PE imports to Russia down by 7% in Jan-Nov 2021

MOSCOW (MRC) -- Imports of polyethylene (PE) into Russia fell by 7% year on year to 544,600 tonnes in January-November 2021. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) accounted for the greatest decrease in imports, according to MRC's DataScope report.

November PE imports reached 57,800 tonnes versus 44,100 tonnes a month earlier, shipments of all grades of ethylene polymers increased. Overall PE imports totalled 544,600 tonnes in the first eleven months of 2021, compared to 586,300 tonnes a year earlier. HDPE and LLDPE accounted for the main reduction in imports, whereas shipments of ethylene copolymers and low density polyethylene (LDPE) increased.

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

November HDPE imports rose to 24,800 tonnes from 18,400 tonnes a month earlier, PE shipments from Uzbekistan and South Korea increased. Overall imports of this PE grade totalled 202,700 tonnes in January-November 2021, down by 15% year on year. Film grade and blow moulding HDPE accounted for the main reduction in shipments.

Last month's LDPE imports exceeded 10,600 tonnes, whereas this figure was at 7,600 tonnes in October. Shipments from Belarus and Germany grew. Overall LDPE imports to Russia reached 109,700 tonnes in the first eleven months of 2021, up by 7% year on year.

November LLDPE imports reached 13,400 tonnes, compared to 9,900 tonnes a month earlier, purchases of film grade PE in South Korea decreased. Overall LLDPE imports totalled 135,000 tonnes in January-November 2021, down by 14% year on year.

Last month's imports of other ethylene polymers, including ethylene-vinyl-acetate (EVA), were 8,900 tonnes, compared to 8,200 tonnes in October. Overall imports of other ethylene polymers reached 97,200 tonnes over the stated period versus 89,500 tonnes a year earlier.


COVID-19 - News digest as of 29.12.2021

1. Crude oil prices mixed, US crude futures down after COVID-19 flight cancellations

MOSCOW (MRC) -- Oil prices were mixed on Monday, with Brent edging up while US crude futures slipped after airlines called off thousands of flights in the US over Christmas holidays amid surging COVID-19 infections, reported Hydrocarbonprocessing. US West Texas Intermediate crude futures fell 41 cents, or 0.6%, to USD73.38 a bbl by 0053 GMT. The contract did not trade on Friday because U.S. markets were closed for the Christmas holiday. Brent crude rose 40 cents, or 0.5%, to USD76.54 a bbl after settling down 0.92% on Friday. Both contracts jumped 3% to 4% last week after early data suggested that the Omicron variant of COVID-19 may cause a milder level of illness.


Asia distillates-jet fuel cash premiums slip on Omicron-led travel restrictions

MOSCOW (MRC) -- Asia's cash premiums for jet fuel slipped to their lowest in more than three weeks on Friday, posting a weekly drop, as airlines continue to struggle with weak capacity amid Omicron-led travel restrictions, reported Reuters.

Cash premiums for jet fuel dropped to 28 cents per bbl to Singapore quotes on Friday, the lowest since Nov. 29. The differentials have shed nearly 63% this week.

"Jet fuel demand this year has been largely undermined by travel restrictions. Even with the re-opening of borders across several Asian countries in recent months, international air travels are still limited, and jet fuel demand recovery has been relatively weak," said Serena Huang, Asia lead analyst at Vortexa.

Asia's jet fuel refining margins are on track to double by end-2021 from the previous year, but traders and analysts say it would likely take until the middle of this decade for aviation demand to return to pre-COVID levels.

Just as vaccinations and re-opening of national borders raised hopes for a pick-up in air travel, the highly contagious COVID-19 Omicron variant emerged last month, prompting governments to impose lockdowns and travel curbs again.

The refining margins, also known as cracks, for jet fuel dipped to USD11.05 per bbl over Dubai crude during Asian trading hours, 34 cents lower from a day earlier.

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.

SHV Energy, UGI get EU approval to form renewable DME joint venture

SHV Energy, UGI get EU approval to form renewable DME joint venture
MOSCOW (MRC) -- SHV Energy and UGI Receive European Union Approval to Create Joint Venture to Advance the Production and Use of Renewable Dimethyl Ether, said the company.

SHV Energy and UGI International, a subsidiary of UGI Corporation, distributors of off-grid energy, today received approval from the European Commission to create a joint venture to advance the production and use of renewable dimethyl ether (rDME).

The proposed joint venture was approved, marking an important step that will enable both parties to form the joint venture and commence operations in early 2022. As previously announced, the joint venture is intended to gain market acceptance and accelerate the use of rDME as a renewable solution for the LPG industry.

The parties anticipate the development of up to 6 production plants within the next 5 years, targeting a total production capacity of 300,000 tons of rDME per year by 2027. The aggregate investment in production capacity is estimated to be up to USD1 billion which is expected to involve third party investment.

In May 2021, SHV Energy and UGI International, a subsidiary of UGI Corporation, leading distributors of off-grid energy, announce the intention to launch a joint venture to advance the production and use of Renewable Dimethyl Ether (“rDME”), a low-carbon sustainable liquid gas, to accelerate renewable solutions for the LPG industry.

SHV Energy, via its subsidiary Pinnacle Propane, has acquired 100% of the assets and customers of United Propane and Collins Propane in the United States.

SHV Energy is a leading global distributor of off-grid energy such as LPG and LNG and is active in the area of sustainable fuels and renewable energy solutions. SHV Energy is a wholly owned subsidiary of SHV, a family-owned multinational, and consists of a group of specialized energy companies. The company’s brands include Calor, Ipragaz, Liquigas, Pinnacle, Primagas, Primagaz and Supergasbras.

Japan industrial output surge offers hope of end to supply chain squeeze

Japan industrial output surge offers hope of end to supply chain squeeze

MOSCOW (MRC) -- Japan's industrial production grew by 5.4% year on year in November, supported by higher output of motor vehicles and plastic products, said The Financial Times.

Japanese industrial output jumped in November by the largest margin since 2013, providing hope that the country’s automotive sector could finally be moving beyond its semiconductor supply struggles. Industrial production increased 7.2 per cent last month compared with October, significantly exceeding economists’ forecasts. The improvement was driven by a 43.1 per cent month-on-month resurgence in car production, said analysts, who noted that other manufacturers appeared to be rebuilding exhausted inventories more rapidly than expected.

Takuji Aida, chief economist at Okasan Securities, said that while overseas parts procurement was stagnant, it appeared that supply chain problems that have afflicted Japanese manufacturers were gradually being resolved. The monthly data released by the Ministry of Economy, Trade and Industry represent Japan’s last major economic release of the calendar year. The November increases followed October’s more modest 1.8 per cent gain from the previous month.

The government also issued an upward revision of its overall assessment of industrial production, saying the manufacturing sector was “showing signs of recovery” after having previously rated the situation as “at a standstill”. Analysts at Goldman Sachs, who had forecast a 4.8 per cent increase, noted that the production index had recovered to just below its pre-pandemic level in January 2020.

“While monthly production will likely fluctuate amid lingering supply shortages for semiconductors and other components, it appears to be returning steadily to a solid growth track,” wrote Yuriko Tanaka, a Goldman Sachs economist, in a note to clients.

Investors reacted positively to the data, with the benchmark Topix closing up 1.37 per cent higher on Tuesday. But while some interpreted the numbers as a potential leading indicator of more sustained gains during the final quarter of the financial year ending in March 2022, others were more guarded.

As per MRC, Japanese refineries may be forced to shut down capacity once again unless they see a strong recovery from the coronavirus pandemic. They’ve been hit by declining use for fuel at home, competition from newer refineries in China and South Korea dominating in other markets, as well.

As MRC wrote before, JXTG Nippon Oil and Energy is in plans to restart its cracker following an unplanned outage. The company is likely to resume operations at the cracker early this week. The cracker was shut owing to technical issues on May 4, 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 feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.