Domo to close nylon films plant in Germany, citing overcapacity

MOSCOW (MRC) -- Domo Chemicals says it will cease production of biaxially oriented polyamide (BOPA) films at Leuna, Germany, closing its plant there in August 2020, said Chemweek.

The company's Domo Film Solutions (DFS) subsidiary will continue operating its BOPA and cast non-oriented polyamide (CPA) film plants at Cesano Maderno, Italy. The company says it has informed employees at Leuna about the closure but has not specified how many jobs will be lost. Domo says it employs about 2,200 people worldwide.

Other operations at the site will not be impacted by the closure. Family-owned Domo says it will maintain the Leuna site as its nylon 6 “core operations hub.” The site is integrated and Domo operates a caprolactam plant there.

Domo says it decided to close the Leuna BOPA plant because of worldwide overcapacity for nylon films. The plant started up in 2018, according to the DFS website. “In these extraordinary circumstances of high business volatility, we have opted to continue to focus on quality and flexibility through cautious and smart asset management, rather than reacting with short-term volume strategies,” Attilio Annoni, managing director at DFS, says.

Following the acquisition of Solvay’s Europe-based nylon 6,6 business at the beginning of this year, Domo says it has become a leading integrated nylon 6 and 6,6 player worldwide. Despite the current market slowdown, which is hurting the automotive and other industrial segments served by Domo’s polymers and intermediates, and engineering materials units, the company says it remains on course to achieve its growth objectives.

Domo says its nylon film business forms an integral part of the supply chains related to segments such as pharmaceuticals, medical, and food packaging, which have all proven to be “essential during the COVID-19 period.”

“We continue to focus on flexibility and competitiveness and have not been impacted in how we support our customers…we will continue to partner with our customers in developing and supplying nylon films for high-performing and sustainable flexible packaging structures,” Annoni says.

Domo generated 2019 sales of more than EUR900 million (USD1 billion).

Phthalic anhydride is widely used in the manufacture of paints and varnishes and plasticizers for PVC products. In a small amount it is used in the manufacture of rubber products, tires. In addition, it is used in the light, pharmaceutical and electrical industries.

As per MRC's ScanPlast, Russia's production of unmixed polyvinyl chloride (PVC) decreased in April, including due to the scheduled maintenance works of one of the producers. Overall PVC output totalled 432,100 tonnes in January-May 2020, up by 2% year on year.


Qatar Petroleum announces integration of Muntajat into QP

MOSCOW (MRC) -- As part of its ongoing efforts to strengthen its global competitive position in the downstream sector, Qatar Petroleum announces its decision to integrate Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat) into QP, according to The Peninsular.

The integration will involve leveraging a combined set of human, technical, commercial, and financial capabilities, as well as customer relationships into the QP organization with the aim of being completed within the next few months, which will enable QP to continue expanding its global reach, and to remain the partner of choice providing superior high quality products and excellence in customer service.

In making the announcement, H E Saad Sherida Al-Kaabi, Minister of State for Energy Affairs, President and CEO of Qatar Petroleum, said, "The integration of Muntajat into QP is a strategic move that will further strengthen our downstream capabilities and enhance the State of Qatar’s global competitive position in the downstream sector. We are committed to establishing a center of excellence for the downstream business in Qatar by pooling the commercial, technical, and financial capabilities of both QP and Muntajat, and by leveraging higher efficiencies in the deployment of our human and financial resources."

During the integration process, Muntajat will continue to deliver its commitments and contractual obligations to all its customers around the world with no interruption and with the same superior customer service.

This integration marks another step towards achieving Qatar Petroleum’s vision to become one of the best national oil & gas companies in the world.

As MRC reported earlier, Qatar Petrochemical Company (Qapco) has failed to restart its linear low density polyethylene (LLDPE) line and extented force majeure on shipments of material. The company unexpectedly shut down the LLDPE line on 3 May 2020 due to an unspecified technical issue. The shutdown has forced its sole marketing and distribution arm - Muntajat to declare force majeure on the shipment of these cargoes to Asian customers. Apparently, the plant failed to restart on 12 May. The company bought the 570,000 tons/year LLDPE line online in late May 2020.

According to MRC's ScanPlast report, April LLDPE shipments rose to 42,830 tonnes from 36,790 tonnes a month earlier, production increased. Overall LLDPE shipments totalled 152,840 tonnes in the first four months of 2020, up by 13% year on year. SabSibNeftekhim accounted for the main increase in shipments.

Showa Denko completes vinyl ester expansion project in China

MOSCOW (MRC) -- Showa Denko (SDK) expanded production lines to produce vinyl ester resin (VE) and synthetic resin emulsion (EM) in the premises of Shanghai Showa Highpolymer Co., Ltd. (SSHP), a Chinese subsidiary of SDK, and has increased production of VE and EM there, aiming to expand the Showa Denko Group’s functional resin business in China, said the company.

The market for electronic parts such as liquid crystal displays (LCDs) and touch panels has been expanding due to the progress in telecommunication technologies including 5th Generation mobile communication system. As a result, the demand for VE, which is used in the process to produce electronic parts including LCDs and touch panels, has been rapidly increasing in China. In addition, since VE has excellent corrosion resistance and chemical resistance, the demand for VE for use as corrosion-resistant inner lining material has also been increasing.

This use includes inner lining for desulfurization equipment increasingly introduced to thermal power plants to prevent air pollution, wastewater treatment equipment for electronic parts factories, garbage plants and storage tanks for chemicals. In China, regulation against volatile organic compound (VOC) as an environmental protection policy started in 2015, and, since then, there has been strict regulation for use of paints and adhesives containing organic solvents. As a result, switching over to aqueous paints and aqueous adhesives utilizing EM has been in progress, and therefore the demand for EM has been increasing. Responding to these movements, SHHP increased the capacities of its production lines to produce VE and EM to about twice as much as before.

As per MRC's ScanPlast, Russia's production of unmixed polyvinyl chloride (PVC) decreased in April, including due to the scheduled maintenance works of one of the producers. Overall PVC output totalled 432,100 tonnes in January-May 2020, up by 2% year on year.

Showa Denko K.K. Mainly engaged in the petrochemical business. The company's petrochemical division produces and markets industrial gases, olefins, organic chemicals, and others.

ACC releases April 2020 resin production and sales statistics

MOSCOW (MRC) -- U.S. production of major plastic resins totaled 7.0 billion pounds during April 2020, a decrease of 2.8 percent compared to the same month in 2019, according to statistics released today by the American Chemistry Council (ACC).

Year-to-date production was 30.0 billion pounds, a 4.3 percent increase as compared to the same period in 2019.

Sales and captive (internal) use of major plastic resins totaled 7.3 billion pounds during April 2020, decrease of 2.0 percent from the same month one year earlier. Year-to-date sales and captive use was 30.2 billion pounds, a 3.8 percent increase as compared to the same period in 2019.

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.

US crude stockpiles surge to record high

MOSCOW (MRC) -- U.S. crude oil stockpiles rose unexpectedly last week to an all-time high as refiners boosted imports, particularly from Saudi Arabia, while exports dropped to lows not seen since November, reported Reuters.

The Energy Information Administration also said on Wednesday that refined product demand ticked up, but still remained far below normal levels.

Crude inventories rose 5.7 million barrels in the week to June 5 to 538.1 million barrels, most in history, not including the U.S. strategic reserves, EIA data showed.

Shipments booked during the Saudi-Russia price war from March and April, when the kingdom ramped up exports sending U.S. prices to negative-USD40 a barrel, have been arriving in the United States. Refiners’ imports of Saudi barrels have averaged more than 1.5 million barrels per day (bpd) for three consecutive weeks, which has not happened since 2013.

Crude inventories in the Gulf Coast import-export and refining hub jumped 6.9 million barrels to a record 303.7 million barrels. U.S. exports fell to 2.4 million bpd, their lowest since November, so overall net crude imports rose by 1 million bpd, the EIA said.

“These are bearish numbers really. Crude (stocks) rose again despite being stymied by subdued demand. We are down significantly from a year ago today and saw builds in products as well,” said Matt Smith, director of commodity research at Clipper Data.

Gasoline inventories rose 866,000 barrels, compared with analysts’ expectations for a 71,000-barrel rise. Distillate stockpiles, which include diesel and heating oil, increased by 1.6 million barrels.

Product supplied, a proxy for demand, showed gasoline consumption rebounded to 7.9 million bpd, still roughly 20% below the year-ago period, but an improvement from recent weeks. Overall gasoline demand is down 16% from a year ago.

Refinery utilization rates rose by 1.3 percentage points to 73.1% of capacity.

The market was lower after the data. U.S. crude futures fell 2% to USD38.18 a barrel, while Brent was down 1.4% to USD40.60 a barrel.

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 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.