MEG stocks in China fell below 1 mln tonnes

MOSCOW (MRC) -- China's monoethylene glycol (MEG) stocks fell in mid-December below the 1 million mt mark for the first time since February, according to S&P Global with reference to market sources.

Thus, MEG stocks were at 976,000 mt, down by around 20,000-30,000 mt from a week ago.

As MRC reported earlier, MEGlobal has announced its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in January 2021. Thus, on 11 December, the company said ACP for MEG would be at USD670/MT CFR Asian main ports for arrival in January 2021, up by USD10/MT from December. The November 2020 ACP reflects the short term supply/demand situation in the Asian market.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to ICIS-MRC Price report, in Russia, December contract PET prices were in the range of Rb68,100-71,000/tonne CPT Moscow, including VAT. Most producers raised their prices of material in the second week of December and expect further price increases by the end of this month.

Versalis slashes ABS production due to acrylonitrile force majeure

MOSCOW (MRC) -- Versalis, the chemicals subsidiary of Eni (Rome, Italy), has reduced production at its 65,000-metric tons/year acrylonitrile-butadiene-styrene (ABS) plant at Mantova, Italy, to 50% until at least February 2021 due to one of its suppliers declaring force majeure, reported Chemweek with reference to the company's notice to its customers on 18 December.

"Our main acrylonitrile supplier has stated force majeure. Based on the allocation and forecasts we received, the lower availability of this raw material will reduce our ABS production by about 50%, at least for the next two months of January and February 2021," Versalis said.

The company further explained that it might not be able to meet its contractual agreements until the end of the first quarter of 2021. "Due to that event, we are forced to state that Versalis SpA will not be able to fulfil its commitments and maintain the standard level of supply to your company indicatively until the end of the first quarter of 2021," Versalis told its customers.

Versalis added that it will buy ABS from alternative sources to replenish its stocks of ABS. "We guarantee that we have taken all necessary steps to minimize the damaging consequences of this event, such as, but not limited to, seeking alternative sources of acrylonitrile," Versalis said.

The operating reduction at Versalis could exacerbate the tight ABS market in Europe, said Philipp Deitmerg, engineering polymers director at IHS Markit. Ongoing strong demand coupled with low imports, rising exports, and increasing feedstock costs have led to a price rally in Europe in the last quarter of 2020, according to Deitmerg. "In addition to strong demand from segments such as appliances, toys, and consumer goods, the automotive market also performed way better with a demand last seen in 2018, further tightening the ABS market," Deitmerg said.

The reduction of ABS at Versalis may slow demand for styrene, said Tobias Spyra, styrenics and polyurethane feedstocks director at IHS Markit. "Although ABS is a smaller styrene derivative in Europe, the consumption of styrene into this chain will deteriorate for quite some time," said Spyra. "ABS has been a strong performer in Europe this year so far, thus leading to increased styrene demand while most other derivatives were struggling amid COVID-19 and its severe impact."

As MRC wrote before, in 2019, Versalis unveile plans to increase production capacity for ABS at its Mantua, Italy, facility. The project will boost ABS capacity at its existing unit by 30,000 t/y. The engineering phase ha already begun, and production was scheduled to start in 2020.

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.

Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.

BASF to increase caprolactam, nylon 6 prices

MOSCOW (MRC) -- BASF says it will increase prices for caprolactam and downstream polymer polyamide 6 (PA6, Nylon 6) in North America by 6 cents/lb, effective 1 January, said Chemweek.

Major North American producers of caprolactam are AdvanSix, in Hopewell, Virginia; BASF, in Freeport, Texas; and Univex, in Salamanca, Mexico. Caprolactam is produced from the benzene derivatives phenol or cyclohexane.

North American producers of Nylon 6 include AdvanSix, BASF, Cast Nylons, Custom Resins, DuPont, EMS-Chemie, Mohawk Industries, Nylene Canada, Nylon Corporation of America, Quadrant Engineering Plastic Products USA, and Shaw Industries.

We remind that German chemicals maker BASF said in early November it had put a project to build a petrochemicals complex in India worth up to USD4 billion on hold due to the economic uncertainty caused by the COVID-19 pandemic. BASF signed a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC), Adani Group and Borealis AG in October 2019 to evaluate a collaboration to build the chemical site in Mundra, in India’s Gujarat state.

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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.


Brenntag to acquire Canadian distributor Alpha Chemical

MOSCOW (MRC) -- Brenntag says it has agreed to acquire Alpha Chemical (Dartmouth, Nova Scotia, Canada), a full-line chemical distributor in Canada, reported Chemweek.

Terms of the deal, including purchase price, were not disclosed. Alpha Chemical generates about USD12 million/year in revenue, and operates mainly in the oil and gas, mining, water treatment, and aquaculture end markets.

“The company’s infrastructure, capabilities, and personnel will support the expansion of our new Brenntag Essentials and Brenntag Specialties divisions in Canada,” says Lars Schneider, president/Canada at Brenntag. The deal will be a particular boost to Brenntag’s business in Atlantic Canada, Schneider adds.

The acquisition enables “ready access to the oil and gas offshore upstream market in Atlantic Canada,” says Anthony Grace, managing director/mergers and acquisitions at Brenntag. It also includes a facility in Newfoundland that can serve other markets in Canada, according to Grace.

The deal is expected to close in January 2021.

As MRC informed earlier, in April 2020, Brenntag said 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 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 also 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.

PP imports to Ukraine increased by 1% in January-November

MOSCOW (MRC) -- Overall polypropylene (PP) imports into the Ukrainian market totalled slightly over 124,400 tonnes in the first ten months of 2020, up by only 1% year on year. Imports of all grades of PP increased, with the exception of PP random copolymers, according to MRC DataScope.

November PP imports to Ukraine decreased to 11,400 tonnes against 11,800 tonnes a month earlier, purchases of all types of propylene polymers from Ukrainian companies decreased, with the exception of pipe PP random copolymers. Overall imports of propylene polymers reached 124,400 tonnes in January-November, compared to 123,400 tonnes a year earlier. Demand for all grades of propylene polymers increased, whereas demand for injection moulding PP block copolymers increased.

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

November imports of propylene homopolymers to the Ukrainian market reached about 8,000 tonnes against 9,500 tonnes a month earlier, imports of polypropylene from Saudi Arabia decreased due to the limited export quotas from local producers. Total homopolymer PP imports were 94,800 tonnes in January-November, compared to 93,900 tonnes a year earlier.

Last month's imports of block copolymers of propylene (PP block copolymers) were about 900 tonnes, compared to 1,000 tonnes in October, demand for injection moulding PP block copolymers decreased. About 12,300 tonnes of PP block copolymers were imported in the first ten months of 2020, compared to 13,100 tonnes a year earlier.

November imports of PP random copolymers exceeded 2,200 tonnes from 1,100 tonnes a month earlier, local companies increased their purchasing of pipe grade PP random copolymers. Overall PP random copolymers imports reached 15,100 tonnes in January-November 2020, compared to 14,700 tonnes a year earlier. Overall imports of other propylene copolymers totalled about 2,200 tonnes over the stated period.