Russia, Iran, US to lead methanol capacity additions by 2030

MOSCOW (MRC) -- Global methanol capacity is poised to see considerable growth by 2030, potentially increasing from 148.44 MMtpy in 2019 to 310.94 MMtpy in 2030, registering a total growth of 109%. Russia, Iran and the US are expected to drive capacity additions during the forecast period. Together, these three countries will contribute around 59% of the total global methanol capacity additions, according to Hydrocarbonprocessing with reference to GlobalData, a leading data and analytics company.

GlobalData’s report, “Global Methanol Capacity and Capital Expenditure Outlook to 2030” reveals that Russia accounts for the highest capacity additions with 40.35 MMtpy by 2030. Major capacity additions will be from the Sherwood Energy Maysky Methanol Plant with a capacity of 7.20 MMtpy by 2030.

GlobalData identifies Iran as the second highest country in terms of capacity additions, with capacity of 29.39 MMtpy by 2030. Major capacity additions will be from the Mahan Chemical Zagros Petrochemical Eslamabad-e-Gharb Methanol Plant, with a capacity of 1.85 MMtpy by 2030.

The US will be the third highest country in terms of capacity additions, with capacity of 23.74 MMtpy by 2030. Major capacity additions will be from the NW Innovation Works Kalama Methanol Plant and NW Innovation Works St. Helens Methanol Plant, each with the capacity of 3.60 MMtpy by 2030.

Sherwood Energy Ltd, IGP Methanol LLC and NW Innovation Works Inc will be the top three companies globally in terms of planned and announced capacity additions during the outlook period.

Dayanand Kharade, Oil and Gas Analyst at GlobalData, says: “The abundant availability of low-cost feedstock in Russia and Iran and the shale gas advantage in the US are the primary reason for the rush in methanol capacity additions in these countries.”

As MRC reported earlier, in late April, 2020, the first phase of Connell Chemical Industry Ltd.'s 600 KTA MTO complex, a 300 KTA MTO plant, successfully started up and produced on-spec ethylene and propylene. This project is the first large-size chemical project brought online during period when China was in the process of restarting the economy while fighting COVID-19 pandemic. The MTO plant started feed-in at 8:18 AM on April 15, produced on-spec propylene at 7:00 AM on April 18, and produced on-spec ethylene at 4:00 AM on April 20.

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

According to MRC's DataScope report, 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. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- K+S (Kassel, Germany) and Remex, a subsidiary of Remondis Group (Lunen, Germany), are bundling their waste-management activities in a new joint venture (JV) called REKS, K+S says, said Chemweek.

The partners plan jointly to tap into the rapidly growing market for reutilization and disposal, as well as sustainable waste-management solutions, K+S adds. REKS will combine the operations and infrastructure of K+S’s waste-management facilities with the sales network of Remex. “The waste-management market provides this partnership with an attractive development potential,” says Burkhard Lohr, chairman of K+S.

The JV will offer K+S “the best possible access” to the materials needed in the future to cover large tailings piles at the company’s potash sites in Germany, K+S says. To avoid tailings pile water resulting from precipitation and to solve one essential issue of water protection in the long run, all tailings piles are to be suitably covered by means of new, environmentally friendly processes, the company says.

K+S’s stake in REKS, which is to be consolidated at equity, will enable K+S to realize a significant book gain, while generating a cash inflow of about EUR90 million (USD110 million) before taxes with closing. This forms part of a package of measures to reduce K+S’s debt.

K+S will incorporate its waste-management sales activities into the partnership. The underground waste-management facilities of K+S are exclusively available to the JV, it says. Remex is contributing its wholly owned subsidiary Aurec, which processes mineral waste for backfilling at the K+S site at Bernburg, Germany, as well as corresponding sales activities.

The transaction will be submitted to the antitrust authorities for approval with closing expected in summer 2021.

As MRC informed earlier, K+S (Kassel, Germany) has reported an adjusted group net loss of EUR1.97 billion (USD2.33 billion) for the third quarter, plunging year on year (YOY) from a loss of EUR41.8 million, due mainly to a EUR2.0-billion write-down of the company's potash assets after it lowered assumptions for long-term global potash prices.

As MRC informed earlier, in September, 2.014 million tons of mineral fertilizers were produced (in terms of 100% nutrients) against 1.993 million tons a month earlier. In general, in January - September 2020, Russian enterprises produced just over 18.5 million tons of fertilizers, which is 3.5% more than in 2019.

Also, in 2019, Russian enterprises produced 23.588 million tons of fertilizers, which is 3.2% more than in 2018.
MRC

MOSCOW (MRC) -- Russia's output of products from polymers grew in November 2020 by 9.8% year on year.
However, this figure increased by 2.2% year on year in the first ten months of 2020, reported MRC analysts.

According to the Russian Federal State Statistics Service, November production of unreinforced and non-combined films rose to 124,500 tonnes from 124,100 tonnes a month earlier. Output of films products grew in January-November 2020 by 9.8% year on year to 1 229,400 tonnes.

Last month's production of non-porous boards, sheets and films dropped to 37,300 tonnes from 39,100 tonnes in October. Thus, overall output of these products reached 387,600 tonnes over the stated period, up by 5.2% year on year.

November production of porous boards, sheets and films was 34,300 tonnes, down by 5.7% month on month.
Overall output of these products reached 300,400 tonnes in the eleven months of 2020, compared to 252,900 tonnes a year earlier.

November production of plastic bottles and flasks grew to 1.8 bln items from 1,6 bln items a month earlier. Overall output of these plastic products totalled 18,71 bln units over the stated period, compared to 18,54 bln units a year earlier.

Last month's production of polymer pipes, hoses and fittings was 59,700 tonnes versus 69,000 tonnes in October.
Overall output of these products was 651,900 tonnes in January-November 2020, up by 10.2% year on year.

November production of sacks and bags from ethylene polymers decreased to 2,500,000,000 units, compared to 2,724,000,000 units a month earlier. Overall output of these plastic products totalled 27,940 bln units in the eleven months of 2020, compared to 23,400,000 bln units a year earlier.

Last month's production of linoleum and floor coverings was 14,800,000 square metres, compared to 17,400,000 square metres in October. Overall output of these products totalled 148,3 mln square metres over the stated period versus 138,5 mln square metres a year earlier.

November production of plastic windows and door blocks reached 2,343 mln square metres and 89,700 square metres, respectively, versus 2,762 mln square metres and 103,200 square metres a month earlier. Overall output of these plastic products totalled 24,790,000 square metres and 930,200,000 square metres, respectively, compared to 22,868,000 square metres and 949,600 square metres a year earlier.
MRC

1. Asia distillates-gasoil cash differentials rise to strongest in 4-1/2 months

MOSCOW (MRC) -- Asia's cash differentials for 10 ppm gasoil firmed to their highest level in four-and-a-half months on Monday, while refining margins for the industrial fuel slipped despite weaker prices of raw material crude, reported Reuters. Cash discounts for gasoil with 10 ppm sulphur content narrowed by a cent to 4 cents a barrel to Singapore quotes, the smallest discount since differentials plunged into a negative territory on Aug. 11. The gasoil market has firmed in recent weeks, thanks to reviving demand from India and China, but analysts have warned that increased refinery runs and reimposed lockdowns in several other key markets would pressurise refining margins and prices in the near term.



MRC

MOSCOW (MRC) -- Oil futures settled lower Dec. 22 amid pandemic-dimmed demand outlooks prompted by the spread of more lockdowns across Europe, reported S&P Global.

NYMEX February WTI settled 95 cents lower at US47.02/b and ICE February Brent declined 83 cents to settle at USD50.08/b.

The UK's demand for road fuels and jet fuel is taking a fresh tumble after the country's efforts to contain a new strain of the coronavirus ripple through the European region.

A number of European countries, as well as countries further afield such as India and Russia, suspended all flights and closed their borders to the UK on Dec. 21 after the UK announced details of a new coronavirus strain spreading in the country. France has temporarily halted all UK arrivals and goods flows from ferries and trains.

The UK government on Dec. 20 imposed a tougher lockdown on 17 million people in the southeast of England amid concerns over the potentially more infectious COVID-19 variant.

Front-month Brent slid nearly 2% the day to settle at the lowest since Dec. 11, while WTI was down 1.5% and the lowest since Dec. 14.

NYMEX January RBOB settled down 2.09 cents at US1.3395/gal and January ULSD was 1.58 cents lower at US1.4616/gal.

"Crude prices declined as global lockdowns appear to be a harsh reality for the first quarter," OANDA senior market analyst Ed Moya said in a note. "The crude demand outlook over the next few months is bleak as US hospitalizations are at a record high, a new COVID strain could be spreading across Europe, and as skepticism grows over how quickly people will be willing to get vaccinated."

Brent forward structure slid deeper into contango, with the sixth-month contract settling at a 7 cent/b premium over front month, compared with a 3 cent/b discount on Dec. 21. The sixth-month contract had been in 45 cent/b backwardation to front month as recently as Dec. 10.

Europe's latest round of lockdowns had already removed some 900,000 b/d of road fuel demand last month, according to Rystad Energy. This year, European oil demand is forecast to decline by about 15%, or 1.8 million b/d.

"In the short term, we expect mobility restrictions in the US and Europe introduced in Q4 2020 to mostly spill over into Q1 2021, for which we expect oil demand to average 93.6 million b/d," Rystad said in a note.

Meanwhile, a strengthened US dollar added further pressure to oil prices. The ICE US Dollar Index climbed to a six-session high 90.57 in afternoon trading.

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.
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