COVID-19 - News digest as of 29.10.2021

1. TotalEnergies posts sharp rise in earnings and higher output in Q3 2021

MOSCOW (MRC) -- France's TotalEnergies reported higher production and a sharp jump in earnings in the third quarter of 2021, predicting that surging oil and gas prices and rebounding demand will lift its performance into early 2022, reported S&P Global. Given the outlook for higher OPEC+ production quotas and seasonal gas demand in the fourth quarter, TotalEnergies said Oct. 28 it expects fourth-quarter 2021 hydrocarbon production to be in the range of 2.85 million-2.9 million b/d of oil equivalent, up from Q3 levels. After gas prices hit record levels in Europe and Asia during the quarter, TotalEnergies said, "barring an exceptionally mild winter, the low inventory level for gas and expected sustained demand are likely to keep gas prices in Europe and Asia at high levels until the second quarter 2022."


Crude oil futures rise in Asia amid ongoing deficit and Africa supply outages

Crude oil futures rise in Asia amid ongoing deficit and Africa supply outages

MOSCOW (MRC) -- Crude oil futures inched higher in mid-morning trade in Asia Oct. 29, as bearish pressures from US inventory builds and the resumption of Iranian nuclear talks ran up against the ongoing narrative of a severe oil market deficit, reported S&P Global.

Reports of supply disruptions in Africa also provided support to prices.

At 10:00 am Singapore time (0200 GMT), the ICE December Brent futures contract was up 21 cents/b (0.25%) from the previous close at USD84.53/b, while the NYMEX December light sweet crude contract rose 6 cents/b (0.07%) at USD82.87/b.

Crude prices have endured wild intra-day swings of close to 3% this week amid a slew of bullish and bearish reports, but were otherwise on track to end the week slightly lower by about 1%.

Analysts said that while sentiment was under pressure from large inventory builds in the US and the potential return of Iranian oil as Iran and Western powers return to the negotiating table, the ongoing narrative of a tight supply market has not gone away.

"The oil market deficit that is in place will not change anytime soon despite the recent bearish headlines of rising COVID cases across eastern Europe and Asia, potentially additional output from Iran, and expectations it won't be a particularly bad winter for the North," said OANDA senior market analyst Edward Moya.

Also putting a floor under prices were reports of outages in Libya and Nigeria. In Libya, production of the country's Es Sider crude has plunged 72% and will continue to decline for 10 days due to a pipeline leakage. Waha Oil is currently producing 77,000 b/d of Es Sider crude, down from 285,000 b/d production capacity, state-owned National Oil Corp. said in an Oct. 27 statement.

In Nigeria, Shell declared force majeure on Bonny Light crude loadings Oct. 25 due to the shutdown of the Nembe Creek Trunk line, a key pipeline for the grade, a spokesperson said Oct. 27. Bonny Light is one of Nigeria's main export grades, but the 150,000 b/d Nembe Creek Trunk Line - a pipeline feeding the grade's export terminal, operated by Aiteo Exploration and Production Limited - has come under repeated attack from militants. Loading volumes are typically around the 250,000 b/d mark, in the absence of disruption.

Meanwhile, OPEC and its allies appear set to reaffirm plans to increase crude production by 400,000 b/d in December after an advisory committee saw no major changes in the market's supply/demand outlook, despite calls from major consumers to further boost output to tame three-year high oil prices.

Nonetheless, analysts at ANZ Research noted that demand erosion from the threat of COVID-19 remained ever-present.

"There are still risks to demand. A surge in new cases of COVID-19 threatens to slow the recovery in oil demand," they said.

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.

Trinseo raises November prices for PS, ABS and SAN produced in EMEA

Trinseo raises November prices for PS, ABS and SAN produced in EMEA

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN), manufactured in the EMEA, as per the company's press release.

Effective November 1, 2021, or as existing contract terms allow, a surcharge of EUR200/mt will apply to the contract and spot prices for all Trinseo STYRON PS, MAGNUM ABS resins and TYRIL SAN resins.

According to the company's statement, these surcharges are in response to unprecedented and escalating pressure from energy prices and apply to all current agreements and contracts for deliveries as of November 1, 2021 and are subject to further potential adjustments linked to fluctuating energy prices.

As MRC reported earlier, earlier this month, Trinseo announced a price increase for all PS, ABS and SAN in Europe. Effective October 1, 2021, or as existing contract terms allow, the contract and spot prices for the products listed below rose, as follows:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR55 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR55 per metric ton;
- MAGNUM ABS resins - by EUR60 per metric ton;
- TYRIL SAN resins - by EUR45 per metric ton.

According to ICIS-MRC Price report, in Russia, October prices of Nizhnekamskneftekhim's GPPS were in the range of Rb152,750-163,700/tonne CPT Moscow, including VAT, and HIPS prices were at Rb156,750-167,700/tonne CPT Moscow, including VAT. Penoplex contracted its GPPS quantities at Rb169,000-171,000/tonne CPT Moscow, including VAT, in October, whereas last week's prices of Gazprom neftekhim Salavat's GPPS were heard at Rb152,500-156,500/tonne CPT Moscow, including VAT.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.

Tosoh to permanently stop producing and selling TDI an related Products at its Nanyo complex

MOSCOW (MRC) -- Tosoh Corporation, a major Japanese petrochemical producer, has announced it will permanently stop producing and selling toluene diisocyanate (TDI) and TDI-related products from its Nanyo complex in Japan, effective April 2023, according to Apic-online.

Despite the continuous implementation of measures to improve profitability, the environment surrounding this business has become increasingly severe in recent years, and there are no prospects for improvement, the company stated.

Tosoh currently produce 25,000 t/y of TDI at the site.

As MRC reported earlier, Tosoh resumed normal production at its caustic soda plant in Nanyo City (Nanyo, Yamaguchi Prefecture, Japan) with the capacity of 1.188 million tons of caustic soda and 1.06 million tons of chlorine per year on June 24, 2021. The company experienced some technical issues when restarting after a scheduled repair. Since June 12, the caustic and chlorine production capacity utilisation was reduced by about 30%.

Founded in 1935, Japan's Tosoh Corporation, headquartered in Tokyo, is an international chemicals and specialty materials company. The main activity of the company is the production of chlor-alkali and petrochemical products, which include ethylene, propylene, polypropylene, polyethylene and synthetic rubbers. The Tosoh Group globally includes over 130 companies with manufacturing facilities and offices in Japan, China, the Philippines, Indonesia, Singapore, Taiwan, South Korea, Germany, Belgium, Holland, Italy, UK, Greece, Switzerland and the USA.

HDPE production in Russia up by 8% in January-September

MOSCOW (MRC) -- Russia's overall production of high density polyethylene (HDPE) totalled slightly over 1.475 mln tonnes in the first nine months of 2021, up by 8% year on year. At the same time, only one producer increased its output, according to MRC's ScanPlast report.

September HDPE production in Russia dropped to 146,400 tonnes, whereas this figure was 158,500 tonnes a month earlier; Gazprom neftekhim Salavat and Kazanorgsintez reduced their capacity utilisation due to the turnarounds. Thus, overall HDPE output reached 1,475,000 tonnes in January-September 2021, compared to 1,366,000 tonnes a year earlier. Only ZapSibNeftekhim's output increased, two more producers reduced their production.

The structure of PE output by grades looked the following way over the stated period.

September production of HDPE at ZapSibNeftekhim reached 98,900 tonnes against 103,200 tonnes a month earlier. In general, total output of HDPE at the Tobolsk plant approached the level of 885,900 tonnes in January-September, up 36% year on year.

Kazanorgsintez's total HDPE production fell to 19,400 tonnes last month from 29,500 tonnes in August, the decrease in production was due to the shutdown for scheduled maintenance in mid-September. Thus, overall production of this PE grade totalled 283,600 tonnes over the stated period, down by 26% year on year.

Stavrolen's September HDPE production was 24,900 tonnes versus 25,800 tonnes a month earlier. The plant's overall HDPE output exceeded 238,200 tonnes in January-September 2021, which virtually corresponded to the last year's figure.

Last month, the total volume of HDPE production at Gazprom neftekhim Salavat amounted to slightly less than 3,200 tonnes, in August there was no production due to the maintenance works. Thus, overall production of this PE grade totalled 66,800 tonnes at the plant over the stated period, down by 28% year on year.