Weekly N. America chemical rail shows continuing strong recovery

MOSCOW (MRC) -- North American chemical rail traffic continued to strengthen during the week ending 10 October, narrowing the year-over-year (YOY) gap with respect to both the four-week moving average (4wma) and the year-to-date total, said Chemweek.

On a four-week basis, volume was down 1.2% from 2019 and 3.3% from 2018, versus shortfalls of 2.8% and 5.9%, respectively, during the period ending 3 October (chart). Year-to-date, volume was down 4.3% from 2019 and 5.6% from 2018, versus respective shortfalls of 4.4% and 5.8%, respectively, for the year through 3 October.

Weekly volume totaled 43,633 carloads, up 3.4% YOY on gains in Canada and Mexico, and down 3.0% from the previous week, according to data released on 14 October by the Association of American Railroads (AAR).

Chemical railcar traffic in the United States contributed 31,035 carloads to the total, up 0.5% YOY and down 1.1% from the previous week. For the year to date, US chemical railcar traffic was down 5.0%.

Canadian chemical rail traffic totaled 11,620 carloads, up 11.0% YOY and down 8.3% from the previous week. For the year to date, Canadian chemical railcar traffic was down 2.2%.

Chemical railcar traffic in Mexico totaled 978 carloads, a YOY increase of 13.1% and a sequential increase of 3.7%. For the year to date, Mexican chemical railcar traffic was down 5.8%.

As MRC informed earlier, Chemical railcar traffic in North America held stable during the week ended 19 September. Volume totaled 42,933 carloads, up 2.7% from the previous week and down 3.8% year over year (YOY). On a four-week basis, volume was down 3.4% from 2019 and 5.8% from 2018, improving over respective shortfalls of 3.8% and 6.6% recorded the previous week (chart). For the year to date, chemical railcar traffic in North America was down 4.5% from 2019 and 5.8% from 2018, equal to the previous week’s figures.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

Crude edges lower in Asia trade as OPEC+ comment dashes output cut hopes

MOSCOW (MRC) -- Crude oil futures edged lower in mid-morning trade in Asia Oct. 14 as comments dashing hopes of an extension to the current OPEC+ production cut countered strong China import data that had fueled sharp overnight gains, reported S&P Global.

At 11.05 am Singapore time (0305 GMT) ICE Brent December crude futures were down 17 cents/b (0.4%) from the Oct. 13 settle at USD42.28/b, while the NYMEX November light sweet crude contract was also down 17 cents/b (0.42%) at USD40.03/b. The benchmarks had settled 1.75% and 1.95% higher, respectively, Oct. 13.

However, sentiment subsequently soured when UAE energy minister Suhail al-Mazrouei quashed speculation that OPEC+ was reconsidering its scheduled 2 million b/d rollback in production. "That is the agreement we signed. It is very clear," Mazrouei said late Oct. 13 at the Energy Intelligence Forum.

OPEC+ is scheduled to relax its current 7.7 million b/d output cut to 5.8 million b/d from January 2021, but a bleak demand outlook amid the resurgent coronavirus pandemic and the return of barrels from Libya had been fueling optimism the rollback may be postponed.

Markets had earlier Oct. 13 been boosted by the release of strong data by China Customs that showed the country's crude imports rose 17.6% year on year to 48.5 million mt in September, and were up 2.1% on month. Imports over January-September were up 12.7% on year at 416 million mt, the data showed.

OPEC in its monthly oil market report released Oct. 13 had also raised its global oil demand forecast for 2020 by 60,000 b/d to 90.29 million b/d. However, it downgraded its forecast for 2021, expecting oil demand to total 96.84 million b/d, 80,000 b/d lower than its last forecast in September.

"China so far appears to be the only country globally moving steadily on the path to recovery based on gradually improving economic indicators, particularly in industrial production, which is rising from month to month," OPEC said in the report. "Oil demand is projected to be in line with these positive developments and trends."

Aside from China, the demand outlook for oil remains bleak as the threat of renewed restrictions amid a resurgent coronavirus pandemic continue to hang over global economies.

"The recovery remains all too fragile, as reflected through gnarly news flow, a resurgence of is now apparent in many major economies," AXI chief market strategist Stephen Innes said in a note Oct. 14. "The question is how to control the spread, and (whether) broader restrictions [will] feed through economic and mobility activity - and hence oil demand."

As MRC wrote before, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

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.

And 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 overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

Vietnam firm launches country's largest solar farm amid renewables drive

MOSCOW (MRC) -- Vietnam’s Trung Nam Group has launched a 450-megawatt solar farm, the largest of its kind in the Southeast Asian country, which is seeking to boost the proportion of renewables while reducing dependence on coal in its power mix, said HYdrocarbonprocesing.

Located in the central coastal province of Ninh Thuan, the 14 trillion dong ($604 million) solar farm is hooked up to the national grid via a 17 km (10.6 miles) transmission line, also built by Trung Nam, the private firm said in a statement.

Facing an imminent electricity shortage, Vietnam is developing renewables, along with LNG-to-power and coal-based projects, as hydropower has been almost fully tapped while oil and gas production has peaked. Plans to build nuclear power plants were scrapped in 2016.

Vietnam plans to raise the proportion of solar and wind energy in its power mix to 15%-20% by 2030 and to 25%-30% by 2045, from 10% currently.

The company said the solar farm, along with its other solar and wind power projects, will help ease the country’s imminent power shortage and diversify power sources.

“Vietnam’s solar and wind energy potential is immense and the country is on the right track to rapidly and effectively tap this potential,” Trung Nam chief executive officer Nguyen Tam Tien said.

Trung Nam said it was also looking to develop LNG-to-power projects, noting it will initially build a terminal in Ninh Thuan to facilitate the imports of liquefied natural gas for future power plants in the area.

Vietnam is also building a fleet of LNG-to-power plants, with the first to be operational by 2023, an ambitious move that could turn LNG into a major energy source for the country.

As MRC informed earlier, two consortiums led by Hyundai Engineering & Construction and Technip Italy are bidding for a USD1.8 billion project to upgrade and expand Vietnam’s Dung Quat refinery. Binh Son Refining and Petrochemical said in a statement the project would raise the refinery’s capacity by 30% to 8.5 million tons of crude oil a year, or 170,000 barrels per day (bpd).

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Henkel's adhesives business achieved sales growth in third quarter

MOSCOW (MRC) -- Henkel has provided a business update for the third quarter and says that, based on preliminary figures, its adhesive technologies business unit achieved positive organic sales growth of 1.3% in the quarter, said Chemweek.

All business areas in adhesive technologies showed a recovery in demand compared with the second quarter, the company says. Henkel notes that in the first nine months of 2020, adhesive technologies recorded a 6.8% decline in organic sales.

“Despite the continued challenging economic environment as a result of the corona crisis, based on preliminary sales figures, Henkel delivered a strong organic sales growth of plus 3.9% in the third quarter. Sales reached around EUR5.0 billion [USD5.9 billion] and all business units contributed to the good performance,” says Carsten Knobel, CEO at Henkel.

Based on the preliminary business performance in the first nine months, Henkel has provided new guidance for 2020, following the withdrawal of its full-year guidance in April due to the high level of uncertainty caused by the COVID-19 pandemic.

For the adhesive technologies business, which is significantly impacted by a sharp decline in general industrial demand such as in the automotive industry, Henkel anticipates organic sales growth in the range of 5.5-6.5%, and an EBIT margin in the range of 14.5-15.0%. Henkel will publish its third-quarter results on 10 November.

As MRC informed earlier, Henkel AG & Co. KGaA (Dusseldorf, Germany) announced that Henkel Adhesives Technologies has officially inaugurated its new production facility in Kurkumbh, India.

Henkel are also partnering with Borealis and plastics solutions company Borouge to develop flexible packaging solutions for detergents containing both virgin polyethylene (PE) and high amounts of post-consumer recyclate (PCR) in efforts to increase sustainability.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Total workers suspend strike at Grandpuits refinery

MOSCOW (MRC) -- Workers at French oil and gas major Total's Grandpuits refinery southeast of Paris have decided to suspend their strike, reported Reuters with reference to the union's statement.

Total said earlier that the strike had disrupted product shipments from its refinery near Paris but that the company would ensure supplies to petrol stations and customers could continue.

Workers at Grandpuits voted on Monday to hold a 24-hour strike, halting fuel shipments.

As MRC wrote before, Within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC