US weekly propane/propylene stocks slide 9.2%

MOSCOW (MRC) -- US combined propane and propylene stocks slid 6.7 million bbl, or 9.2%, during the week ended 8 January to 66 million bbl, the Energy Information Administration reported Wednesday, said Chemweek.

Product supplied for propane and propylene, an indicator of implied demand, surged 402,000 b/d on the week to 2.1 million b/d. Exports advanced 272,000 b/d to 1.075 million b/d and the four-week average for exports rose 257,000 b/d year-over-year (YOY) to 1.389 million b/d.

Propane imports for the week dipped 32,000 b/d to 149,000 b/d, while the four-week average moved up 7,000 b/d to 154,000 b/d from the four-week average a year ago.

Gulf Coast (PADD 3) inventories tumbled 4.2 million bbl to 35 million bbl in the latest week. Midwest (PADD 2) stocks slipped 700,000 bbl to 18.7 million bbl. PADD 1 inventories fell 600,000 bbl to 7.5 million bbl, and PADDs 4 and 5 stocks dipped 100,000 bbl to 4.9 million bbl.

Mont Belvieu TET propane climbed to 92.375 cts/gal from 89.625 cts/gal last traded before the report's release. Non-TET propane advanced to 91 cts/gal from 88.5 cts/gal. Conway propane rose to 90.25 cts/gal from 87.5 cts/gal prior to the report's release.

As per MRC, exports of polypropylene (PP) from the US were up 4.2% in the eleven months of 2020 compared to the same period in 2019, while imports were down 34% over the same period. The decline in imports was mainly due to a sharp drop in imports from Brazil, which supplied large volumes of material in 2019 as a pre-sale of Braskem's new PP plant in La Porte, Texas, which was launched in 2020.

Propylene is a feedstocks for producing 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

SCG Packaging completes acquisition of Go-Pak

MOSCOW (MRC) -- SCG Packaging (SCGP) is expanding is food packaging business by acquiring Go-Pak, a leading food packaging provider in the UK, European and North America with production based in Vietnam, said Nationthailand.

This deal will help SCGP expand its customer base in the food service sector, retail and wholesale businesses, restaurants and fast-food restaurants in the UK, Europe and North America, as well as help expand its market base in Asean.Wichan Jitpukdee, SCGP’s chief executive officer, said the company is expanding its food packaging business in line with rising demands.

SCGP has a manufacturing base in Thailand and has been producing foodservice packaging products such as paper straws under the Fest brand in response to demands for safe and eco-friendly food packaging.In 2018, it expanded its production base to Malaysia buy acquiring shares of Interpress Printers Sendirian Berhad (IPSB), a leading producer of food packaging made from paper.

IPSB supplies packaging solutions to restaurants and fast-food companies in Asia.With lifestyles changing due to the Covid-19 outbreak, consumers are more inclined towards taking meals home or to the office or getting food delivered. And this trend is giving the food packaging industry reason to expand.

As MRC informed earlier, Dow and SCG has recently signed a collaboration agreement to develop new complete recycling solutions to add value to plastic waste and prevent them from ending up in the environment. This agreement is an attempt to create a circular economy for plastic in Thailand.

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.

SCGP is a unit of Thai conglomerate Siam Cement.
MRC

Saudi Aramco cuts February crude supply to some Asian refiners

MOSCOW (MRC) -- Top oil exporter Saudi Arabia has cut supplies of February-loading crude for some Asian buyer by up to a quarter while meeting requirements of at least four others, reported Reuters with reference to several refinery and trade sources with knowledge of the matter.

This comes after Saudi Arabia pledged additional voluntary output cuts of 1 million barrels per day (bpd) in February and March under a deal between the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.

Most OPEC+ producers will hold production steady in the face of new coronavirus-induced lockdowns. Global oil prices are trading at their highest since February following Saudi’s decision.

Two North Asian refiners have received a 10% supply cut from the state-owned energy giant Saudi Aramco, sources said. February allocations for at least three Indian refiners have been cut between 15% and 26%, the sources said on the condition of anonymity.

Saudi Aramco declined to comment.

Last year, the company cut June-August shipments to Asian term buyers to comply with the OPEC+ agreement.

Saudi Arabia exported about 7 million barrels per day of crude, of which around 70% landed in Asia last year, data on Refinitiv Eikon showed.

While the additional Saudi oil supply cut could help support the spot market this month, Asia’s crude consumption is expected to fall amid seasonal refinery maintenance while arbitrage supplies from the West could supplement demand, trading sources said.

Differentials for Middle East benchmarks cash Dubai and DME Oman to Dubai swaps fell by 20 cents from Tuesday, data compiled by Reuters showed, due to weak demand.

Refiners, including India’s HPCL-Mittal Energy Ltd (HMEL), Taiwan’s Formosa Petrochemical Corp, and Thailand’s IRPC Pcl and Bangchak Corp, are heading into maintenance in the first quarter.

Japan’s Idemitsu Kosan Co has shut a 150,000 barrels-per-day (bpd) crude distillation unit (CDU) following a fire mishap.

As MRC wrote previously, Formosa Petrochemical Corporation (FPCC) was running its crackers in Taiwan at 100% capacity utilisation in end-December, 2020. The company"s crackers have combined ethylene production capacity of 2.935 million metric tons/year. Meanwhile, FPCC is planning overhaul of the smallest cracker in mid-2021.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

Wood secures USD120 MM contract with Sinopec for ethylene expansion

Wood secures USD120 MM contract with Sinopec for ethylene expansion

MOSCOW (MRC) -- Wood has secured a contract valued at over USD120 million with Sinopec Hainan Refining and Chemical Limited Company (Sinopec) to provide engineering, procurement and construction (EPC) services to expand its refinery development in the Hainan Free Trade Zone (FTZ) in South China, according to Hydrocarbonprocessing.

Once completed, the ethylene renovation and expansion project will produce up to one million tonnes of ethylene derivatives and refined oil on an annual basis and is expected to boost economic growth in China’s downstream sector by more than 100 billion yuan (USD14.1 billion). Output from the Hainan FTZ will serve ethylene demand across China and globally.

Under the new contract, EPC services for the sitewide pipe rack and associated pipework, cables for power, telecommunications and lighting will be delivered by Wood’s engineering and project management teams based in Shanghai and on site.

Mike Collins, Wood’s Executive President of Projects comments: “We are delighted to win this new contract with Sinopec which demonstrates the strength of our long-standing relationship with the client and their confidence in our extensive EPC expertise in the petrochemical sector.

“We look forward to continuing our partnership to deliver this project safely, sustainably and on-time, making a positive contribution to this significant development.

“Wood is uniquely placed to leverage our engineering design expertise and global petrochemical track record to play a significant role in the growth of Sinopec’s business and the economic development of Hainan, boosting the local supply chain.”

As MRC reported earlier, in late December 2020, SIBUR Holding, Russia’s leading petrochemicals company and one of the most rapidly growing petrochemicals businesses globally, and China Petroleum & Chemical Corporation (Sinopec), China’s leading energy and chemical company, closed the deal to set up a joint venture (JV) at the Amur Gas Chemical Complex after obtaining all the necessary approvals from the regulators of both countries. SIBUR and Sinopec will hold interest in the JV in the amount of 60% and 40%, respectively.

Ethylene is the main feedstocks for the production of polyethylene (PE).

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.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001.
MRC

North America chemical rail begins year strong

MOSCOW (MRC) -- During the week ended 9 January, chemical railcar traffic in North America increased 5.3% year-over-year (YOY) and 10% from the previous week, said Chemweek.

Total North American freight railcar traffic fell by 2.5% year on year for the week ended 9 January, but chemical railcar loadings rose by 5.3%, the Association of American Railroads (AAR) reported on Wednesday.

In chemicals, increases in the US (+7.3%) and Canada (+0.6%) more than offset a 10.7% decline in Mexico.

Railcar loadings for motor vehicles and parts were down by 5.0% year on year, and loadings of oil and oil products were down by 21.6%.

As per MRC, during the week ended 12 December, chemical railcar traffic in North America was up 7.4% from 2019 and down 0.8% from 2018 on a four-week moving-average (4wma) basis, extending the recovery that began in late October (chart), according to data released on 16 December by the Association of American Railroads (AAR). For the year to date, chemical railcar traffic in North America was down 2.8% from 2019 and down 5% from 2018. Weekly volume totaled 46,463 carloads, down 6.2% from the previous week and up 7.0% year-over-year (YOY).

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