CSPC reports unscheduled shutdown at No. 1 LLDPE unit

MOSCOW (MRC) -- CNOOC and Shell Petrochemicals Co (CSPC), has taken off-stream its No. 1 linear low density polyethylene (LLDPE) unit for unplanned maintenance, as per Apic-online.

A Polymerupdate source in China informed that, the company halted operations at the unit on July 17, 2020. The unit is likely to remain off-line for about one week.

Located in Giangdong province of China, the No. 1 LLDPE unit has a production capacity of 270,000 mt/year.

According to MRC's ScanPlast report, May LLDPE shipments to the Russian market rose to 31,290 tonnes from 30,450 tonnes a month earlier, production increased. Overall LLDPE shipments to Russia totalled 153,080 tonnes in the first five months of 2020, down by 5% year on year. Production and exports increased by 2 times.

CNOOC and Shell Petrochemicals Company Limited (CSPC) was established in late 2000. It has built and now operates a world-scale petrochemical complex in the Daya Bay Economic and Technological Development Zone, Huizhou, Guangdong Province. The joint venture partners are Shell Nanhai BV, a member of the Royal Dutch Shell Group, with a 50 per cent stake, and CNOOC Petrochemicals Investment Limited (CPIL), also with 50 per cent. CPIL is owned by China National Offshore Oil Corporation (CNOOC) (90%) and Guangdong Guangye Investment Group Company Limited(10%).

As an integrated petrochemical complex, the major facilities of the complex include 11 process units, steam and power generation and other utility provisions, storage and handling and shipping facilities, as well as environmental protection facilities. The heart of the complex is a world-scale cracker producing 950,000 tons per annum ethylene and 500,000 tons per annum propylene. In total, the complex produces some 2.7 million tons per annum of ethylene and propylene's derivative products to supply the domestic market.
MRC

Index of chemical production in Russia grew by 4.9% in H1 2020

MOSCOW (MRC) -- Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six 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-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.

June production of sodium hydroxide (caustic soda) were 106,000 tonnes (100% of the basic substance) versus 112,000 tonnes a month earlier. Overall output of caustic soda totalled 649,000 tonnes in the first six months of 2020, up by 0.9% year on year.

2,032,000 tonnes of mineral fertilizers (in terms of 100% nutrients) were produced in June 2020 versus 2,283,000 tonnes a month earlier. Overall, Russian plants produced slightly less than 12,400,000 tonnes of fertilizers in January-June 2020, up by 3.5% year on year.

Last month's production of polymers in primary form fell to 791,000 tonnes from 820,000 tonnes in May partially because of a scheduled shutdown for maintenance at ZapSibNeftekhim.

Output of polymers in primary form totalled 4,900,000 tonnes over the stated period, up by 14.8% year on year.

MRC

Formosa cuts refinery runs after fire last week

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp has slashed runs at its 540,000-bpd Mailiao oil refinery to about 68%, down from 80%, following last week’s shutdown of a secondary unit due to a fire, its spokesman said, said Hydrocarbonprocessing.

It was unclear when the affected 80,000-bpd residue desulfurizer (RDS) will be able to resume operations as investigations are ongoing, said spokesman K.Y. Lin. “Shipments of gasoline and diesel in August, however, would be affected as a result,” he added, without elaborating on the total volumes affected.

Even before the fire, Formosa had previously said that its gasoline exports this year would be about half of its 2019 volumes as the pandemic has hit demand from overseas markets. Any impact from a reduction in Formosa’s gasoline shipments would be mitigated by ample supplies in the region, said a trader who tracks petrol.

Asia’s gasoline premium to Brent crude was at a three-session low on Friday at USD1.37 a barrel. The Formosa refinery, which operates one of Asia’s 10 largest standalone refineries by capacity, has two RDS units of the same capacity.

A Formosa RDS unit has been hit by fire twice in the past decade, in 2010 and again in 2014, based on Reuters data. Formosa, Asia’s top naphtha importer, also operates three naphtha crackers in Mailiao.

Two of the units with a total capacity of 1.73 million tons per year (MMtpy) are operating at full capacity and the largest unit at 1.2 MMtpy is running at about 90% of its capacity, said Lin. The 1.2 million tpy cracker is scheduled to undergo maintenance in August.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

Repsol petchem income, sales decline on weak margins, plant outages

MOSCOW (MRC) -- Repsol says that its petrochemical sales volumes declined to 1.3 million metric tons (MMt) in the first half of 2020 from 1.5 MMt in the corresponding period of last year, reported Chemweek.

The company says its chemical business “adjusted its operations in accordance with the falling demand of sectors such as the automotive sector and the increase of others associated with health and food, vital to the fight against COVID-19, and those for which its raw materials are essential.”

Income at Repsol’s chemical business was down largely due to lower margins and sales, and a rise in operating incidents and maintenance stoppages at the company’s Sines, Portugal, and Tarragona, Spain, petchem complexes, the company says.

Repsol does not break out earnings and sales figures for its chemical business. The company’s industrial business, which includes refining and chemicals, saw a big drop in second-quarter adjusted net income to EUR8.0 million (USD9.3 million) from EUR177 million in the year-earlier period. First-half adjusted net income for the industrial business dropped to EUR296 million from EUR448 million a year before, on sales of EUR8.2 billion, down from EUR12.2 billion.

Repsol says that higher international margins in the petchem industry, caused by the collapse in crude oil prices, were offset by lower selling prices for petrochemicals and a narrow naphtha-propane differential. Nevertheless, “margins have been solid and demand has remained at reasonable levels,” Repsol says. Falling prices also reduced the value of Repsol’s chemical inventories, the company says.

The company says that the gradual recovery of the Chinese economy has been countered by the effective closure of other major markets. Meanwhile, “the increased reliance on propylene oxide and styrene units was somewhat successful in compensating for the lack of any real market for polyols and polyurethanes destined for the automotive sector,” the company says.

Separately, Repsol says that the Quimicas del Oxido de Etileno (Iqoxe) ethylene oxide and derivatives complex at Tarragona came back onstream in May after a big explosion and fire in January.

As MRC reported earlier, Repsol's refinery at Puertollano in central Spain will carry out an upgrade of its olefins unit. The modernization will be a part of planned maintenance of the cracker and chemical derivative plants at the end of 2020.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

China to ban ultra-thin plastic bags by 2021

MOSCOW (MRC) -- The Chinese government has mandated a broad ban on ultra-thin plastic bags and munch film used in the agriculture sector across the country starting 1 January 2021, according to CommoPlast.

The move is in addition to the Five-year plan to reduce the use of single-use non-biodegradable plastic products reported earlier.

The latest ban once come to effect would prohibit company/individual from producing, distributing, selling, storing of plastic bags under 0.025 millimeters thick and plastic mulch - used to retain moisture in the soil - of less than 0.01 millimeters.

According to industry experts, the ban would cause domestic demand for plastic bags to fall from 1.6 million tons/year currently to about 1.1 million tons.

Chinese plastic manufacturers are now facing more challenges aside from the rising labor costs and hiking raw material prices. Many are looking to diversify product lines to mitigate the impact of the curb.

As MRC reported before, in September 2019, The Verkhovna Rada of Ukraine introduced a bill of banning plastic bags in stores since January 2022.

Earlier it was reported that, according to the UN, about 80 countries have already introduced a ban on disposable packages. European Parliament, in the fight against pollution of the oceans, voted to ban disposable plastic products - disposable tableware, drinking straws, thin plastic bags and others in October last year. Republic of Belarus also began to consider the prohibition of free plastic bags in stores and the restriction of the use of disposable polymer glassware in catering establishments in July of this year.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time,
MRC