COVID-19 - News digest as of 27.07.2021

1. Dow sees strong petrochemical demand in a number of end-markets

MOSCOW (MRC) -- Dow Chemical, one of the largest US petrochemical companies, saw packaging, construction materials and coatings, industrial and electronics markets surge in the second quarter amid strong demand and higher chemical and resin pricing, reported S&P Global with reference to CFO Howard Ungerleider's statement July 22. "Strong consumer trends continue in retail, housing, and the manufacturing sectors and inventory levels remain low across most of our value chains," Ungerleider said during the company's Q2 earnings call. "We expect these dynamics to continue to support price strength in (Q3) as the industry works to fulfill pent-up demand." The company reported USD1.9 billion in profits, up from a USD225 million loss in Q2 2020, when demand cratered for many products amid the height of coronavirus pandemic-related shutdowns in many global regions.


MRC

MOSCOW (MRC) -- Crude oil futures were higher during mid-morning trade in Asia July 27 as a weakened US dollar prompted buying activity, but upside was limited as the rising number of COVID-19 cases globally sapped market sentiment, reported S&P Global.

At 11:17 am Singapore time (0317 GMT), the ICE September Brent futures contract was up 46 cents/b (0.62%) from the previous close at USD74.96/b, while the NYMEX September light sweet crude contract rose 35 cents/b (0.49%) at USD72.26/b. The ICE Brent and the NYMEX light sweet crude markers had edged up 0.54% and down 0.22%, respectively, on July 26, following a directionless trading session.

The uptick in prices comes amid the depreciation of the US dollar ahead of the US central bank's Federal Open Market Committee meeting, with the ICE US dollar index trading at 92.61 at 11.00 am, down 0.35% from the July 23 close.

A weaker US dollar makes dollar denominated assets such as oil futures more attractive for buyers holding foreign currency, and whips up appetite for such assets.

Meanwhile, analysts said the rapid spread of the delta variant of the coronavirus has created significant downside risk for the oil market, as it has raised the prospect of extended and more stringent mobility restrictions. Citing the spread of the delta variant both domestically and internationally, US White House press secretary Jen Psaki said on July 26 that the country will maintain its existing coronavirus travel restrictions, resisting pressure from the travel industry and US allies to ease them, media reports said.

A similar trend of rising cases has been seen all over the world, including in the UK, which boasts one of the highest vaccination rates in the world. Chancellor Angela Merkel's chief of staff, Helge Braun, said July 25 that COVID-19 infections in Germany could surge to 100,000 a day in two months unless more people get vaccinated.

"New COVID-19 cases have been rising in Asia for a few weeks now, but sentiment in the oil market is starting to deteriorate as infections rise in the heavy energy-consuming countries of the west," Avtar Sandu, senior commodities manager at Phillips Futures, said July 27.

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) -- LyondellBassel's La Porte, Texas, cracker was heard to be offline again after a short-lived restart, reported S&P Global with reference to sources familiar with operations' statement on July 23.

The cracker had been confirmed as back online July 20, but, according to one market source, it was shut again not long after.

The 1.5 million mt/year cracker was heard to be shut during the last week of June. It was originally estimated to resume operations within one to two weeks, but a source familiar with LyondellBasell operations said a startup scheduled for the weekend of July 10-11 was unsuccessful. Sources estimated July 20 that production had resumed over the weekend between July 16-18.

However, the market source said the unit only remained only for about six hours before it was shut again. The source said it was online long enough for word of the restart to spread.

LyondellBasell did not respond to requests for comment.

As MRC informed before, LBI reported an equipment failure at its La Porte linear low density polyethylene (LLDPE) plant, which forced the company to shut down the 355,000 tons/year unit without a return schedule, according to the company's official letter to its customers on 17 June 2021.

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 density 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.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) -- Hyosung Vina Chemicals Co Ltd plans to bring online its new No. 2 polypropylene (PP) plant in Southern Vietnam in August 2021, according to CommoPlast.

Besides, a new 600,000 tons/year propane dehydrogenation (PDH) unit is also scheduled for a start-up at the same site next month.

Thus, the start-up of the company's new PDH unit will enable the launch of its second PP plant with a capacity of 300,000 tons/year.

The company already operates No. 1 PP plant in Southern Vietnam with the same production capacity, using external sources of propylene. It was shut down on 9 July, 2021, due to an unspecified technical issue and is expected to remain off-line between three to four weeks.

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.

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) - CJSC NikoMag, a member of the Nikokhim group, plans to increase the production capacity of its magnesium hydroxide plant from 25,000 to 40,000 tonnes per year, according to a statement from Volgograd-based Kaustik, which owns by a group of companies "Nikokhim".

The company plans to complete the expansion project in early 2023.

It is noted that the project for the expansion of production will be carried out through the installation of additional equipment and technological units. Also, all technical changes will be carried out during regular repairs of the plant, so the existing production facilities for the production of magnesium hydroxide will remain fully operational.

Earlier it was reported that at the Volgograd Kaustik in July 2015, CJSC "NikoMag" launched the production of magnesium oxide and magnesium hydroxide. The production capacity of nanostructured magnesium hydroxide was 25,000 tonnes per year, magnesium oxide - 30,000 tonnes per year.

Nanostructured magnesium hydroxide is widely used as a filler and fire retardant in the production of cable compounds and non-combustible polymer composite materials. When introduced into the structure of polymer compounds, it provides a significant increase in their quality, higher fire resistance.

ZAO NikoMag, a member of the Nikokhim group, is a joint project of Caustic, RUSNANO and Sberbank of Russia. The total project budget is 3.8 bn roubles. The new plant of CJSC "NikoMag" is located at the industrial site of Kaustik.
MRC