COVID-19 - News digest as of 08.09.2021

1. Sidel adjusts equipment prices due to rising raw material costs

MOSCOW (MRC) -- The global pandemic has affected the packaging solution industry by leading to a significant price increase and shortage of raw materials and components used in packaging equipment, said the company. To compensate for the rising costs and continue to provide the highest quality solutions, Sidel is implementing a commodity-induced price adjustment on its equipment by an average of 5% effective September 6, 2021. Deficiency of raw materials and components may impact equipment delivery time as well. Since the outbreak of COVID-19, Sidel has been striving to keep the same price level for its equipment despite the fact that the price of raw materials has increased significantly since 2020. Moreover, this increase is not expected to recover in the foreseeable future.


Shintech shuts PVC plant in Freeport on feedstock shortage

Shintech shuts PVC plant in Freeport on feedstock shortage

MOSCOW (MRC) -- Shintech, a subsidiary of Shin-Etsu Chemical Co. and the largest US polyvinyl chloride (PVC) producer, has shut its 1.45 million mt/year PVC operations in Freeport, Texas, on a lack of upstream vinyl chloride monomer (VCM) supply, sources familiar with company operations told S&P Global Sept. 7.

The shutdown of the largest PVC plant in the US pushed the amount of US PVC capacity offline to about 58%, according to S&P Global data. About 41% of US PVC capacity was already offline after Hurricane Ida's Aug. 29 assault on Louisiana.

Shintech's Freeport shutdown at the end of the week starting Aug. 30 came after Olin's 835,000 mt/year VCM plant at Freeport shut the same week because of an equipment failure, sources familiar with Olin's operations said. Both issues were unrelated to Ida, which affected Louisiana along the Mississippi River, Mississippi and other states as it moved toward the US Northeast after making landfall.

Olin supplies Shintech with VCM to make PVC, a construction staple used to make pipes, window frames, vinyl siding and other products.

Neither company responded to requests for comment.

Sources said Olin emptied its inventories of VCM for Shintech after shutting its plant, and Shintech had to shut its PVC operations when those flows dried up.

As MRC informed previously, Shintech will start up the first phase of an expansion across the PVC production chain at its Louisiana complex in September, 2021.

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 580,500 tonnes in the first seven months of 2021, up by 4% year on year. At the same time, one producer reduced its output.

Shintech Inc. is the world's largest producer of polyvinyl chloride (PVC). PVC is a general-use resin that is finding wide application in goods used in daily life and a significant number of industrial materials. Shintech is committed to operating safe and environmentally responsible facilities

Kem One declares FM on PVC shipments from its plant in Berre, France

Kem One declares FM on PVC shipments from its plant in Berre, France

MOSCOW (MRC) -- France’s Kem One has declared a force majeure (FM) on polyvinyl chloride (PVC) with K=70 supplies from its Berre unit in France, according to NCT with reference to a letter sent to its customers.

The company had to declare FM on September 2, 2021, following an equipment failure on the night of August 27 to 28, 2021.

It is not yet known when the equipment failure will be fixed or the force majeure will be lifted.

The plant has a suspension PVC production capacity of 290,000 tons/year through 3 fully automated production trains, according to Kem One’s web site.

As MRC reported earlier, Kem One declared an FM on PVC supplies from its Berre unit in France on April 15, 2021, because of a technical issue. The FM was lifted on June 30, 2021.

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 580,500 tonnes in the first seven months of 2021, up by 4% year on year. At the same time, one producer reduced its output.

Kem One, a fully integrated vinyl production company, was established mid-2012 following the acquisition of Arkema's vinyl products division by the Klesch Group. The company employs 2,600 people at 22 manufacturing sites, primarily in Europe but also in Asia and North America. Europe’s second-largest producer of PVC with revenues in excess of one billion euros, Kem One continues to grow and build on its numerous strengths with a view to becoming market leader for integrated vinyl solutions.

Crude oil futures rise in Asia on bullish China data and tight supply due to Hurricane Ida

Crude oil futures rise in Asia on bullish China data and  tight supply due to Hurricane Ida

MOSCOW (MRC) -- Crude oil futures were higher in midmorning Asia trade Sept. 8 on bullish Chinese trade data while US output outages due to Hurricane Ida continued supporting prices, reported S&P Global.

At 10:40 am Singapore time (0240 GMT), ICE November Brent futures were 2 cents/b (0.03%) higher at USD71.71/b while the NYMEX October WTI contract was up 14 cents/b (0.20%) at USD68.49/b.

"The US August jobs data is baked in, thus there is no reason for crude to remain under downward pressure. Furthermore, as attention shifts to the continuing and sizable outages in the US Gulf of Mexico and an expected slump in US oil inventories last week, crude should catch a bid," Vandana Hari, CEO of Vanda Insights, told S&P Global Sept. 8, adding that the return of crude oil appetite in China is also positive.

Several analysts have noted bullish signs of demand rising in the airline industry in China, along with the upcoming Golden Week holiday that could be a boost for domestic travel.

"Flight activity continues to improve, with the total number of worldwide flights rising 35% year on year to more than 18,000 flights," ANZ research analysts said in a note.

Chinese crude imports in August rose 8% on the month to 10.53 million b/d, or 44.53 million mt, according to General Administration of Customs data Sept. 7. It was the first time since April that inflows crossed the 10 million b/d mark, signaling a slowdown of destocking activity in China's state-owned oil sector.

Meanwhile, the damage on oil production facilities in the US Gulf following Hurricane Ida continued to keep output largely halted, limiting price declines. More than a week after Ida made landfall, 1.44 million b/d, or 79.33% of total US Gulf crude output, remained shut in, the Bureau of Safety and Environmental Enforcement said Sept. 7.

As informed earlier, Shell said it observed damage from Hurricane Ida to its transfer station West Delta-143 offshore facilities in the Gulf of Mexico. West Delta-143 serves as the transfer station for all production from its assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. Shell said it is not yet safe to send personnel offshore to learn the full extent of the damage and estimate the effect on production.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also 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.

PetroChina Liaoyang to start up new HDPE/LLDPE plant in China

PetroChina Liaoyang to start up new HDPE/LLDPE plant in China

MOSCOW (MRC) -- PetroChina Liaoyang Petrochemical, part of the Chinese petrochemical major - PetroChina, in which CNPC owns 80% of shares, is in plans to start up new high density polyethylene (HDPE)/linear low desnity polyethylene (LLPE) plant in Liaoyang, China, in September, 2021, according to CommoPlast with reference to market sources.

The new plant will have a capacity of 400,000 mt/year of HDPE/LLDPE.

The company also intends to start up a new standalone HDPE plant with the same production capacity at the same site this month.

As MRC reported earlier, PetroChina Liaoyang Petrochemical successfully started up its new polypropylene (PP) plant in late August. Based in Liaoning City, Liaoyang Province, China, the new PP plant has a production capacity of 300,000 tons/year. Tthe construction of a new PP plant in Liaoning began in September, 2019, and was completed in early June, 2021.

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.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation (CNPC), headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.