COVID-19 - News digest as of 24.11.2021

1. Global petrochemical market suffers from price volatility - SIBUR CEO D. Konov

MOSCOW (MRC) - Record gas prices have a significant impact on the petrochemical market, said RBK with reference to the words of SIBUR head D. Konov. Dmitry Konov, Chairman of the Board of SIBUR Holding, said that the "main evil" for the petrochemical market this year is not the rise in prices, but the speed and frequency of their change. "The main evil - and this is true for both us and the consumer - is not some absolute level of prices, but the speed and frequency of their changes. When prices rise and fall by 30% month by month, this is bad," Konov said. He noted that this year there were many such phenomena that led to record gas prices. This includes interruptions in American production, an accident at the Urengoy plant for preparing condensate for transport, and force majeure events in Europe. Konov stressed that as a result of this, "the long-standing established system is failing," which manifests itself in the hypervolatility of product prices and leads to anomalous delivery costs from one geography to another.


Crude oil futures up in Asia after 3% surge overnight on smaller-than-expected release from strategic petroleum reserves

Crude oil futures up in Asia after 3% surge overnight on smaller-than-expected release from strategic petroleum reserves

MOSCOW (MRC) -- Crude oil futures were higher in mid-morning trade in Asia Nov. 24, extending gains of more than 3% overnight, after major oil-consuming economies announced a smaller-than-expected release from their strategic petroleum reserves, reported S&P Global.

Some bearish pressures also came from an unexpected build in US crude oil and gasoline inventories last week.

At 10:23 am Singapore time (0223 GMT), the ICE January Brent futures contract was up 14 cents/b (0.17%) from the previous close at USD82.45/b, while the NYMEX January light sweet crude contract was 25 cents/b (0.32%) higher at USD78.75/b.

Oil prices continued to climb after settling 2.3%-3.3% higher overnight as investors deemed the scale of the SPR releases by several major oil-consuming economies insufficient to offset the current shortage of oil the world faces.

"Markets deemed the overall release of the strategic oil reserves to be too small to ease the demand-supply imbalance," IG market strategist Yeap Jun Rong said.

The US will release 50 million barrels from its SPR by early next year, though a portion of that has to be returned by 2025, while India will release 5 million barrels and the UK will allow companies to voluntarily release 1.5 million barrels.

South Korea also said Nov. 24 that it will release crude oil from its SPR, though it did not specify the timing and volume to be released.

A source at South Korea's energy ministry said the country could possibly release about 4% of the country's SPR, equivalent to around 3.8 million barrels, as it did in 2011 during the Libyan crisis.

The announced figures will do little to calm nerves about soaring energy costs and the associated rise in inflation. Despite declines in the last four weeks, crude prices remain not far from the seven-year highs touched in late October.

In the US, drivers are now facing the highest Thanksgiving gasoline prices in nine years as of Nov. 23.

Media reports indicate the American Petroleum Institute has reported a build in US crude oil and gasoline inventories for the week ended Nov. 19, with crude stocks rising 2.3 million barrels in the week and gasoline inventories up 600,000 barrels.

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.

Fire broke out at PBF Energy gasoline unit in Toledo

Fire broke out at PBF Energy gasoline unit in Toledo

MOSCOW (MRC) -- PBF Energy reported a fire in a gasoline unit at its 172,800 b/d refinery in Toledo, Ohio, reported S&P Global with reference to a company spokesman's statement on Nov. 23.

"We can confirm that a fire occurred on a gasoline processing unit at the Toledo Refinery at approximately 11:00 am this morning. Refinery crews are actively responding with assistance from the local Oregon, OH Fire Department," said PBF spokesman Mike Karlovich in an email.

Karlovich said there were no injuries on site and that officials had been notified.

As MRC wrote previously, in H1 September, 2021, US-based PBF Energy began the process of restarting aromatics production in Chalmette, southeast Louisiana, USA after an unscheduled maintenance, caused by Hurricane Ida. The plant's production capacity is 185,000 mt/year of benzene, 180,000 mt/year of toluene and 270,000 mt/year of xylenes. PBF Energy restarted most of the production at its refinery in Chalmetta around September 17, 2021. The facility was shut down due to a power outage when Hurricane Ida hit the coast on 29 August.

Benzene is feedstock for the production of styrene monomer (SM), which, in its turn, is the main raw material for the production of polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 420,690 tonnes in the first nine months of 2021, up by 16% year on year. September estimated consumption was 46,150 tonnes, down by 3% year on year.

US EPA proposes compliance deadline extension for biofuel laws

US EPA proposes compliance deadline extension for biofuel laws

MOSCOW (MRC) -- The US Environmental Protection Agency on Thursday proposed an extension to 2020 and 2021 deadlines for oil refiners to prove compliance with the nation's biofuel blending mandates, reported Reuters with reference to the agency's statement.

The extension could help oil refiners that have slowed or stopped buying credits to prove they have complied with the blending requirements, amassing huge outstanding liabilities in the process. The EPA's move would allow those refiners, such as Monroe Energy and PBF Energy Inc, to spread their debt over a longer period of time.

The short positions, which the refiners built up over the last year, were a bet that President Joe Biden will ultimately side with refiners and their union supporters and roll back the law known as the US Renewable Fuel Standard (RFS), Reuters previously reported.

Under the RFS, oil refiners must blend billions of gallons of biofuels into their fuel mix, or buy compliance credits from those that do. The EPA, which administers the RFS, can grant some refiners exemptions to the law if the refiners prove the obligations are financially harmful.

As MRC informed previously, in July 2021, Northern California regulators directed two of the state's largest oil refineries to slash their fine particulate air pollution, which will require costly modifications at the plants.

We remind that Chevron Corp is considering permanently closing the gasoline-producing fluidic catalytic cracker (FCC) at its 112,229 barrel-per-day (bpd) Pasadena, Texas refinery as part of a possible reconfiguration of the plant. Idling the shut 52,000-bpd FCC would be part of converting the refinery on the Houston Ship Channel to a simpler hydroskimming configuration.

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.

Cosmo Specialty Chemicals developed hydrophilic block silicone emulsions

Cosmo Specialty Chemicals developed hydrophilic block silicone emulsions

MOSCOW (MRC) -- Cosmo Speciality Chemicals, a 100% subsidiary of Cosmo Films Ltd., has developed hydrophilic block silicone emulsions that exhibits better softening properties because of their lower rotational free energy than C-O bonds as compared with any other traditional non-silicone softeners, said the company.

Non-toxic and eco-friendly, the agent is suitable for a wide range of applications while providing an outstanding effect in the textile industry. With remarkable lubricity and hydrophilicity, the innovative softener improves water absorbency and smoothness of the fabric along with improving the efficiency of cutting and sewing in. LYOSIL BHL can be used on cotton like knits, woven, terry towels, etc.

Cosmo Films Limited announced expansion by setting up the world’s largest BOPP film production line at Aurangabad with annual rated capacity of 67,000 MT.

As MRC informed earlier, Cosmo Films introduced BOPP based heat resistant (HR) films. The films have been engineered to work as printing layer replacing BOPET film in multi-layer laminates for various packaging applications in both food and non-food segments. The company has also launched a barrier version of the film.

Cosmo Speciality Chemicals is a 100% subsidiary of Cosmo Films Ltd with strong research capabilities to provide best and the most competitive products through innovations based on sustainable science to its customers. The Company is into specialty polymers& textile chemicals and has now launched 'Fabritizer' to safeguard consumers from the various viruses, bacteria and germs.

Established in 1981 and founded by Mr. Ashok Jaipuria, Cosmo Films today is a global leader in specialty films for packaging, lamination, labeling and synthetic paper. With engineering of innovative products and sustainability solutions, Cosmo Films over the years has been partnering with worlds’ leading F&B and personal care brands and packaging & printing converters to enhance the end consumer experience. Its customer base is spread in more than 100 countries with sales & manufacturing units in India and Korea and additionally sales & distribution base in Japan, USA, Canada and Europe.