Crude oil futures in Asia down on concerns over spread of delta variant of coronavirus

MOSCOW (MRC) -- Crude oil futures were lower during mid-morning trade in Asia July 26 as concerns over the spread of the delta variant of the coronavirus continued to weigh on the market's upward potential, reported S&P Global.

At 11 am Singapore time (0300 GMT), the ICE September Brent futures contract was down 35 cents/b (0.47%) from the previous close at USD73.75/b, while the NYMEX September light sweet crude contract was down 36 cents/b (0.50%) at USD71.71/b.

Both benchmarks experienced significant volatility in the week ended July 23, recovering from a plunge on July 19 to end the week marginally higher. The front-month ICE Brent marker rose 0.69% on the week to settle at USD74.10/b July 23, while front-month NYMEX light sweet crude rose 0.71% to USD72.07/b.

Analysts said that oil market fundamentals remained strong, with improving downstream oil demand in the US and Europe boosting sentiment. Implied oil product demand in the US rose 6.62% on the week to 20.6 million b/d in the week ended July 16, the latest Energy Information Administration report showed July 21.

The ANZ analysts also expressed optimism that rising vaccination rates have reduced the likelihood that countries may retreat into full-blown lockdowns. "With officials from well-vaccinated countries reluctant to reinstate harsh lockdown measures, the risk of demand growth faltering is diminishing," they said.

The uptrend in oil demand has raised concerns of a supply deficit in the market, as the supply-side response from US shale producers remains conservative. These concerns come despite the OPEC+ coalition deciding on July 18 to increase its production quotas by 400,000 b/d each month from August.

As MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.

We remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.

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) -- SayanskKhimPlast (Irkutsk region) has resumed its polyvinyl chloride (PVC) production after the scheduled turnaround, according to ICIS-MRC Price Report.

According to a representative of the enterprise, the production of polyvinyl chloride was resumed after scheduled maintenance works which began 12 July. The outage was short and lasted 10 days. PVC production capacity at the plant will be 350,000 tonnes/year.

It is also worth noting that the Bashkir Soda Company (BSK) intends to resume PVC production in the beginning of this week after a planned shutdown for repairs. The shutdown began on 10 July, the plant's capacity is 240,000 tonnes per year.

According to MRC ScanPlast , SayanskKhimPlast reduced its capacity utilisation last month and produced 23,400 tonnes of suspension PVC (SPVC), compared to 26,500 tonnes in May. The Sayansk plant managed to produce 156,900 tonnes of PVC in the fist six months of 2021, compared to 164,3000 tonnes a year earlier.

JSC SayanskKhimPlast (Irkutsk region), established in 1998, is a complex of large-capacity chlororganic production facilities connected in a single production cycle. SayanskKhimPlast produces PVC, caustic soda and bleach. After commissioning of RusVinyl's PVC production (Nizhny Novgorod region), SayanskKhimPlast became Russia's second largest PVC producer.
MRC

MOSCOW (MRC) -- Epsilyte (The Woodlands, Texas), a leading North American producer of expandable polystyrene (EPS), has announced an increase in its prices for all EPS grades for August shipments on higher feedstock costs, said the company.

Thus, the price of the company's EPS grades will go up by 5 cents/pound (cts/lb) or USD110/tonne, effective 1 August, 2021 or as contracts allow.

Rising feedstock costs, along with current EPS supply and demand dynamics, necessitate this adjustment.

As MRC reported earlier, Epsilyte cut its July EPS prices in the region by 9 cts/lb or USD198/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, prices of Russian EPS remained steady last week. Prices of spot quantities of Russian material were at Rb175,000-180,000/tonne CPT Moscow, including VAT. EPS producers have not announced next month's price adjustments yet.

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) -- BP and Johnson Matthey partnered with Cardiff University and the University of Manchester in a ?9m project that aims to convert CO2, waste and sustainable biomass into clean and sustainable fuels and products, said the company.

A partnership featuring two leading British universities, Cardiff University and The University of Manchester, together with bp and Johnson Matthey, has been launched to explore transforming carbon dioxide, waste products and sustainable biomass into fuels and products that can be used across the energy and transportation sectors. The project is one of eight business-led Prosperity Partnerships announced today in support of the government’s ambitious new Innovation Strategy.

Cardiff University, an internationally leading center for catalysis research, is leading the project, and The University of Manchester will provide expertise in materials science, characterization methods and catalysis. They are joined by bp, which is transitioning from an international oil company to an integrated energy company, and Johnson Matthey, a global leader in sustainable technologies. The partnership will devote the next five years to exploring new catalyst technology to help the world get to net zero.

Catalysts are involved in helping to manufacture an estimated 80% of materials required in modern life, so are integral in manufacturing processes. As a result, up to 35% of the world’s GDP relies on catalysis1. To reach net zero, it will be critical to develop new sustainable catalysts and processes, which will be the main objective for the partnership to explore.

Professor Duncan Wass, Director of the Cardiff Catalysis Institute, said: “The catalysts we use today have been honed over decades to work with specific, fossil fuel resources. As we move to a low carbon, more sustainable, net zero future, we need catalysts that will convert biomass, waste and carbon dioxide into valuable products such as fuels and lubricants. Working in this partnership, we will bring together a wide range of catalysis expertise to uncover new science and contribute towards achieving net zero - perhaps the most pressing objective for us all."

Dr. Kirsty Salmon, bp vice-president for advanced bio and physical sciences for low carbon energy, said: “We are excited to be working with our longstanding partners Johnson Matthey, Cardiff Catalysis Institute and The University of Manchester in this Prosperity Partnership. It is a great team, which builds on our successful bp International Center of Advanced Materials (bp-ICAM) partnership, and I am looking forward to seeing them work across scientific disciplines to innovate new low carbon technologies to help the world get to net zero."

Dr. Elizabeth Rowsell, Corporate R&D Director, Johnson Matthey, added: “We are delighted to be part of the EPSRC-funded Prosperity Partnership which will help to deliver sustainable materials leading to increased circularity in industrial processes. This project will be critical in developing the next generation of enabling catalyst technologies that will be needed in a Net Zero world, so it is entirely aligned with the net zero commitments of both industrial partners."

As per MRC, BP acquired US shale assets from BHP Billiton for USD10.5 billion in the largest deal since the 1999 acquisition of Atlantic Richfield oil company. British oil and gas company BP bought US shale assets owned by mining company BHP Billiton.

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) -- Axalta Coating Systems announced that it has entered into definitive agreements to acquire U-POL Holdings Limited (U-POL) from Graphite Capital Management LLP and other holders for GBP428 million (approx. USD590 million), according to Kemicalinfo.

Founded in 1948 and based in the United Kingdom, U-POL is a leading manufacturer of repair and refinish products used primarily for automotive refinish and aftermarket protective applications. The business produces a wide range of high-quality automotive refinishing products and accessories including fillers, coatings, aerosols, adhesives, and paint related products as well as other automotive aftermarket protective coatings.

Axalta will accelerate growth of U-POL’s products by expanding market access through Axalta’s existing sales and distribution channels while leveraging U-POL’s distribution channels to extend the reach of its Refinish Coatings portfolio to new customers.

“Axalta is the world leader in the premium refinish coatings segment. U-POL’s expertise in refinish accessories and protective coatings is highly complementary to Axalta’s business and expands our addressable market into the important and growing mainstream and economy-based refinish segment as well as the consumer do-it-yourself (DIY) aftermarket,” said Robert Bryant, Axalta’s Chief Executive Officer.

U-POL expects net sales of approximately USD145 million and adjusted EBITDA of approximately USD38 million for fiscal year 2021. The total consideration of approximately USD590 million reflects a full year 2021E adjusted EBITDA multiple of approximately 12.5x, including run rate operating synergies and efficiencies. Axalta expects the acquisition to be immediately accretive to adjusted EBITDA margin, excluding transaction-related costs associated with the acquisition. Axalta plans to finance the transaction from cash on hand.

The transaction is expected to close in the second half of 2021, subject to clearance under applicable antitrust laws and other customary closing requirements.

As MRC reported earlier, Wanhua Chemical, a global leader in the production and marketing of polyurethanes, petrochemicals and fine chemicals, has recently received the inaugural “Excellence Award” from Axalta. The Excellence Award is given to suppliers, who exhibit progressively exceptional overall quality, service, technology and total capacity performance for three consecutive years or longer. The Excellence Award winner also demonstrates an exceptional commitment to helping Axalta achieve its strategic initiatives.

We remind that in January, 2020 Wanhua Chemical Group disclosed plans for a second ethylene cracker project at its Yantai, China, site with local government officials. The project will include a 1.2-million metric tons/year (MMt/y) ethylene unit; pyrolysis gasoline hydrogenation; aromatics extraction; and production facilities for butadiene, high density polyethylene (HDPE), low density polyethylene (LDPE), polyethylene (PE) plastomers and elastomers, polypropylene (PP), and other derivatives. Timing and other details were not disclosed. The second ethylene project will use naphtha and C4s as feedstock.

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