North American weekly chemical rail depressed by USGC outages

MOSCOW (MRC) -- Chemical railcar traffic in North America remained depressed last week as US Gulf Coast chemical producers attempted to restart following freeze-related shutdowns, reported Chemweek.

During the week ended 27 February, volume totaled 40,696 carloads, up 15.4% from the previous week, but down 15.3% year-over-year (YOY), according to data released by the Association of American Railroads (AAR).

On a four-week basis, volume was down 9.4% from 2020 and 6.4% from 2019 (chart). For the year to date, volume was down 1.9% from 2020 and 0.1% from 2019.

Chemical railcar traffic in the United States contributed 27,768 carloads to the total, down 18.4% YOY and up 16.4% from the previous week. For the year to date, US chemical railcar traffic is down 3.1%.

Canadian chemical rail traffic totaled 12,142 carloads, down 7.3% YOY and up 15.9% from the previous week. For the year to date, Canadian chemical railcar traffic is up 1.5%.

Chemical railcar traffic in Mexico totaled 786 carloads, a YOY decrease of 18.5% and a sequential decrease of 14.3%. For the year to date, Mexican chemical railcar traffic is down 2.3%.

As MRC informed before, Chemical rail traffic in North America closed January strong, pushing year-to-date volume up 5.7% from 2020 and 5.5% from 2019. During the week ended 30 January, volume totaled 48,312 carloads, up 5.2% from the previous week and up 4.4% year-over-year (YOY), according to data released by the Association of American Railroads (AAR). On a four-week basis, volume increased 5.6% from 2020 and 3.7% from 2019.

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.

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.
MRC

MOSCOW (MRC) -- The largest U.S. refinery, Motiva Enterprises’ 607,000-barrel-per-day (bpd) Port Arthur, Texas, plant, restarted its largest crude oil processing unit, sources familiar with plant operations said, said Reuters.

The 325,000-bpd VPS-5 crude distillation unit (CDU) and 110,000-bpd coker were increasing production, the sources said. The refinery was shut on Feb. 15 due to severe cold weather along the Gulf Coast. Motiva did not immediately reply to a request for comment on Friday morning.

Motiva also restarted the 105,000-bpd HCU-2 hydrocracker on Friday, the sources said, as well as two hydrotreaters. In addition, the 32,000-bpd HTU-3 hydrotreater is scheduled to restart on Friday. CDUs break down crude oil into hydrocarbon feedstocks for all other production units at the refinery. There are three CDUs at the Motiva refinery.

Cokers convert residual crude oil from distillation units to either motor fuel feedstocks or petroleum coke, a substitute for coal. Hydrocrackers use catalyst in the presence of hydrogen under high heat and pressure to convert gas oil into diesel and other motor fuels. Hydrotreaters remove sulfur from feedstocks for motor fuels in compliance with U.S. environmental rules.

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.

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.
MRC

MOSCOW (MRC) -- BASF says a “continued and rapid escalation” in raw material costs and availability, as well as higher manufacturing and transportation costs, has prompted it to increase its formulation and performance additives prices in North America by up to 10%, according to Chemweek.

The increase will be effective 1 April 2021, or as contracts permit.

The increase is required “in order to provide continued service, support, and sustainable product manufacturing for our customers,” it says.

As MRC reported before, earlier this week, BASF announced prices increases in North America for formic acid, neopentylglycol, select polyetheramines, and 1,4-butanediol (BDO) and its derivatives.

We remind that 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.
MRC

MOSCOW (MRC) -- Israel’s Oil Refineries (ORL) swung to a loss in the fourth quarter, hit by the coronavirus pandemic, and said it had saw signs of recovery so far in 2021, said Hydrocabonprocessing.

ORL, Israel’s largest refining and petrochemicals group, said it lost USD68 million in the October-December period compared with zero profit a year earlier. Revenue dipped 39% to USD952 million. Its adjusted refining margin was USD4.3 a barrel in the fourth quarter, compared with USD5.2 a year earlier but above Reuters’ quoted Mediterranean Ural Cracking Margin of a negative USD0.1. ORL said that since the start of 2021, refining and polymer margins have risen sharply.

"In March, the volume of orders was a sign of a return to routine in the consumption of diesel and gasoline in the Israeli market,” said CEO Moshe Kaplinsky, adding that ORL continued to supply essential products to factories, and the medical, food, high-tech and agricultural industries throughout 2020.

ORL said it was in the process of formulating a strategic plan that will focus on strengthening core areas, along with a gradual transformation in the refining of fuels and production of polymers. Its fixed expenses declined by USD21 million last year, while implementing an early retirement plan that is expected to reduce wage costs in coming years.

ORL also said it projects saving as much as USD45 million on natural gas purchases in 2021.

As MRC informed earlier, Israel’s Oil Refineries (ORL) reported lower quarterly net profit, saying timing differences on the value of its inventory offset higher refining margins. ORL, Israel’s largest refining and petrochemicals group, earned USD63 million in the third quarter, down from USD74 million a year earlier.

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.
MRC

MOSCOW (MRC) -- South Korea's top two refiners SK Energy and GS Caltex plan to shut one crude processing unit each in March to April for regular maintenance, said an official from SK Innovation and two trade sources, said Hydrocarbonprocessing.

The official from SK Innovation, which owns SK Energy, said on Tuesday that they have routine maintenance scheduled for their No.4 crude distillation unit (CDU) in Ulsan between mid-March and mid-April. The CDU has a capacity of 240,000 barrels per day (bpd).

Separately, GS Caltex planned to shut its No. 4 330,000 bpd CDU at Yeosu during March to April, the sources said. GS Caltex declined to comment.

SK Energy has five CDUs at its refinery in the southeastern city of Ulsan, with a total refining capacity of 840,000 bpd, while GS Caltex has an overall refining capacity of 800,000 bpd.

As MRC wrote previously, SK Global Chemical restarted its naphtha cracker in late January 2018 after a brief but unplanned shutdown earlier in the day. The 660,000 tonnes-per-year (tpy) naphtha cracker began to operate normally the following day. Located in Ulsan, South Korea, the No. 2 cracker has a production capacity of 690,000 mt/year.

SK Global Chemical also operates a smaller 200,000 tpy cracker at the site.

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.
MRC