Crude oil futures slightly up on optimism over stronger demand from US and Europe

MOSCOW (MRC) -- Crude oil futures were slightly higher, but rangebound, during mid-morning trade in Asia May 18, as optimism over increased oil demand from the US and Europe kept the market afloat, reported S&P Global.

At 11:24 am Singapore time (0324 GMT), the ICE Brent July contract was up 17 cents/b (0.24%) from the May 17 settle at USD69.63/b, while the June NYMEX light sweet crude contract was up 10 cents/b (0.15%) at USD66.37/b.

The market brushed aside news of Asia's worsening COVID-19 situation and turned its attention towards the recovery in the US, where a rebound in economic activity has propped up downstream oil product demand.

Apple mobility data showed that US driving activity was up by around 1% in the week to May 14, reaching a nine-month high that is 142.04% of the January 2020 baseline.

Furthermore, the US Transportation Security Administration said the number of people passing through US airports on May 16 was 1.85 million, the highest since March 2020. This is just 30% lower than the equivalent seen on the same day in May 2019, indicating that US domestic air travel demand is recovering.

The market is also optimistic of Europe's prospective oil demand as major economies are gradually easing their mobility restrictions. The UK took a major step out of its lockdown on May 17, allowing social gatherings in limited numbers, activities such as indoor dining and replacing the ban on international travel with a more lenient set of rules.

Meanwhile, Italy, on May 17, announced it is pushing back its nightly coronavirus curfew by an hour to 11 pm from May 18 and is easing other mobility restrictions in areas where infections are low. France is also set to push back its nightly curfew by two hours to 9 pm from May 19, while lifting some restrictions on leisure venues and outdoor dining.

Over in Asia, concerns over renewed mobility restrictions in India, Japan and Southeast Asia were mollified by hopes that oil demand from the region's economic powerhouse China will remain strong.

As MRC informed earlier, 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 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 the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

SEPC to shut PE plants for scheduled turnaround on 23 May

MOSCOW (MRC) -- Saudi Ethylene and Polyethylene Company (SEPC), a subsidiary of Tasnee, is planning to start a routine maintenance at its polyethylene (PE) in Jubail on 23 May, 2021, according to CommoPlast with reference to market sources.

A 400,000 tons/year of high density polyethylene (HDPE) and a 400,000 tons/year of low density polyethylene (LDPE) plant will be shut for a turnaround for about 27 days.

The company also operates a cracker that produces 1 million tons/year of ethylene and 285,000 tons/year of propylene at the same site, which will be also taken-off line for maintenance during the stated above period.

As MRC informed before, Saudi Arabia's National Industrialization Company, or Tasnee, had announced a curtailment of feedstock to petrochemical affiliates in varying proportions by an average of 41% due to the attacks on key Saudi Aramco facilities on Saturday, 14 September 2019. Tasnee owns a majority stake in Saudi Polyolefins Company and Saudi Ethylene and Polyethylene Company.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased.

SEPC is a joint venture between Tasnee, Sahara Petrochemical Company, and LyondellBasell.

Ukrainian PE imports down by 8% in Jan-Apr 2021

MOSCOW (MRC) -- Overall polyethylene (PE) imports into the Ukrainian market reached 83,500 tonnes in the first four months of 2021, down by 8% year on year. High density polyethylene (HDPE) accounted for the main decrease in imports, according to MRC's DataScope report.

Last month's PE imports to Ukraine were 19,500 tonnes, compared to 28,700 tonnes in March, local companies reduced their purchases of all PE grades, except for ethylene copolymers, because of record high prices in foreign markets. Thus, overall PE imports reached 83,500 tonnes in January-April 2021, compared to 90,900 tonnes a year earlier. These were mainly HDPE imports that decreased, whereas imports of other PE grades increased.

The structure of PE imports by grades looked the following way over the stated period.

Last month's HDPE imports were 6,600 tonnes, compared to 9,000 tonnes in March, Ukrainian companies reduced their purchases of PE for extrusion blow moulding (EBM) and films extrusion. Overall HDPE imports totalled 26,500 tonnes in the first four months of 2021 versus 38,600 tonnes a year earlier.

April imports of low-density polyethylene (LDPE) were 5,800 tonnes versus 8,800 tonnes a month earlier, Ukrainian companies reduced their purchases in Russia. Overall LDPE imports reached 26,100 tonnes over the stated period, up by 3% year on year.

Last month's imports of linear low density polyethylene (LLDPE) were 5,700 tonnes, compared to 9,500 tonnes in March, shipments of film grade LLDPE from Saudi Arabia decreased because of high prices. However, overall LLDPE imports reached 25,800 tonnes in the first four months of 2021, compared to 22,800 tonnes a year earlier.

Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 5,100 tonnes over the stated period, compared to 4,000 tonnes a year earlier.


PVC production in Russia down by 1% in January-April 2021

MOSCOW (MRC) -- Overall production of polyvinyl chloride (PVC) reached 346,100 tonnes in the first four months of 2021, down 1% year on year. All producers decreased production volumes over the reported period, with the exception of the Bashkir Soda Company, according to MRC's ScanPlast Report.

April production of unmixed PVC in Russia was 79,400 tonnes from 90,200 tonnes a month earlier, RusVinyl decreased capacity utilisation.
Total PVC production in Russia reached 346,100 tonnes in January - April 2021 against 350,800 tonnes a year earlier, a decrease in production volumes was seen from all producers, the only exception was the Bashkir Soda Company, which showed a minimum increase.
The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (JV of SIBUR and SolVin) produced about 29,100 tonnes of PVC in April, with emulsion polyvinyl chloride (EPVC) accounting for 2,400 tonnes, compared to 31,000 tonnes a month earlier. Total SPVC production at RusVinyl decreased to 117,300 tonnes in the first four months of this year, compared to 119,200 tonnes in the same period in 2020.

SayanskKhimPlast kept high level of capacity utilisation in April, having produced about 26,500 tonnes of suspension PVC (SPVC) compared to 27,400 tonnes a month earlier. The Sayansk plant managed to produce about 107,000 tonnes of PVC in January-April, compared to 109,600 tonnes a year earlier.

Baskhir Soda Company produced about 23,800 tonnes of SPVC in April, against 24,500 tonnes a month earlier. The Baskhir plant's overall production of PVC reached 93,500 tonnes in January-April 2021, up 1% year on year.

Kaustik (Volgograd) produced about 7,200 tonnes of SPVC in April, compared with 7,400 tonnes in March. The plant's overall production of PVC reached 28,300 tonnes in January-April versus 29,100 tonnes a year earlier.


PVC imports into Ukraine fell by 40% in Jan-Apr, exports up by 10%

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 40% in the first four months of this year, compared to the same period in 2020 and reached about 8,600 tonnes. Sales of Ukrainian PVC to foreign markets increased by 10% year on year on a higher prices in the foreign markets, according to a MRC's DataScope report.

Last month, imports of PVC-S to the Ukrainian market rose to 2,200 tonnes against 1,700 tonnes, despite serious export restrictions, local companies still managed to slightly increase purchases of European PVC. Overall SPVC imports exceeded 8,600 tonnes in January-April 2021, compared to 14,300 tonnes a year earlier.

Limited export quotas from European and North American producers were the main reason for such a serious drop in imports. European producers with the share of about 97% of the total imports over the stated period were the key suppliers of PVC to the Ukrainian market.

Last month, Karpatneftekhim increased the volume of external sales, the export sales of Ukrainian PVC amounted to 19,100 tonnes against 18,800 tonnes in March. Overall, about 79,500 tonnes were shipped for export in the first four months of 2021, compared to 72,300 tonnes a year earlier.