Covestro plans maintenance in May at TDI plant in Dormagen, Germany

MOSCOW (MRC) -- Covestro is planning to carry out maintenance work in May 2021 at its 270,000-metric-tons/year toluene diisocyanate (TDI) plant in Dormagen, Germany, according to Chemweek with reference to market sources.

“The TDI turnaround is expected in mid-May,” says a source. The exact dates for the turnaround are not known, and Covestro declined to comment when asked to specify them. “We don’t comment on turnarounds of our plants,” says a company spokesperson. Another source suggested that the TDI unit maintenance program could take two weeks. “Usually it takes two weeks if there are no issues,” the source says.

BASF, meanwhile, is planning to carry out maintenance from early March until the end of May this year at its 300,000-metric-tons/year TDI plant in Ludwigshafen, Germany.

“The month that BASF Ludwigshafen comes back, Covestro will start its turnaround. It will be interesting when they return, as we expect gasoline demand to improve in the second quarter of this year. So, you may see TDI producers compete with gasoline blenders for the toluene, which is a feedstock and a blend component at the same time,” says Eleanor Dann, principal analyst/aromatics and fibers at IHS Markit.

The TDI market in Europe was tight throughout the second half of 2020, but in December supply began to improve as all three European TDI makers were operational, according to James Elliott, associate director/polyurethane feedstocks at IHS Markit. “As we move into the second quarter of this year, two major TDI suppliers will be on maintenance. Whilst stocks will have been built up in advance of the downtimes, there is the potential for short-term tightness to arise should the outages extend, like last year, beyond the initially planned timeframe,” he says.

In October 2020 Covestro declared force majeure on its TDI plant at Dormagen following the sudden failure of a central pump at the facility. The force majeure affected all of Covestro’s TDI products in the EAME region. The plant had been undergoing maintenance and was expected to restart mid-October. Covestro lifted the force majeure on 1 November.

OPIS is an IHS Markit company.

As MRC reported earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to\from Belarus) rose in January-November 2020 by 18% year on year to 83,600 tonnes (70,600 tonnes a year earlier).

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2019 sales of EUR12.4 billion, Covestro has 30 production sites worldwide and employs approximately 17,200 people (calculated as full-time equivalents) at the end of 2019.
MRC

Algerian oil producer Sonatrach expects output, sales increase in 2021

MOSCOW (MRC) -- Algeria's state oil and gas company Sonatrach expects to increase production and sales in 2021, the North African nation's state news agency cited Chief Executive Officer Toufik Hakkar as saying, reported Hydrocarbonprocessing.

The company will keep annual exports above 90 million tonnes of petroleum equivalent, by bringing onstream new fields in the south-west and the south-east of the country, he said, according to Algerie Presse Service.

As MRC informed before, in January 2020, Turkey and Algeria announced that they will jointly establish a petrochemicals plant in Adana on the Mediterranean coast. Turkey’s Ronesans Holding and Algeria’s state-owned energy company Sonatrach will take part in the project, Arkab said on the margins of the Turkey-Algeria Business Forum. The petrochemical facility is estimated to cost around USD1.4 billion, according to the Algerian minister, who also said stakes of Ronesans Holding and Sonatrach in the project will be 66 percent and 34 percent, respectively. The facility is planned in Seyhan industrial zone for petrochemical development and will have production capacity of 450,000 tons per year of polypropylene (PP).

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% 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-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

According to MRC's DataScope report, 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

Colonial Chemical starts building specialty surfactants plant in Saudi Arabia

MOSCOW (MRC) -- Colonial Chemical, Inc. announced the start of construction of a new specialty chemicals manufacturing plant in Dammam, Saudi Arabia, said the company.

The new facility is named Colonial Chemical M.E. Arabia. This facility is a joint venture with Sadeem Investments and Earth’s Reservoir for Oil and Gas, EROG. Colonial Chemical, Inc. is providing the technology and operations knowledge for the plant while Sadeem Investments and EROG are responsible for local operational oversight and construction support.

The Board of Directors overseeing the joint venture is headed by David Anderson, Colonial Chemical, Inc. President, as the Chairman. Mohammed Abduldaim, EROG President, is the Vice-Chairman, and other members include Dr. Peter Chetcuti, David Anderson Jr and Douglas Wynn.

This operation will primarily provide a source of locally manufactured specialty surfactants and other chemicals for oilfield, industrial lubricants, water treatment, paper, paints, coatings, personal care, household, and industrial cleaning applications. The new plant will offer manufacturing technology capabilities for a variety of chemicals as well as toll blending capability for finished formulations and custom chemical manufacture.

The plant will allow customers in Saudi Arabia and the region to achieve high local content levels required by localization initiatives such as IKTVA, NUSANED and NIDLP.

Construction is underway on a nine-acre plant that will include reaction vessels, distillation columns, toll blending and mixing vessels, pilot scale equipment for development, warehousing and tank farms. Additionally, construction will include state-of-the-art laboratories for R&D and formulation development and administrative offices for supply chain and customer service personnel. The plant will also house packaging and labeling operations.

Manufacturing operations are expected to commence in Q4 2021. Raw materials will be sourced locally to produce amine oxides, quaternary ammonium compounds, hydroxypropyl sultaines, betaines, propionates, ether carboxylates, imidazolines, phosphate esters, EPI-sulfonates, and phosphates.

We remind that in February 2020, PPG said it had completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

We also remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% 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-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC

Irving cuts contract, refinery workforce at Saint John plant

MOSCOW (MRC) -- Irving Oil is reducing its contract and plant workforce at Canada’s largest oil refinery due to challenges caused by the coronavirus pandemic, the company said, as per Hydrcoarbonprocessing.

The Canadian oil giant is cutting its contract workforce at its 320,000 barrel per day refinery in St. John, New Brunswick to 225 from 1,000 in the first quarter of 2021. An additional 60 Saint John refinery employees were cut on Thursday, representing 7% of the refinery workforce, the company said.

“The COVID-19 pandemic has had extreme and serious impacts on our business and our industry,” Irving Oil President Ian Whitcomb and chief brand officer Sarah Irving said in a joint statement, citing the collapse in demand for refined products, market volatility, poor margins and the economic downturn.

Last year, Irving said it would lay off 250 people, or 6% of its global workforce, due to demand disruption caused by the coronavirus pandemic. A resurgence of coronavirus cases across the world has complicated an uneven recovery in consumption for liquid fuels that is estimated to have fallen by 9 million barrels per day in 2020, according to the U.S. Energy Information Administration.

U.S. refining margins were below USD10 - the threshold above which most refiners make money - for the majority of the fourth quarter of 2020. Margins have since risen to about USD12.70 on Thursday, though refinery utilization is off about 10% year on year.

Refiners across the globe have been scaling back contract workers as they defer maintenance projects as a result of the coronavirus pandemic. Companies, many of them lumbered with high debts, slashed all but the most essential work.

U.S. oil refiners such as CVR, Hollyfrontier and PBF Energy also cut salaried employees last year due to economic strain caused by the coronavirus pandemic.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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

Huafon Chemical to construct plans spandex plant in China

MOSCOW (MRC) -- Huafon Chemical plans to invest CNY4.36bn (USD674m) to construct a 300,000 tonne/year spandex project at Chongqing, said the company.

The project will be implemented in three phases, with a capacity of 50,000 tonnes/year, 150,000 tonnes/year and 100,000 tonnes/year, respectively. Each phase is expected to take two years to complete construction.

Currently in early stage without a detail timeline, the project will focus on high-end products to improve the company’s competitiveness, it said.

As MRC informed earlier, BASF and Huafon Group Co., Ltd. have signed a strategic cooperation agreement to extend their partnership with initiatives to develop the polyurethane, bio-fiber and spandex markets in China. The two companies will work together in the areas of technical exchange, market development, and quality raw material supply.

As MRC informed earlier, BASF says its 420,000-metric ton/year steam cracker in Ludwigshafen, Germany is continuously running and has not caused any interruption of supply to its customers. Earlier, several media outlets reported that unscheduled flaring started on 13 January at the northern part of the Ludwigshafen site and was expected to last until 17 January and that an unspecified unit was shut, which "was not the case", as per the company's letter received by MRC.

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