Nippon Shokubai discontinues production at SAP lines in Japan and Belgium

MOSCOW (MRC) -- Nippon Shokubai said it has decided to stop production of superabsorbent polymers (SAP) at some of its lower productivity units in Japan and Belgium with a total capacity of 60,000 t/y, due to a difficult and challenging market situation and cost structure, according to Apic-online.

Instead, the company will expand the same capacity in its existing production lines equipped with a higher effective production technology by debottlenecking as planned, depending on the market situation.

As MRC informed previously, in October 2020, Nippon Shokubai and Sanyo Chemical postponed their plan to merge via a share transfer, which would have formed an integrated holding company named Synfomix Co. The deal was announced in May 2019. The companies had planned to establish the holding company on 1 October 2020, located in Kyoto, Japan, subject to regulatory approval.

The companies say that the global outbreak of the COVID-19 pandemic and resulting sharp decline in oil and oil product markets have made the business environment unpredictable. They say that significant changes in raw material prices and product prices, as well as heightened uncertainty surrounding product demand in the future made it difficult to carry out the planned business integration. Shokubai currently has a 5.0% stake in Sanyo. The biggest shareholders in Sanyo are Toyota Tsusho with 19.4% and Toray Industries with 17.3%.

We remind that JXTG Nippon Oil and Energy brought on-stream its cracker in Kawasaki on April 28,2020, following a turnaround. The cracker was shut for maintenance on February 27, 2020. Located at Kawasaki in Japan, the cracker has an ethylene production capacity of 460,000 mt/year and propylene production capacity of 235,000 mt/year.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

MOSCOW (MRC) -- U.S. oil and gas major ExxonMobil announced it had made a final investment decision (FID) to build a multi-billion dollar petrochemical complex in south China's Guangdong province, said Hydrocarbonprocessing.

The firm did not specify a value for this investment. The decision, announced late on Monday, came nearly 18 mos after China's state news agency Xinhua reported in April last yr that the U.S. firm kicked off construction of the USD10 B venture in Dayawan in Huizhou city.

One of the few petrochemical complexes in China that are wholly owned by a foreign investor, ExxonMobil said the Dayawan plant will produce performance polymers used in packaging, automotive, agricultural, and consumer products for hygiene and personal care. China is the world's largest petrochemicals consumer and importer.

Construction is underway on the greenfield project, which includes a flexible feed steam cracker, three performance polyethylene lines, and two differentiated performance polypropylene lines, it added. The steam cracker will have a nameplate capacity of about 1.6 MM tons per yr.

Separately, ExxonMobil told Reuters in July that the firm was advancing project discussions with potential partners for an import terminal for liquefied natural gas also in Huizhou. The two projects are part of an initial agreement the U.S. firm signed with China in 2018.

ExxonMobil also owns a stake in a refinery and petrochemical complex in neighboring province of Fujian that is controlled by Chinese state refiner Sinopec Corp.

As per MRC, ExxonMobil plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022. By recycling plastic waste back into raw materials that can be used to make plastic and other valuable products, the technology could help address the challenge of plastic waste in the environment. A smaller, temporary facility, is already operational and producing commercial volumes of certified circular polymers that will be marketed by the end of this year to meet growing demand.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in the first nine months of 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.

MRC

1. U.S. demand for crude among refiners making gasoline and diesel surged

MOSCOW (MRC) -- Crude oil tanks at the Cushing, Oklahoma storage hub are more depleted than they have been in the last three years, and prices of further dated oil contracts suggest they will stay lower for months, said Reuters. U.S. demand for crude among refiners making gasoline and diesel has surged as the economy has recovered from the worst of the pandemic. Demand across the globe means other countries have looked to the United States for crude barrels, also boosting draws out of Cushing. Analysts expect the draw on inventories to continue in the short-term, which could further boost U.S. crude prices that have already climbed by about 25% in the last two months. The discount on U.S. crude futures to the international Brent benchmark should stay narrow. "Storage at Cushing alone has the potential to really rally the market to the moon," said Bob Yawger, director of energy futures at Mizuho.


MRC

MOSCOW (MRC) -- Crude oil futures inched higher in mid-morning trade in Asia Nov. 9 amid thin activity, though sentiment was pressured by reports that the US was considering taking action to curb rising oil prices, reported S&P Global.

At 10:11 am Singapore time (0211 GMT), the ICE January Brent futures contract was up 11 cents/b (0.13%) from the previous close at USD83.54/b, while the NYMEX December light sweet crude contract was similarly up 11 cents/b (0.13%) at USD82.04/b.

US Energy Secretary Jennifer Granholm said Nov. 8 that US President Joe Biden might take action this week to address soaring oil and gasoline prices. The US President has been vocal in recent weeks in calling on OPEC to raise output beyond their planned quotas and has blamed the group for the current high oil prices.

Analysts said the most likely option for the Biden administration was to tap its Strategic Petroleum Reserves. A ban on crude oil exports, an option that had been brought up by Granholm in the past, was less likely.

"The most obvious tool for the US administration to use is the Strategic Petroleum Reserve," said ING analysts Warren Patterson and Wenyu Yao in a note.

"Outside of mandated and SPR modernization sales (and a test sale in 2014), the last sale was part of a coordinated IEA release back in June 2011, which saw 30.6 million barrels released. There have also previously been suggestions that the US could implement a ban on crude oil exports. While we believe this is less likely, if such action was taken, it would lead to a widening in the WTI/Brent discount," Patterson and Yao said.

Nonetheless, there are signs that the OPEC+ group continues to face difficulty in ramping up output to required levels.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

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.
MRC

MOSCOW (MRC) - The most of Russian producers increased prices for polyvinyl chloride (PVC) with a few exceptions in October. High world prices and global shortages were the main reasons for the rise in prices in the Russian market, according to the ICIS-MRC Price Report.

For more than a year, the global PVC market has been demonstrating a constant rise in prices under the pressure of a deficit. This situation in the global scale affected the Russian PVC market. For the second year in a row, contrary to the seasonal factor and the expectations of many converters, Russian producers raise prices in the domestic market in the winter period. The price rise for November SPVC shipment in some cases reached RB20,000/tonne. At the same time, one of the producers rolled over October prices.

PVC prices continued to rise in several regions of the world under the pressure of the deficit in November. Thus, in Asia, prices rose by USD250/tonne and exceeded the level of USD2,000/tonne CFR for India. Prices exceeded USD2,300/tonne CFR in Turkey in in mid-October. Thus, the export parity for Russian producers turned out to be higher than the level of October prices on the domestic market.

There has been practically no import PVC fro Russian consumers since August. Chinese manufacturers and their acetylene PVC accounted for key imports during the summer months, but since late August, due to the COVID-19 outbreak, the Chinese authorities have been constantly restricting freight rail transport.

As a result, some Russian importers have not yet received Chinese PVC in full under the August contracts. It is also worth saying that some manufacturers from the north of China do not plan to export PVC sales to Russia until the end of the year. The demand for PVC in the Russian market, despite the record price levels, remains at a good level, although it is gradually decreasing.

But any free volumes are easily exported by domestic producers. Demand for PVC was mixed from local companies in November. Some converters actually intend to keeo the October volume of polymer purchases. Some converters plan to decrease PVC purchases this month, including because of the expectations of a decline in PVC prices in December.

Since the summer months, the range of prices for Russian PVC was quite large at manufacturers. Deals for November PVC supplies with K64/67 were in the range: Rb175,000-201,000/tonne CPT Moscow, including VAT for quantities up to 500 tonnes, compared to Rb155,000-201,000/tonne CPT Moscow, including VAT, in October.
MRC