Crude oil futures rise in Asia on higher US crude inventories

MOSCOW (MRC) -- Crude oil futures rose during the mid-morning trade in Asia June 30, as data from the American Petroleum Institute showed a large draw in US crude inventories, and as the market eagerly awaited the July 1 OPEC+ meeting, reported S&P Global.

At 11:13 am Singapore time (0311 GMT), the ICE August Brent futures contract was up 43 cents/b (0.58%) from the previous close at USD75.19/b while the NYMEX August light sweet crude contract was up 49 cents/b (0.67%) at USD72.98/b.

The data released by the American Petroleum Institute led to some bullishness in the market, as it showed a draw of 8.15 million barrels in the US crude inventories for the week ended June 25.

The data was less positive with regards to downstream products inventories, showing gasoline and distillate inventories rising by 2.42 million barrels and 428,000 barrels, respectively.

The market remains optimistic about US products demand, and especially gasoline demand, with Apple Mobility data showing the US driving activity staying near record levels at 162% of the January 2020 baseline in the week ended June 25.

The market will now be awaiting more comprehensive data from the Energy Information Administration, due to be released later June 30, for more pricing cues.

Meanwhile, the market has its eyes set on the July 1 OPEC+ meeting, after the July 29 Joint Technical Committee provided little definite guidance into the producer group's production plans for August.

Despite calls for higher production, analysts generally expect the coalition to raise production moderately by 500,000 b/d in August, especially as the resurgence in COVID-19 infections due to the delta variant of the coronavirus threatens demand, and as the threat of additional barrels from Iran following a possible Joint Comprehensive Plan of Action deal hangs over the market.

"Russia apparently is leading a group of countries that want to (increase) output. Saudi Arabia is taking a more cautious approach, with Energy Minister, Prince Abdulaziz bin Salman, cautioning (that) it's not clear whether oil prices were rising due to real supply and demand or because of expectations and trajectories that are excessively optimistic," ANZ analysts said in a June 30 note.

We remind that as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

MOSCOW (MRC) -- Japan's polyvinyl chloride (PVC) exports fell 5.9% month on month in May to hit a 13-month low of 42,212 mt, amid India's partial lockdown, reported S&P Global with reference to the latest data by Japanese Customs June 30.

From a year earlier, the exports fell 10.8%.

Around half of Japan's monthly exports go to India, where it enjoys zero import tax. Japan's PVC exports to India also hit a 13-month low of 22,310 mt in May as partial lockdown in India amid surging COVID-19 cases lowered PVC buying appetite.

India was hit by the second wave of the coronavirus pandemic in May, which resulted in partial lockdowns in major cities. India's buying appetite for PVC cargoes diminished quickly as economic activities slowed down amid partial lockdowns.

Market sources said India started recovering from the second wave in June. However, the sources expect a slower recovery.

We remind that as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

According to MRC's ScanPlast report, Russia's overall PVC production 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.
MRC

MOSCOW (MRC) -- Epsilyte (The Woodlands, Texas), a leading North American producer of expandable polystyrene (EPS), has announced a reduction in its prices for all EPS grades for July shipments, said the company.

Thus, the price of the company's EPS grades will go down by 9 cents/pound (cts/lb) or USD198/tonne, effective 1 July, 2021 or as contracts permit.

The present adjustment reflects current EPS supply and demand dynamics as well as expected feedstock trends.

As MRC reported earlier, Epsilyte cut its June EPS prices in the region by 3 cts/lb or USD66/tonne.

EPS is a rigid form of polystyrene (PS) used in insulation foams for the construction industry as well as for packaging.

According to ICIS-MRC Price report, in Russia, EPS producers said they expect a further preservation of high activity in the EPS market in July. Prices of SIBUR-Khimprom's material were not adjusted last week. Russian producers are expected to announce July EPS prices this week. The shortage of polymer is expected to remain next month on the back of stronger demand.

Epsilyte is owned by private equity firm Balmoral Funds (Los Angeles, California). Epsilyte is one of North America’s leading producers of expandable polystyrene resin. The company is focused on solving customer needs for efficient, high-R value EPS. This includes reducing energy usage in buildings, ensuring safe and healthy food through innovative packaging technology, and participating in infrastructure investment both in the United States and abroad.
MRC

MOSCOW (MRC) -- A fire at Westlake Chemical’s Petro 1 Unit in Lake Charles, Louisiana was reported on 25 June, 2021, according to KPLC News with reference to company officials' statement.

The fire has been quickly contained. The fire brigade has extinguished 90% of the fire, said Joe Andrepont, spokesperson for Westlake Chemical.

Everyone in the unit has been accounted for and no injuries have been reported, Andrepont said. US petrochemical producer is still working to account for workers in other areas.

There is currently no off-site impact, according to Dick Gremillion, head of Calcasieu Parish head of Emergency Preparedness.

“t was no chemical release - it was a lube oil fire from one of the actual compressor decks,” said Derek Senegal, spokesperson for Louisiana State Police. “The fire, smoke, whatever you saw, that was just from the flares from that particular section they isolated.”

As MRC informed earlier, the company conducted a scheduled turnaround at Petro 1 steam cracker from 19 April, 2016, to mid-July 2016. The company operates two steam crackers at the site - Petro-1, with current ethylene capacity of 660,000 m tpa, and Petro-2, with 886,000 m tpa.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

MOSCOW (MRC) -- BASF has struck a EUR1.6bn deal for a 49.5% stake in a Dutch offshore windfarm project as it aims to secure renewable power for its Antwerp chemical site in Belgium and other sites in Europe, said the company.

BASF and Vattenfall have signed a contract for the purchase of 49.5% of Vattenfall’s wind farm Hollandse Kust Zuid (HKZ) by BASF. The purchase price amounts to EUR0.3 billion and takes into account the achieved status of the project. Including BASF’s contribution to fund the wind farm construction, BASF’s total commitment amounts to around EUR1.6 billion. Closing of the transaction is expected in the fourth quarter of 2021, subject to the approval of the relevant authorities. Offshore construction of the wind farm will start in July 2021.

Once fully operational, the wind farm will be the largest offshore wind farm in the world with 140 wind turbines and a total installed capacity of 1.5 Gigawatt. The Hollandse Kust Zuid wind farm will also be the first fully merchant offshore wind farm in the world which does not receive any price subsidies for the power produced. The project is expected to become fully operational in 2023. A significant part of the electricity production of HKZ is reserved for Vattenfall’s Dutch customers.

BASF is acquiring the electricity from the wind farm for its ownership share through a long-term power purchase agreement. It will enable BASF to implement innovative, low-emission technologies at several of its production sites in Europe. BASF’s Antwerp Verbund site will benefit from the renewable power to a significant extent. The BASF Antwerp site is the largest chemical production site in Belgium and the second largest BASF Group site worldwide.

The supply scheme to other BASF sites in Europe will depend on the further development of the respective regulation for renewable energy. The wind farm will also support the Netherlands in reaching its target share of renewable power generation and greenhouse gas reduction targets. BASF has more than 1,500 employees in the Netherlands who develop, produce and sell products for many sectors at various locations.

“This wind farm will be an important building block to supply our Antwerp Verbund site and other European sites with renewable electricity. It is the first major investment of BASF in facilities for renewable power. With this investment we are securing significant volumes of electricity from renewable sources for BASF, which is a key element of our transformation towards climate neutrality,” said Dr. Martin Brudermuller, Chairman of the Board of Executive Directors of BASF SE.

"Vattenfall and BASF share a common objective of phasing out greenhouse gas emissions from our operations. With this cooperation, Vattenfall once more proves that partnerships with industries are a key element to accelerate the European energy transition across sectors. I am particularly proud that we can do this, while at the same time securing the delivery of fossil-free electricity to our Dutch customers," said Anna Borg, President and CEO of Vattenfall.

Vattenfall has a mission to enable fossil-free living within one generation. In order to reach this goal, the company invests heavily in renewable energy. Offshore wind plays an important part in reaching its goals. A cornerstone of Vattenfall’s growth strategy is to look for partners to balance the significant?investment costs of its future assets.Strong investors will support Vattenfall to accelerate and drive the transformation of the energy landscape since it will?open up?financial space for new investments in renewables and decarbonization.

BASF aims to reduce its greenhouse gas emissions by 25% by the year 2030 and achieve net-zero emissions by 2050. One important lever to further bring down emissions is replacing fossil-based electricity with fossil-free electricity. BASF will secure the required amounts of renewable power through a “make and buy” approach. This includes the intention to bring in financial co-investors to this project allowing for an efficient use of capital.

BASF is working on scaling up low-emission technologies to industrial dimensions. Beyond 2030, BASF expects to implement technologies such as CO2-free methods for the production of hydrogen and electrically heated steam crackers, which will significantly increase BASF’s demand of renewable power. Steam crackers play a central role in the production of basic chemicals and require a significant amount of energy to break down hydrocarbons under high temperatures and pressure into olefins and aromatics. Offshore wind farms can play a key role to supply the required amounts of renewable energy.

“Vattenfall and BASF are long-standing partners. With this truly European project we take a further step in strengthening our partnership. Together we will make a positive impact on the climate, on our businesses, and we will continue to look for future opportunities for cooperation,” said Borg and Brudermuller.

As per MRC, BASF and the Fabbri group of companies developed biodegradable films for food packaging.
Based on ecovio, a certified biodegradable material from BASF, the Fabbri Group produces Nature Fresh, a highly transparent stretch film. This product is the first certified biodegradable film for foodstuffs, combining optimal breathability, long shelf life, high transparency and excellent mechanical properties for automatic packaging.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

BASF is the largest diversified chemical company in the world and a leading global supplier of high quality polyamide and polyamide intermediates for films and monofilaments.
MRC