Shin-Etsu declares FM on PVC from Nerthelands

MOSCOW (MRC) -- Shin Etsu declared force majeure on deliveries of all polyvinyl chloride (PVC) grades from its plant in Pernis, the Netherlands on October 13, reported NCT with reference to market sources.

The plants production capacity is 450,000 tons/year.

The producer could not be reached for confirmation at the time of publication.

It is not yet known when the force majeure will be lifted.

As MRC informed earlier, completion of Shintech's USD1.49 billion expansions across the PVC chain at its Louisiana complex has been pushed back to the first quarter of 2021 from late 2020 because of a slowdown in the work to ensure safety protocols on coronavirus pandemic concerns. Shintech, the North American division of one of the largest Japanese companies - Shin-Etsu Chemical Co. Ltd.

We remind that Shintech completed a turnaround at its 1.4 million mt/year polyvinyl chloride (PVC) complex, also in Texas in April of 2020.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.
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MOSCOW (MRC) -- Mexican Energy Minister Rocio Nahle said that construction of the country’s new refinery at the southern Gulf coast port in Dos Bocas was almost a quarter completed, said Reuters.

A confidant of Mexican President Andres Manuel Lopez Obrador, an energy nationalist who favors a stronger state role in the sector, Nahle said construction was 24% completed and had entered the next phase. The government has said it aims to finish the refinery by 2022.

The government has put an $8 billion price tag on the refinery, but independent analysts have said that figure is low. Investors and ratings agencies have criticized the project, arguing that resources should go instead to more profitable parts of state oil company Petroleos Mexicanos, or Pemex.

"We want to be self-sufficient,” Lopez Obrador reiterated at the same event, held in his home state, Tabasco. “It’s very important that we continue with this project."

As MRC informed earlier, European and U.S. oil refineries face a wave of closures due to plateauing fuel demand, tightening environmental rules and overseas competition, prompting some owners to opt for an easier alternative - converting plants to produce biofuels.

As MRC wrote before, on 15 October, The European Commissionadopted the EU's chemicals strategy for sustainability, describing it as the first step towards a zero-pollution ambition for a toxic-free environment announced in the European Green Deal.

We remind that Russia's output of chemical products rose in August 2020 by 5% year on year. At the same time, production of basic chemicals increased year on year by 5.3% in the first eight 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 January-July output. August production of benzene fell to 102,000 tonnes from 95,300 tonnes a month earlier due to scheduled shutdowns for maintenance at several producers. Overall output of this product reached 918,300 tonnes over the stated period, down by 0.9% year on year.

At the same time, August production of primary polymers rose to 888,000 tonnes against 838,000 tonnes in July due to increased capacity utilisation at ZapSibNeftekhim, Stavrolen and Gazprom neftekhim Salavat. Overall output of polymers in primary form totalled 6,630,000 tonnes over the stated period, up by 15.2% year on year.
MRC

MOSCOW (MRC) -- Nippon Shokubai and Sanyo Chemical have postponed their plan to merge via a share transfer, which would have formed an integrated holding company named Synfomix Co, said Chemweek.

The deal was announced in May 2019. The companies had planned to establish the holding company on 1 October 2020, located in Kyoto, Japan, subject to regulatory approval.

The companies say that the global outbreak of the COVID-19 pandemic and resulting sharp decline in oil and oil product markets have made the business environment unpredictable. They say that significant changes in raw material prices and product prices, as well as heightened uncertainty surrounding product demand in the future made it difficult to carry out the planned business integration.

Shokubai and Sanyo have combined annual sales of about GBP511.2 billion (USD4.7 billion) and operating profit of GBP39 billion. The merged entity would have been the 11th-largest chemical company in Japan, ranked by sales. Shokubai is currently the 14th-largest firm and Sanyo ranks 20th, according to company reports.

Shokubai said earlier that the business environment surrounding the chemical industry is increasingly difficult. In Japan, demand for chemicals is expected to decline due to a changing social structure including a decrease and aging of the population, which is causing intense competition between chemical manufacturers.

Demand for chemicals is increasing in emerging countries due to rising population and income levels, but the expansion of chemical manufacturers in those countries and increasing scale disparity with big European and US chemical players are causing the Japanese chemical industry to be less competitive, Shokubai added.

Shokubai currently has a 5.0% stake in Sanyo. The biggest shareholders in Sanyo are Toyota Tsusho with 19.4% and Toray Industries with 17.3%.

As MRC reported earlier, JXTG Nippon Oil and Energy brought on-stream its cracker in Kawasaki on April 28,2020, following a turnaround. The cracker was shut for maintenance on February 27, 2020. Located at Kawasaki in Japan, the cracker has an ethylene production capacity of 460,000 mt/year and propylene production capacity of 235,000 mt/year.

We remind that Russia's output of chemical products rose in August 2020 by 5% year on year. At the same time, production of basic chemicals increased year on year by 5.3% in the first eight 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 January-July output. August production of benzene fell to 102,000 tonnes from 95,300 tonnes a month earlier due to scheduled shutdowns for maintenance at several producers. Overall output of this product reached 918,300 tonnes over the stated period, down by 0.9% year on year. At the same time, August production of primary polymers rose to 888,000 tonnes against 838,000 tonnes in July due to increased capacity utilisation at ZapSibNeftekhim, Stavrolen and Gazprom neftekhim Salavat. Overall output of polymers in primary form totalled 6,630,000 tonnes over the stated period, up by 15.2% year on year.
MRC

MOSCOW (MRC) -- Skincare brand Origins and its parent company The Estee Lauder Companies (ELC) have partnered with chemical firm SABIC and beauty packaging manufacturer Albea to launch an advanced recycled tube package in 2021, according to Chemweek.

Origins will tap SABIC’s advanced recycling technology to manufacture a tube pack format made from tough to recycle, post-consumer mixed plastics material.

The skincare brand’s Clear Improvement Active Charcoal Mask will be packaged in a tube of a circular polymer resin made using SABIC’s certified circular polyethylene (PE) and polypropylene (PP) advanced recycling technology.

Albea will leverage its expertise in the use of recycled resins to provide a ‘high-performing’ tube experience.

With the help of advanced recycling technology, the hard-to-recycle plastics are broken down to its molecular state, which is then used to create high-performance plastics like a virgin material.

SABIC’s certified circular polymer, which is part of its TRUCIRCLE portfolio of circular solutions, makes use of this technology that can continually convert plastics back to the original polymer.

This partnership aligns with sustainable packaging goals of ELC. Among these goals feature increasing the amount of post-consumer recycled (PCR) material in its packaging by up to 50% by 2025. This will extend the efforts of Origins to have at least 80% of its packaging by weight to be recyclable, refillable, reusable, recycled or recoverable by 2023.

The certified polymers of SABIC are based on a mass balance approach.

The firms involved in the value chain need an ISCC PLUS certification, which verifies that the mass balance accounting follows predefined and transparent rules. Furthermore, it offers traceability along the supply chain, right from the feedstock to the final product.

Origins vice president of global marketing and product development Francesca Damato said: “Respect for the well-being of your skin and our planet is ingrained into our brand’s DNA.

“It guides our actions and is reflected in our Origins offerings which is why we’re excited to partner with SABIC and Albea to provide our consumers with a safe, high-quality and responsible packaging solution that helps reduce our impact on the environment.

“Together, we have an exciting opportunity to define how the prestige beauty industry can create sustainable, attractive packaging solutions that please both consumer and the planet. This is a significant first step in the transition towards a circular economy, helping to close the loop on plastic waste.”

SABIC circular economy leader Mark Vester said “The new Origins packaging is the result of true collaboration and innovation, and another step closer to closing the loop on used plastics. We are committed to collaborating with partners across the value chain to work towards a more sustainable, circular future.”

As MRC reported earlier, Saudi Aramco and Saudi Basic Industries Corporation (SABIC) have decided to reevaluate their crude-oil-to-chemicals project in Yanbu on the kingdom's west coast, according to an Oct. 18 statement on the Tadawul stock exchange, as they slash spending due to low prices. The USD20 billion project may be downsized to use Aramco's existing facilities in the port city, instead of building a new plant, the statement posted by SABIC said. "Both parties intend to re-evaluate the scope of the crude-oil-to-chemicals (COTC) complex project and study the integration of Saudi Aramco's existing refineries in Yanbu with a world-scale mixed feed steam cracker and downstream olefin derivative units," the statement said.

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.

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.
MRC

MOSCOW (MRC) -- US exports fell to a 14-month-low over the week ended Oct. 9, and are expected to remain weak into 2021, as sources note poor demand in the export market, reported S&P Global.

The US exported an average of 2.135 million b/d of crude over the weekend ended on Oct. 9, the lowest level since the week ended on August 2, 2019, when exports were reported at just 1.865 million b/d, according to weekly data from the US Energy Information Administration.

Lack of demand was evident in the shipping markets where dirty tankers rates out of the Americas have floundered.

"(There are) lots of boats hanging around with few takers was what ship brokers were saying (the) past three weeks now," one source said.

Freight has been depressed since the end of May and remains so 15 days into Q4, when freight typically sees seasonal highs, but due to the pandemic and unwinding of floating storage barrels booked in Q2 2020, rates have not picked up.

The cost of taking an Aframax on the benchmark 70,000 mt USGC-UK Continent route was assessed at w40, or USD8.15/mt October 15. Rates for the trans-Atlantic voyage first reached this level on Oct.5, the lowest level since Platts began assessing the route in March 2018. The monthly average for freight for the trip was USD10.36/mt in Sept. 2020, compared to a monthly average of USD22.72/mt in Sept. 2019, and USD17.11/mt in the same month of 2018.

There have been 12 fixtures booked to make USGC-UK Continent/Mediterranean routes so far in October, compared to 14 in the same period of 2019, S&P Global Platts fixture data shows.

Freight for VLCCs, which account for the lion's share of export business out of the USGC destined to Asia, has also been at low levels, with the 270,000 mt USGC-China run assessed Oct. 15 at lump sum USD4.75 million. Rates for the long-haul voyage have fallen 76% since Apr. 1, 2020, when freight spiked on the back of a massive drop in global crude prices that prompted an uptick in floating storage and tanker demand.

"Most ships (are) facing long idle (times)," a VLCC shipowner said. "(The) end result is very poor, way below what the routes are showing, (we) need an increase on cargo volumes, which won't happen soon."

There have been two VLCCs fixed out of the USGC since the beginning of October, compared to eight booked in the same period of 2019.

At least one trading source expected the lower export levels to continue past the prompt market, which is currently trading November cargoes. "Exports are tough in November, demand is weak and (arbitrage) isn't there," the trader said, "I expect it to be weak (in December and January) as well."

Indeed, Platts Analytics expects exports to remain near the current levels in October and November before trending downwards towards the end of the year. As US shale crude production is slated to decline in 2021, the lowered production will result in fewer barrels available for the export market. Platts Analytics forecasts total US production to be 1.2 million b/d lower in 2021 versus 2020, and 2 million b/d lower than the 2019 average. With this decline in production, Platts Analytics expects total US exports to average just 2.1 million b/d in 2021. By comparison, through the first eight months of 2020, US crude exports have averaged 3.22 million b/d, according to data from the US Census Bureau.

As MRC informed before, US crude stocks moved lower last week as Hurricane Delta shut in Gulf of Mexico output and exports hit a 14-month low, according to US Energy Information Administration data showed Oct. 15.

We remind that in August, 2020, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We also remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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.
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