COVID-19 - News digest as of 31.08.2020

1. Indian Oil nears first Mauritius fuels export deal

MOSCOW (MRC) -- Indian Oil Corp, the country’s top refiner, is close to winning its first contract to export up to 720,000 tons of clean products to Mauritius under an annual deal from November, reported Reuters with reference to two sources familiar with the matter. IOC mostly stays away from participating in term tenders for fuel exports as the refiner sells most of its fuel in the local market, besides supplying its retail outlets in Nepal and Bhutan. This year because of falling local demand due to COVID-19 and weak margins, the company is attempting to lock in sales of its fuels. IOC this year also won its first contract to supply fuels to Bangladesh.


Ufaorgsintez began gradual shutdown of its PE production

MOSCOW (MRC) -- Ufaorgsintez (UOS, a petrochemical asset of Bashneft) has begun a gradual shutdown for maintenance, which will last until 11 October, at its high density polyethylene (LDPE) production capacities, according to the ICIS-MRC Price report.

The plant's customers said UOS shut some of its LDPE production capacities (158 and 153 grade PE) for a scheduled turnaround on 25 August. The outage will not be long and will last approximately until 17 September. And this is the first phase of the shutdown for maintenance.

The second phase of the turnaround involves shutting the first LDPE line (108 grade polyethylene) for maintenance from 12 September to 11 October. The plant's overall annual production capacity of the two LDPE lines is 90,000 tonnes.

It is also worth noting that Russia's two largest LDPE producers - Tomskneftekhim and Kazanorgsintez - will shut down their production capacities for a scheduled turnaround in September.

PJSC Ufaorgsintez produces phenol, acetone, synthetic ethylene-propylene rubber, high and low pressure polyethylene, polypropylene, more than 30 types of petrochemical products and over 25 consumer products.

Prices of Russian PVC to continue rising in September

MOSCOW (MRC) -- Negotiations over September shipments of suspension polyvinyl chloride (SPVC) to the domestic market began in the Russian market on Tuesday. Russian producers announced a further price increase of Rb1,000-3,000/tonne, according to ICIS-MRC Price report.

Demand for PVC remained good from Russian consumers. A similar situation was registered in foreign markets: strong demand was accompanied by price increases. On the back of this, Russian producers also intend to achieve a price rise of Rb1,000-3,000/tonne for September shipments. A long devaluation of the rouble against the dollar strengthened the bargaining position of Russian producers.

Demand for PVC has remained good from Russian converters since June. Despite a major increase in polymer prices in summer, and, as a result, a rise in prices of finished products, many consumers had optimistic expectations about demand for finished products in September.

Shutdowns for maintenance at SayanskKhimPlast and RusVinyl's production capacities significantly reduced the supply of resin in the market in July, but already in August, the situation with the PVC availability improved noticeably in the market. Resin with K = 70 was the exception because of technical issues at RusVinyl and Bashkir Soda Company's production capacities.

In September, there will be also no need to talk about oversupply of PVC in the market because of strong demand and lower imports. Moreover, the devaluation of the rouble and higher export prices in China are unlikely to help boost imports in the near future.

As in the previous month, converters were in no hurry to agree on deals for September shipments of Russian PVC, hoping to limit the price growth to the lowest possible value. September deals for Russian resin with K64/67 were negotiated in the range of Rb81,000-85,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes.

Shaanxi Yanchang Coal Yulin Energy and Chemical resumes production at PE plants

MOSCOW (MRC) -- Shaanxi Yanchang Coal Yulin Energy and Chemical Ltd, has brought on-stream its high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) units following a turnaround, according to Apic-online.

A Polymerupdate source in China informed that, the company resumed operations at the units on August 3, 2020. The units were shut for maintenance on June 22, 2020.

Located at Shaanxi province in China, the HDPE and LLDPE units have a production capacity of 300,000 mt/year each.

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.

Shaanxi Yanchang Coal Yulin Energy and Chemical is a 70:30 joint venture company between Shaanxi Yanchang Petroleum (group) Co Ltd and China National Coal Group Corporation.

Indian crude imports fall to lowest in over a decade in July

MOSCOW (MRC) -- India’s crude oil imports fell in July to their lowest since March 2010 as fuel demand slowed amid renewed coronavirus-induced lockdowns and closures of refinery units for maintenance, reported Reuters with reference to government's data.

Crude oil imports last month slumped about 36.4% from a year earlier to 12.34 million tonnes, or 2.92 million barrels per day, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.

That marked a fourth straight monthly decline. Fuel demand in the world’s third-biggest oil importer and consumer also fell, posting a fifth consecutive year-on-year drop.

The country reported a record daily jump of 69,652 coronavirus infections on Thursday, taking the total number of cases to 2.84 million, data from the federal health ministry showed.

India is also Asia’s third-biggest economy, which imports and exports refined fuels.

Refined product imports surged 46.4% to 4.07 million tonnes year-on-year, mainly due to a sharp jump in India’s fuel oil imports. Fuel oil imports rose to record 1.22 million tonnes in July from 127,000 tonnes a year ago.

Reliance Industries Ltd, operator of the world’s biggest refining complex, has been buying some straight-run fuel oil from countries including Iraq to process at its revamped coker, to maximise refining margins.

However, exports of refined products fell 22.7% in July to 3.92 million tonnes, their lowest since April 2018.

Diesel shipments continued to hold a major share of the total exports at 2.06 million tonnes, down 21.1% year on year, the data showed.

Demand for diesel, which is widely used for transportation as well as for irrigation needs in India, fell about 19.3% year-on-year to 5.52 million tonnes, in July.

As MRC informed previously, Reliance Industries, operator of the world’s biggest refining complex in western Gujarat, shut one of its crude refining units at its export-focused plant in the fourth week of July for 3-4 weeks of maintenance. Other Refinery units were expected to operate normally during this period. Reliance has two equal-size crude distillation units at the 704,000 barrel per day (bpd) export-focused refinery. This refinery at the Jamnagar complex is adjacent to a 660,000 bpd plant that mostly meets local fuel demand.

We also remind that Reliance Industries says in July, 2020, that due to unforeseen circumstances in the energy market as well as COVID-19, its talks with Saudi Aramco to form an oil-to-chemicals (O2C) partnership have not progressed according to the original timeline.

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.