Pucheng Clean Energy reduces capacity utilisation at its LLDPE plant to 80%

Pucheng Clean Energy reduces capacity utilisation at its LLDPE plant to 80%

MOSCOW (MRC) -- Pucheng Clean Energy, a key coal-based petrochemical producer in China, has cut operating rates at its low density polyethylene (LLDPE) plant to approximately 80% in the last week of November, after hitting the annual coal consumption quota of 3.7 million tons, according to CommoPlast.

The producer is now sourcing 50,000 tons of spot methanol to feed the downstream plants, including its LLDPE unit.

Pucheng Clean Energy owns a 300,000 tons/year LLDPE plant and a 400,000 tons/year polypropylene (PP) plant in Shanxi province, China.

The development raises many questions among Chinese players on whether other coal-based petrochemical plants would face the same issue moving forward, which would eventually affect domestic supply.

As MRC informed earlier, this year, Pucheng Clean Energy conducted scheduled turnarounds at its LLDPE plant in Shaanxi province from 22 to 28 February and from 12 July to 5 August.

According to MRC's ScanPlast report, September LLDPE shipments to Russia dropped to 47,590 tonnes from 54,030 tonnes a month earlier. Producers reduced their PE output, at the same time, imports decreased. LLDPE shipments to the Russian market were 367,030 tonnes in January-September 2021, up by 28% year on year.

COVID-19 - News digest as of 01.12.2021

1. Global jet fuel demand stays under pressure from new COVID-19 variant

MOSCOW (MRC) -- Global jet fuel markets stayed under pressure on Tuesday as more countries expanded border restrictions to keep the new Omicron coronavirus variant at bay, prompting travelers to reconsider their plans, reported Reuters. Jet fuel demand - the biggest laggard in the oil complex - had been forecast to post the strongest growth of 550,000 bpd to 5.9 MMbpd in fourth quarter, according to the International Energy Agency in its Nov. 16 report. But now Omicron poses the greatest risk to jet fuel consumption. Hong Kong expanded a ban on entry for non-residents from several countries, the latest to expand travel curbs after Israel and Japan have already announced border closures to all foreign travelers.


PP production in Russia up by 11% in January-October

MOSCOW (MRC) - Production of polypropylene (PP) in Russia increased to 1.693 mln tonne in the first ten months of this year, up 11% compared to the same period of 2020. Four producers increased their output, according to MRC's ScanPlast report.

Russian producers' October PP production fell to 155,500 tonnes from 169,700 tonnes a month earlier, three producers shut its production for scheduled maintenance. Russia's overall PP output reached 1.693 mln tonnes in January-October 2021, compared to 1.530 tonnes a year earlier. Four out of seven producers increased their capacity utilisation, with SIBUR Tobolsk/ZapSibNeftekhim traditionally accounting for the greatest growth in the output.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk/SapSibNeftekhim decreased its capacity utilisation in October, the plant's production was 86,900 tonnes versus 94,800 tonnes a month earlier. Tobolsk complex's overall PP output reached 900,300 tonnes in the first ten months of 2021, up by 18% year on year.

Poliom kept high level of capacity utilisation in October, having produced about 12,000 tonnes of PP compared with 17,400 tonnes a month earlier. Overall, the Omsk plant produced about 166,800 tonnes of PP over the stated period, up by 11% year on year.

Nizhnekamskneftekhim produced slightly less than 13,800 tonnes of propylene polymers in October versus 17,800 tonnes a month earlier.
The Nizhnekamsk plant's overall output of polymer reached 178,900 tonnes in January-October 2021, compared to 182,500 tonnes a year earlier.

Tomskneftekhim last month produced about 13,500 tonnes against 13,400 tonnes a month earlier. Total PP production by the producer increased to 127,900 tonnes in January-October 2021, up 4% year on year.

Ufaorgsintez's October PP production was about 10,200 tonnes versus 4,800 tonnes; the producer carried out scheduled maintenance works in September. The Ufa plant's overall output of polymer reached 98,500 tonnes in the first ten months of 2021, which in fact corresponded to the last year's figure.

NPP Neftekhimiya (Kapotnya) produced about 13,100 tonnes last month, compared to 10,400 tonnes in September. The plant's overall PP output reached 124,100 tonnes over the stated period, which was the same as in 2020.

Stavrolen (LUKOIL) produced slightly less than 6,000 tonnes of propylene polymers in October due to a shutdown for long-term preventive maintenance in the middle of the month against 11,200 tonnes a month earlier. The Budennovsk plant's overall output of propylene polymers reached 96,200 tonnes in the first ten months of 2021, up by 7% year on year.


Record high HDPE prices remain in the Russian market

Record high HDPE prices remain in the Russian market

MOSCOW (MRC) -- Negotiations over December prices of high density polyethylene (HDPE) began in Russia late last week. Some sellers announced a price increase of Rb5,000/tonne, and others intend to maintain their prices at the level as of the second half of November, according to ICIS-MRC Price report.

HDPE supply has been increasing gradually in the Russian market after the end of the producers' shutdowns for maintenance and higher capacity utilisation. But there has been no need to talk about an oversupply so far. Moreover, the devaluation of the rouble against the dollar significantly reduced the ability to increase imports. As a result, some sellers rolled over their polyethylene (PE) prices as of the second half of November for December deliveries, and in some cases, buyers even reported a price rise of Rb5,000/tonne.

Gazprom neftekhim Salavat and Kazanorgsintez finished their turnarounds in September-October. By the third decade of November, Stavrolen had resumed its HDPE production with the annual capacity of 300,000 tonnes after a long shutdown for maintenance. Thus, the period of this year's scheduled shutdowns for repairs at Russian plants came to an end.

Supply of PE has been increasing gradually in the market, and demand has been subsiding in some consumption segments due to seasonal factors. In addition, record high prices have been putting a major pressure on demand for the past few months.

This year's HDPE imports are 20% lower than last year. Some market participants reported a slight increase in imports from Iran. But the current devaluation of the rouble against the dollar blocks all the prospects for the growth of HDPE imports.

In the spot market, some sellers announced their December offer prices for film grade HDPE in the range of Rb150,000-156,000/tonne, including VAT and delivery. The spread of blow moulding PE prices was wider and ranged between Rb150,000-167,000/tonne FCA, including VAT and delivery.

Fire broke out at Eni Livorno refinery

Fire broke out at Eni Livorno refinery

MOSCOW (MRC) -- A fire broke out at the Eni refinery in Stagno, in the municipality of Collesalvetti, near Livorno, which triggered the alarm throughout the province, especially for the black smoke and exhalations released, according to L'Unione Sarda.

The local fire services teams from Pisa, Lucca, and Florence were called to the site in Collesalvetti at around 14:30 local time to tackle the fire. After hours of work, the firefighters managed to put out the fire.

The fire, which also triggered an explosion, involved the "hot oil furnace" inside the plant and after the fire extinguishing operations, cooling and reclamation operations have been started.

No injuries were reported.

The investigations on the incident started. Based on a first hypothesis, the plant was under maintenance and perhaps there were hydrocarbon residues that caught fire.

As MRC wrote earlier, Eni is evaluating conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality 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 1,868,160 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.

Eni, abbreviation of Ente Nazionale Idrocarburi, in full Eni SpA, Italian energy company operating primarily in petroleum, natural gas, and petrochemicals. Established in 1953, it is one of Europe's largest oil companies in terms of sales.