Chemours to close Pascagoula facility, exit aniline

MOSCOW (MRC) -- Chemours will close its aniline and nitrobenzene site in Pascagoula, Mississippi state, by the end of the year, said Chemweek.

The First Chemical site produces aniline, nitrobenzene and nonylated diphenylamine (NDPA) lubricant antioxidant. "As a result of a business review we determined that aniline business is not core to our future strategy," Chemours said in a statement.

The company has decided to exit the business and cease production at the site. Chemours said it was reviewing options for productive reuse of the site.

Aniline is used to make polyurethanes, dyes and rubber chemicals among other products.

As MRC informed before, in December 2019, Chemours announced plans to sell its methylamines and methylamides unit to Belle Chemical, an affiliate of Cornerstone Chemical. The sales price was not disclosed. Thus, Chemours had signed a letter of commitment with Belle Chemical Co. to sell Chemours' methylamines and methylamides business and production facilities at the Belle location. Earlier in 2019, Chemours announced it would stop making methylamines and methylamides at the plant. In 2020, it planned to start dismantling the methylamines operations. Once Belle takes possession of the plant, most of the employees at Belle and others assigned in supporting roles at other locations will become part of Belle, Chemours said. Cornerstone makes acrylonitrile (ACN) and melamine at Fortier, Louisiana.

We remind that Russia's output of chemical products rose in May 2020 by 4.4% year on year. Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020, according to Rosstat's data. 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.

Chemours is a global leader in titanium technologies, fluoroproducts and chemical solutions, providing its customers in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Chemours has approximately 9,000 employees across 37 manufacturing sites serving more than 5,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Del.
MRC

MOSCOW (MRC) -- US energy companies slammed the brakes on returning staff to their Houston offices as COVID-19 cases soared and top hospitals warned they could soon run out of beds for the most severely ill patients, reported Reuters.

Texas officials imposed restrictions as new cases in the state topped 5,000 on three consecutive days as of Thursday. Intensive care unit (ICU) beds were 97% full at Houston’s Texas Medical Center, which said it may soon move to increase ICU capacity assignments, officials said.

Texas Governor Greg Abbott has announced a phased reopening of shops, bars and amusement parks from May 1, and businesses have rolled out their own office restarts. But on Wednesday, he warned of a “massive outbreak” and urged people to stay at home.

Many energy firms qualify as essential, and therefore are free to staff normally, but the surge in illness and hospitalizations has prompted large employers to delay or halt openings.

Halliburton Co, the second-largest US oilfield service company by revenue, delayed for two weeks a second phase of its return-to-work plan, and power producer Calpine pushed back the start of returning non-essential workers to offices until August from July 6, representatives for the two companies said.

Chevron also has delayed its reopening plans for further evaluation, said spokesman Sean Comey. About 5% of its Houston office staff and about 2% of its San Ramon, California, workforce are in their offices now, he said.

Midcoast Energy, a natural gas pipeline company, reopened on June 1 but sent Houston employees home three weeks later after two tested positive for the virus, said a person familiar with the matter. President Robert Bond did not respond to requests for comment.

Exxon Mobil, Phillips 66 and ConocoPhillips returned some white-collar workers to their campuses in May or this month. Exxon will remain below 50% capacity at its Houston-area facility, a spokesman said. Conoco is prepared to change its return-to-office plan if needed, a spokesman said.

Phillips 66 said the vast majority of its staff had returned and would remain working from their offices.

"We are a critical infrastructure industry and have an ongoing obligation to continue operating," spokesman Joe Gannon said, noting that the company follows Centers for Disease Control and government advisories.

As MRC wrote before, Exxon Mobil Corp is restarting the hydrocracker at its 560,500 barrel-per-day (bpd) Baytown, Texas, refinery. The 25,000-bpd hydrocracker was shut by a malfunction on Monday, 22 June, caused by a heavy thunderstorm.

We remind that boiler work at the ExxonMobil-operated 830,000-metric tons/year ethylene plant at Mossmorran, UK, was scheduled for completion in June, 2020. Two of the three boilers at the plant exploded in August 2019, resulting in the plant being taken offline until the end of February. OPIS sources said in May that the plant was currently able to operate at full capacity with two boilers in operation but that the third boiler would be working by June.

We also remind that in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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.
MRC

MOSCOW (MRC) -- Crude oil futures were trading higher in mid-morning trade in Asia July 1 after a significant draw in US crude oil inventories, and despite an increase in coronavirus cases clouding the demand outlook, reported S&P Global.

At 10:25 am Singapore time (0225 GMT), new front-month ICE Brent September crude futures were up 45 cents/b (1.09%) from the June 30 settle at USD41.72/b, while the NYMEX August light sweet crude contract was 53 cents/b (1.35%) higher at USD39.80/b.

"The American Petroleum Institute survey estimated a significant draw in crude oil inventories of 8.156 million barrels for the week ending June 26, which was much higher than analysts' guesses," Stephen Innes, chief global markets analyst at AxiCorp, said in a note July 1.

Market participants will look to more definitive US Energy Information Administration data due for release later in the day to confirm these estimates.

"The reports could go a long way to easing some of those lingering inventory concerns. And possibly there is enough oomph in (the API) announcement to trigger a retest of the psychologically important WTI USD40/b before (the) EIA release," Innes added.

Meanwhile, rising coronavirus cases in some US states continue to weigh heavily on market sentiment, capping any strong recovery in crude prices in the short term.

Coronavirus cases more than doubled in 14 US states in June, including California, Florida and Texas, according to media reports. White House infectious disease expert Anthony Fauci told a Senate hearing June 30 that new cases could more than double to 100,000/day unless a full nationwide effort was undertaken, according to media reports.

"This has seen the EU extend its travel ban on US citizens. Within the US, states stalled the easing of restrictions. New York extended its list of states from which visitors must quarantine on arrival. Sentiment wasn't helped by signs that supply may be on the rise," ANZ analysts said in a note July 1.

ConocoPhillips said June 30 it will start increasing producing in July after announcing some of the biggest North American production cuts in the second quarter, with 460,000 boe/d curtailed in June. The company said it will begin by restoring its Lower-48 US production and its Alaskan production in July, followed by its Surmont volumes in Canada later in the third quarter.

"Brent ended Q2 with gains of 21%. It has been an eventful Q2 for crude oil, with WTI plunging into negative price territory briefly and OPEC+ enacting the largest output reduction in its history. In Q3, we think oil prices may continue to rise, but at a much slower pace than Q2. The path to recovery is unlikely to be smooth or linear," OCBC analysts said in a note July 1.

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.
MRC

MOSCOW (MRC) -- Coronavirus and the cyclical slump in petroleum consumption are accelerating a long-term rationalization of the global refining industry and a shift eastwards in its center of gravity to Asia, said Hydrocarbonprocessing.

Refinery margins for making middle distillates such as gasoil and jet fuel have plunged to their lowest since 2009 as lockdowns and recession have cut fuel consumption by millions of barrels per day. Much of this is cyclical and will unwind if and when the major economies and their fuel consumption recover and stocks of gasoline and diesel return to more normal levels.

But the crisis is compounding the long-term challenge for smaller, older and simpler refineries, especially in North America and Europe, faced with a growing competition from more modern mega-refineries in Asia. Refinery margins, the difference between the prices at which refineries purchase crude and sell refined products, have historically aligned with the business cycle.

At the top of the cycle, capacity constraints become binding and refiners struggle to make enough fuel, fattening margins. When the cycle turns down, there is too much capacity, and margins shrink. But the present recession is the worst for nearly a century and the impact has been concentrated in the petroleum-dominated transport sector because of lockdowns, so refiners have faced unprecedented cyclical pressure.

In April, U.S. refiners were forced to cut their crude processing by 20% compared with the previous five-year average as fuel consumption slumped, and refiners in other parts of the world have faced similar problems. Pressure on margins has been particularly acute in this instance, however, because the expanded OPEC+ group of major crude exporters and U.S. shale producers have also cut their output of crude oil.

Consequently, the production-consumption balance for crude has tightened faster than the balance for fuels such as gasoline and distillate. Crude stocks are falling while fuel stocks remain bloated for the time being. Refiners are now being squeezed on both sides of their business: there are too many refineries chasing not enough crude (raising input prices) and too few fuel users (depressing output prices). The result is low crude processing rates, lots of idle capacity, poor margins and poor profitability across the global refining sector.

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.
MRC

MOSCOW (MRC) -- Borealis says it has signed two long-term power purchase agreements (PPAs) to source renewable electricity from Finnish wind farm operator Ilmatar Energy for its integrated petrochemical production facility at Porvoo, Finland, reported Chemweek.

The purchase agreements have been made jointly with Neste, Borealis’ long-term partner in Porvoo, Borealis says. The purchase and supply of more than 20 megawatts of wind power over the next decade will enable the company to increase the share of renewable power in its overall electricity consumption at its Porvoo complex to 13%, it says. The purchase volume will comprise the annual output of approximately four wind turbines, with Ilmatar to build onshore wind farms scheduled to start delivering the electricity by mid-2022, it adds.

Borealis aims to source at least half of its overall electricity supply from renewable sources for its polyolefins, hydrocarbon, and energy businesses by 2030, it says. The PPAs also support the aim of the chemical industry in Finland to be carbon neutral by 2045, it adds.

Indirect carbon dioxide (CO2) emissions at its facilities in Porvoo will be reduced by approximately 16 kilotons/year, according to Borealis.

The company needs to take “meaningful action” to reach its energy and climate targets by 2030, says Martijn van Koten, executive vice president/base chemicals and operations at Borealis. “The long-term power purchase agreement with Ilmatar is the first of its kind for us.”

The petchem facility at Porvoo includes a steam cracker producing ethylene, propylene, and butadiene, a phenol and aromatics plant, two polyethylene (PE) plants, a polypropylene (PP) plant, a compounding unit, and an innovation center.

As MRC informed earlier, Borealis has maintained its cracker in Stenungsund (Sweden) offline longer than initially anticipated, after it was shut following a force majeure declaration at the site on May 11, 2020. Sources said that the unit has been offline longer than initially expected with no confirmed startup date. The Stenungsund cracker has an ethylene capacity of 625,000 tonnes and a propylene capacity of 150,000 mt/year.

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.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC