Nizhnekamskneftekhim selects contractor for construction of new PP plant

Nizhnekamskneftekhim selects contractor for construction of new PP plant

MOSCOW (MRC) -- PJSC "Nizhnekamskneftekhim" (NKNKh, part of TAIF) has decided on a contractor for the construction of a new polypropylene (PP) plant, said the company.

Thus, on 6 August, 2021, in Kazan, in the head office of TAIF JSC, three contracts were signed between NKNKh and the Chinese company China Machinery Engineering Corporation (CMEC) for the construction of a PP production with a capacity of 400,000 tonnes per year based on LyondellBasell's Spheripoll technology.

Contracts were concluded for the provision of design services and the supply of documentation; for the purchase and supply of equipment, as well as for the provision of technical consulting services. The documents were signed by Airat Safin, General Director of Nizhnekamskneftekhim PJSC, and Fan Yangshui, President of China Machinery Engineering Corporation.

These contracts are linked by a tripartite framework agreement, in which China Huanqiu Contracting & Engineering Co., Ltd. is the main design subcontractor for CMEC.

According to the statement, NKNKh is already one of the leaders in this segment in the Russian Federation. After the commissioning of a new PP production facility, Nizhnekamskneftekhim will almost triple its PP output and become one of the largest PP producers in Europe.

As MRC reported earlier, the construction of the NKNKh's olefin complex was completed by 30% in July, 2021. The construction of the olefin complex is carried out within the framework of a memorandum of strategic cooperation concluded in June 2017 between TAIF Group, which includes Nizhnekamskneftekhim, and the German company Linde AG. The basic agreement on the design, supply of equipment and provision of services for the commissioning of the first stage of the future plant was signed between Nizhnekamskneftekhim and the Linde Engineering division. In February 2019, a contract for construction and installation works was signed with the Turkish company Gemont. The planned completion date for the construction and installation works of the olefin complex is July 2023.

According to MRC's ScanPlast report, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Shipments of propylene homopolymer (homopolymer PP) and block copolymers of propylene (PP block copolymer) increased. Supply of injection moulding statistical copolymer of propylene (PP-random) has decreased.

PJSC "Nizhnekamskneftekhim" (NKNKh) is one of the largest Russian manufacturers of petrochemical products. The industrial complex of the company includes ten major production plants and ten departments (Railway Transport, Ethylene pipelines, etc..). NKNKh produces more than 120 types of chemical products, including synthetic rubber, polyethylene, polypropylene, polystyrene, surfactants. Nizhnekamskneftekhim is a member of TAIF Group of Companies.

China HuanQiu Contracting and Engineering Corporation (HQC) is a subsidiary of China Petroleum Engineering Corp. Ltd. - China National Petroleum Corporation. The company specializes in the construction of refineries, petrochemical plants and chemical fertilizer plants associated with oil refineries and mining plants.
MRC

PVC prices go up again in August, but not all Russian producers raise them

PVC prices go up again in August, but not all Russian producers raise them

MOSCOW (MRC) -- Despite the end of the period of shutdowns for maintenance, some Russian producers raised again their suspension polyvinyl chloride (SPVC) prices. At the same time, the excitement subsided in the market, and converters were already reluctant to accept new prices, especially given higher imports, according to ICIS-MRC Price report.

In July, scheduled shutdowns for repairs at Bashkir Soda Company and SayanskKhimPlast created additional pressure on the already scarce Russian market. Converters partially switched to the purchase of imported PVC, while the imported resin often arrived with a long delay. In August, the rush subsided in the market, Russian producers quickly resumed production after the turnarounds, and supply of resin increased in the market partially because of a major rise in imports. However, some European producers raised their PVC prices further.

Bashkir Soda Company and SayanskKhimPlast shut their production capacities for scheduled repairs in mid-July, and the outages did not exceed two weeks. The plants' production capacities are 240,000 and 350,000 tonnes per year, respectively.

The next and last shutdown for maintenance among Russian producers will take place at Kaustik' (Volgograd) production capacities in the third decade of September and will last for three weeks. The plant's annual production capacity is 90,000 tonnes.

Shutdown for maintenance at two domestic producers during the high season led to a major increase in imports, despite the export restrictions of Chinese producers. According to preliminary information, July imports of suspension reached 13,500 tonnes, compared to 5,000 tonnes a month earlier. Large quantities of acetylene PVC from China are also planned for shipment to the Russian market in August.

A significant increase in imports and the end of the shutdowns for repairs at Russian plants brought down the excitement in the market. Many converters said there were already no such serious problems with resin with K=64/67, as it was the case in July. In addition, imported resin became cheaper than some Russian producers' resin in August. A shortage remained in the PVC markets with K=58/70.

Amid growing supply of PVC in the market, converters were no longer in a hurry to confirm new prices of Russian producers and often tried to find an alternative at a lower price. At the same time, not all producers decided to further increase domestic prices of resin in August.

As a month earlier, deals for Russian resin with K64/67 were done in a very wide range: Rb155,000-201,000/tonne CPT Moscow, including VAT for quantities up to 500 tonnes, compared to Rb151,000-200,000/tonne CPT Moscow, including VAT, in June. Prices for K=58/70 PVC grew to Rb175,000-216,000/tonne CPT Moscow, including VAT.
MRC

LANXESS completes acquisition of Emerald Kalama Chemical

LANXESS completes acquisition of Emerald Kalama Chemical

MOSCOW (MRC) -- Specialty chemicals company LANXESS completed the second-largest acquisition in its history on August 3 with the takeover of Emerald Kalama Chemical, as per the company's press release.

The US-based specialty chemicals manufacturer was majority-owned by affiliates of private equity firm American Securities LLC. All required regulatory approvals have been received. The enterprise value of Emerald Kalama Chemical was USD1.075 billion (EUR 900 million). After deducting liabilities, the purchase price was approximately USD 1.04 billion (EUR870 million), which LANXESS financed from existing liquidity.

“Emerald Kalama Chemical gives us another major boost on our growth path. The new businesses are an optimal strategic fit for us. We are strengthening our position in markets with attractive growth rates and opening up new high-margin application areas, especially in the beverage and food sector or in cleaning and cosmetic products. What's more, Emerald Kalama Chemical is perfectly backward integrated - strengthening our value chain in Consumer Protection. This segment is thus an important engine on the way to making LANXESS even more stable and profitable,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.

With the closing of the transaction, LANXESS grows by around 470 employees and the three production sites in Kalama/Washington (USA), Rotterdam (Netherlands) and Widnes (Great Britain).

In 2020, Emerald Kalama Chemical achieved global sales of approximately USD425 million (EUR 375 million) and EBITDA pre exceptionals of around USD90 million (EUR80 million). Within three years, LANXESS expects an additional annual EBITDA contribution of around USD30 million (EUR25 million) from synergy effects. The acquisition will already be earnings per share accretive in the first fiscal year after its completion.

As MRC reported earlier, in April 2021, LANXESS expanded its Colortherm Yellow pigment range for heat-resistant high-performance plastics. Two new inorganic yellow pigments are now available, namely Colortherm Yellow 5 and Colortherm Yellow 26.

We remind that Russia's output of chemical products rose in June 2021 by 10.2% year on year. However, production of basic chemicals increased year on year by 8.2% in the first six months of 2021. according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary forms and synthetic rubbers accounted for the greatest increase in the output in January-June 2021.

LANXESS is a leading specialty chemicals company with about 19,200 employees in 25 countries. The company is currently represented at 74 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics. Through Arlanxeo, the joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber.
MRC

China fuel demand is on track to hit record highs in 2021 despite COVID cloud

China fuel demand is on track to hit record highs in 2021 despite COVID cloud

MOSCOW (MRC) -- China's fuel demand is on track to hit record highs this year on a rebound in car sales and booming domestic air travel, even as a resurgence of COVID cases slows movement in some cities in the near term, reported Reuters with reference to analysts.

Despite slowing growth for diesel, the main industrial fuel, overall consumption of gasoline, diesel and aviation fuel in the world's top crude oil importer is expected to grow by 7% to 11% in 2021 to a record between 8.4 million and 8.9 million barrels per day, analysts at consultancy SIA Energy, IHS Markit and Energy Aspects estimated.

By comparison, the International Energy Agency (IEA) in March forecast China's demand for gasoline, jet fuel and diesel would rise by 6.5% to 8.2 million bpd in 2021.

China's strong growth in fuel use has helped stoke a 50% jump in global crude oil prices from 2020.

The latest outbreaks of the COVID-19 Delta variant across 17 provinces are expected to constrain travel in the near term, but analysts say the overall growth trend remains intact.

"If fast containment can be achieved by mass testing, and future large-scale outbreaks can be avoided with the vaccination rollout, gasoline and jet will be still on track to hit a record," ISH Markit analyst Shi Fenglei said.

Gasoline demand, which accounts for a quarter of China's refined fuel use, is forecast to rise by 11% to 13% this year to a record 3.8 million to 4.1 million barrels per day, well above the IEA's March forecast of 3.5 million bpd.

"Gasoline leads the growth as people drive more for long-distance travel, (there are) more ride-hailing services and motorbike e-commerce deliveries," said Seng Yick Tee, senior director at SIA Energy.

New passenger vehicle sales are expected to rise 7% this year, marking China's first annual growth since 2017, said Tao Gao, light vehicle specialist with IHS Markit.

As MRC wrote earlier, China's crude oil imports rebounded in July from a six-month low as state-backed refiners ramped up output after returning from maintenance, though independent refineries slowed restocking amid probes by Beijing into trading and taxes.

We remind that earlier this year, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

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.
MRC

Alpek newly acquired rPET facility to start up in Q3 2021

Alpek newly acquired rPET facility to start up in Q3 2021

MOSCOW (MRC) -- Alpek (Monterrey, Mexico) expects to finish commissioning and begin production at a Reading, Pennsylvania, recycled polyethylene therephthalate (PET) facility in the third quarter of 2021, reported S&P Global with reference to CEO Jose de Jesus Valdez' statement.

DAK Americas, Alpek's US subsidiary, bought the facility in late-May for USD98.1 million at an auction in the bankruptcy case of California recycled PET producer CarbonLite.

Valdez said the recycling and pelletization facility is one of the largest recycled PET units in the Americas, and can produce food-grade pellets.

The acquisition brought Alpek's total recycled PET capacity to 282,000 mt, "reaffirming its position as the largest PET recycler in the Americas and achieving the company's target of supplying its customers with 25% of rPET content before 2025," Valdez said.

Thailand-based Indorama Ventures, the world's largest virgin PET manufacturer, bought CarbonLite's rPET facility in Dallas, Texas, at the bankruptcy auction for USD63.87 million, and TGS Shelf II Acquisition LLC, an affiliate of Houston private equity firm The Sterling Group, bought a third CarbonLite facility in Riverside, California, at the auction for USD57.5 million, according to bankruptcy records.

Indorama is one of Alpek's partners in a major PET/purified terephthalic acid complex awaiting further construction near Corpus Christi, Texas. Valdez said July 22 he had no update on the progress of that project, which is undergoing a cost review throughout 2021. Alpek, Indorama and their partner Far Eastern New Century, aim to finalize engineering and construction contracts by year-end so construction can begin in early 2022.

The project includes a 1.1 million mt/year PET plant and an upstream 1.3 million mt/year purified terephthalic acid (PTA) unit. The three companies bought the unfinished project out of prior owner M&G Chemical's bankruptcy in 2018 for USD1.25 billion.

Since then, they have evaluated costs to restart construction that M&G halted in October 2017, and those efforts were suspended in 2020 amid COVID-19 restrictions.

When an analyst asked whether Alpek would buy a larger stake in the project and proceed if one or both partners decided not to push forward with it, Valdez said the company would consider those options if that situation arises.

Valdez noted that demand for virgin PET and polypropylene, which Alpek also produces, was seen strong as COVID-19 vaccinations have improved market confidence, which has strengthened the global economy. PP is heavily used in the automotive sector for dashboards, door panels and other vehicle plastics, but also is used to make plastic food takeout containers, carpet, and other products.

"Alpek has reached 1.2 million tons this period, setting a record for any second quarter in our history and achieving an 8% increase year-on-year," CFO Jose Carlos Pons De La Garza added.

Volumes in the company's plastics and chemicals segment rose 45% on the year, while polyester segment volumes rose 1%.

As MRC informed earlier, Mexican polyester producer Alpek reported a rise in Q2 net income because sales rose faster than costs. Quarter on quarter, sales rose because of higher prices and margins. Alpek did not discuss year-on-year trends. Quarter on quarter, Alpek noted higher margins for PET. In addition, margins for PP maintained their strength for longer than expected following the winter storms that hit the US in mid-February. Quarter on quarter, EBITDA fell because the rise in feedstock costs was not as pronounced as it was in the first quarter. Such increases cause positive inventory and carry-forward effects for the segment's earnings.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.

Alpek operates two main business segments, focused on polyester, and plastics and chemicals, and is a leading producer of purified terephthalic acid (PTA) and polyethylene terephthalate (PET). It is also the largest EPS manufacturer in the Americas.
MRC