Formosa raises September PVC prices in the USA after Hurricane Ida

Formosa raises September PVC prices in the USA after Hurricane Ida

MOSCOW (MRC) -- Formosa Plastics USA, part of Formosa Petrochemical, has announced a price increase for September shipments of domestic polyvinyl chloride (PVC) in the USA after Hurricane Ida, according to a customer letter seen by S&P Global.

Thus, the company's PVC prices rose by 5 cents/lb or USD 110/tonne effective September 15, 2021, or as contract terms permit.

The increase was in addition to a 2 cents/lb price rise announced earlier to be effective September 1. If accepted, the latest increase would push prices up by 7 cents/lb or USD156/tonne for September.

The present announcement came after Hurricane Ida's August 29 landfall in Louisiana that prompted five US PVC plants representing 41% of North American PVC capacity to shut down.

As MRC reported earlier, Formosa Plastics USA has postponed the start-up of its expanded PVC production capacities at its existing plant in Baton Rouge, Louisiana, to Q4 2022. Initially, the company planned to launch the expanded capacities at its 513,000 mt/year of PVC plant in Q4 2021. Formosa did not respond to inquiries about the delay. The company intends to debottleneck production at this plant, adding 130,077 mt/year of PVC capacity, according to permitting documents.

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.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Repsol to start up the first electrolyser at its refinery in Spain

Repsol to start up the first electrolyser at its refinery in Spain

MOSCOW (MRC) -- Repsol will install the first electrolyzer in the Basque Country-region to produce renewable hydrogen at its Petronor refinery, said the company.

The electrolyzer will involve an investment of EUR8.9 million and will come into operation in the second half of 2022.
This project is part of the Basque Hydrogen Corridor, an initiative promoted by Petronor and Repsol that has already been joined by 80 entities and brings together a total investment of EUR1.431 bn. It will have a capacity of 2.5 MW.

Repsol is transforming all its industrial complexes to decarbonize their processes. Renewable hydrogen is one of the strategic pillars of the company, enabling it to manufacture products with low, zero, or even a negative carbon footprint and become a net zero emissions company by 2050.

The multi-energy company is currently the leading producer and consumer of hydrogen in Spain. It has the ambition to lead the renewable hydrogen market, aiming to install a total capacity of 557 MW equivalent in 2025 and reaching 1.9 GW in 2030.

As per MRC, Maire Tecnimont S.p.A. announces that its subsidiary Tecnimont S.p.A. has been awarded a contract by Repsol for the realization of a polypropylene (PP) Unit and a linear low density polyethylene (LLDPE) unit on an EPC (Engineering Procurement and Construction) Lump Sum Turn-Key basis, as part of Repsol’s expansion of Sines Industrial Complex in Portugal.

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.

Repsol is a global multi-energy company established in Spain and listed on the Spanish Stock Exchange for 25 years. Its products are distributed in nearly 100 countries to around 24 million customers. Repsol Industrial Complex in Sines is the largest chemical site in Portugal.
MRC

NNPC to be incorporated within six months

NNPC to be incorporated within six months

MOSCOW (MRC) -- Nigeria's President Muhammadu Buhari said he had appointed a board for state-oil firm NNPC and directed that it should be incorporated within six months, a move that could allow it to sell shares in the future, reported Reuters.

Buhari, who doubles as petroleum minister, signed an oil bill into law last month that has been in the works for nearly two decades, aiming to overhaul the sector and turn the state-owned oil company into a private firm.

The new oil law requires NNPC to be incorporated within six months, Buhari said in a statement, appointing Ifeanyi Ararume as NNPC chairman and its current Chief Executive Mele Kyari to lead the firm.

Kyari has said NNPC could consider an initial public offering (IPO) within three years. The incorporation could pave the way for NNPC to sell shares.

Buhari said last month that NNPC made its first profit in 44 years in 2020.

As MRC wrote before, in August, 2021, Nigeria gave its state oil firm the green light to acquire a 20% stake in Dangote's oil refinery for USD2.76 billion, reported. The 650,000-barrel-per-day oil refinery, owned by Africa's richest man Aliko Dangote, is under construction in Lagos, the biggest city in the most fuel-consuming nation in the region. The refinery is scheduled for commissioning by January.

We remind that loadings of Nigeria's key crude grade Forcados were on force majeure last month due to some operational issues at the export terminal, according 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.

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

China resumes storing crude oil inventories in August

China resumes storing crude oil inventories in August

MOSCOW (MRC) -- China resumed adding crude oil to inventories in August after four consecutive months of draws, but this was a reflection of weak refinery processing rather than a bullish demand signal, reported Reuters.

The world's biggest oil importer added about 760,000 barrels per day (bpd) to stockpiles in August, according to calculations based on official data for crude imports, domestic output and refinery throughput.

This partially reverses inventories draws in the prior four months, with about 223,700 bpd leaving in July, about 980,000 bpd in June, 589,000 bpd in May and 280,000 bpd in April.

China doesn't disclose the volumes of crude flowing into or out of strategic and commercial stockpiles. But an estimate can be made by deducting the total amount of crude available from imports and domestic output from the amount of crude processed.

Refinery throughput in August was the equivalent of 13.74 million bpd, the lowest since May 2020, at the height of the economic lockdowns imposed to combat the coronavirus pandemic. read more

August's refinery processing was down 2.2% from the same month last year, and 1.2% lower than July's already soft 13.91 million bpd. The total volume of crude available in August was 14.5 million bpd, comprising imports of 10.49 million bpd and domestic output of 4.01 million bpd.

For the first eight months of the year, China appears to have added 270,000 bpd to inventories, including to both commercial stockpiles and the strategic petroleum reserve (SPR). This is a far cry from 1.26 million bpd added to inventories over the whole of 2020, when China snapped up massive volumes of crude after the coronavirus pandemic and a brief price war between top exporters Saudi Arabia and Russia sent benchmark Brent futures to the lowest in two decades.

Brent prices have since recovered amid output restrictions by OPEC+, a grouping of the Organization of the Petroleum Exporting Countries and allied producers such as Russia. Brent futures have surged 372% from a 2020 low of USD15.98 a barrel to end at USD75.46 on Wednesday. But the price rally is a story of producer discipline and recovery in demand in Europe and North America, with China, and indeed much of Asia, sitting on the sidelines amid coronavirus outbreaks and economic disruption.

China's crude imports are down 5.7% in the first eight months of the year compared to the same period in 2020, and this soft trend may continue in coming months.

China has made a major shift in policy as well, announcing its first-ever public sale of crude from its SPR, with around 7.38 million barrels to be auctioned on Sept. 24. The National Food and Strategic Reserves Administration last week said it would release oil reserves to the market in phases to help stabilise prices.

As MRC informed before, China's July daily crude throughput fell to the lowest since May 2020 as independent plants slashed production amid a tighter quotas, high inventories and weakening profits. July processing volumes were 59.06 million tonnes, or 13.9 million barrels per day (bpd), 0.9% below the same month of 2020, data from the National Bureau of Statistics (NBS). That was the first year-on-year decline since March last year when coronavirus hammered Chinese fuel demand, and the July level was down 6% from off June's record at 14.8 million bpd.

And 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.

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

DSM to sell its materials division to focus purely on producing sustainable food and health products

DSM to sell its materials division to focus purely on producing sustainable food and health products

MOSCOW (MRC) -- Dutch specialty chemicals maker DSM plans to sell its materials division, which some analysts suggested could sell for around USD5.7 billion, as its focuses purely on producing sustainable food and health products, reported Reuters.

Based in the southern Dutch town of Heerlen, DSM’s products range from vitamins, baby formula and animal food to specialized materials such as plastics which are used in construction, clothes and automobiles.

Although a spin-off of its materials division had been anticipated by analysts for years, the present confirmation of the move lifted DSM shares 3% in Amsterdam, making them the strongest gainer in the blue chip AEX-index.

“DSM is on its way to (finally) become a focused health, nutrition and bioscience group”, KBC Securities analysts wrote.

KBC predicted a EUR4.8 billion (USD5.7 billion) selling price for the materials unit, after the EUR1.6 billion sale last year of DSM’s resins and functional materials businesses to Germany’s Covestro.

That sale cut revenues of the remaining materials unit, which makes engineering and protective materials, to just under EUR1 billion in the first half of 2021, with an adjusted EBITDA of EUR232 million. DSM reported total sales of EUR4.5 billion over the first six months of the year, as core earnings hit EUR925 million.

As MRC reported earlier, in April 2021, DSM said it had completed the sale of the resins & functional materials businesses to Covestro for EUR1.6 billion (USD1.9 billion), including EUR1.4 billion in cash. It included DSM Niaga, DSM additive manufacturing, and the coatings activities of the DSM advanced solar business, which together represented EUR1.01 billion of DSM’s 2019 total annual net sales and EUR133 million of DSM’s 2019 total EBITDA.

We remind that Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market were almost 56,000 tonnes in January-July 2021, down by 3% year on year (58,000 tonnes).

Royal DSM, commonly known as DSM, is a Dutch multinational corporation active in the fields of health, nutrition and materials. The Materials cluster is made up of DSM Engineering Materials, DSM Protective Materials and DSM Resins & Functional Materials. DSM Engineering Materials’ specialty plastics are used in components for the electrical and electronics, automotive, flexible food packaging and consumer goods industries.
MRC