Evonik starts up new plant in Germany

MOSCOW (MRC) -- Evonik has started up production at a new silicone facility at Geesthacht near Hamburg, said the company.

The new multi-purpose silicones plant is now fully operational after completing final commissioning tests and obtaining regulatory approvals. It produces silicones and silyl-terminated polymers (SMP’s) for use in parquet adhesive flooring, liquid membranes for roofing or electronical potting, among other applications.

The plant strengthens Evonik’s focus on silicone and nanotechnology specialty chemical products, the company said. Details about costs or capacities in terms of tonnes or pounds per year were not disclosed.

As MRC informed before, Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

We remind that Dow plans to install a new furnace in its steam cracker at Fort Saskatchewan, Alberta, Canada, increasing its ethylene capacity, currently 1.42 million metric tons/year (MMt/y), by 130,000 metric tons/year. Dow will split the cost of the project and the incremental volume equally with an unnamed regional customer, according to CEO Jim Fitterling, who announced the news during the company's fourth-quarter earnings call. Start-up is slated for the first half of 2021.

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.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.

MRC

MOSCOW (MRC) -- Faster oil market rebalancing could present OPEC and other producers with an opportunity to ramp production in 2021, the International Energy Agency said in its latest monthly report, as it revised up its demand expectations for 2020 and signalled ongoing supply weakness in US shale, reported S&P Global.

The IEA predicts oil demand will grow 3 million b/d more than supply in 2021, as it released its first estimates for next year in its June 16 outlook, which would mean shifting some of the huge stock overhang that has built up.

The Paris-based agency gave some glimmers of optimism around demand, seeing growth of 5.7 million b/d next year and revising up its expectations by almost 500,000 b/d for 2020, predicting a decline of 8.1 million b/d. But even with the bounce back that still puts demand at 97.4 million b/d, its nearly 2.4 million b/d below 2019.

The IEA's improved tone stems in part from improved mobility trends more broadly, particularly in demand powerhouses China and India and noting an easing of lockdown measures in many countries in the second half of the year is likely to provide a boost.

"While the oil market remains fragile, the recent modest recovery in prices suggests that the first half of 2020 is ending on a more optimistic note," the IEA said in its introduction. "New data show that demand destruction in the early part of the year was slightly less than expected, although still unprecedented," the IEA added.

The biggest drag on oil demand is set to be from the aviation sector that will last well into 2022. Jet/kerosene demand will drop by 3 million b/d in 2020, before rebounding by just 1 million b/d in 2021, leaving it short of pre-crisis levels, the IEA states.

The agency warned that "going into 2021, jet fuel demand will depend heavily on the containment of the virus, which is unlikely to be completely achieved until a vaccine is found and widely administered," which could take up to 18 months.

The IEA noted that global oil supply plunged by 11.8 million b/d in May, driven by a record OPEC+ cut and economic shut-ins in the US, Canada and elsewhere. OPEC and its allies have extended its deep production cut of close to 10 million b/d through July, while continued oil price weakness has also weighed on supply.

Saudi Arabia led May's decline in global oil production to 88.8 million b/d, the IEA noted, with the Kingdom removing 3.7 million b/d. The IEA also found Russia cut by 1.95 million b/d and the UAE reined in 1.5 million b/d. The US shut in an estimated 1.5 million b/d.

Global oil output will remain above that of demand still in 2020, dropping by 7.2 million b/d in 2020, the IEA estimates. In 2021, oil output is set to limp back to life with a 1.7 million b/d recovery, "assuming OPEC+ cuts ease, Norway, Brazil and Guyana deliver solid gains and Libya manages to sustain a rebound."

The IEA's prediction contains many caveats given OPEC+'s ongoing market management strategy as had many about-turns, while Libya's civil strife means it remains a potential 1 million b/d wildcard.

The agency is also downbeat on the speed of any revival in US output, predicting supply tumbling 900,000 b/d this year and dropping 300,000 b/d in 2021 unless prices recover to a level that injects fresh life into the shale patch.

As MRC wrote 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) -- Clariant, Celanese, and Orbia have been fined a total of EUR260 million (USD296 million) by the European Commission for breaching EU competition rules by participating in a cartel related to ethylene purchases in Europe, said Chemweek.

Westlake, which also participated in the cartel, received full immunity by revealing the breach, avoiding an aggregate fine of about EUR190 million, the Commission says.

The four companies “took part in a cartel concerning purchases on the ethylene merchant market. They colluded to buy ethylene for the lowest possible price. All four companies acknowledged their involvement in the cartel and agreed to settle the case,” the Commission says. The cartel’s activity covered the territories of Belgium, France, Germany, and the Netherlands, it says.

Clariant has been fined EUR155.8 million, Celanese EUR82.3 million, and Orbia EUR22.3 million. All three benefited from fine reductions for their cooperation with the investigation, according to the Commission. Clariant’s total fine factors in a "reduction under leniency notice" of 30%, and Orbia received a 45% leniency reduction with Celanese receiving a 20% leniency reduction. The companies also received a further 10% reduction in their imposed fines in view of their “acknowledgement of the participation in the cartel and of the liability in this respect,” the Commission says. “The reductions reflect the timing of their cooperation and the extent to which the evidence they provided helped the commission to prove the existence of the cartel in which they were involved,” it adds.

The Commission says its investigation showed that from December 2011 to March 2017 during the process of establishing the monthly contract price for ethylene, the four purchasers coordinated their price-negotiation strategy in relation to ethylene sellers to influence the industry price reference to their advantage. Unlike in most cartels where companies conspire to increase their sales prices, the four companies colluded to lower the value of ethylene, to the detriment of the product’s sellers, says the Commission. The companies coordinated their price-negotiation strategies before and during the bilateral monthly contract price-settlement negotiations with ethylene sellers to push the price down to their advantage and also exchanged price-related information, it says.

The Commission's investigation began in June 2016 with an application submitted by Westlake under the Commission’s 2006 leniency notice, followed by applications for reduction of fines by the other parties, it says. “This cartel aimed at manipulating the prices [that] the companies paid for their ethylene purchases,” says Commission executive vice president Margrethe Vestager. “The four companies in the cartel have colluded and exchanged information on purchasing prices, which is illegal. The Commission does not tolerate any form of cartels. EU antitrust rules not only prohibit cartels related to coordination of selling prices, but also cartels related to coordination of purchasing prices. This protects the competitive process for inputs,” she says.

As the cartel related to collusion on purchase prices, the Commission used the value of purchases rather than the value of sales in the EU to set the level of fine. It says it also “took account of the duration of the infringement, the individual weight of the companies in the infringement, their overall size, and the fact that Clariant had previously been sanctioned for a similar infringement."

The Commission has extended by three months the due date for payment of the fines to a total of six months from the date of the investigation’s decision, saying it has taken into consideration the impact of the COVID-19 outbreak on all sectors, and potential short-term liquidity issues of companies. Fines imposed on companies found in breach of EU antitrust rules are paid into the general EU budget.

Clariant says the Commission’s investigation found one of its former employees had infringed on competition law and that it had been found liable for this conduct and fined. “Clariant deeply regrets the incident and is disappointed that its strong culture of compliance, based on a clear code of conduct and an antitrust compliance program including a multitude of tailored antitrust trainings, was not upheld,” it says. The company has assisted the relevant authorities throughout the investigation and “fully cooperated with the European Commission, a fact that has been recognized and reduced the fine. Clariant will continue to promote the highest ethical standards and ensure compliance in the future,” it says.

Clariant says it made “a provision for the investigation in 2019.” Earlier this year the company said it had set aside USd236.5 million to cover costs from the investigation. Westlake has also issued a statement, saying the cartel's practices were uncovered as a result of Westlake’s internal compliance program. "Westlake voluntarily disclosed these practices to the European Commission and fully cooperated with the related investigation," it says. "Based on the company’s voluntary notification and cooperation, the European Commission granted Westlake immunity from government fines."

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) --Iran is determined to develop its oil industry in spite of U.S. sanctions imposed on the country, reported Reuters with reference to Iranian Oil Minister Bijan Zanganeh's statement in a televised speech.

"We will not surrender under any circumstances ... We have to increase our capacity so that when necessary with full strength we can enter the market and revive our market share," said Zanganeh.

Hit by reimposed US sanctions since Washington exited Iran’s 2015 nuclear deal in 2018, Iran’s oil exports are estimated at 100,000 to 200,000 barrels per day, down from more than 2.5 million bpd that Iran shipped in April 2018.

The Islamic Republic’s crude production has halved to around 2 million bpd.

As MRC informed before, Iran's petrochemical products will reach 100 million tons by the end of 2021, according to a message from the managing director of the investment department of the National Petrochemical Company of Iran Hossein Alimorad. The volume of Iran’s petrochemical industry in 2013, Alimorad noted, was only about 56 million tons, and in 2017 - 64 million tons. The total cost of production in the petrochemical industry in 2013 amounted to USD16 billion, and in 2017 this figure reached USD17 billion. According to Alimorad, by 2021, the volume of production in Iran in the petrochemical industry will reach USD25 billion.

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) -- KBR has been awarded a catalyst supply contract for a Vinyl Acetate Monomer (VAM) project by Shenghong Refining Petrochemical (Lianyungang) Co. Ltd., China, said Industryprojectstechnology.

Under the terms of the agreement, KBR will provide proprietary catalyst for Shenghong’s grassroot 300 KTA VAM unit. The unit represents the first commercial VAM technology license and engineering contract under an alliance agreement between KBR and Showa Denko K.K.(SDK).

The KBR-SDK VAM technology is backed by more than 40 years of know-how accumulated through the safe and stable operation of SDK’s ethylene based VAM unit at the Oita Petrochemical Complex in Japan. VAM is a key intermediate for the production of polymers and resins for adhesives, coatings, paints, films, textiles and other products.

"This award underscores KBR’s emerging leadership in the VAM market and strengthens our successful partnership with Shenghong," said Doug Kelly, KBR President, Technology Solutions.

VAM is the main raw material for the production of ethylene vinyl acetate (EVA).

According to MRC ScanPlast, last month external deliveries of other ethylene polymers, including ethylene vinyl acetate (EVA) to Russia, amounted to 7,300 tonnes against 6,200 tonnes in May. In general, during the period under review, the total external supply of other ethylene polymers reached 46,100 tonnes against 45,200 tonnes a year earlier.

KBR has more than 50 years of experience in providing technologies, flexible solutions and expertise that petrochemical manufacturers rely on to produce ethylene, propylene, acetyls, phenolics, vinyls and other specialty products from a variety of feedstocks, safely and efficiently.
MRC