COVID-19 - News digest as of 18.08.2021

1. Lotte Chemical uses BASF stabilizer to deliver high-clarity medical PP for syringes used in COVID-19 vaccinations

MOSCOW (MRC) -- Lotte Chemical, a major Korean chemical company, has produced the polypropylene (PP) required for medical applications using BASF’s Irgastab, a non-discoloring processing stabilizer. With the rollout of COVID-19 vaccinations worldwide, the need for syringes made from PP has increased exponentially, as per BASF's press release. Lotte Chemical’s medical PP has been applied to the LDS (low dead space) syringes developed by a medical syringe manufacturer in South Korea. These specialized products are designed to minimize the amount of a drug left in the device after injection which leads to reduced vaccine wastage. As a result, LDS syringes are in huge demand globally as it is estimated to enable 20% more people to get the dose with the same amount of vaccine.


Crude oil futures up in Asia on lower US stocks

Crude oil futures up in Asia on lower US stocks

MOSCOW (MRC) -- Crude oil futures were higher during mid-morning trade in Asia Aug. 18 following the decline in US inventories, as per the American Petroleum Institute's latest data, but the upside was capped by a stronger US dollar and prevailing concerns over the spread of the COVID-19 delta variant, reported S&P Global.

At 12.30 pm Singapore time (0430 GMT), the ICE October Brent futures contract was up 24 cents/b (0.34%) from the previous close at USD69.27/b, while the NYMEX September light sweet crude contract was up 23 cents/b (0.34%) at USD66.86/b.

US crude inventories declined by about 1.16 million barrels for the week ended Aug. 13, latest data from the API showed, while China, the world's largest energy consumer, has reported that its daily crude processing in July had dived to its lowest in nearly 15 months. The API data also showed that gasoline inventories declined by about 1.2 million barrels last week, compared with a 1.1 million-barrel draw the prior week.

However, analysts said further upside was capped by a stronger US dollar as disappointing economic data from China and the spread of the delta variant weighed on the risk appetite for commodity prices.

"The strengthening of the dollar has potentially added to the downward pressure of the oil prices," said Vandana Hari, CEO at Vanda Insights on Aug 18, added that oil prices has been impacted by the outbreak of delta variant which has created significant downside risk for the oil market. Despite the grim situation, she expects the impact of the delta variant to be short lived and fall of the oil prices could be nearing its bottom.

ANZ research analysts said that poor data out of China remains a concern as mobility in key cities such as Beijing has been curtailed by authorities trying to curb the outbreak.

As MRC informed earlier, crude oil stockpiles fell modestly last week, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.

We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.

Zhejiang Petrochemical starts up new ACN plant in China

Zhejiang Petrochemical starts up new ACN plant in China

MOSCOW (MRC) -- Zhejiang Petrochemical Co Ltd managed to produce on-specification acrylonitrile (ACN) from its new No. 2 ACN plant at Zhoushan in eastern China's Zhejiang province on 12 August, 2021, reported S&P Global.

This plant's production capacity is 260,000 mt/year of ACN.

The company also operates No.1 ACN plant at the same site. It can produce 260,000 mt/year of ACN.

As MRC informed previously, Zhejiang Petrochemical started up No.1 ACN plant on 23 June, 2020, and produced on-specification material in the week ended 4 July.

We remind that the company started up its ethylene cracker in late December 2019 and its polyolefin plants in late December 2019-January 2020.

ACN is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, ABS imports into Russia rose in the first half of 2021 by 40% year on year to 20,900 tonnes from 15,000 tonnes a year earlier. The share of South Korean shipments fell to 56% (11,800 tonnes) from 60% (9,000 tonnes) a year earlier.

Ukrainian PVC imports down by 31% in Jan-Jul 2021, exports up by 11%

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) to the Ukrainian market decreased in the first seven months of 2021 by 31% year on year to 15,800 tonnes, whereas export sales of Ukrainian PVC rose by 11% year on year partially due to record high prices in a number of the global regions, according to MRC's DataScope report.

Last month's SPVC imports into Ukraine increased to 3,100 tonnes from 2,100 tonnes in June, Ukrainian companies significantly increased their shipments of polymer from China and the USA. Overall imports of suspension reached 15,800 tonnes in January-July 2021, compared to 23,000 tonnes a year earlier. Limited export quotas of European and North American producers were the main reason for such a major fall in imports.

European producers with the share of about 89% of the total imports over the stated period were the key suppliers of resin to the Ukrainian market.

Last month, Karpatneftekhim slightly raised its sales to foreign markets, export sales of Ukrainian resin grew to 13,600 tonnes from 12,800 tonnes in June. Overall, slightly over 116,400 tonnes of PVC were shipped for export in the first seven months of 2021, compared to 105,000 tonnes a year earlier.


Shell declares FM on Nigerian key crude grade loadings due to operational issues at export terminal

Shell declares FM on Nigerian key crude grade loadings due to operational issues at export terminal

MOSCOW (MRC) -- Loadings of Nigeria's key crude grade Forcados are on force majeure due to some operational issues at the export terminal, reported S&P Global with reference to Shell's statement Aug. 16.

Force majeure was declared effective Aug. 13 due to "the curtailment of production and suspension of export operations as a result of some sheen noticed on the water around the loading buoy," Shell Petroleum Development Company of Nigeria Ltd. said in a statement.

Forcados is a gasoil-rich sweet crude blend and is one of Nigeria's top export grades. Output has averaged around 200,000 b/d over recent months compared to its full capacity of 250,000 b/d.

Nigeria oil output has been hampered by operational and technical problems in the past few months. Key crudes such as Bonny Light, Escravos, Forcados, Qua Iboe have all faced production issues due to operational and technical reasons. Forcados, which relies heavily on oil pipelines, has also faced persistent sabotage in the past few months.

Growing threats by militants to renew attacks on oil infrastructure in the restive Niger Delta also pose a huge concern for Africa's largest oil producer.

Nigeria has the capacity to produce around 2.2 million-2.3 million b/d of crude and condensate, but production has averaged only around 1.62 million b/d in the first seven months of 2021, according to Platts estimates.

As MRC wrote 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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

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.