SK Global Chemical and Kolon Industries to jointly produce biodegradable plastics from Q3 2021

MOSCOW (MRC) -- SK Global Chemical Co., a petrochemical subsidiary of SK Innovation Co., and chemical and textile heavyweight Kolon Industries signed a strategic partnership on 7 April to produce biodegradable polybuthylene adipate-co-terephthalate (PBAT) plastic from the third quarter of this year, according to Kemicalinfo with reference to the two companies' statements.

SK and Kolon will manufacture 50,000 tons per annum of PBAT by 2023, the highest output of biodegradable plastic in South Korea.

PBAT is a biodegradable plastic that biodegrades in nature within six months through air, sunlight, heat and enzyme reactions, whereas a typical plastic material takes more than 100 years to biodegrade. PBAT also has an eco-friendly advantage over other biodegradable plastics, including polylactic acid (PLA) plastics, which unlike PBAT require certain soil conditions such as high temperature and humidity for degradation. The PBAT will be used in agricultural bags, disposable bags and fishing nets.

The two companies launched a research project last year to develop a biodegradable plastic material. Within a year of this joint effort, they are on the brink of the first mass production of biodegradable plastic in South Korea.

Under the deal, Kolon Industries will offer support regarding the mass-production process and facilities management, based on its nylon and polyester production know-how.

SK Global Chemical, as the only manufacturer and supplier of the base material used in PBAT production, will build on its technical expertise of eco-friendly packaging materials.

“This partnership will put us a step ahead of the competition in the biodegradable plastics market and in establishing an eco-friendly plastics ecosystem,” said SK Global Chemical CEO Na Kyung-soo.

As MRC reported previously, earlier this yeaar, SK Innovation Co Ltd, the owner of South Korea's top refiner SK Energy, said refining margins are expected to gradually recover this year on a pick-up in fuel demand as the impact of COVID-19 eases

We remind that the Korean energy and chemical firm SK Innovation, a subsidiary of SK Group, has recently announced its intention to build a plant in Wojewodztwo Slaskie, Poland that will manufacture Lithium-Ion Battery Separators (LiBS) and Ceramic Coated Separators (CCS), said Manufacturingglobal. Separators are the core material of electric vehicle (EV) batteries, with SK Innovation seeking to further bolster its offering to battery manufacturers.

IMF improved forecast for Russian economic growth in 2021 to 3.8%

MOSCOW (MRC) -- The International Monetary Fund (IMF) has improved its estimate of Russia's GDP growth in 2021 to 3.8% from 3% it expected in January and 2.8% it forecast last October, reported Interfax.

The world economy, according to the IMF, will grow by 6% this year (in January the rise was estimated at 5.5%, in October 2020 - at 5.2%), according to the World Economic Outlook: Managing Divergent Recoveries. released by the IMF on Tuesday.

The IMF estimate is now somewhat at odds with the official forecast of the Ministry of Economic Development for 2021 - 3.3%, which was made back in September. At the same time, the head of the ministry, Maxim Reshetnikov, last week announced a slight revision of this forecast downward against the background of a smaller drop in GDP in 2020 than expected (the GDP of the Russian Federation in 2020 fell by 3% against the forecast of the Ministry of Economic Development of 3.9%, so the 2020 base year will be higher than the ministry laid down in September with the forecast for 2021).

The IMF's expectations for the growth of the Russian economy in 2022 are also higher than the current forecast of the Ministry of Economic Development - 3.8% versus 3.4%.

According to the current forecast of the Central Bank, Russia's GDP growth in 2021 will be in the range of 3-4%, in 2022 - in the range of 2.5-3.5%.

The consensus forecast of analysts surveyed by Interfax at the end of March for GDP growth for 2021 is 2.9%. There are more significant discrepancies between economists and official forecasts for GDP dynamics in 2022 - analysts expect the growth of the Russian economy to slow down to 2.2%.

As reported earlier, based on the January forecast of the IMF, by the end of 2022, the Russian economy will grow by 3.2% higher than in the pre-crisis 2019, and based on the forecast of the Ministry of Economic Development - by about 2.7%. The IMF raised its forecast for global GDP growth in 2021 by 0.3% - to 5.5%.

High prices and shortages hit the production of PVC windows in Europe

MOSCOW (MRC) -- EPPA member companies are very concerned about the wave of force majeure statements from European raw material suppliers, which has not been seen since 2015, said the department.

Massive supply chain problems on PVC resin put PVC window system suppliers under pressure. These are consequences of the global pandemic that heavily impacts logistics combined with multiple force majeures that have been declared by resin producers in the past weeks. As a main consumer of PVC resin in the European market, PVC window system suppliers suffer from increasing shortages of material paired with price surges, both impacting their production.

At the same time the demand for construction products such as windows has been increasing in the past months. The shortage of raw materials, additives and related goods is generating unacceptable supply bottlenecks and worsening the overall difficult economic situation caused by the pandemic. If demand for PVC resin cannot be met, PVC profile producers cannot continue to produce as planned. The situation is further burdened by the lack of imports in particular from the USA as well as from Middle and Far Eastern Countries.

If the current situation persists, the effects will also be felt further down in the supply chain and materialize on the European market for PVC windows. As first adverse effects can already be seen EPPA calls on raw material manufacturers to do everything possible to lift force majeure-related shutdowns as quickly as possible.

According to MRC ScanPlast, the prices of Russian polyvinyl chloride (PVC) broke new records in March under the pressure of the situation in foreign markets. Despite the high level of prices, the demand for PVC during March was at a good level. The lack of PVC supply has continued since the middle of last year, and converters were unable to build additional PVC stocks, as they did in previous years.

According to the ScanPlast of MRC, the total volume of unmixed PVC production in Russia amounted to 169,200 tonnes in the first two months of this year, which is 4% less than the same indicator a year earlier. All manufacturers showed a decrease in output volumes.

U.S. crude stockpiles fell more than expected

MOSCOW (MRC) -- U.S. crude oil stockpiles fell more than expected last week, while gasoline inventories jumped sharply as refining rates to the highest in over a year, the Energy Information Administration said, as per Reuters.

Crude inventories fell by 3.5 million barrels in the week to April 2 to 501.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.4 million-barrel drop. Stocks in the Midwest fell to their lowest since March 2020.

U.S. gasoline stocks rose by 4 million barrels in the week to 230.5 million barrels, compared with forecasts for a 221,000-barrel drop.? With summer driving season approaching, the expectation is that gasoline inventories will soon start to recede, but that has not happened yet.

"The gasoline number was so large that it’s not allowing crude oil to rally despite the draw in crude oil," said Robert Yawger, director of energy futures at Mizuho Securities.

Oil priced edged lower after the report. U.S. crude futures slipped by 50 cents to USD58.83 a barrel, while Brent dropped 46 cents to USD62.27 a barrel as of 10:44 a.m. EDT.

Refinery crude runs rose by 103,000 barrels per day and utilization rates edged up 0.1 percentage point, and are now running at 84% of capacity, their highest since March 2020. Distillate stockpiles, which include diesel and heating oil, rose by 1.5 million barrels to 144.1 million barrels, versus expectations for a 486,000-barrel rise.

Net U.S. crude imports fell last week by 141,000 bpd, while crude production fell 200,000 bpd to 10.9 million bpd.

As per MRC, Global chemical output rose by 1.4% in February, at a slightly slower pace than January. The ACC’s Global Chemical Production Index (CPRI) measures the production volume of the chemical industry for 33 key nations, sub-regions, and regions, all aggregated to the world total. During February, output was weak in most regions, with chemical production increasing in the Commonwealth of Independent States and in the Asia-Pacific region.

As per MRC, Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021. According to the Federal State Statistics Service of the Russian Federation, mineral fertilizers accounted for the greatest increase in the January-February output. Production of benzene dropped to 113,000 tonnes in February 2021, compared to 120,000 tonnes a month earlier. Overall output of this product reached 241,000 tonnes over the stated period, down by 7.5% year on year.

Clariant appoints Gunter von Au as new chairman

MOSCOW (MRC) -- Clariant (Muttenz, Switzerland), a focused, sustainable and innovative specialty chemical company, says that Gunter von Au has been elected the company’s new chairman during its annual shareholders' meeting held on 7 April, as per the company's press release.

Clariant’s board had unanimously proposed to shareholders that Gunter von Au be elected chairman following an announcement in February by Harolf Kottmann, the company’s chairman since 2018, that he would no longer be a candidate for the office of chairman and board member.

Gunter von Au, Chairman of Clariant’s Board of Directors, said “It is a great honor for me to be elected as Chairman of the Board of Directors, especially because of the close relationship that I have with this company for almost a decade now. Together with all my fellow board members as well as CEO Conrad Keijzer, I look forward to continuing Clariant’s successful path towards becoming one of the world’s leading companies for specialty chemicals and create value for all stakeholders, including shareholders.”

Meanwhile, Clariant’s shareholders approved at the meeting all agenda items and resolutions proposed by the board, including the distribution of an ordinary dividend of 0.70 Swiss francs (USD0.75) per share for the company’s performance over past two financial years; the integrated report and group consolidated financial statements for 2020; and the compensation report for 2020 on an advisory basis, the company says.

As MRC reported earlier, in December 2020, Clariant said that its board had appointed Conrad Keijzer as the company’s new CEO, effective 1 January 2021.

We remind that in October 2020, Clariant announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

Propylene is the main feedstocks for the production of polypropylene (PP).

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.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.