Plastics and polymers trade fair will be in Shenzhen, China, in April 2021

MOSCOW (MRC) -- The 34th edition of ChinaPlas has been rescheduled to April 13-16, 2021, at a new venue: the Shenzhen World Exhibition & Convention Center in that southern Chinese city, adjacent to Hong Kong, said Recyclingtoday.

The event’s organizer says this will be the first time for ChinaPlas to be held in Shenzhen. Starting in 2021, the trade fair will alternate between Shenzhen (odd years) and its traditional home of Shanghai (even years).

Organizer Adsale Exhibition Services Ltd. held a press conference in late June 23, using online video conferencing tools to interact with more than 100 Chinese and international media representatives.

"Shenzhen combines China’s enormous market potential and its unique geographic advantages, and the upcoming ChinaPlas will help to position the plastics and rubber industries to seize new growth opportunities," stated Ada Leung, general manager of Adsale.

The Guangdong-Hong Kong-Macau Greater Bay Area is "the most concentrated region for plastics processing in China," according to Adsale. Plastic products output within the nine cities in the region reached 11.17 million metric tons in 2019, representing more than 13.6 percent of the national total.

In addition to Adsale, other organizations involved in organizing ChinaPlas include Beijing Yazhan Exhibition Services Ltd., the China National Light Industry Council - China Plastics Processing Industry Association, the China Plastics Machinery Industry Association, the Guangdong Plastics Industry Association, the Shenzhen Polymer Industry Association and Messe Dusseldorf China Ltd.

As MRC informed earlier, Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May. Production of benzene was 110,000 tonnes in May 2020, which equalled the figure a month earlier. Overall output of this product reached 615,000 tonnes over the stated period, up by 1.7% year on year.


Danone India aims to achieve 100% recyclable packaging by 2025

MOSCOW (MRC) -- French dairy and nutrition company Danone has revealed its aim to make packaging in India 100% recyclable by 2025, said Packaging-gateway.

The ambition is part of the company’s ‘One Planet. One Health’ frame of action commitment. The strategic initiatives under the frame of action are intended to boost Danone’s capacity across the food supply chain.

According to the company, its One Planet. One Health agenda is based on the idea that health of people and planet are linked to each other. Additionally, the company will work on innovating and developing products and solutions to expand its portfolio to offer healthier diets that address local nutritional needs.

Danone India managing director Himanshu Bakshi said: “In today’s times, consumers are increasingly shifting their attention to healthier products and brands which have a positive impact on the environment. "At Danone, we believe that food companies have a critical role to address the ever-changing needs of the consumers and that we can change the world through food.

"Our ‘One Planet. One Health’ frame of action embodies our commitment towards encouraging healthier eating and drinking habits in consumers and espouses sustainable business practices for the industry." Currently, more than 90% of the company’s products are in ‘healthy categories’.

In February, Danone launched a dual-QR code packaging solution for its baby formula brands Aptamil and Nutrilon in China as part of the company’s newly launched digitally enabled baby formula Track and Connect service.

As MRC informed earlier, Danone consolidated 100% of Unimilk’s shares, having bought all minority stakes from minority shareholders. According to him, Danone, which in 2010 agreed to merge assets in Russia and the CIS with Unimilk and owned almost 58% of the company’s shares, bought the remaining 42% of the joint venture.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim.

Danone has been working in Russia since 1992. In the summer of 2010, the merger of Danone's dairy business in Russia and Unimilk, a Russian dairy company, was announced. The investment volume of Danone since the start of operations in Russia has reached $ 1.8 billion. The group includes 20 factories that produce products under the brands Danone, Activia, Actimel, Rastishka, Danissimo, Prostokvashino and others.

Chinese June crude imports at independent refineries dip amid congestion

MOSCOW (MRC) -- Chinese independent refineries' June crude imports edged down 0.5% to 4.4 million b/d, or 18 million mt, in June from the record high of 4.42 million b/d in May as Zhejiang Petroleum & Chemical could only manage to take in half of its feedstock tanker arrivals due to port congestion, reported S&P Global.

ZPC received about 2.85 million mt of crude arrivals in June, according to market information collected by S&P Global Platts on July 3.

However, the 20 million mt/year refinery only managed to take in 1.35 million mt of crude in the month due to congestion problems at Zhoushan port in eastern China's Zhejiang province, according to refinery and port sources. Its imports were at 2.17 million mt in May.

A number of Sinopec refineries in the region and crude barrels delivered to storage facilities in Zhoushan designed by Shanghai International Energy Exchange also use that port.

Many Chinese companies bought crude when prices were low, causing port congestion issues in the country for more than a month.

The volume of crude on tankers idled in Chinese waters for 15 or more days has been consistently setting fresh highs, hitting 42.98 million barrels in the week beginning June 29, data from trade flow and inventory tracker Kpler showed.

Meanwhile, the other leading independent refiner Hengli Petrochemical (Dalian) received 2.28 million mt in June, slumping from 3.35 million mt in May, as the refinery cut its buying with the expectation of crude prices rising, a company source said.

However, the reduction was capped as the volume of crude oil discharged for the rest of the small-scale independent refineries, including those under the non-major ChemChina, surged 9.1% to 14.39 million mt from the previous record high of 12.95 million mt in May, Platts data showed.

This was because the ports in Shandong, where most of the independent refineries are located, have maximized their capacity to discharge crude cargoes to ease congestion problems.

Chambroad Petrochemical lead the growth in the volume among its Shandong peers to receive 885,000 mt in eight crude cargoes last month from 100,000 mt in May.

But there were still about 67 crude cargoes waiting for discharge at Shandong's crude ports - Qingdao, Dongjiakou, Rizhao, Yantai, Longkou, Laizhou and Dongying - as of July 3, according to Kpler.

It also suggests that crude import volume in July is likely to remain heavy.

Platts in June collected information on crude arrivals for 38 independent and non-major refineries. These refineries import crude through ports in Shandong province, as well as Tianjin, Zhoushan and Dalian.

The barrels include those imported directly by the refiners and bought by trading companies on behalf of the independent refiners, and those that were discharged into the tanks.

These refiners were awarded a total of 129.01 million mt of import quotas in the first two batches, accounting for 84.5% of the county's total allocations for qualified refineries.

As MRC informed previously, in H1 February, 2020, China’s private chemical giant and refiner Hengli Petrochemical cut to 90% from this week its crude oil processing rate at a northeastern plant, down from 109%, as a spreading coronavirus hits demand. The cuts at the 400,000-barrel-per-day refinery and petrochemical complex in Dalian were equivalent to 17%, or 76,000 bpd. Hengli also shut in a 3.2-million-tonne-per-year reforming unit, one of three it operates, because of a mix of technical and market problems.

We remind that Hengli Petrochemical resumed operations at its propylene unit on March 9, 2020, following a planned outage. The unit remained under turnaround for about one week. Located in Liaoning, China, the propylene unit has a production capacity of 450,000 mt/year.

We also remind that Hengli started up the 450,000 tons/year Phase I polypropylene (PP) plant in May 2019 and launched its Phase II PP plant by end of November 2019.

Propylene is the main feedstock for the production of PP.

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

US refiners slashed gasoline output in response to lockdown

MOSCOW (MRC) -- Faced with an unprecedented collapse in gasoline consumption during the most intense period of lockdown, US refiners responded by slashing crude intake and curbing conversion processes used to boost gasoline yields, reported Reuters.

But the extraordinary operating changes introduced during the emergency left refiners with a legacy of too much diesel, which is still weighing down diesel prices worldwide, and will have to be eliminated over the next few months.

The scale of the shock and the shift in refinery processes to cope with it were revealed for the first time on Tuesday with the publication of “Petroleum Supply Monthly” by the US Energy Information Administration.

Consumption of all three major fuels fell sharply in April, the most recent month for which data is available, but the hit was greatest for jet (down 61% compared with a year earlier) and gasoline (37%) and much smaller for distillate fuel oil (12%).

Faced with a collapse in the demand for gasoline, refineries cut the volume of crude and other inputs fed into their distillation units to just 70% of their maximum capacity compared with almost 89% a year earlier.

More importantly, they slashed the flow of semi-refined distilled oil into downstream conversion units, including catalytic crackers and reformers, that would normally upgrade more fuel oil into gasoline and jet fuel.

In April, their catalytic crackers were operated at just 59% of their capacity compared with 81% a year earlier. Hydrocracker usage was down to 56% from 71%. And catalytic reformers were down to 61% from 80%.

The result of these changes in downstream conversion was an abrupt shift in the mix of refinery output, from gasoline and jet towards distillate, that has no precedent in terms of either size or speed outside wartime.

Gasoline production fell to just 41% of total output from 45% in April 2019; jet output halved to less than 5% from 10% a year ago; by contrast, distillate fuel oil surged to more than 38% from less than 30%.

The twin shifts in refinery operations (reduced crude intake and reduced downstream processing) minimized the overall build-up of fuel inventories and gasoline in particular.

But the consequence has been a massive blow out in stocks of less-refined distillate fuel oil which has only recently been brought under control and which is now overhanging the market, depressing diesel prices.

To work down bloated distillate stocks, refiners are continuing to restrict crude processing, even as the economy recovers, but are now switching to maximum gasoline production.

The most recent weekly refinery reports from the Energy Information Administration show gasoline output rising steadily since late April while distillate and jet output remains almost unchanged.

Refineries are now producing about two-thirds more gasoline than distillate and jet combined, up from around equal volumes in April, as refiners ramp up conversion units.

If refiners continue to operate in max-gasoline mode, distillate stocks are likely to normalise in the next 2-3 months – provided the global economy does not stumble into a double-dip recession.

As MRC reported earlier, Valero Energy Corp’s Memphis, Tennessee, crude oil refinery is operating at two-thirds of its 180,000 barrel-per-day (bpd) capacity because of low demand in the COVID-19 pandemic. The Memphis refinery cut production by as much as 50% in early April and has been raising production gradually since then.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

Crude lower as fresh coronavirus cases outweigh bullish US jobs report

MOSCOW (MRC) -- Crude oil futures were lower in midmorning trading in Asia July 3, after hitting a four-month high overnight on better-than-expected US labor market data, as concerns over rising COVID-19 cases continue to cap the upside, reported S&P Global.

At 10:05 am Singapore time (0205 GMT) on July 3, ICE Brent September crude futures were down 23 cents/b (0.53%) from the July 2 settle at USD42.91/b, while the NYMEX August light sweet crude contract was down by 24 cents/b (0.59%) at USD40.41/b.

US non-farm payrolls added 4.8 million jobs in June, exceeding market expectations of a 3.2 million gain, and bringing the nationwide unemployment rate down to 11.1% from 13.3%, according to data released July 2 by the US Department of Labor. The improvements in the labor market was largely due to a sharp increase in employment in the leisure and hospitality sectors which benefited as states reopened and economic activities resumed.

"Markets responded positively to the US labor market release, which mirrored other data suggesting that the economy is recovering quicker than median expectations," ANZ analysts said in a note July 3.

However, sharply rising coronavirus cases continue to weigh heavily on market sentiment even as the US head toward the long Fourth of July weekend, traditionally one of the busiest driving periods of the year. Florida, the third most populous state, set a new daily record of over 10,000 new infections July 2, bringing its total confirmed cases to nearly 170,000, according to media reports.

The US registered over 55,000 new infections nationwide July 2, marking a second consecutive day when cases rose more than 50,000, and the largest single-day total since the start of the coronavirus outbreak, according to media reports.

"And as significantly, the infection curve rose in 40 out of 50 states in a reversal that has mostly spared only the Northeast. Indeed, faltering re-opening of US States as COVID-19 cases rise remains the primary thorn in the oil bulls' side," said Stephen Innes, chief global markets analyst at AxiCorp, in a note July 3.

Beyond the US, a surge in infections post-lockdown plagued several other countries. Australia's second most populous state of Victoria reported 77 new cases on July 2, leading authorities to lock down more than 300,000 people in Melbourne suburbs to contain the situation. Meanwhile, Tokyo recorded 107 new cases on July 2, the highest the capital has seen since May 2, raising fears that Japan might yet declare another state of emergency, according to media reports.

On the supply front, OPEC+ continues to ensure a strict level of compliance among member countries to previously agreed oil production cuts, and requiring laggards to compensate for non-compliance. However, the current record production cuts of 9.7 million b/d is set to expire at the end of July.

"The market will have to confront the specter of rising OPEC supply in the near term. Russia's Energy Minister said the OPEC+ alliance hasn't made a decision on extending the deeper cuts past July, but warned that it should avoid repeated changes to the current plan," the ANZ analysts said.

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 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.