COVID-19 - News digest as of 09.09.2020

1. VCI forecasts decline in Germany's chemicals output, sales in 2020

MOSCOW (MRC) -- Germany’s chemical industry association VCI (Frankfurt) says it expects the country’s production of chemicals and pharmaceuticals to fall by 3% in 2020 compared to the prior year, with annual sales to decline by 6% year on year (YOY). A return to pre-COVID-19 levels is not expected before the end of 2021 at the earliest, it says, said Chemweek. Initial signs of a recovery are, however, now being seen, says Christian Kullmann, VCI president and chairman of Evonik Industries. “If another shutdown can be avoided, demand for chemicals and pharmaceuticals is expected to stabilize in the second half of the year," he says.


Sri Lanka navy says no real risk of spill on stricken supertanker

MOSCOW (MRC) -- There is no real risk of a spill from a fully loaded supertanker that caught fire off the east coast of Sri Lanka, reported Reuters with reference to a senior official in the Indian Ocean nation's navy.

The fire that broke out in the engine room of the New Diamond on Thursday morning had spread to the bridge of the ship, carrying about 2 million barrels of oil, though it has not reached the cargo area, the Sri Lankan navy said.

Director-General of Operations Rear-Admiral Y N Jayarathna told reporters it was the navy’s view that there was no real danger of a spill, because the fire on the ship has been contained in the rear section of the vessel.

"The live flames have now died down and there is only white smoke emanating from the vessel," he told a televised press conference.

A navy spokesman, Captain Indika de Silva, said there were 23 crew members on board, one of whom is presumed dead. The rest have been taken off the ship by the Sri Lankan navy, with one injured crew member flown to the capital Colombo for treatment.

Three tug boats, five Sri Lankan navy ships as well as two craft from the Russian navy and three from the Indian navy have been assisting in an operation to fight the fire and tow the ship away from the coast, after it began drifting towards land.

At present, the vessel is being held by the salvage team in deep sea 35 kms (21.7 miles) east of the Sri Lankan town of Pottuvil, de Silva said.

Initially, the ship was stranded 38 kms (24 miles) east of the town of Thirukovil, but drifted within 25 kms of the coast after being abandoned. Authorities were now towing it eastward, away from the coast, de Silva said.

Thirukovil is a town in Sri Lanka's Ampara district that was badly battered by the 2004 Indian Ocean tsunami. Arugam Bay, a world-renowned surfing spot, is nearby.

"The missing Filipino sailor is presumed dead. He was badly injured when a boiler exploded," de Silva told Reuters, citing crew who were rescued.

"There were five Greek and 18 Philippine nationals among the crew. One of them was injured and he was airlifted out of the ship and the rest were accounted for."

Sri Lanka's meteorology department had already modeled the impact of 70,000 tons of crude oil - a quarter of the ship's cargo - spilling into the ocean.

The simulation, a worst case scenario according to authorities, found that such a spill would not immediately threaten the country's east coast.

But Dharshani Lahandapura, chair of Sri Lanka's federal Marine Environment Protection Authority, told Reuters that any spill from the ship would be catastrophic for marine life.

"It will be a huge environmental and economic disaster if this happens," she said.

The 1989 oil spill from the Exxon Valdez, considered one of the worst human-caused environmental disasters, spewed about 37,000 tons of crude into waters off Alaska.

The 20-year old New Diamond, chartered by Indian Oil Corp (IOC), had sailed from the port of Mina Al Ahmadi in Kuwait, loaded with Kuwait Export Crude, Refinitiv Eikon tracking data showed. It was heading for the Indian port of Paradip, where state-run IOC has a 300,000 barrel-per-day refinery.

As MRC informed previously, 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.

We remind that Indian Oil says it will build an integrated paraxylene (PX) and purified terephthalic acid (PTA) facility at Paradip in Odisha State, India, at an estimated investment of 138 billion Indian rupees (USD1.84 billion). The project will be completed by early 2024, with the complex planned to produce 800,000 metric tons/year of PX and 1.2 million metric tons/year of PTA, it says.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes of material in June.

Shanghai Golden Phillips starts maintenance at HDPE plant

MOSCOW (MRC) -- Shanghai Golden Phillips Petrochemical Co, a subsidiary of Sinopec Shangai Petrochemical Co, has shut its high density polyethylene (HDPE) plant for a maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed that the company halted operations at its plant on September 5, 2020. Exact duration of the shutdown could not be ascertained.

Located in Shanghai, China, the HDPE plant has a production capacity of 140,000 mt/year.

As MRC reported earlier, the company shut down its HDPE plant in Shanghai for scheduled turnarounds from 20 March to 8 April, 2019, and from 30 June to 15 July, 2019.

According to MRC's ScanPlast report, Russia's HDPE production totalled 1,040,000 tonnes in the first seven months of 2020, up by 84% year on year. ZapSibNeftekhim accounted for the main increase in the output.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.

SABIC sees COVID-19 change plastic usage, need to maintain sustainability efforts

MOSCOW (MRC) -- Major petrochemicals producer, SABIC, expects the lifestyle changes brought about by the COVID-19 pandemic to shape the different usage of plastics going forward, reported S&P Global with reference to the company's vice president and regional head for South Asia and ANZ, Janardhanan Ramanujalu.

"We have seen a rise in demand for new and enhanced applications to help safeguard against COVID-19 on the frontlines," Ramanujalu said in an email interview with S&P Global Platts. This included "production of ventilators and respiratory masks; polypropylene (PP) products used in making medical disposable gowns, masks, shields and coveralls to safeguard community health as well as other intensive care equipment, such as infusion pumps, monitors and diagnostic devices."

In the early stages of the pandemic, PP prices were supported by the sharp spike in demand for masks, S&P Global Platts data showed. Demand for plexi-glass, a derivative of methyl methacrylate, or MMA, also witnessed a steep climb given its usage in protective gears.

It is not impossible for these lifestyle changes to become the new normal.

"Aside from medical supplies, the demand for packaging materials used for food and other essential goods has certainly grown, driven by retailers' need to meet rising consumer demand and (to) restock shelves quickly," Ramanujalu said.

The increase in demand for plastics used in packaging was driven mainly by the shift in consumer's preference for retail e-commerce during the pandemic.

A key challenge during the COVID-19 pandemic is to ensure the stability of the supply chain amid logistics and manpower issues as countries went under lockdown.

With several planned petrochemical expansions delayed due to the pandemic, SABIC, according to Ramanujalu, did not experience any major disruption to its production or expansion plans.

"As the majority of SABIC products are considered essential during this crisis, we could continue to supply material and support customers without disruption, amid unprecedented prolonged challenges."

SABIC prioritized requests from the healthcare industry for the production of, among others, ventilators to aid the fight against COVID-19, by leveraging on its extensive worldwide distribution network and regional business response teams.

"With the chemical industry playing a crucial role in the fight against the pandemic, many of our manufacturing sites were permitted to operate in full compliance with local regulatory as well as health and safety guidelines aligned with the local authorities and the World Health Organization guidelines", he added.

Global recycled plastic demand is expected to grow in the next few years given the increased focus and capital investments into the recycled plastic space, according to S&P Global Platts Analytics. Some of the new projects include investments from Coca-Cola, Indorama, PTT and Suez.

"It is even more critical during this time, that manufacturers commit their operations to supporting sustainable solutions and commit to designing products for recyclability. Change needs to happen throughout the value chain, and this starts from manufacturers and suppliers, down to the end-user," Ramanujalu said.

"To this end, we have made several landmark decisions and invested its scientific and technological expertise over the past year to advance the circular economy and help close the loop on waste for the good of our business and planet," he added.

As for SABIC's forecast and outlook on the growth of recycled plastics and the trend of sustainability, Ramanujalu said: "Today, more than ever, industry needs to respond to the world's environmental and societal challenges by embedding sustainability and recycling into its very DNA. We understand the global market for recycled plastics is expected to grow by USD14.74 billion over the next few years."

The growth in the use of plastics has put recycling in the spotlight and there is increasing pressure on the industry to utilize resources more efficiently, develop innovative ways to recycle plastics and avoiding waste by keeping valuable plastics in the value chain.

"Supporting the growth and development of a circular economy, one in which products and raw materials are not wasted, but rather used to create new, valuable and durable products, has been a key goal of SABIC's sustainability platform. The circular economy is a concept embedded in our product innovation and development processes," Ramanujalu said.

SABIC, headquartered in Saudi Arabia, is the first petrochemical company in the world to scale-up high-quality processes for the chemical recycling of used mixed plastic back to the original polymer for commercial application. SABIC is also a founding member of the Alliance to End Plastics Waste, or AEPW.

"In a circular economy, chemical recycling can play a crucial role in converting hard or difficult to recycle plastic wastes such as used mixed plastic waste, thereby preserving material resources, increasing overall recycling rates and enabling its further conversion back to the same or similar polymers," Ramanujalu said.

Not only does chemical recycling enable the possibility of closed loop recycling of plastics, it boasts of a carbon footprint advantage over incineration, offers greater flexibility and broader coverage of waste types, leading to higher potential for waste management.

"Chemical recycling also produces virgin-like quality as compared to mechanical recycling, and hence, can be used in applications with more stringent requirements (such as those found in the food packaging industries) where conventional mechanical recycling is not possible," Ramanujalu said.

As MRC informed before, Saudi Basic Industries Corp., the petrochemicals giant 70%-owned by Saudi Aramco, saw average petrochemical prices in the second quarter plunge by 27% year-on-year as it posted a third consecutive quarterly loss, according to CEO Yousef al-Benyan's statement Aug. 6.

According to MRC's DataScope report, 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.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Bukhara refinery revamp brings new technologies to Central Asia’s most populous nation

MOSCOW (MRC) -- Honeywell announced Bukhara Refinery LLC, a subsidiary of JSC Uzbekneftegaz, will use UOP technology to increase crude oil conversion and produce cleaner-burning Euro-V standard gasoline and diesel fuel in compliance with the government of Uzbekistan’s stricter specifications for fuel products taking effect in 2023, said Hydrocarbonprocessing.

Honeywell UOP will provide licensing and basic engineering design services to Bukhara Refinery LLC for new Naphtha Hydrotreating, Par-Isom, RFCC, SelectFining and Merox process units. In addition, the existing DHT and ARU units are to be revamped to meet new requirements. The Euro V standard limits sulfur content to less than 10 parts per million in transportation fuels and restricts emissions of carbon monoxide, hydrocarbons, nitrous oxides and particulate matter from gasoline and diesel vehicles and will improve overall refinery emissions.

"The Bukhara Refinery is revitalizing its operations for improved quality and increased production of fuels to meet growing domestic demand for motor fuels,” said Bryan Glover, vice president and general manager, UOP Process Technologies. “The company selected UOP due to its experience in working in the region and its technologies to assist Uzbekneftegaz in meeting sustainability goals."

The Bukhara refinery is part of the Uzbekistan government’s multi-year development plan to achieve national energy independence and increase the country’s export potential. With 33 million people, Uzbekistan is the most populous country in Central Asia and is a significant producer and exporter of oil and natural gas.

The Par-Isom™ process upgrades light naphtha into high-value isomerate for gasoline blending, and the Merox process treats the naphtha feedstock to meet product specifications. UOP’s Resid Fluid Catalytic Cracking process converts heavy feedstocks into cleaner-burning gasoline and diesel products that meet new global emissions regulations.The SelectFining process uses selective hydrodesulfurization of naphtha to meet low-sulfur gasoline specifications while minimizing octane loss.

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.