two to contain a new outbreak," ANZ analysts said in a June 17 note.

China reported 44 new coronavirus cases nationwide on June 16, comprising 11 imported and 33 local acquired cases, increasing concerns over a resurgence of infections, according to media reports.

"This comes amid rising cases in the US. The market was reminded of the damage the pandemic has caused the oil market, with the IEA calling it the biggest shock to world energy markets since WWII (World War Two)," ANZ analysts added.

While US markets remained buoyed by recent Federal Reserve announcements of efforts to stimulate the economy, the number of new COVID-19 cases continued to trend higher in the US, hitting record highs in six US states on June 16 and posing further concerns over oil demand recovery.

The outlook is expected to remain volatile as investors weighed new COVID-19 headlines versus the optimistic US market data seen earlier in the week.

US retail sales jumped by a record 17.7% month on month in May, even as May sales remained 6.1% lower from the same month a year earlier, latest data showed.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. 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 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.
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Yisheng starts up new PET plant in Hainan

MOSCOW (MRC) -- Hainan Yisheng Petrochemical Co Ltd has started up one of its polyethylene terephthalate (PET) new line since last weekend, reported CommoPlast with reference to market sources.

Based in Hainan, the new PET bottle plant consists of two lines with production capacity of 250,000 tons/year each.

Market players informed that the plant has started up one line last weekend and pending to achieve prime grade, meanwhile another line is expected to start-up in the near term, which resulting expectation that additional supply might pressured sentiment in domestic market.

As MRC wrote before, in early November 2019, Dalian Yisheng Co Ltd started up its new PET bottle plant. Based in Dalian, China, the new plant has a production capacity of 350,000 tons/year.

As per MRC's ScanPlast report, April total estimated PET consumption in Russia virtually did not change year on year, totalling 60,840 tonnes (in April 2019 - 60,980 tonnes). 235,160 tonnes of PET chips were processed in Russia in January-April 2020.

Yisheng Petrochemical is jointly owned by polyester giants Zhejiang Hengyi Group and Zhejiang RongSheng Group.
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Kuraray to expand production of melt-blown nonwoven fabric

MOSCOW (MRC) -- Kuraray Co., Ltd. announces its decision to modify the production item lineup of its meltblown nonwoven fabric production facility, which is located on the premises of the Okayama Factory, a facility run by nonwoven fabric production and sales subsidiary Kuraray Kuraflex Co., Ltd. that is currently undergoing expansion, said the company.

This move will result in the production of face mask filters at said facility and is aimed at meeting surging demand for nonwoven fabrics for use as mask filters.

?The Kuraray Group’s meltblown nonwoven fabrics are currently being used as a filter material in various applications, including face masks, thanks to their fine structure consisting solely of extremely thin polymer fibers that are firmly intertwined without the use of binders.

?Currently, there is a lingering shortage of face mask filters due to a rapid increase in domestic demand amid the widespread implementation of novel coronavirus countermeasures. In particular, high-performance filters for use in surgical masks have been seriously depleted.

?Although the Kuraray Group has been marketing its meltblown nonwoven fabrics for a variety of applications, such as face masks, filtering materials for food and beverage production and air filters, the Group’s existing facilities for producing mask filters have been in constant full-capacity operation due to tight demand-supply status reflecting the recent spread of the novel coronavirus.

"Against this backdrop, the Group decided to modify the production item lineup of this meltblown nonwoven fabric production facility currently undergoing expansion to enable to produce face mask filters. This move is expected to empower the Group to produce enough sheets of meltblown nonwoven fabric for approximately 300 million face masks per year. In this way, the Kuraray Group will contribute to nationwide efforts aimed at preventing the spread of the novel coronavirus.

In line with Kuraray’s mission “For people and the planet—to achieve what no one else can,"the Kuraray Group will continue to deliver products backed by unique technologies, with the aim of contributing to the betterment of society.

As MRC informed earlier, Kuraray in October 2019 closed the production of vinyl acetate (VAM) in Okayama (Okayama, Japan) for scheduled repairs. This production with a capacity of 160 thousand tons of YOU per year was closed for about one month.

According to MRC's DataScope report, April EVA imports to Russia dropped by 5,85% year on year to 3,050 tonnes from 3,250 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation increased in January-April 2020 by 1,55% year on year to 12,540 tonnes (12,350 tonnes a year earlier).
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