Crude oil prices hold near USD85/bbl on stronger demand outlook

Crude oil prices hold near USD85/bbl on stronger demand outlook

MOSCOW (MRC) -- Oil prices were steady on Thursday near two-month highs, with Brent crude trading near USD85 a barrel, buoyed by expectations that a strong economic recovery will boost demand, but rising US inventories and high inflation capped gains, reported Reuters.

Brent crude futures rose 26 cents, or 0.3%, to USD84.93 a barrel, by 1445 GMT.

US West Texas Intermediate (WTI) crude futures were up 8 cents, or 0.1, to USD82.72 a barrel.

Oil prices rallied more than 50% in 2021 and some analysts expect this trend to continue this year, forecasting that a lack of production capacity and limited investment could lift crude to USD90 or even above USD100 a barrel.

"The main factors driving prices up are ... the generally positive market sentiment as Omicron concerns abate and the expectation of continued dynamic economic development," Commerzbank said.

Cold weather in North America also supported prices.

Rising US fuel inventories last week and high inflation in the world's biggest economy weighed, however.

Data from the US Energy Information Administration (EIA) on Wednesday showed fuel demand has taken a hit from Omicron, with gasoline stockpiles increasing by 8 million barrels in the week to Jan. 7, compared with analyst expectations for a 2.4 million-barrel rise.

"In reality, the weekly EIA report was less bullish than the headline number, as total crude oil inventories fell 4.8 million barrels but were more than offset by a stock build across refined products," Citi said in a note.

The drop in crude inventories "might have been related to end-of-year tax issues on oil stocks onshore in Texas and Louisiana", the bank added.

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 was expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, EIA said in a monthly report earlier last year, a smaller decline than its previous forecast for a drop of 210,000 bpd.

Reliance acquires UK-based firm Faradion for GBP 100 mln

Reliance acquires UK-based firm Faradion for GBP 100 mln

MOSCOW (MRC) -- Reliance New Energy Solar Ltd, a Reliance Industries subsidiary, has acquired 100% shareholding in UK-based firm Faradion Limited for GBP 100 million, reporte Business Standard.

Reliance will spend an additional GBP 25 million to accelerate its roll out, Reliance Industries said in a press release.

Faradion Limited is a leading global battery technology firm that has patents of sodium-ion battery technology. The Sheffield and Oxford-based firm has a wide range of IP portfolios covering several aspects of the sodium-ion technology.

The technology provides next generation, high density, safe, sustainable and low cost energy storage technology solution, the company said.

Reliance will use Faradion’s state-of-the-art technology at its proposed fully integrated energy storage giga-factory as part of the Dhirubhai Ambani Green Energy Giga Complex project in Jamnagar, the Mukesh Ambani-led firm said.

On the acquisition, Ambani said, "We welcome Faradion and its experienced team to Reliance family. This will further strengthen and build upon our ambition to create one of the most advanced and integrated New Energy ecosystem and put India at the forefront of leading battery technologies."

Ambani also said that Faradion's technology will help secure India's energy storage requirements for its fast-growing renewable energy and EV charging market.

As MRC reported earlier, Indian refining giant Reliance Industries is doubling its polyethylene terephthalate (PET) recycling capacity by setting up a recycled polyester staple fiber (PSF) manufacturing facility in Andhra Pradesh. The move is part of RIL's commitment to lead the industry on circular economy, enhance its sustainability quotient and bolster the entire polyester and polymer value chain.

According to MRC's ScanPlast report, Russia's estimated PET consumption grew to 737,590 tonnes in the first eleven months in 2021, up by 14% year on year. PET consumption in Russia grew by 25% in November and reached 75,760 tonnes versus 60,520 tonnes a year earlier.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.

DIC acquires Italian adhesives maker SAPICI and its holding company

DIC acquires Italian adhesives maker SAPICI and its holding company

MOSCOW (MRC) -- DIC Corp’s Sun Chemical subsidiary has acquired 100% of the shares of Italian adhesives and polymers manufacturer SAPICI for an undisclosed sum, said the Japanese chemicals company.

SAPICI, which stands for Societa Azionaria Per l’Industria Chimica Italiana, has two production sites in Italy: Cernusco sul Naviglio, Milan; and San Cipriano Po, Pavia. Sun Chemical has marketed SAPICI’s lamination adhesives portfolio under the Sun Chemical commercial brand name since 2017.

Access to SAPICI’s production technologies, in particular for ultra low monomer polyisocyanate (ULM), would give DIC a competitive edge in Europe's environment-conscious adhesives industry, it said in a statement.

"Markets for adhesives continues to expand around the world, with those in Europe and the Americas - which together represent half of the overall global market - in particular projected to see further growth as needs for environment-friendly products increase against a backdrop of rising concern for environmental impact and safety," DIC added.

As per MRC, SAPICI and the Chinese Wanhua Chemical Group have signed an agreement on a distribution and tolling cooperation for aliphatic polyisocyanates for the European, Middle Eastern and African (EMEA) markets. Under the agreement, Sapici will warehouse and distribute Wanhua’s polyisocyanates (HDI trimer and HDI biuret) portfolio throughout the EMEA region. In addition, Wanhua will have access to Sapici’s manufacturing capacities and technical resources.

Societa Azionaria Per l’Industria Chimica Italiana (SAPICI) was founded in Italy in 1936. The company offers very low monomer adhesives (less than 0.1%) and zero migration adhesives for flexible packaging, as well as polyisocyanates and prepolymers for coatings. SAPICI is one of the few companies capable of processing all types of isocyanates: TDI, MDI, HDI, IPDI, H12MDI, XDI.

Mexican finance ministry concludes near-term Pemex debt refinancing

Mexican finance ministry concludes near-term Pemex debt refinancing

MOSCOW (MRC) -- A debt refinancing operation for Mexican national oil company Pemex that swapped the highly-indebted firm's short-term bonds for a new 10-year bond has been completed, said Reuters, citing the finance ministry.

In a statement, the ministry said the near-term debt management scheme lowers Pemex's overall debt load by USD3.2 B, while reducing "financial pressure" on the company between 2024 and 2030 by USD10.5 B.

The joint operation between the finance ministry and Pemex benefited from a USD3.5 B infusion from the federal government, the statement added, and will result in an annual USD180 MM reduction in the state-owned Pemex's financing costs.

The reduction stems from lowering the gap between the interest rate Pemex pays to service its debt and the government's sovereign debt by 50 basis points, according to the statement. Pemex, one of the world's most indebted oil companies, has struggled with 17-years of declining crude production and in 2020 lost its coveted investment-grade rating.

Halfway through his six-year term, President Andres Manuel Lopez Obrador has sought to boost the company's operations and finances while simultaneously canceling oil auctions open to private producers as well as tenders to pick joint venture partners for Pemex, a common tool used to share risks and rewards in the international industry.

Lopez Obrador, a leftist who favors a state-controlled energy industry, also seeks to end Pemex's crude exports in the next few years and instead refine the oil at home in a bid to make Mexico more energy independent.

As per MRC, Mexico's attorney general has requested a prison sentence of up to 39 years for the former chief executive of state oil company Petroleos Mexicanos (Pemex) for his role in a corruption scandal. Emilio Lozoya is accused of having requested money from scandal-plagued Brazilian construction conglomerate Odebrecht to partially finance the presidential campaign of former President, Enrique Pena Nieto in exchange for contracts.

As MRC informed before, Pemex Petroquimica, a subsidiary of the Mexican state oil company Pemex, has resumed production of high-density polyethylene (LDPE) on line 2 in Cangrejera, Mexico after an unscheduled renovation. Earlier it was noted that Pemex postponed the restart of the second line with a capacity of 200,000 tonnes per year for the production of LDPE until August 10. It was originally planned that the launch of this production will begin at the end of July. The line was closed on 10 July.

Petroleos Mexicanos (Pemex) is a Mexican state-owned oil and gas and petrochemical company. Since the nationalization of the Mexican oil industry in 1938, Pemex has remained a state-owned company and, by law, has exclusive rights to explore and produce oil in the country. Almost 60% of the company's revenues go to the state budget. Petrochemical products include, but are not limited to, polyethylene, polyvinyl chloride.

Indorama strengthens its footprint in Asia-Pacific by expanding packaging business in Vietnam

Indorama strengthens its footprint in Asia-Pacific by expanding packaging business in Vietnam

MOSCOW (MRC) -- Indorama Ventures Public Company Limited (IVL), a global sustainable chemical company, announces that it is in the process of acquiring shares in Ngoc Nghia Industry - Service - Trading Joint Stock Company (NN), as per the company's press release.

NN is a leading polyethylene terephthalate (PET) converter in Vietnam with long-standing relationships with major brands. It has four manufacturing sites in both the North and South of Vietnam. It has a total production capacity of approximately 5.5 billion units of PET preforms, bottles and closures, or equivalent to a PET conversion of 76,000 tons per annum.

Operating with high quality standards, NN is a trusted provider of PET packaging products to major multinational and Vietnamese brands in the beverage and non-beverage industries. Its business operations are run by an experienced management team with strong industry knowledge as well as local market exposure and understanding. These competitive advantages are strategic fits for IVL and would complement the company’s long-term growth after integration. This proposed acquisition will strengthen IVL’s market position in the packaging business in high growth markets of the Asia-Pacific region.

The acquisition process is required to follow the Law on Securities, its guiding decrees and circulars as required by the State Securities Commission of Vietnam and regulations of the Hanoi Stock Exchange. Through its affiliate, Indorama Netherlands B.V., IVL would be required to do the tender offer of all of NN’s shares. The transaction is expected to be completed by the first half of 2022.

As MRC wrote before, in November 2021, the board of directors of IVL, a large producer of recycled PET for beverage bottles, approved the purchase of land, buildings and utility machinery from Aurus Specialty to utilize for a proposed PET recycling facility in Thailand. The assets, valued at a total of 112.90-million baht, will be acquired by Indorama Polyester Industries and Indorama Holdings, direct subsidiaries of IVL. Subject to approval from the board of investment, the transaction is expected to be com-pleted in the first quarter of 2022.

According to MRC's ScanPlast report, Russia's estimated PET consumption grew to 737,590 tonnes in the first eleven months in 2021, up by 14% year on year. PET consumption in Russia grew by 25% in November and reached 75,760 tonnes versus 60,520 tonnes a year earlier.

Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB), is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Africa, Asia Pacific, Europe and Americas. The company’s portfolio comprises Integrated PET, Olefins, Fibers, Packaging and Specialty Chemicals. Indorama Ventures products serve major FMCG and automotive sectors, i.e. beverages, hygiene, personal care, tire and safety segments. Indorama Ventures has approx. 24,000 employees worldwide and consolidated revenue of US$ 11.4 billion in 2019. The Company is listed in the Dow Jones Emerging Markets and World Sustainability Indices (DJSI).