China crude imports drop in Jan-June by 3% YOY and see first H1 fall since 2013

MOSCOW (MRC) -- China's crude oil imports fell 3% from January to June versus a year earlier, in the first first-half contraction since 2013, as an import quota shortage, refinery maintenance and rising global prices curbed buying, reported Reuters.

Imports totalled 40.14 million tonnes last month, data released by the General Administration of Customs showed on Tuesday, equivalent to 9.77 million barrels per day (bpd).

That compared with 9.65 million bpd in May and a record 12.9 million bpd in June 2020, when refiners snapped up cheap oil to supply China's quick recovery from the pandemic.

For the first half of 2021, imports into the world's top crude oil importer totalled 260.66 million tonnes, or about 10.51 million bpd, 3% lower than a year earlier.

As the impact of COVID-19 locked down most of the world, China was the only major oil consumer to increase imports in 2020, accounting for a record 19.8% share of global crude imports for the year, the BP Statistical Review of World Energy showed. That strong appetite helped crude prices to rebound sharply last year from their April slump, but slowing purchases by China going forward may start to weigh on prices.

Bumper purchases led by independent refineries, known as teapots, had bolstered imports in the first quarter of 2021, pushing inbound shipments 9.5% above the same period of 2020. Imports fell nearly 13% in the second quarter, however, versus the first three months as inventories climbed and refining margins were squeezed by steadily rising global oil prices and a flood of imports of blending fuels, such as light cycle oil that slipped into the diesel pool.

As MRC informed earlier, more crude oil was being refined in China's refineries in April 2020 than in US refineries for the first month on record, and this trend continued for all remaining months in 2020 except for July and August. Thus, China processed more crude oil than the United States not only because of the unique effects of COVID-19 pandemic-related restrictions in 2020, but also because of differences in the longer-term structural refining trends between the two countries.

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.
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1. Crude oil futures steady in Asia amid softening demand due to resurgence of COVID-19 cases across the globe

MOSCOW (MRC) -- Crude oil futures were steady during mid-morning trade in Asia July 13, with market sentiment bogged down by a resurgence of COVID-19 cases across the globe that could slow economic recovery, while the OPEC+ alliance remained unable to reach a consensus on reducing production cuts for August and beyond, reported S&P Global. At 10:24 am Singapore time (0224 GMT), the ICE September Brent futures contract was up 16 cents/b (0.21%) from the previous close to USD75.32/b, while the NYMEX August light sweet crude contract was up 17 cents/b (0.23%) at USD74.27/b. "Oil looks like it is stuck between opposing forces -- on one hand, there is the slowing down of recovery, particularly in Asia, and on the other hand, there are expectations that OPEC+ will come up with a (production) deal to maintain prices," Jeffery Halley, senior market analyst at OANDA, told S&P Global Platts July 13.

MRC

MOSCOW (MRC) -- Neste and LyondellBasell has recently announced a long-term commercial agreement under which LyondellBasell will source Neste RE, a feedstock from Neste that has been produced from 100% renewable feedstock from bio-based sources, such as waste and residue oils and fats, as per Neste's press release.

This feedstock will be processed through the cracker at LyondellBasell’s Wesseling, Germany, plant into polymers and sold under the CirculenRenew brand name.

Through their collaboration, Neste and LyondellBasell are jointly contributing to the development of the European market for more sustainable polymers and chemicals solutions. By ensuring continuity with significant industrial-scale volumes of renewable polymers produced with renewable feedstock from bio-based sources, the companies wish to enable sustainability-focused brands to develop more sustainable products and offerings.

In April 2021, LyondellBasell launched the Circulen family of products. LyondellBasell’s CirculenRenew product line consist of polymers linked to renewable-based feedstocks, while polymers made from mechanically recycled materials are marketed under the brand name CirculenRecover and those linked to advanced (molecular) recycling are called CirculenRevive.

As MRC reported earlier, in late June 2021, the scheduled maintenance i.e. the major turnaround at Neste’s Porvoo refinery in Finland was successfully completed and production started at the refinery. The major turnaround is a significant investment to secure safety, availability and competitiveness of the refinery. The total investment of the Porvoo refinery major turnaround was approximately EUR630 million, of which approximately EUR 330 million was realized in the major turnaround in 2021. In 2020, only the most critical maintenance work was executed at the refinery as the corona pandemic delayed the turnaround by a year.

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.

Neste (Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. The company refines waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. The company is the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. In 2020, Neste's revenue stood at EUR 11.8 billion, with 94% of the company’s comparable operating profit coming from renewable products.

LyondellBasell is one of the world's largest polypropylene producers, a leading supplier of polyethylene and catalysts, and a developer of polyethylene and polypropylene technologies. The company manufactures products at 58 production sites in 18 countries around the world. In addition, LyondellBasell is the developer of the Spheripol process, which is the basis for polypropylene production at Omsk Poliom and Nizhnekamskneftekhim.
MRC

MOSCOW (MRC) -- Shell continues to experience COVID-19 disruption at one of its main North Sea development projects, the revamp of the Shearwater gas and condensate hub, with evacuation plans underway for 20 people tested positive and a further 98 close contacts, reported S&P Global with reference to a source close to the situation.

Separately, industry group Oil & Gas UK said it was seeking a relaxation of rules on self-isolation for offshore workers deemed to have been in close contact with those tested positive for COVID-19, in order to ensure the efficiency of operations, while continuing to prioritize health and safety.

Shell's Shearwater project, intended to incorporate new fields and redirect gas flows to St Fergus on the Scottish coast and nearby petrochemical facilities, has been buffeted by a coronavirus upsurge since late June that threatens to delay completion of a current shutdown of the facility, due for completion mid- to late July.

The overall Shearwater project was already delayed by the pandemic, with startup originally scheduled for 2020.

The Shearwater area fields, along with TotalEnergies' nearby Elgin-Franklin complex, are predominantly gas, but send significant volumes of light oil or condensate through the UK's main crude artery, the Forties pipeline. A section of the Forties route that handles oil from Elgin-Franklin and Shearwater is currently shutdown for a protracted maintenance overhaul.

Regarding the latest infection situation at Shearwater, the source close to the situation said all those concerned "have been flown to shore, or are isolating while waiting to return to shore". Shell did not comment.

The UK's North Sea oil and gas industry typically produces around 1 million b/d of oil, or around 1% of the global market, while meeting about half the country's gas needs.

However, the problems for Shell come as UK oil and gas output has plunged due to operators catching up on maintenance and development work postponed from 2020 due to the pandemic.

Infection concerns have abated, partly, the industry says, due to strict COVID-19 testing and protocols, and offshore workforce numbers are now significantly higher than last year - at 10,678 for the week commencing June 28, according to Oil & Gas UK.

As MRC informed before, Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) - PJSC Vladimir Chemical Plant has signed a contract for the supply of PVC compound IN-M 30 with one of the Czech consumers, which will allow organizing regular deliveries of this product to the European market, the company said.

The first test batch of products was sent to the Czech Republic in April, and in May 80 tons of raw materials were already shipped to ProCab. It is noted that, despite fierce competition, demanding European consumers preferred the Vladimir Chemical Plant.

"From the very beginning of its operation, the Vladimir Chemical Plant supplied products for export to partners in neighboring countries, and now we have entered the European market. Our export strategy is aimed at increasing the volume of supplied products and simultaneously expanding our geographical presence, and we are also aiming at increasing the percentage a component of export supplies in the client portfolio, which will allow VHZ.31 to expand production and its influence not only in Russia, but also abroad, "said Ilya Gorbatsky, managing partner of VHZ holding.

The high quality of VHZ products, corresponding to Russian and European standards, is achieved through proven technologies and formulations and testing for efficiency and safety in our own laboratory at different stages of production. In addition, in 2020, the plant underwent technical re-equipment of production lines, as well as a research laboratory and data technical control service.

"It is worth noting that the production facilities of the VHZ continued to function even under severe restrictions associated with the COVID-19 epidemic. At the moment, the plant's workload is about 80%, which allows us to produce up to 3 thousand tons of products per month. We plan to further increase volumes, because our strategy for the coming years includes goals for a significant increase in the company's financial performance, production volumes and the expansion of sales channels, including through the development of new directions and attracting projects to the site of the Vladimir Chemical Plant holding ", - commented Dmitry Moskovets, First Deputy General Director VHZ, chairman of the board of directors.

Earlier it was reported that PJSC Vladimirsky Chemical Plant plans to spend 300 million rubles for the modernization of the production complex until 2023. These funds will be invested in the purchase of a new PVC production line, as well as the modernization of current equipment and a scientific and technical laboratory on the territory of the VHZ. In addition, part of the funds is planned to be used to support and improve the quality of manufactured products in accordance with the requirements of the international standard.

Vladimir Chemical Plant was registered in Vladimir in 1992 and is part of the vertically integrated holding VHZ.31, which also includes a management company, an investment fund and a laboratory. According to the data on the site of the plant, the enterprise is one of the largest in Russia for the production of plastics for various industries. The main type of manufactured products is PVC compounds, non-plasticized materials in the form of sheets and granules. The owner of 79.71% of the company is Cheshor Enterprises Limited (Cyprus).
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