Sinopec refinery in Qilu resumes operation after overhaul

MOSCOW (MRC) -- Sinopec Corp's Qilu refinery has resumed operations after a more than three-month overhaul of its 160,000 barrels per day (bpd) crude processing facility, reported Reuters with reference to the company's statement on Thursday.

The refinery, based in China's oil refining hub Shandong province, has total crude oil processing capacity of 13 million tonnes per year, or 260,000 bpd.

"With only half-month left before the year-end, the refinery will increase operational rates at all production facilities to meet the output targets for 2020," Sinopec said.

As MRC informed earlier, SKGC's joint venture Sinopec-SK Wuhan Petrochemical plans to restart its naphtha-fed steam cracker in Wuhan in the second-half of December as scheduled after the turnaround and debottlenecking. The cracker was shut down in October, 2020.

SK Wuhan's steam cracker is able to produce 800,000 mt/year of ethylene and 400,000 mt/year of propylene.After the debottlenecking, the cracker's ethylene production capacity will be increased to 1.1 million mt/year and propylene capacity to 550,000 mt/year. The company will add a new 60,000 mt/year butadiene unit at the plant.

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.

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.
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1. VCI sees return to growth in Germany next year

MOSCOW (MRC) -- Production of chemicals, including pharmaceuticals, will increase 1.5% in Germany in 2021, and sales generated by the German chemical-pharmaceutical industry will rise 2.5%, according to industry association VCI (Frankfurt), said Chemweek. Demand for chemical products is largely stable at the end of 2020, it says. "Business sentiment is now confident in most of our companies,” says VCI president and Evonik Industries CEO Christian Kullmann. "More than half of them expect sales to go up next year both in Germany and abroad." The industry in Germany has had a “difficult year” in 2020 due to COVID-19, VCI says. The period has been “characterized by marked ups and downs in the four quarters,” it says. Due to weaker demand, chemical production including pharmaceuticals has decreased by 3% overall in 2020, with all sectors recording losses, VCI says. The decline is in line with VCI’s latest forecast. Losses by sector ranged from a minor slip in the output of pharmaceuticals of 0.5% to a slump of 6.5% in polymers production. Total output of chemicals excluding pharmaceuticals has decreased 4% in Germany this year, VCI says.


MRC

MOSCOW (MRC) -- The supervisory board of Brenntag has appointed Ewout van Jarwaarde to the company’s management board as chief transformation officer, reported Chemweek.

Van Jarwaarde, a Dutch national, will take over the newly created position as of 1 January 2021. He will be responsible for the execution of the company’s global transformation program Project Brenntag.

Van Jarwaarde will also, among other responsibilities, be in charge of driving functional excellence, realizing digital- and data-driven business opportunities, as well as developing the group-wide IT and indirect procurement functions. His appointment increases the number of Brenntag management board members to five.

Van Jarwaarde was most recently CEO of CarNext.com, a marketplace for used cars that forms part of LeasePlan (Amsterdam, Netherlands), which has operations across Europe. He was previously a partner at McKinsey & Co. in Amsterdam.

As MRC informed earlier, in April 2020, Brenntag sai it had acquired the operating assets of Suffolk Solutions’ (Suffolk, Virginia) caustic soda distribution business. Financial terms of the deal have not been disclosed.

We also remind that Brenntag said earlier this month that it had signed a deal with Elementis under which Brenntag will distribute the company’s products in coatings, adhesives, sealants, inks and construction materials in Canada.

We remind that October production of sodium hydroxide (caustic soda) in Russia were 109,000 tonnes (100% of the basic substance) versus 108,000 tonnes a month earlier. Russia's overall output of caustic soda totalled 1,054,600 tonnes in the first ten months of 2020, down by 1.6% year on year.
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MOSCOW (MRC) -- Business conditions for chemical manufacturers are expected to improve in 2021, albeit with some first-half difficulties due to the resurgence in COVID-19 cases in much of the world, reported Chemweek with reference to an outlook report from Moody’s Investors Service (New York, New York), a credit ratings agency.

Demand growth is expected to be strongest in Asia, where the pandemic has been brought under control more quickly than in Europe and the US in most countries.

Moody’s characterizes the outlook for credit quality as ‘stable,’ reflecting an improving operating environment but “sustained recovery in the global economy (that) is delayed until 2022,” the ratings agency says.

Commodity chemical makers saw the sharpest declines this year, and are expected to see the strongest bounceback next year, Moody’s says. “However, we do not expect that EBITDA for most commodity producers will return to 2019 levels,” Moody’s adds. “We view (second-quarter) 2020 as the trough with a number of companies benefitting from higher commodity prices and volumes in the third and fourth quarters as several sectors rebounded, including autos, construction and housing.” Continued strong demand for packaging will also prop up polyethylene prices.

For specialties producers, the rebound will be less pronounced, as the downturn was less severe. The demand outlook is strong for coatings, cleaning and sanitizing chemicals, food and nutrition, and pharmaceutical ingredients, all of which showed resilience this year. “Most specialty chemical producers will return towards or even exceed their pre-COVID EBITDA levels in 2021,” Moody’s says. However, companies with major exposure to the automotive, energy and aerospace sectors, which will see weaker recoveries, are the exception, although automotive production is expected to gradually increase.

Regionally, APAC is expected to outperform the rest of the world, with China leading the way. China’s recovery has been ‘v-shaped’ according to Moody’s, while other countries have been more varied, although the general trend is positive. Europe has the weakest outlook, due to a very large increase in COVID-19 cases, a strengthening euro, and uncertainty related to Brexit.

Longer-term, environment, social and governance (ESG) will weigh more heavily on chemical makers, as challenges around climate change and recycling cut into demand in some sectors and factor into investor risk assessments. “The impact over the next 12-18 months is focused mainly on corporate decision-making for major capital investments and M&A,” Moody’s says. “Over a longer horizon, we expect that ESG-related factors will undercut demand growth for certain chemical products, especially single-use plastics.”

As MRC wrote previously, chemical production is rebuilding momentum after shocks linked to the global COVID-19 pandemic, according to the American Chemistry Council’s (ACC) Year-End 2020 Chemical Industry Situation and Outlook. US chemical production volume excluding pharmaceuticals is expected to fall by 3.6% in 2020 followed by growth of 3.9% in 2021. The US decline is the sharpest since 2008 and 2009, during the financial crisis.

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.
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MOSCOW (MRC) -- India’s Chemicals and Fertilisers Minister D V Sadananda Gowda on Tuesday said the demand for chemicals and petrochemicals is expected to rise 9% annually, and the size of the industry is likely to grow to USD300 billion by 2025, according to Kemicalinfo.

Addressing a conference organised by industry body Assocham, the minister said the Indian chemical industry, over the last one-and-a-half decade, has transformed from manufacturing principal chemicals in a highly regulated market to being a mature industry in a liberalised economy.

Majority of the chemicals produced in India comprise either upstream products or intermediates, which go into a variety of manufacturing applications including fertilisers, pharmaceuticals, textiles and plastics, agrochemicals, paints and dyes, he said, adding that end-use industries like automotives, electronics, packaged food and textiles are driving Indian specialty chemicals industry.

‘Strong domestic demand, coupled with huge investments by domestic and foreign players, is making the industry scale new heights,’ Gowda said.

The minister said rising disposable income, median age of population, urbanization and growing penetration, and demand from rural markets are the factors contributing to growth of chemical and petrochemical sector.

‘As production and consumption shift towards Asian and Southeast Asian countries, the demand for chemicals and petrochemicals is expected to grow at 9 per cent per annum, much faster than the expected GDP growth rate, to reach USD300 billion by 2025,’ Gowda said.

Gowda said the size of the industry was USD163 billion in 2018, contributing 13.4% of manufacturing GVA (gross value added) and 2.4% of national GVA. The sector employs 2 million people.

He said Indian chemical and petrochemical industry plays an important role in all sectors of the economy.

Stating that successive governments have taken various initiatives to promote this sector, the minister highlighted that licensing requirements, except for hazardous chemicals and a few special drugs, have been removed.

Entrepreneurs are allowed to set up chemical industries following the Industrial Entrepreneurs’ Memorandum (IEM) route and under the automatic route, 100% FDI is allowed for all chemicals, except hazardous ones, he said.

Gowda said the peak rate of customs duty on most chemicals has been brought down to 7.5%, while the Petroleum Chemical Petrochemical Investment Regions (PCPIR) policy has been introduced to boost the development of chemicals and petrochemicals investment regions.

‘I certainly believe that the Indian chemical and petrochemical sector holds a potential to emerge as global manufacturing hub. We are aware of the need to support the cluster based development of the sector through provision of world class infrastructure and logistics. The department is working on it,’ he said.

Speaking at the event, Niranjan Hiranandani, President ASSOCHAM, said, “The Indian chemical industry presents excellent potential and is expected to register a growth of 8-9% in the next decade and is expected to double its share in the global chemical industry to about 6% by 2021. The Indian chemical industry has a significant potential for growth, provided some of the key drivers are focused upon like Securing Feedstock, Right Product Mix and M&A opportunities.”

“The Government could continue to work toward the ease of doing business in India by streamlining regulations and processes and by issuing clear directives on future regulatory requirements. I am sure the insightful views from the experts would further contribute to the initiatives of the Government on making India a global manufacturing hub,” he added.

Jai Shroff, Global CEO, UPL Group, said, “India has ample manufacturing potential for chemicals sector which needs to be leveraged to substitute imports and promote exports. For India, to emerge as a dominant leader in the sector, research and development and creation of centres of excellence need to be promoted and encouraged.

Speaking at the session, Janardhanan Ramanujalu, Vice President & Regional Head- South Asia & Australia, SABIC, said, “All of Industrial Revolution 4.0 ingredients like precision manufacturing, digital capability, talent availability and supportive policies makes India best suited to be the global manufacturing hub”.

Adnan Ahmad, Region Head – India, Clariant Chemicals (India) Limited, said, “India’s position as a global manufacturing hub contender was always a given. The only question was when we would take across the tipping point. Now we are seeing opportunities for the Specialty Chemicals Industry like never before, with the local demand expected to grow exponentially and global industries looking to de-risk their Supply Chain dependency on China. It is now time for us to act and move into a role that was destined to be ours, as a Global Manufacturing Hub for chemicals.”

As MRC reported earlier, Clariant Chemicals Limited., an Indian subsidiary of specialty chemicals giant Clariant AG, has announced its results for the second quarter ended September 30, 2020. The company reported a net profit of Rs 191.8 crores for the period ended September 30, 2020 as against net profit of Rs 2.7 crores for the previous quarter. Net sales grew 40% to Rs 180.8 crores during the period ended September 30, 2020 as compared to Rs 129.0 crores during the previous quarter. The company reported a net profit of Rs 191.8 crores for the period ended September 30, 2020 as against net profit of Rs 9.2 crores for the prior-year quarter.

We remind that in October 2020, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

Propylene is the main feedstocks for the production of polypropylene (PP).

According to MRC's ScanPlast report, 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.
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