U.S. plastics industry trade improves in 2021 after 2020 pandemic slump

MOSCOW (MRC) -- During the 2020 COVID-19 recession, stimulated by federal relief dollars, U.S. plastics consumption held up at a time when employment was down and capacity was constrained, a new report from the Plastics Industry Associations says, with the result being higher imports and a trade deficit, said Canplastics.

The U.S. plastics industry’s trade balance fell to a USD5.5 billion deficit in 2020, from a US$0.7 billion surplus in 2019, according to executive summary of the Plastics Industry Association’s Global Trends report, which was released Oct. 13.

Industry exports fell 8.2 per cent and imports rose 1.8%, the summary said, with Mexico and Canada remaining the U.S. plastics industry’s largest export markets. In 2020, the industry exported USD13.7 billion to Mexico and USD11.7 billion to Canada.

“The industry had its largest trade surplus with Mexico in 2020 – USВ8.2 billion,” the summary said. “China is the industry’s third largest export market; however, the industry, overall, had its largest trade deficit with China – USD15.3 billion in 2020."

The estimated value of domestic shipments fell 2.2 per cent in 2020, to US$282.8 billion. “Shipments figures were depressed by the COVID-19 recession, supply chain constraints and lower prices,” the summary said. “Exports amounted to 20.4 per cent of domestic shipments in 2020, down from 21.8 per cent in 2019."

The U.S. plastic resin sector, meanwhile, had a US$18.6 billion surplus in 2020, which was down 6.9 per cent from the US$20.0 billion surplus in 2019. “U.S. resin exports decreased 9.1 per cent in dollar terms from 2019 to 2020, while imports decreased 12.0 per cent,” the summary said. “Lower resin prices were a factor."

And the U.S. plastics machinery industry registered a US$2.0 billion trade deficit in 2020, the summary said, which doesn’t show much change from 2019. “Exports fell 14.4 per cent, and imports fell 6.5 per cent,” the summary said. “The industry had its largest surplus with Mexico at USD184 million, and its largest deficit with Germany at
USD772 million."

“Although the merchandise trade outlook is much brighter this year, uncertainties remain and depend largely on global economic recovery,” said Plastics Industry Association chief economist Perc Pineda. “While the U.S. plastics industry trade volume rose 27.9 per cent in the first six months of 2021 compared to the same period in 2020, it still has a plastics trade deficit. The large and growing plastics industry outside the U.S. will continue to compete with the U.S. for overseas markets as well as for their own domestic markets.”

Canada and Mexico will continue to be the two largest export markets and are also the top sources of U.S. plastics imports, the summary noted, and the manufacturing sector’s supply chain in these countries was strengthened with the passage of the North American Free Trade Agreement (NAFTA). “The updated free trade pact, United States Mexico Canada Agreement (USMCA), should further enhance trade among the three countries, which is important particularly as global manufacturing is experiencing supply chain difficulties,” the summary said. The 2021 complete Global Trends report is available to download for free for members and is available for purchase to non-members here.

As per MRC, Jokey Group (Germany) and the World Wide Fund for Nature (WWF) intend in the future to jointly promote a working economy with a closed cycle of using plastic packaging in Germany. The companies announced a collaboration, one of the goals of which is to create closed cycles for the use of plastics, allowing the reuse and production of high-quality recycled granules.

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.
MRC

MOSCOW (MRC) -- Saudi Arabia will require foreign firms working in the energy sector, including petrochemicals and water desalination, to boost local input to at least 70% in order to secure government contracts, reported Reuters.

Energy Minister Prince Abdulaziz bin Salman discussed the plan to increase domestic input with local and international energy executives at a gathering in the Eastern city of Dammam last week, they said, confirming a video recording of his comments seen by Reuters.

He said the energy ministry would hold an event to announce the timeline, targets and mechanism for the plan, the latest effort to create new industries and generate jobs under Crown Prince Mohammed bin Salman's push to diversify the economy of the world's top oil exporter away from crude revenues.

Requirements for energy sector local content - which include workers, supplies and operations as well as added value - are currently around 30 to 35% but it is not clear how strictly these are enforced.

Authorities had already earlier this year handed foreign firms an ultimatum to set up regional headquarters by 2023 or risk losing out on government contracts in a bid to attract foreign capital and talent.

In the recorded remarks obtained by Reuters the prince did not specifically mention the link to government contracts when disclosing that all companies operating in the kingdom, including international firms, would have to raise the percentage of local services and energy-related products to 70%.

The three sources said securing government contracts would be contingent on meeting the new requirement for local content, which would require companies to invest heavily.

The Saudi energy ministry and the government's media office CIC did not respond to Reuters' requests for comment.

As MRC informed before, Worley has just been awarded a services contract for a residue upgrade project at Aramco’s Ras Tanura refinery. The project will convert low-value refinery residue into higher-value products including gasoline, jet fuel and ultra-low sulfur diesel.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

MOSCOW (MRC) -- Qatar changed the name of its state-owned oil and gas firm to Qatar Energy from Qatar Petroleum to reflect what it said was a broader strategy but said it had no plans to sell assets to raise funds as other Gulf state producers have, reported Reuters.

"We have plenty of cash," Chief Executive Saad al-Kaabi said on Monday, indicating the Qatari firm would not follow in the footsteps of Gulf rivals which have sold assets, such as Saudi Aramco and Abu Dhabi National Oil Company (ADNOC).

Kaabi, who is also minister of state for energy, said the new name better represented a broader strategy included a focus on energy efficiency and environmentally-friendly technology such as capturing and storing carbon dioxide.

Qatar is the world's biggest supplier of liquefied natural gas (LNG). Qatar Energy handles the country's LNG production and its more modest oil output, alongside a range of other industries, such as a gas-to-liquids project and petrochemicals production.

Amid surging global gas prices, Qatar aims to expand LNG output to 127 million tons a year by 2027 from 77 million tons.

Kaabi said gas, which generates lower emissions than other fossil fuels such as oil and coal, would remain part of the global energy mix for years to come even as the world shifts to more renewable energy sources.

As MRC informed earlier, in July 2021, Qatar Petroleum entered into a long-term Sale and Purchase Agreement (SPA) with Shell for the supply of 1 million tons per year of LNG to the People's Republic of China for ten years. China is considered a major customer for the State of Qatar and a strategic partner in the energy sector. With the conclusion of this agreement, China will be supplied with approximately 12 MPTA of LNG under long term SPAs from Qatar.

We remind that 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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

MOSCOW (MRC) -- Specialty chemicals company LANXESS and energy company bp are entering into a strategic partnership for the use of sustainable raw materials in high-tech plastics production, as per LANXESS' pres release.

bp will supply sustainably produced cyclohexane to the LANXESS’ production site in Antwerp, Belgium, starting in the fourth quarter of 2021. The sustainable origin of the raw materials is certified according to ISCC Plus rules (“International Sustainability and Carbon Certification”).

With this partnership, both companies, which already have a long-standing business relationship, want to significantly advance the production of sustainable plastics.

“The chemical industry plays an important role in the expansion of the circular economy and efficient sustainable management. To meet the global challenges of climate change, creative approaches to solutions and collaboration are needed in service of our customers. We are pleased to accompany LANXESS as a strong partner with a broad portfolio of raw materials from renewable sources,” says Wolfgang Stuckle, Vice President Midstream Refining and Specialities Solutions Europe and Africa of bp. bp uses bio-based and bio-circular feedstocks for the production of “green” cyclohexane. These can be, for example, rapeseed oil or biomass.

“High-performance plastics are the solution for many sustainable products, for example in various e-mobility applications. It is now important to also make the production of this valuable material sustainable. In this context, the use of bio-based raw materials, along with modern recycling processes, is a key lever. We are delighted to have bp as a strategic partner at our side,” says Marcel Beermann, Head of Global Procurement and Logistics at LANXESS.

LANXESS uses cyclohexane as a precursor in the production of polyamide 6, a high-performance plastic that is used primarily in the automotive industry as well as in the electrical and consumer goods industries.

As MRC reported earlier, LANXESS completed the second-largest acquisition in its history on August 3, 2021, with the takeover of Emerald Kalama Chemical. 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.

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.

bp is one of the world's largest oil and gas companies, serving millions of customers every day in around 80 countries, and employing around 85,000 people. bp’s business segments are Upstream (oil and gas exploration & production), and Downstream (refining & marketing). Through these activities, bpP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbon basins and strong market positions in key economies.
MRC

MOSCOW (MRC) - The Eurasian Economic Commission proposes to introduce an anti-dumping duty in respect of primary low-density polyethylene (HDPE) from Uzbekistan in the amount of 20.3% of the customs value for a period of 5 years, the ministry said.

So, on 27 July, 2020, the Eurasian Economic Commission launched an anti-dumping investigation against primary high-density polyethylene originating from the Republic of Uzbekistan.

The object of the investigation is primary polyethylene in solid primary forms with a specific gravity of 0.94 g / cm3 and more, originating from the Republic of Uzbekistan, classified by the EAEU TN VED code 3901 20 900 9.

The conclusions set out in the report indicate the presence of dumping imports of primary HDPE from the Republic of Uzbekistan and the resulting material damage to the EAEU economy.

The agency decided to start an anti-dumping investigation based on the results of consideration of an application filed on behalf of Nizhnekamskneftekhim (NKNKh, part of TAIF) and Kazanorgsintez (KOS, part of TAIF) and supported by the West Siberian Petrochemical Plant (ZapSibNeftekhim, part of SIBUR Holding).

The presence of dumped imports and the resulting damage to the EAEU economy sector is explained by the applicants by the fact that in 2019 primary high-density polyethylene from the Republic of Uzbekistan was supplied to the EAEU territory at dumping prices, that is, at prices below the normal cost in the domestic market of the Republic of Uzbekistan.

According to the applicants, the dumping margin for HDPE supplies in the EAEU exceeded the minimum allowable dumping margin and amounted to 29.2%. At the same time, against the background of an increase in HDPE consumption in the EAEU market (for the period from 2016 to 2019 by 18.1%, in 2019 compared to 2018 by 5.4%), there was a significant increase in the volume of HDPE imports from Uzbekistan for the period from 2016 to 2019 by 4.5 times, and in 2019 compared to 2018 by 21.9%, the rate of which significantly exceeded the growth rate of HDPE consumption in Russia.

The production of HDPE in Uzbekistan is carried out by the Uz-Kor Gas Chemial JV (Ustyurt Gas Chemical Complex, UGCC), which produces HDPE under a license from LOTTE Chemical (Korea) and the Shurtan Gas Chemical Complex (ShGKhK, SGCC).

According to the ICIS-MRC Price Report, Uz-Kor Gas Chemical has resumed its HDPE production facilities from 4 October after a planned shutdown for repairs. The preventive downtime was short and started on 4 September. At the same time, during October the enterprise will operate with reduced capacity utilization. The annual capacity is 386,000 tonnes.

Uz-Kor Gas Chemical was commissioned in 2016 and has production capacity for the production of ethylene 400 thousand tons per year, HDPE 387 thousand tons per year, propylene and polypropylene (PP) 83 thousand tons per year. Shurtan GCC has a production capacity for the production of HDPE and LLDPE in the amount of 125 thousand tons per year.
MRC