BASF increases prices in North America

MOSCOW (MRC) -- BASF has announced prices increases in North America for formic acid, neopentylglycol, select polyetheramines, and 1,4-butanediol (BDO) and its derivatives, reported Chemweek.

The price of all grades of formic acid has been raised by 5 cents/pound (cts/lb), effective immediately or as existing contracts permit, it says. Prices for BDO and its derivatives gamma-butyrolactone and n-methylpyrrolidone, meanwhile, will rise by 15 cts/lb as of 1 April, or as contracts allow. Prices will also be increased by 20 cts/lb for tetrahydrofuran and polytetramethylene ether glycol, also as of 1 April.

BASF says prices for three of its polyetheramine products in North America will also rise, effective 1 April or as contracts permit, by 30-38 cts/lb. The polyetheramine products are used mainly for the processing and curing of epoxy resins in various coating applications and sealing compounds.

The price of neopentylglycol, meanwhile, has been increased in the Americas, also effective 1 April or as allowable. BASF says it will hike its price for all grades of the polyalcohol in North America by 27 cts/lb, and in South America by $595/metric ton.

BASF announced a price rise on 1 March for BDO and its derivatives in Europe.

As MRC wrote before, in mid-February, BASF said it was restarting one of its steam crackers at its Ludwigshafen complex in Germany after operations were halted last Wednesday due to a technical issue. The naphtha cracker produces ethylene and propylene, and is one of two crackers on the site. One has a production capacity of 420,000 metric tons/year, with the other’s capacity at 240,000 metric tons/year, according to IHS Markit data.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively 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.

ExxonMobil adds activist-investor execs to board of directors

MOSCOW (MRC) -- ExxonMobil has said that it is adding Michael Angelakis and Jeffrey Ubben to the company’s board of directors, bringing the size of the company’s board to 13 directors, according to Chemweek.

Angelakis is CEO of Atairos (New York, New York), a diversified investment firm, and a former CFO at cable and telecommunication company Comcast (Philadelphia, Pennsylvania). Ubben is a co-founder of Inclusive Capital Partners (San Francisco, California), an investment firm focused on environment, social and governance (ESG) investing.

“Their contributions will be valued as ExxonMobil advances plans to increase shareholder value by responsibly providing needed energy while playing a leadership role in the energy transition,” says ExxonMobil chairman and CEO Darren Woods.

ExxonMobil shares jumped on 1 March on the news, closing at USD56.40, after closing at USD54.38 on Friday. Ubben has a history as an activist shareholder, having previously co-founded ValueAct Capital Partners, which has held stakes in Baker Hughes, Rolls-Royce and Motorola, among other major companies.

As MRC wrote before, ExxonMobil's recent operational shutdowns include polyethylene (PE) facilities amid power outages prompted by the deep freeze that has enveloped the US Gulf Coast. "This event has caused widespread power outages across Texas and Louisiana" Feb. 15," the letter, dated Feb. 16, said. "As a consequence, several ExxonMobil Chemical operations have experienced loss of power and other key utilities, impacting our ability to resume full operations." ExxonMobil operates three PE units in Mont Belvieu, Texas, with combined capacity of 880,000 mt/year, according to S&P Global Platts Analytics.

Exxon is among many petrochemical producers that shut Feb. 14 and subsequent days because of sustained extreme sub-freezing temperatures in the region. ExxonMobil previously confirmed Feb. 16 that the company had shut all refining and chemical operations at its Baytown and Beaumont, Texas, complexes. Ethylene produced at Baytown feeds the Mont Belvieu PE operations.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world's energy.

Ineos, Engie team up for hydrogen pilot project at phenol plant in Belgium

MOSCOW (MRC) -- Ineos and French power company Engie have announced a pilot project to partially replace natural gas feed with hydrogen at Ineos’s phenol plant in Doel near Antwerp, Belgium, said Chemweek.

No investment figure has been given. Hydrogen will be used in a commercial-scale cogeneration plant designed to generate electricity and heat from natural gas. About 10% of the cogeneration plant's gas feed will initially be replaced by hydrogen, with this to then be increased to 20% in a gradual process. This is the first time that such tests have been carried out on an industrial scale in Belgium, says Ineos. The cogeneration plant at the phenol site “has the ideal profile to realize this test," it says.

Engie will be responsible for the design, installation, and operation of the technology at the site in Doel, says Ineos, which adds that its phenol business “has experience in handling hydrogen as a raw material for its production processes and also has the necessary permits for the hydrogen project." The project will provide practical insights and data in the use of hydrogen in industrial facilities, including monitoring efficiency and measuring emissions during combustion.

Ineos and Engie are both already participating in a potential power-to-methanol project consortium at Port of Antwerp, which aims to produce green methanol by reusing captured carbon dioxide (CO2) in combination with sustainably generated hydrogen. Ineos subsidiary Inovyn plans to operate an 8,000-metric tons/year demonstration plant at the company’s Lillo manufacturing site in Belgium, with the unit operational by 2022.

Ineos currently produces 300,000 metric tons/year of hydrogen as a coproduct of its chemical processes. The hydrogen is used largely as a low-carbon fuel and raw material in the company’s production processes, it says. The pilot project at Doel will “demonstrate the potential for conversion of existing installations to hydrogen, as a springboard for further industrial upscaling," it adds.

As per MRC, Ineos Styrolution, a subsidiary of Ineos, a major European manufacturer of petrochemical products, has announced force majeure for the supply of polystyrene (PS) in North America. The company's operations in Altamira, Mexico, Chanakhon, Illinois and Decatur, Alabama have been severely affected by the recent winter storms in Texas.

According to MRC's ScanPlast, the estimated consumption of PS and styrene plastics at the end of 2020 amounted to 502,630 tonnes, which corresponds to the consumption indicator a year earlier. Estimated consumption of PS and styrene plastics in December increased by 5% compared to the same month in 2019 and amounted to 47,490 tonnes.

Styrolution, the world's leading manufacturer of styrene monomer, polystyrene and styrene-based products, was founded in October 2011 by BASF and Ineos, who held equal shares in a joint venture. In June 2014, Ineos closed the deal to acquire a 50% stake in BASF in a joint venture between the two companies - Styrolution. The deal was valued at EUR1.1 billion. Thus, upon completion of the deal, Ineos became the sovereign owner of Styrolution. The sale of BASF's stake in Styrolution is part of a 2011 shareholder agreement. In January 2016 Styrolution made the decision to change its name to Ineos Styrolution.

COVID-19 - News digest as of 02.03.2021

1. Indorama reports lower profit despite higher volume

MOSCOW (MRC) -- Thailand-listed Indorama Ventures Ltd (Ltd) expects demand recovery for its products to continue this year after it swung to a net profit of Thai baht (Bt) 1.61bn ($54m) in the fourth quarter of 2020, said Chemweek. Fourth-quarter earnings were driven by stronger production volumes and contributions from its polyethylene terephthalate (PET) business. IVL's overall production rose by 21% year on year to 3.48m tonnes in the fourth quarter. Core EBITDA at its combined PET business rose by 31% year on year to USD177m in October-December 2020. In 2021, the uptrend in crude oil prices is expected to positively impact its PET premiums this year and result in positive inventory valuation gains, IVL said in a statement. "We see robust demand for PET and tightness in the market, which will be positive for spreads across our value chain of paraxylene (PX), purified terephthalic acid (PTA) and monoethylene glycol (MEG)," the company said.


Crude oil futures fall on stronger dollar, OPEC+ uncertainty

MOSCOW (MRC) -- Crude oil futures dived during mid-morning trade in Asia March 2, as a stronger US dollar eroded buying sentiment, and as uncertainty over the upcoming OPEC+ meeting continued to weigh on the market, reported S&P Global.

At 11:05 am Singapore time (0305 GMT), the ICE Brent May contract was down 96 cents (1.5%) from the March 1 settle to USD62.73/b, while the April NYMEX light sweet crude contract fell $1.07/b (1.76%) to USD59.57/b.

The fall in crude prices was precipitated by a stronger US dollar, which makes purchasing oil more expensive for buyers using other currencies. At 10:54 am, the March US Dollar Index futures on ICE was trading at 91.235, up 0.388% from the March 1 settle of 91.036.

Contributing to the downturn was jitters ahead of the March 4 OPEC+ meeting, which is expected to offer guidance into the coalition's production plan going forward.

"Crude oil fell as traders look ahead nervously to the OPEC meeting later this week," ANZ analysts said in a March. 2 note.

The coalition has currently taken out 7.2 million b/d of crude production - roughly 7% of pre-pandemic supply - and can increase supply by up to 500,000 b/d each month, as per the agreement struck on Dec. 3, 2020.

The March 4 meeting, however, could potentially see oil production rising by up to 1.5 million b/d, as Saudi Arabia is also expected to announce whether it will extend its voluntary additional 1 million b/d cut, scheduled to end after March.

Analysts believe that given rising global oil demand, the market can likely absorb a 1.5 million b/d increase in oil production. However, these analysts have also cautioned that such a large increase in supply could spook the market, and lead to a downward price correction.

The meeting may see some contention among coalition members, some of whom such as Saudi Arabia, remain conservative, with others, such as Russia, are keen to increase supply given oil's impressive rally.

"Brent crude has rallied nearly 30% this year as stimulus measures and the vaccine rollout raised hopes of stronger demand...this could see alliance members once again turn to the kingdom to provide the bulk of support to the market, even if others call for higher quotas," ANZ analysts said.

In inventory data, commercial crude stocks in the US are expected to have increased 1.3 million barrels to around 464.3 million barrels in the week ended Feb. 26, analysts surveyed by S&P Global Platts said. The build would put inventories 0.4% behind the five-year average of US Energy Information Administration data, opening the first deficit to the average since late March 2020.

The weekly inventory reports from the American Petroleum Institute and the EIA, are due to be released later March 2 and March 3, respectively.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

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 ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.