MEGlobal raised ACP for July 2020 by USD20 per tonne

MOSCOW (MRC) -- MEGlobal has announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in July 2020, according to the company's press release.

Thus, on 11 June the company said ACP for MEG will be USD590/MT CFR Asian main ports for arrival in Julyl 2020, up by USD20/MT from June.

The July 2020 ACP reflects the short term supply/demand situation in the Asian market.

As MRC reported earlier, MEGlobal announced its June ACP for MEG at USD570/MT CFR Asian main ports, up by USD10/tonne from May.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to ICIS-MRC Price report, in Russia, spot PET prices continued to go down. June formular prices for contract customers were in the range of Rb67,500-69,500/tonne CPT Moscow, including VAT. Formular prices are expected to decrease further next month.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).

Taiyo Petrochemical to operate SM plant in Japan at 80% in June

MOSCOW (MRC) -- Taiyo Petrochemical continues to operate its styrene monomer (SM) plant at curtailed capacity levels in June 2020, as per Apic-online.

A Polymerupdate source in Japan informed that the company is likely to operate its plant at around 80% of production capacity rates in month of June 2020. The lower run rate has been attributed to commercial reasons.

Located at Ube, Japan, the SM plant has a production capacity of 370,000 mt/year.

As MRC informed previously, Taiyo Petrochemical took off-stream its SM plant in Ube for maintenance in October 2015. The shutdown lasted for around one month.

SM is the main feedstock for the production of polystyrene (PS).

According to MRC's ScanPlast report, April estimated consumption of PS and styrene plastics in Russia was 36,170 tonnes, down by 12% year on year. Russia's estimated consumption of PS and styrene plastics totalled 157,110 tonnes in January-April 2020, down by 5% year on year.

Zhejiang Petrochemical confirms start-up of new ACN plant by late June

MOSCOW (MRC) -- Zhejiang Petrochemical Co Ltd has affirmed that they will start up their new acrylonitrile (ACN) plant by end-June, 2020, reported S&P Global.

Based in Zhejiang, China, this plant is able to produce 260,000 tons/year of ACN. Initially, the company planned to begin operations at this production in early May, but then postponed the start to the second half of May. Zhejiang Petrochemical last announced mid-June to be the start.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December 2019 and its polyolefin plants in late December 2019-January 2020.

Market sources reported then that one of its polypropylene (PP) plant with capacity of 450,000 tons/year started up by 30 December 2019, followed by another line with same capacity by 15 January 2020.

Meanwhile its 450,000 tons/year of linear low density polyethylene (LLDPE) and 300,000 tons/year of high density polyethylene (HDPE) were launched around similar time with PP plants.

We also remind that China's greenfield Zhejiang Petrochemical will use a range of process technology from Honeywell UOP for the second phase of its integrated refining and petrochemical complex in Zhoushan, Zhejiang province, according to a document, quoting a senior Honeywell official. "This second phase of the complex by itself will process 20 million tons per year of crude oil and produce another six million tons per year of aromatics when completed," Bryan Glover, vice president and general manager, Process Technology and Equipment, at Honeywell UOP, stated in the document as of January 2019.

ACN is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

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.

About 23% of US Gulf oil, gas still offline after Cristobal: BSEE

MOSCOW (MRC) -- About 23% of US oil and natural gas production from the Gulf of Mexico remained offline on June 10 after Tropical Storm Cristobal swept through the region during the weekend, reported S&P Global.

Another 140,000 b/d of crude came back online from June 9 to June 10, according to daily updates from the US Bureau of Safety and Environmental Enforcement. Nearly 35% of the US Gulf production was shut-in in advance of the storm. After a peak of 635,781 b/d was shut in, BSEE said 435,767 b/d remained down on June 10, or 23.55% of total US Gulf oil production.

BSEE decreased its gas shut-in estimate from 898 MMcf/d down to 619 MMcf/d, keeping 22.84% of the offshore gas volumes offline.

BP, Occidental Petroleum and other producers that shuttered some volumes said they are working to resume operations and production volumes.

"We have safely returned staff to all of our central and eastern (US Gulf) facilities that were affected by Tropical Storm Cristobal, and we are in the process of carefully ramping back up production and resuming normal operations," Oxy said in a statement late June 9.

Ahead of Cristobal's move onshore, BSEE said, operators evacuated 188 platforms and rigs in the US Gulf - roughly 30% of the region's total platforms with working personnel - and relocated several drillships. BSEE said 61 platforms remained evacuated on June 10.

BP reduced output at its Thunder Horse, Atlantis and Na Kika platforms in the US Gulf. Those three BP-operated platforms churn out more than 200,000 boe/d. BP's Mad Dog platform was not affected.

"BP has started to resume normal operations at its four operated platforms in the deepwater Gulf of Mexico," BP said in a June 8 statement, declining to give further updates.

Others such as Royal Dutch Shell and Chevron said they had not reduced their US Gulf production volumes during the storm.

Cristobal battered southern Mexico and shut down ports over the past week, before moving through the Gulf of Mexico and depositing heavy rainfall from Louisiana to Florida. The storm hit just as oil prices were moving up, with the OPEC+ group agreeing to extend deeper production cuts at least through July and front-month NYMEX WTI flirting with $40/b for the first time since early March.

Total US Gulf oil production was nearly 2 million b/d before the coronavirus pandemic cratered global demand and oil prices. BSEE was estimating US Gulf oil production at closer to 1.85 million b/d before Cristobal.

However, S&P Global Platts Analytics data estimates that US Gulf crude production will fall to an estimated 1.62 million b/d average for June as some producers reduced their volumes because of lower prices.

In Mexico, Pemex had to shutter production at some of its wells in the area struck by storms Amanda and Cristobal for 10 working days between May and June, CEO Octavio Romero said during a press conference June 7.

Romero did not say how many wells were affected or where they are located. Amanda hit Mexico on May 31, passing through the states of Campeche, Chiapas, Oaxaca, Tabasco and Veracruz. Only Chiapas does not have Pemex oil or gas infrastructure.

As MRC informed earlier, Total SA cut production at its Port Arthur, Texas, refinery to 70% of its 225,500 barrel-per-day (bpd) capacity with a reduction in the operating level of the large crude distillation unit (CDU), said Gulf Coast market sources in mid-May, 2020.

We also remind that Total has recently disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.

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.