Polytama shuts PP plant in Indonesia due to propylene shortage

MOSCOW (MRC) -- PT Polytama Propindo has reportedly taken its polypropylene (PP) plant in Balongan, Indonesia offline after a fire broke out at the Pertamina refinery at the nearby location that disrupts the propylene supply to the company, reported CommoPlast.

This facility can produce 380,000 tons/year of PP.

There have been a number of reports from market players that the producer has canceled contract obligations for the current week due to the shutdown while delaying the announcement of second-quarter contract volume to the end of the week.

“The shutdown at our PP plant is a precautionary measure to prevent any potential issue spreading from the fire at the upstream complex. We were informed that it might take roughly a week for propylene supply to resume, in the meantime, we are looking for other sources of supply,” a source close to the producer reported.

As MRC wrote previously, in 2017, the company conducted maintenance at this plant from end-January to mid-February.

According to MRC's ScanPlast report, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

PT Polytama Propindo was established in 1993 as a signifcant manufacturer of polypropylene resin (PP resin) in Indonesia. Polytama is taking a leading role in Indonesia's fast growing economy by utilizing the country wealth i.e. the secondary processing yield of oil and natural gas , through industrial manufacturing. The factory located in Balongan, Juntinyuat district, Indramayu-West Java, using one of the best technology in the world, the Spheripol technology of Montell (now LyondellBasell), with an installed capacity of 100,000 metric tons per year.

Two years later the construction of the factory was completed on July 27, 1995 and PT Polytama Propindo started the production (the product trade name: Masplene), the supply of raw material propylene with high purity from PERTAMINA refinery UP-VI (now RU-VI ) Balongan. In 1996, and the plant capacity grown to 180,000 tons per year. Response to the addition of propylene production capacity of PERTAMINA RU-VI in 2004, PT Polytama Propindo increased its capacity to 200,000 tons per year.
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1. Global oil demand will improve after COVID-19 vaccination - Kuwait Oil Minister

MOSCOW (MRC) -- Kuwait's Oil Minister Oil Mohammad Abdulatif al-Fares expressed "cautious optimism" that the global oil demand will improve as COVID-19 vaccination programs gather pace and industrial output recovers, as per Rueters. Speaking ahead of a joint meeting of the Organization of Petroleum Exporting Countries and other major oil producers, he said the market supply/demand balance has largely improved as result of output cuts implemented by the group known as OPEC+, according to state news agency KUNA. He called on the group to the fully comply with these cuts.


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MOSCOW (MRC) -- India has imposed anti-dumping duties (ADD) on bottle grade polyethylene terephthalate (PET) resin imports originating in or exported from China for five years, according to Kemicalinfo.

Bottle grade PET imports from China grew from 88,000 metric tonne in FY18 to 147,600 MT in FY19, a 67% increase, whereas imports from other countries decreased, as per govt data.

The Directorate General of Trade Remedies (DGTR), under the Department Of Commerce, had recommended in December last year that anti-dumping duty ranging from USD60.92 to USD200.66 (depending on the material quality) be imposed on the import of bottle grade PET resin from China to offset the injury to the domestic industry from cheaper imports. The Finance Ministry accepted and notified the same on Saturday.

The Finance Ministry, in its notification, said, “imposition of anti-dumping duty is required to offset the injury to the domestic industry caused by the dumped imports of subject goods from the subject country and has recommended imposition of definitive anti-dumping duty on imports of the subject goods, originating in or exported from the subject country and imported into India.”

The PET resin, having an intrinsic viscosity of 0.72 decilitres per gram or higher (bottle-grade PET resin, excluding recycled PET resin), is used for manufacturing bottles and jars for storage of mineral water, carbonated soft drinks, pharmaceutical products.

It also observed that imports entered the market at a price significantly below the selling price of the domestic industry, thus undercutting the prices of the domestic industry in the market. “It is seen that the market share of subject imports increased considerably over the injury period, while the market share of the petitioning domestic industry fell,” added DGTR.

Reliance Industries and IVL Dhunseri Petrochem Industries - two largest producers of the product in India, accounting for over 90% of the domestic production - had applied for the anti-dumping investigation before DGTR, which it initiated in October 2019.

The domestic industry, in its submission to DGTR, said that the imports from China have increased dramatically during the investigation period.

Importers of the PET resin said that there is no injury to the domestic industry as it is still profitable, and inventories reflect a decline in the injury period. The importers said, “The imports had no price effect on the domestic industry as the domestic prices increased by 26% over the injury period while the import prices increased by 33% and thus, analysis of price undercutting is meaningless.”

Indian Plastics Federation (IPF), a user of the imported raw material, in its submission said that any anti-dumping duty on imports from China will affect the domestic processors adversely and, therefore, the proposed anti-dumping duty should not be imposed.

IPF added, “Large discounts are offered to big companies. This is not available to small and medium units. This price disparity goes against small and medium industries. Hence small and medium industries prefer to import raw materials from China since their pricing policy and terms and conditions of payment are easier.”

As MRC reported earlier, The US International Trade Commission (USITC) is investigating a statement by American manufacturers that imports of granular polytetrafluoroethylene (PTFE) from India and Russia are being sold in the United States at below fair prices, said USITC in March. Daikin America (Orangeburg, New York) asked the USITC and the US Department of Commerce for the investigation in a petition filed on 27 January. The USITC announced that it had found enough support to begin the final phase investigation on 15 March.

According to MRC's ScanPlast report, Russia's estimated PET consumption increased in January 2021 by 3% year on year. Thus, January estimate PET consumption in Russia totalled 57,420 tonnes.
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MOSCOW (MRC) -- Renewed lockdown restrictions in Europe and slower than expected vaccine rollouts are likely to check a global recovery in fuel demand and make OPEC+ oil producers take a cautious stance when the group reassesses output policy this week, reported Reuters.

With its extensive vaccination program, Europe was central to forecasts for demand recovery, especially as many Europeans were hoping for a return to normality by the summer and holidays abroad. That now seems unlikely.

Germany, Europe's biggest oil consumer, has extended its lockdown until April 18 to contain a third COVID-19 wave.

A third of French people have entered a month-long lockdown, and most of Italy, including its capital Rome and its financial centre Milan, have curbs on business and movements.

Lockdowns in Austria, Norway and Switzerland have also been tightened.

When the Organization of the Petroleum Exporting Countries and other oil producing nations, a group known as OPEC+, meet on Thursday, it will be difficult for them to ignore the new lockdowns that most analysts had ruled out for the medium term because of their economic cost.

With oil prices making steady gains earlier this year, OPEC+ had hoped to ease output cuts, but industry sources say those plans in jeopardy.

The renewed lockdowns and problems with vaccination could prevent the recovery of up to 1 million barrels per day (bpd) of oil demand in 2021, Rystad Energy said.

Energy Aspects forecasts European demand to be lower by 800,000 bpd year-on-year in March, but expects the demand to continue recovering, rising by 2.7 million bpd in third quarter versus first quarter 2021.

Globally, Energy Aspects expects August demand to be 8.2 million bpd higher versus March, as summer discretionary driving peaks.

In the United States, the situation has been more stable. The US vaccine rollout has outpaced Europe's, and additional widespread lockdown measures have not been imposed.

The United States is the world's biggest gasoline consumer, and gasoline demand has mostly been rising week on week, Energy Information Administration data shows.

Demand increased in the week to March 19 to 8.6 million bpd, the highest since November except for the first week of March, when demand hit 8.7 million bpd. Traders are waiting for demand this year to hit a sweet spot of 9 million bpd, which will indicate stronger levels of consumption, said John Kilduff, partner at Again Capital LLC in New York.

Gasoline demand in Asia was also stable and there are no renewed widespread lockdowns.

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 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- Kuwait's Oil Minister Oil Mohammad Abdulatif al-Fares expressed "cautious optimism" that the global oil demand will improve as COVID-19 vaccination programs gather pace and industrial output recovers, as per Rueters.

Speaking ahead of a joint meeting of the Organization of Petroleum Exporting Countries and other major oil producers, he said the market supply/demand balance has largely improved as result of output cuts implemented by the group known as OPEC+, according to state news agency KUNA. He called on the group to the fully comply with these cuts.

As MRC informed earlier, U.S. crude oil and gasoline stockpiles fell unexpectedly last week as refiners ramped up runs to their highest in about a year to meet improved demand, the Energy Information Administration said. Crude inventories fell by 876,000 barrels in the week to March 26, compared with analysts' expectations in a Reuters poll for an increase of 107,000 barrels. Midwest crude stocks fell to their lowest since March 2020. Crude stocks at the Cushing, Oklahoma, delivery hub for futures rose by 782,000 barrels, EIA said.

As per MRC, Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), rose 1.2% in March on a three-month moving average (3MMA) basis, following a 1.0% increase in February. On a year-over-year (Y/Y) basis, the barometer rose 5.5% in March. The unadjusted data show a 1.2% gain in March following a 0.9% gain in February, ACC said. The diffusion index rebounded to 82% in March, well above the long-term average of 58%.

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).
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