COVID-19 - News digest as of 12.11.2021

1. Stronger fuel demand boosts profits at Asia crude oil refineries

MOSCOW (MRC) -- Stronger fuel demand has boosted profits at crude oil refineries across Asia in recent weeks, but they have also been given a helping hand by lower exports of refined products from regional heavyweight China, reported Reuters. China's exports of refined fuels dropped in October to 3.95 MM tons, snuffing out what was a slight rise in shipments in September and reverting to the declining trend seen since April. The past four months have been the weakest for fuel exports from China since a slump in mid-2020. That was largely the result of plummeting fuel demand across Asia as many countries locked down their economies in a bid to combat the coronavirus pandemic.


Crude futures down in Asia on uncertainty about any US intervention to curb rising oil prices

Crude futures down in Asia on uncertainty about any US intervention to curb rising oil prices

MOSCOW (MRC) -- Crude oil futures fell during midafternoon trade in Asia Nov. 12 on profit-taking activity following uncertainty about any US intervention to curb rising oil prices, including releasing some of its Strategic Petroleum Reserve, reported S&P Global.

At 2:59 pm Singapore time (0659 GMT), the ICE January Brent futures contract was down 68 cents/b (0.82%) from the previous settle at USD82.19/b while the NYMEX December light sweet crude contract was 62 cents/b (0.76%) lower at USD80.97/b.

"The uncertainty over how US may intervene to curb elevated oil prices may draw some profit-taking, coming off the back of a stronger US dollar and virus resurgences in China and Europe, which may dampen some sentiments on eventual reopening," IG market strategist Yeap Jun Rong told S&P Global Platts Nov. 12.

Some analysts have talked about the buildup of a risk-off sentiment as there were few events to move markets at the end of the week, particularly after recent headlines of higher-than-expected US inflation numbers weighing on investors' minds.

The US recorded its highest inflation rate in 31 years. Data from the Bureau of Labor Statistics showed Nov. 10 that consumer prices rose 6.2% year on year and 0.9% month on month.

This has also led to a stronger dollar index, which in turn impacted oil prices. At 2.59 pm in Singapore, the Dollar Index was trading at 95.20, up 0.02% from the previous close at 95.18.

Market watchers were awaiting moves from the Biden administration on a possible release of SPR crude in a bid to combat high gasoline prices, which might stem rising oil prices.

"US President Biden is facing pressure from fellow Democrats to address high gasoline prices with measures such as a ban on oil exports. He is still weighing the merits of an emergency release of crude from strategic reserves," ANZ research analysts said.

Echoing a similar sentiment, UOB Market Research has said that traders have remained concerned about whether the Biden administration would intervene to cool rising energy prices in response to growing political pressure, including from his own party.

Meanwhile, the OPEC+ alliance released its latest monthly market report late Nov. 11 that saw only marginal changes to supply and demand estimates for both this year and next. The group has downgraded its 2021 global oil demand forecast by 160,000 b/d.

The group also cut its demand estimates for the final quarter of this year, expecting that high energy prices will have a dampening impact on demand.

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, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.

Ukrainian PVC imports down by 21% in Jan-Oct 2021, exports up by 18%

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) into Ukraine fell in the first ten months of 2021 by 21% year on year, totalling 22,900 tonnes. Export sales of Ukrainian PVC rose by 18% year on year, with Turkey accounting for the largest export volumes, according to MRC's DataScope report.

Last month's SPVC imports to the Ukrainian market dropped to 2,200 tonnes from 2,300 tonnes in September, Ukrainian companies reduced their shipments of polymer from the USA. Overall SPVC imports reached 22,900 tonnes in January-October 2021, compared to 29,000 tonnes a year earlier. Limited export quotas of European and North American producers were the main reason for such a major fall in imports.

European producers with the share of about 86% of the total imports over the stated period were the key suppliers of resin to the Ukrainian market.
Karpatneftekhim reduced its export sales last month, thus, export sales of Ukrainian resin were 14,200 tonnes versus 16,300 tonnes in September. However, slightly over 160,200 tonnes of PVC were shipped for export in the first ten months of 2021, compared to 136,300 tonnes a year earlier.


European PP prices increased by EUR100/tonne for CIS market in November

MOSCOW (MRC) -- The November contract price of propylene was settled in Europe up by EUR95/tonne from the previous month. As a result, European producers raised their November contract polypropylene (PP) prices for the CIS countries. But the price increase was not proportional to the rise in monomer prices, according to ICIS-MRC Price report.

Negotiations over November export prices of European PP were over last week. Many market participants said almost all European producers still had export restrictions on propylene copolymers. There were fewer problems with the supply of propylene homopolymer (homopolymer PP).

At the same time, the increase in the cost of propylene led to an increase in the export prices of PP for shipments in November, and in some cases it was not proportional to the increase in the price of monomer. Deals for November shipments of homopolymer PP were done in the range of EUR1,675-1,780/tonne FCA, whereas last month's deals were done in the range of EUR1,600-1,680/tonne FCA.

Deals for block copolymers of propylene (PP block copolymers) were negotiated in the range of EUR1,950-2,000/tonne FCA, up by EUR100/tonne from the previous month.


Stavrolen resumed PP production

MOSCOW (MRC) -- Stavrolen, Russia's major polyolefins producer, has resumed its polypropylene (PP) production capacities after an scheduled turnaround, according to ICIS-MRC Price report.

According to the company's clients, by 11 November, Stavrolen completely resumed PP production after a planned shutdown for scheduled maintenance works, which started on 16 October. The plant's annual production capacity is 120,000 tonnes.

It is also worth noting that Stavrolen shut its high density polyethylene (HDPE) production from 12 October for scheduled repairs. The resumption of polyethylene production in full is planned by the middle of next week. The plant's annual production capacity is 300,000 tonnes.

Stavrolen, Lukoil's subsidiary, is Russia's second largest high density polyethylene (HDPE) producer after Kazanorgsintez and the fifth largest PP manufacturer. Stavrolen's HDPE and PP production capacities are 300,000 tonnes and 120,000 tonnes per year, respectively, the plant also produces 80,000 tonnes of benzene and 50,000 tonnes of vinyl acetate per year.