Asia Distillates-Gasoil refining margins post weekly rise

MOSCOW (MRC) -- Asian refining margins for 10 ppm gasoil rose on Friday, posting their seventh consecutive weekly gain, but the pace of demand recovery is expected to take a hit as several regional economies continue to battle COVID-19 infections, reported Reuters.

Refining margins, or cracks, for 10 ppm gasoil rose 25 cents to USD6.04 a barrel over Dubai crude during Asian trade, lingering close to a multi-month high of USD6.40 touched earlier in the week. "I don't see much movement in the (gasoil) cracks in the last month of 2020. This is because the hope for next year will prevent downside," said Sukrit Vijayakar, director of energy consultancy Trifecta. "There will be no change in physical demand immediately. And traders are not likely to lay on fresh positions this late in the year."

Cracks for the benchmark gasoil grade in Singapore have increased 2.7% this week, which is a weaker growth compared to a 16% rise last week, Refinitiv Eikon data showed. The slowdown in demand from renewed lockdown measures in some markets would increase the regional gasoil surplus, market watchers said, while India's gasoil exports are expected to be elevated in coming weeks with strong refinery runs in the country. Diesel exports from India this month are well on track to exceed November's 2.2 million tonnes, Refinitiv oil research assessments showed. Cash discounts for gasoil with 10 ppm sulphur content were at 11 cents a barrel to Singapore quotes on Friday, compared with a 8-cent discount a day earlier.

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 5.4% to 2.6 million tonnes in the week to Dec. 10, data from Dutch consultancy Insights Global showed. - The data showed ARA jet fuel inventories climbed 11.8% to 995,000 tonnes. - Compared with a year earlier, ARA gasoil inventories gained 6.6%, while jet fuel stocks rose 47.2%.

As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- Avient, formerly PolyOne, said today that it is increasing its forecast for fourth-quarter adjusted earnings to 48 cents/share, from 40 cents/share previously. This compares with fourth-quarter 2019 adjusted earnings of 34 cents/share, said Chemweek.

Sales were up 5.4% YOY in October and November on a pro-forma basis, including the addition of Clariant’s masterbatches business, which Avient acquired in July. “We expect to achieve…fourth quarter adjusted EPS of approximately USD0.48 as recovering demand conditions around the world exceed the traditional seasonality we normally see this time of year,” says Avient chairman and CEO Robert Patterson. “Overall demand is better than we initially estimated in every region of the world, and we are capturing synergies related to our acquisition of Clariant Masterbatch."

Avient says it will end the year with about USD600 million in cash, which it expects to use for bolt-on acquisitions and share buybacks. The company’s board has authorized a 5-million-share increase of the company’s share repurchase program, bringing the program’s total authorization to 6 million shares. Avient expects 2020 pro-forma revenues, including the Clariant masterbatches business, to total about USD3.7 billion.

The announcement could be a sign of a restocking cycle, according to Laurence Alexander, an analyst with Jefferies (New York, New York). “Demand trends are running above normal seasonality in every region,” Alexander says. “We expect broad-based strength to be a theme across the chemical sector this winter."

As MRC informed earlier, Avient Corporation launched ColorForward 2022. This 16th edition of the annual color forecasting guide for the plastics industry marks its debut within Avient, which was formed this year from legacy businesses PolyOne and Clariant Masterbatch.

We remind that Russia's output of chemical products rose in October 2020 by 7.2% year on year. At the same time, production of basic chemicals grew in the first ten months of 2020 by 6.3% year on year, 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-October output. October production of polymers in primary form grew to 857,000 tonnes from 852,000 tonnes in September. Overall output of polymers in primary form totalled 8,340,000 tonnes over the stated period, up by 17% year on year.
MRC

MOSCOW (MRC) -- Polyethylene (PE) imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports, according to MRC's DataScope report.

November PE imports dropped to 44,400 tonnes from 50,500 tonnes a month earlier, shipments of low density polyethylene (LDPE) an linear low density polyethylene (LLDPE) increased. Overall imports of ethylene polymers totalled 569,900 tonnes in the first eleven months of 2020, compared to 688,700 tonnes a year earlier. All ethylene polymers accounted for lower imports, with LDPE and other ethylene polymers being the exception.

The structure of PE imports by grades looked the following way over the stated period.

November HDPE imports fell to 15,100 tonnes from 19,300 tonnes a month earlier, shipments of injection moulding and film grade PE from Central Asia decreased. Overall imports of this PE grade totalled 237,000 tonnes in January-November 2020, down by 31% year on year. Film grade and pipe grade HDPE accounted for the main reduction in shipments.

Last month's LDPE imports did not exceed 10,000 tonnes, which virtually corresponded to the figure of October. Overall LDPE imports to Russia reached 103,200 tonnes in the first eleven months of 2020, up by 5% year on year.

November LLDPE imports reached 10,200 tonnes, compared to 11,200 tonnes a month earlier, local producers of compounds and large items by rotational moulding increased their purchases in foreign markets. Overall LLDPE imports totalled 139,600 tonnes in January-November 2020, down by 15% year on year.

Last month's imports of other ethylene polymers, including ethylene-vinyl-acetate (EVA), were 9,100 tonnes, compared to 10,100 tonnes in October. Overall imports of other ethylene polymers reached 90,200 tonnes over the stated period versus 85,200 tonnes a year earlier.

MRC

MOSCOW (MRC) -- United Airlines said it had committed to a multimillion-dollar investment in a project to remove carbon dioxide from the air through air direct-capture technology as part of a plan to be 100% "green" by 2050, said Hydrocarbonprocessing.

The project, 1PointFive, is a partnership between Occidental Petroleum Corp subsidiary Oxy Low Carbon Ventures and Rusheen Capital Management that plans to build the first U.S. industrial-sized direct air capture plant that would permanently sequester 1 million tons of CO2 each year.

That is the equivalent of what 40 million trees can do, but covering a land area about 3,000 times smaller, United said, adding that direct-capture technology is one of the few proven ways to correct for aircraft emissions. United declined to provide details on the investment amount.

Speaking to reporters about the project, United CEO Scott Kirby said carbon capture and sequestration is the only scalable technology that removes carbon from the atmosphere and buries it in the ground. "Sequestration is a real and permanent solution," Kirby said.

Until now, the airline industry has focused primarily on the purchase of carbon offsets to reduce the environmental impact of flying. Before the COVID-19 pandemic disrupted global air travel earlier this year, carbon reduction was expected to be a top priority for airlines, particularly in Europe, where a flight-shaming movement has gained momentum.

Although the pandemic has forced airlines to focus heavily on daily survival rather than longer-term environmental goals, Kirby said climate change could alter behaviors in even more dramatic ways than the pandemic. Aside from the carbon-capture program, United is also investing in sustainable aviation fuel, which has up to 80% less carbon emissions than conventional jet fuel.

Most of an airline's contribution to climate change comes from the fuel it takes to fly. Kirby said that with fewer planes in the skies during the pandemic, emissions were likely down about 55%. The carbon-capture project will offset nearly 10% of United's annual emissions, he said.

As MRC informed earlier, Perstorp says it plans to build a large-scale commercial carbon capture and utilization (CCU) unit at Stenungsund, Sweden, dubbed Project AIR, that will use a production concept the company has developed to produce sustainable methanol from a variety of recovered end-of-life streams and hydrogen from electrolysis. The company plans to utilize its own CO2 and residue streams, and use the methanol to substitute all the fossil-based methanol used in its production in Europe. Project AIR aims to substitute all the 200,000 metric tons/year of fossil methanol that Perstorp uses in Europe as a raw material for downstream chemical products, the company says.

As MRC reported earlier, in December 2017, Perstorp announced world’s first portfolio of renewable alternatives to the essential polyols Pentaerythritol (Penta), Trimethylolpropane (TMP), and Neopentyl glycol (Neo).

As per MRC's ScanPlast report, November total production of unmixed PVC was about 86,100 tonnes versus 86,600 tonnes a month earlier, SayanskKhimPlast and RusVinyl decreased their capacity utilisation last month. Overall output of polymer were 892,100 tonnes in the eleven months of 2020 from 893,600 tonnes a year earlier. Two producers increased their production, whereas two other manufacturers reduced their output.
MRC

MOSCOW (MRC) -- Japan’s Mitsubishi Chemical Corporation (MCC) has decided to consolidate its subsidiaries at the national level across three countries, including the US, Germany, and the UK, according to Chemicals Technology.

The integration of subsidiaries is said to be part of the company’s medium-term management plan.

In the US, MCC will be integrating its nine subsidiaries, including Lucite International, Mitsubishi Chemical Performance Polymers, Dianal America, Mitsubishi Chemical Imaging Corporation, Cleanpart USA, Mitsubishi Polyester Film, Mitsubishi Chemical Composites America, MC Ionic Solutions US and Mitsubishi Chemical America.

As part of the integration initiative, the Japanese chemical company will be consolidating its five subsidiaries in the UK, including Mitsubishi Chemical UK, Lucite International Trading, Lucite International Specialty Polymers & Resins, Nippon Gohsei UK and MC Ionic Solutions UK.

In Germany, MCC will be integrating five subsidiaries: Mitsubishi Chemical Carbon Fiber and Composites, Mitsubishi Chemical Europe, cleanpart Group, Cleanpart, and MCPP Europe.

Subsidiaries across the US, Germany and the UK will be integrated on 1 April 2021.

MCC anticipates that the integration of subsidiaries will enhance cooperation and further strengthen overall business capabilities in each of these three countries.

In another development, MCC acquired a ‘greenfield’ property at a large integrated site on the Mississippi River in Geismar, Louisiana, the US.

It also plans to advance its feasibility study for the design and construction of a 350,000mt Methyl Methacrylate (MMA) plant, which will be based on its proprietary ALPHA technology.

Currently, the project is in the early engineering stage and the final investment decision (FiD) is expected to take place in early 2022.

If the project gets approval, the plant would commence production in 2025.

Last month, Mitsubishi Chemical concluded a framework agreement with some Chinese companies for the transfer of its light metal products business.

The main application, consuming approximately 75% MMA, is in the production of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used to produce methyl methacrylate-butadiene-styrene copolymer (MBS), used as a modifier for polyvinyl chloride (PVC).

According to MRC's ScanPlast report, October total production of unmixed PVC grew to 86,600 tonnes from 86,000 tonnes a month earlier, SayanskKhimPlast and Bashkir Soda Company increased their capacity utilisation. Overall output of polymer was 805,100 tonnes in the first ten months of 2020, which virtually corresponds to the last year"s figure. Two producers increased their production, whereas two other manufacturers reduced their output.
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