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MOSCOW (MRC) -- The December contract price of propylene was settled in Europe down by EUR15/tonne from the previous month. However, all European producers announced a greater increase in export prices of polypropylene (PP) to be shipped to the CIS markets in December, than the rise of monomer prices, according to ICIS-MRC Price report.
Negotiations over December prices of European PP began in the first days of the month. All market participants said European producers raised their export prices of propylene polymers, and in some cases, the price increase was EUR90/tonne. There were also cases when the price growth was more modest and amounted to EUR20/tonne.
Deals for December shipments of homopolymer propylene (homopolymer PP) were done in the range of EUR940-980/tonne FCA, whereas last month's deals were done in the range of EUR850-960/tonne FCA. Deals for block copolymers of propylene (PP block copolymers) were done in the range of EUR970-1,030/tonne FCA versus EUR920-990/tonne FCA.
Many producers virtually contracted all their December quantities in the first week of the month because of strong demand from the domestic and export markets. Some producers also had significant restrictions on PP shipments to the CIS markets.
MRC
December prices of European PP rise significantly for CIS markets
PP imports in Russia grew by 21% in January-November
Russian companies increased external purchases of polypropylene in November, imports reached 20,400 tonnes against 17,900 tonnes a month earlier. Thus, overall PP imports into Russia reached 202,000 tonnes in January-November 2020, compared to 167,400 tonnes a year earlier. Purchasing of all grades of propylene polymers in foreign markets increased, with homopolymer PP imports accounting for the most noticeable rise.
Overall, the structure of PP imports by grades looked the following way over the stated period.
November imports of homopolymer PP were about 8,600 tonnes versus 6,000 tonnes a month earlier, homopolymer PP shipments from Turkmenistan increased significantly. Thus, overall imports of homopolymer PP totalled 82,900 tonnes in the first eleven months of 2020, compared to 54,100 tonnes a year earlier.
November imports of PP block copolymers in Russia were about 4,900 tonnes against 4,100 tonnes in October on increased demand for pipe PP from Russian companies. Imports of PP block copolymers into Russia reached 52,400 tonnes in January-November 2020, compared to 50,700 tonnes a year earlier.
November imports of statistical copolymers of propylene (PP random copolymer) dropped to 1,600 tonnes from 3,200 tonnes a month earlier, with pipes producers accounting for the main reduction in shipments due to an increase in the supply of domestic raw materials. Total imports of PP random copolymers in Russia were 32,600 tonnes in January - November 2020, compared with 30,100 tonnes year on year.
Russia's imports of other polymers of propylene for the period were about 34,100 tonnes in the first eleven months of the year, compared with 32,500 tonnes year on year.
MRC
Lotte Chemical restarts Daesan butadiene plant
MOSCOW (MRC) -- South Korea’s Lotte Chemical successfully restarted its butadiene (BD) plant in Daesan, South Korea on 10 December, reported S&P Global.
This plant was shut on 4 March, 2020, after the fire on the cracker in Daesan that day.
As MRC wrote before, the cracker with the production capacity of 1.1 million mt/year of ethylene and 550,000 mt/year of propylene was shut on March 4 following an explosion, which injured more than 30 people.
Lotte Chemical had initially planned to restart its BD plant in Daesan with the capacity of 150,000 mt/year in one month after the shutdown, then - in November.
Butadiene is one of the main feedstocks for the production of acrylonitrile-butadiene-styrene (ABS).
According to MRC's ScanPlast report, October ABS shipments to the Russian market virtually remained at the previous month's level, totalling 5,060 tonnes. Overall consumption of material in Russia was 37,120 tonnes in the first ten months of 2020, down by 6% year on year.
Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the southwestern city of Yeosu.
MRC
Oil slips on demand worries as COVID-19 lockdowns tighten in Europe
MOSCOW (MRC) -- Oil prices dipped in early trade on Tuesday, with demand worries due to tighter lockdowns in Europe outweighing relief from vaccination rollouts and concerns about a flare-up of tension in the Middle East, reported Hydrocarbonprocessing.
US West Texas Intermediate (WTI) crude futures fell 16 cents, or 0.3%, to US46.83 a barrel at 0158 GMT, while Brent crude futures fell 20 cents, or 0.4%, to US50.09 a barrel, erasing half of Monday's gains.
London stepped up restrictions requiring bars and restaurants to close, as COVID-19 infection rates continued to rise sharply, which will dent fuel demand in the near term.
Further marring the demand outlook, Italy said it was considering more stringent restrictions over the Christmas holidays, while most stores in Germany have been ordered to shut until Jan. 10, with little prospect of an easing early in the new year.
However vaccination rollouts in the United States, Britain and Canada, which spurred a sharp rally in oil prices last week, continue to keep Brent above USD50.
"You've got demand recovery hopes based on the rollout of vaccinations, but increasing restrictions on the pandemic side," said Commonwealth Bank commodities analyst Vivek Dhar.
OPEC on Monday pared its forecast for the oil demand recovery in 202l by 350,000 barrels per day, due to the persistent impact of the coronavirus pandemic, but said a rapid rollout of vaccines in major economies "provides potential upside for next year's growth forecast."
In a sign of weaker demand, analysts expect data from the American Petroleum Institute on Tuesday and the Energy Information Administration on Wednesday to show that US gasoline inventories rose by 1.6 million barrels last week, while distillate inventories, which include diesel and heating oil, rose by 400,000 barrels.
Oil prices found some support after a fuel transport ship at the Saudi Arabian port of Jeddah was hit by an explosion on Monday, which the energy ministry called a terrorist attack. That followed an attack on two oil wells in Iraq last week.
"When you have the level of tension rising in the Middle East, you build in a bit of a premium in pricing," Dhar said.
As MRC informed previously, 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% 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 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
US PVC Jan-Oct 2020 exports fall 9.5% on year: ITC
MOSCOW (MRC) -- US exports of construction staple polyvinyl chloride (PVC) were 9.5% lower from January through October 2020 compared with the same period a year ago, reported S&P Global with reference to the latest US International Trade Commission data, released Dec. 8.
The US shipped out 2.13 million mt of PVC from January through October, down from 2.53 million mt in the same time frame of 2019.
The US exported nearly 2.99 million mt in all of 2019, or 37% of about 8 million mt/year of US PVC capacity.
The decline illustrates limited export volume availability amid tight supply because of months of reduced upstream chlor-alkali rates exacerbated by two force majeure events Formosa Plastics USA and Westlake Chemical declared in August that remained in effect Dec. 8. Formosa's force majeure stemmed from operational issues, while Westlake's was declared after Hurricane Laura's Aug. 27 assault on its operations in Lake Charles, Louisiana.
In addition, strong domestic demand amid a housing construction boom has further limited export volume availability, market sources said.
The tightness is global. Market sources said supply was limited in Asia and Europe, amid turnarounds and three ongoing PVC force majeure events in Europe as well. "It is on all sides," a source said.
Another source said the squeeze was expected to last into early 2021. "Typically if we get a shortage, it will last for six weeks, maybe two months. I've never seen a globally traded product be this tight for this long a period of time," the second source said.
According to MRC's ScanPlast report, Russia's overall PVC production reached 891,200 tonnes in the first eleven months of 2020, down by 0.3% year on year. However, two producers managed to increase their PVC output.
MRC