OPEC decreased global oil demand forecast for last quarter of 2021 due to Delta coronavirus

MOSCOW (MRC) -- OPEC trimmed its world oil demand forecast for the last quarter of 2021 due to the Delta coronavirus variant, saying a further recovery would be partially delayed until next year when consumption will exceed pre-pandemic rates, said Hydrocarbonprocessing.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report it expects oil demand to average 99.70 million barrels per day (bpd) in the fourth quarter of 2021, down 110,000 bpd from last month's forecast.

"The increased risk of COVID-19 cases primarily fueled by the Delta variant is clouding oil demand prospects going into the final quarter of the year," OPEC said in the report. "As a result, second-half 2021 oil demand has been adjusted slightly lower, partially delaying the oil demand recovery into first-half 2022."

Governments, companies and traders are closely monitoring the speed that oil demand recovers from last year's crash. A faster return could boost prices and challenge the view that the impact of the pandemic may curb consumption for longer or for good.

Despite the downward revision to the fourth-quarter, OPEC said world oil demand in the whole of 2021 would rise by 5.96 million bpd, virtually unchanged from last month. The growth forecast for 2022 was adjusted to 4.15 million bpd, compared to 3.28 million bpd in last month's report and an estimate of 4.2 million bpd given by OPEC sources during the group's last meeting on 1 Sept.

"The pace of recovery in oil demand is now assumed to be stronger and mostly taking place in 2022," OPEC said. "As vaccination rates rise, the COVID-19 pandemic is expected to be better managed and economic activities and mobility will firmly return to pre-COVID-19 levels."

As per MRC, US petroleum consumption recovered to pre-pandemic levels, but there has been a marked shift from consumer-facing sectors towards industry and freight transportation, mirroring the uneven economic recovery. The total volume of petroleum products supplied to domestic customers climbed to 20.1 million barrels per day (bpd) in May, according to the Energy Information Administration. Volumes were down by less than 300,000 bpd (1.4%) from the same month in 2019, before the COVID-19 pandemic, and were actually 200,000 bpd (1.1%) above the pre-pandemic five-year average for 2015-2019.

As MRC informed earlier, recyclers in Southeast Asia were heard operating with low capacity utilisation in the film grade high density polyethylene (HDPE) market due to COVID-19-led lockdown measures. Market sources also said persistent bottlenecks at ports in Asia and some maintenance-related plant closures are likely to hurt the supply of petrochemicals during the week of Aug. 30-Sept. 3.

We remind that Southeast Asian polyethylene terephthalate (PET) recycling companies will continue facing challenges with the availability of raw materials, due to the low collecting and processing rate, as a result of the COVID-19 pandemic.

According to MRC's ScanPlast report, June estimated HDPE consumption in Russia decreased to 125,900 tonnes from 128,300 tonnes a month earlier. Domestic producers raised their exports, while some producers' output decreased. Russia's overall HDPE shipments to the Russian market totalled 675,670 tonnes in the first six months of 2021, down by 6% year on year. Production increased by 12%, whereas imports fell by 33%.

MRC

MOSCOW (MRC) -- Westlake Chemical, US petrochemical major, has regained access to industrial gases needed to operate its polyvinyl chloride (PVC) complexes in Plaquemine and Geismar, reported S&P Global with reference to sources familiar with the companies' operations.

That access, plus restoration of electric power, allowed the company to begin restart activities.

Those sources said the restarts would be gradual, as PVC complexes, shut on 29 August in advance of Hurricane Ida, involve multiple plants that have to be restarted one by one while checking for any storm-related, as-yet-undiscovered damage.

The company operates the following plants at these complexes:

- Geismar capacity (tonnes/year): 358,000 caustic soda, 320,000 chlorine, 550,000 EDC, 500,000 PVC, 385,000 vinyl chloride (VCM;
- Plaquemine capacity (tonnes/year): 476,000 caustic soda, 425,000 chlorine, 1.21m EDC, 895,000 PVC, 750,000 VCM.

Besides, Westlake Chemical declared force majeure (FM) on PVC and VCM supplies on August 31, 2021, and on caustic soda deliveries on September 2, 2021.

As MRC informed earlier, Westlake Chemical has lifted its FM on US PVC and upstream VCM, the company announced in a customer letter dated May 17. The letter said the company was "formally lifting the systemwide force majeure condition for PVC and VCM manufactured and shipped from its North American operations that was originally declared on Feb. 19" as a result of mid-February's deep freeze that "resulted in a shutdown/curtailment of our plant operations."

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 664,100 tonnes in the first eight months of 2021, up by 5% year on year. Three producers increased their output.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

MOSCOW (MRC) -- Westlake Chemical Corporation has announced that it has completed the acquisition of Dimex LLC, from Grey Mountain Partners, a private equity firm, as per the company's press release.

“The acquisition of Dimex underscores our longstanding commitment to stewardship of the environment and recycling, and to taking actions that contribute to a sustainable, circular economy,” said Robert Buesinger, Executive Vice President, Vinyl Products of Westlake Chemical Corporation. “We are at an important societal inflection point where consumers prefer and are willing to pay for products made with recyclable materials. Dimex produces a variety of consumer products made from post-industrial-recycled polyvinyl chloride (PVC), polyethylene (PE) and thermoplastic elastomer materials, which will make this transaction an important piece of Westlake’s growth trajectory and ESG commitment for a long time.”

According to a recent survey of 2,000 US consumers reported by Plastics Today, 59% of respondents appreciate buying items made with recycled materials and are willing to pay more for such products. Recycling reduces landfill waste and saves energy from plastics production.

Buesinger continued, “Dimex has over 30 years of experience and is one of the largest processors of recycled plastic materials in the United States. Dimex also supplies recycled flexible PVC and TPE compounds to other environmentally conscious manufacturers. Because Dimex uses its compounds in its own products, the company is uniquely positioned to understand its customers’ needs and to provide the engineering, manufacturing, and distribution capabilities to meet those needs quickly and effectively.”

Based in Marietta, Ohio, Dimex produces a range of consumer and building products, including landscape edging; industrial, home and office matting; marine dock edging; and masonry joint controls. Following its acquisition by Grey Mountain Partners in 2013, the company expanded its product development resources, which resulted in the introductions of No-Dig Landscape Edging®, MotionTex Fitness Equipment Mats, and GrillTex Under the Grill Protective Deck and Patio Mats. Over the last four years, Dimex has secured 29 US patents for its products.

In addition to providing products manufactured with post-industrial recycled materials, Dimex is engaged in research and development to advance additional opportunities to increase the use of recycled materials. The acquisition expands Westlake’s role in improving how plastic materials are sourced and produced to meet the growing demand for sustainable and durable consumer products.

As MRC reported earler, in July 2021, McDermott International, Ltd has been selected by LACC, LLC, a joint venture between Westlake Chemical Corporation and Lotte Chemical Corporation, to provide engineering, procurement and construction for a seventh heater addition to its LACC Ethane Cracker Facility in Westlake, La.

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.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

MOSCOW (MRC) -- U.S. Department of Energy has awarded contracts to eight companies for crude oil from a previously announced Strategic Petroleum Reserve sale of up to 20 million barrels, the department said, said Reuters.

Contracts went to Atlantic Trading & Marketing Inc; Chevron USA; ExxonMobil Oil Corpn; Marathon Petroleum Supply and Trading; Motiva Enterprises; Phillips 66 Co; Unipec America Inc; and Valero Marketing and Supply Co, the department said in statement dated Sept. 10 that appeared online on Monday.

The department had announced the call for bids Aug. 23 to comply with recent legislation mandating the sale from the nation's emergency oil reserve. Deliveries of the oil are expected from Oct. 1 to Dec. 15.

The sale comes as oil prices are at a one-week high amid U.S. supply concerns over storm damage from Hurricane Ida and the ongoing impact from COVID-19.

As per MRC, most of the nine Louisiana refineries shut by Hurricane Ida have restarted or were restarting, nearly two weeks after the powerful storm came ashore, a Reuters survey showed. Refiners are coming back faster than oil production, a reverse of past storm recoveries. Just three of the nine refineries were completely idled, accounting for about 7% of Gulf Coast refining, compared to shut-ins of two-thirds of oil output.

As MRC informed earlier, Royal Dutch Shell Plc, one of the largest operators in the Gulf of Mexico, declared force majeure on some oil deliveries due to damage from Hurricane Ida, which has crippled U.S. offshore oil production. More than three-quarters of the U.S. Gulf of Mexico's offshore oil output remained shut following Ida. Crude buyers said the full restart of production remained unclear due to extensive damage to various facilities. The hurricane was one of the most devastating for offshore producers since back-to-back storms in 2005 cut output for months.

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.

MRC

MOSCOW (MRC) -- Azelis, an innovation service provider in the specialty chemicals and food ingredients distribution industry, is seeking to raise EUR880m in an initial public offering in Brussels in what will be one of the sector’s largest listings this year, reported Financial Times.

The Antwerp-based company, which is owned by Swedish buyout firm EQT, is targeting a valuation of more than EUR5bn, according to people familiar with the matter.

The IPO would make Azelis the world’s fourth-largest listed chemicals distributor in a highly fragmented EUR117bn market. As well as using the IPO’s proceeds to cut some of its EUR1.6bn of debt, the company also plans to make further acquisitions.

“As a public company, we believe we will be able to fully capitalise on growth opportunities, continuing to complement our strong organic growth with accretive acquisitions,” said chief executive Hans Joachim Muller.

Muller said he hoped to expand operations in Asia and gain a foothold in Latin America, where Azelis does not have a presence.

Demand for chemicals has rebounded rapidly from the pandemic’s initial hit, sending valuations for the sector soaring and handing EQT a chance to capitalise.

Nouryon, the former chemicals arm of Akzo Nobel that was acquired by US buyout firm Carlyle in 2018 in a EUR10bn deal, is also set to go public.

Although Azelis has only a 2% market share, it is enough to make it one of the sector’s largest players alongside Germany’s Brenntag, IMCD from the Netherlands and Illinois-based Univar Solutions. In a sign of investor appetite for the sector, Brenntag’s share price is at an all-time high.

As MRC informed earlier, in June 2021, Azelis announced the extension of its distribution scope with CP Kelco in India, Indonesia, Malaysia and Thailand. CP Kelco’s product range is a significant addition to Azelis’ portfolio and the new agreement marks an important milestone in the strong and continuously developing collaboration between both companies globally.

Besides, Azelis made two acquisitions in July, 2021, both in South Korea. The most recent agreement, announced on Jul. 14, is the proposed takeover of Seoul-headquartered Coseal, which specializes in the distribution, repackaging and blending of agricultural/horticultural surfactants. This transaction is expected to close in the third quarter of 2021, when all of Coseal’s 45 employees, along with its owner and CEO Sang Jin Kang, will transfer to the Belgium-based distributor.

Nearly two weeks earlier, on Jul. 1, Azelis revealed it had purchased MH, a local distributor in the food ingredients market, providing the multinational specialty chemicals distribution group with a foothold in the food and health segment. Also headquartered in Seoul, MH is a family-owned business, supplying products such as gluten, starches, sweeteners and functional food ingredients.

Azelis is a leading distributor of speciality chemicals and food ingredients present in over 50 countries across the globe with around 2,200 employees. Our knowledgeable teams of industry, market and technical experts are each dedicated to a specific market within Life Sciences and Industrial Chemicals.
MRC