Saudi and UAE reach compromise in a move that should unlock a deal to supply more crude to tight oil market

MOSCOW (MRC) -- Saudi Arabia and the United Arab Emirates have reached a compromise over OPEC+ policy, an OPEC+ source said, in a move that should unlock a deal to supply more crude to a tight oil market and cool soaring prices, reported Reuters.

Brent oil prices fell on the news by as much as USD1 per barrel towards USD75 per barrel after Reuters reported the two major OPEC producers had agreed a deal.

In a statement on Wednesday, the UAE energy ministry said that a deal with OPEC+ on its baseline is yet to be reached and that deliberations are continuing.

The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC+, still need to take a final decision on output policy, after talks this month were abandoned because of the Saudi-UAE dispute.

OPEC+ had agreed record output cuts of almost 10 million barrels per day (bpd) last year to cope with a pandemic-induced slump in demand. The curbs have been gradually relaxed since then and now stand at about 5.8 million bpd.

The dispute between Riyadh and Abu Dhabi spilled into the open after the OPEC+ talks, with both airing concerns about details of a proposed deal that would have added an extra 2 million bpd to the market to ease oil prices that have recently climbed to 2-1/2 year highs.

While Saudi Arabia and the UAE both endorsed raising output immediately, the UAE had opposed extending the existing deal until December 2022 from April 2022 unless it was granted a higher production quota.

The OPEC+ source said Riyadh had agreed to Abu Dhabi's request to have UAE's baseline - the level from which cuts under the OPEC+ agreement on supply curbs are calculated - set at 3.65 million bpd from April 2022, up from 3.168 million now.

Giving the UAE a higher production baseline paves the way for extending the overall pact to the end of 2022, the OPEC+ source said.

Russia has been insisting on a quick output increase and has been among several countries mediating between Riyadh and Abu Dhabi to get a deal done as soon as possible.

OPEC+ has yet to take a final decision about the production deal. It was not immediately clear if other countries would also adjust their baselines.

The producers have said they will decide on a new date for the next meeting in due course.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC

MOSCOW (MRC) -- Hyosung Vina Chemicals Co Ltd has shut down its new No. 1 polypropylene (PP) plant in Southern Vietnam on Friday, 9 July 2021, due to an unspecified technical issue, according to CommoPlast with reference to market sources.

The 300,000 tons/year unit is expected to remain offline between three to four weeks, which could curtail local supply visibly.

As MRC informed before, following the start-up at the newly constructed PP plant in Vietnam on 12 February 2020, it was reported that Hyosung reached on-spec cargoes approximately in mid-February. The first prime grade parcels were homo-PP yarn grade F501N with a melt index of 3.7.

This is the No. 1 PP unit that has an annual capacity of 300,000 tons/year, operating using external sources of propylene. The company is constructing the Phase II project at the same location, which houses a propane dehydrogenation (PDH) plant and No. 2 PP unit that could produce another 300,000 tons/year.

According to MRC's ScanPlast report, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

Hyosung Corporation is a Korean industrial conglomerate, founded in 1957. It operates in various fields, including the chemical industry, industrial machinery, IT, trade, and construction.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for Methyl Methacrylate (MMA) in Europe, according to the company's press release as of July 9.

Effective July 1, 2021, or as existing contract terms allow, the company's price for MMA monomer grew by EUR300/tonne.

As MRC reported earlier, in May, 2021, Trinseo announced the closing of the previously announced transaction to acquire Arkema’s polymethyl methacrylates (PMMA) business. PMMA is a transparent and rigid resin with a wide range of end uses that augments Trinseo’s existing offerings across several end markets including automotive, building and construction, medical and consumer electronics.

The main application, consuming approximately 75% MMA, is in the production of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used to produce methyl methacrylate-butadiene-styrene copolymer (MBS), used as a modifier for polyvinyl chloride (PVC).

According to ICIS-MRC Price report, in Russia, buying activity subsided last week, some companies said they had already completed all their deals for July PVC shipments. It was not possible to avoid the price rise in July, PVC prices broke another record.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.
MRC

MOSCOW (MRC) -- CPC Corp is in plans to take its No 3 aromatics plant off-stream for a scheduled maintenance turnaround, reported S&P Global with reference to several industry sources' statement on July 9.

Thus, the unit is to be shut from mid-July to the end of September, 2021.

Located in Kaohsiung, Taiwan, the unit can produce 27,000 mt/year of benzene, 135,000 mt/year of toluene and 156,000 mt/year of isomer-MX.

As MRC informed previously, CPC Corporation shut its No. 7 aromatics plant in Taiwan for a maintenance turnaround on February 13, 2017. It remained off-stream for around 25-30 days. Located in Kaohsiung, Taiwan, the plant has a benzene capacity of around 205,000 mt/year and toluene capacity of 100,000 mt/year.

Benzene is a feedstock for the production of styrene monomer (SM), which, in its turn, is the main raw material for the production of polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 236,110 tonnes in the first five months of 2021, up by 27% year on year (172,360 tonnes). May estimated consumption was 48,880 tonnes, up by 66% year on year.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC