COVID-19 - News digest as of 21.01.2022

1. Crude oil prices go down, though supply concerns still dominant

MOSCOW (MRC) - Crude oil edged lower on Thursday, posting slim losses after several days of strength that pushed benchmarks to seven-year highs due to concerns about tight supply, reported Reuters. Brent crude futures settled down 6 cents to USD88.38 a barrel. The global benchmark rose to USD89.17 on Wednesday, its highest level since October 2014; the benchmark is up 13% on the year so far.US West Texas Intermediate (WTI) crude futures for February delivery lost 6 cents to USD86.90 a barrelon the last day of the contract's life. WTI is up 15% so far this year. The more active March WTI contract settled at USD85.55 a barrel, down 25 cents.Crude stocks rose by 515,000 barrels last week while gasoline inventories rose by 5.9 million barrels, boosting those inventories to their highest in a year, according to the US Energy Department.

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Crude oil prices go down, though supply concerns still dominant

Crude oil prices go down, though supply concerns still dominant

MOSCOW (MRC) - Crude oil edged lower on Thursday, posting slim losses after several days of strength that pushed benchmarks to seven-year highs due to concerns about tight supply, reported Reuters.

Brent crude futures settled down 6 cents to USD88.38 a barrel. The global benchmark rose to USD89.17 on Wednesday, its highest level since October 2014; the benchmark is up 13% on the year so far.

US West Texas Intermediate (WTI) crude futures for February delivery lost 6 cents to USD86.90 a barrelon the last day of the contract's life. WTI is up 15% so far this year. The more active March WTI contract settled at USD85.55 a barrel, down 25 cents.

Crude stocks rose by 515,000 barrels last week while gasoline inventories rose by 5.9 million barrels, boosting those inventories to their highest in a year, according to the US Energy Department.

"I don't think the build in gasoline supplies is a bull killer. We're going to need refiners to continue to refine to meet gasoline demand in the summer driving seasons - that is one of the reasons the market is still supported despite the build in gasoline supplies," said Phil Flynn, senior analyst at Price Futures Group.

Trading has been dominated by supply concerns, from short-term issues like a temporary halt to flows in an Iraq-to-Turkey pipeline to a consistent shortfall from OPEC+ members in reaching targeted supply increases.

In the meantime, demand remains steady, with U.S. product supplies, a proxy for demand in the world's largest consumer, reaching 21.2 million bpd over the past four weeks, ahead of the pre-pandemic pace.

Supply concerns have mounted this week after a fire temporarily halted flows through an oil pipeline running from Iraq's Kirkuk to the Turkish port of Ceyhan on Tuesday.

The OPEC+ producer group comprising OPEC and allies led by Russia has been producing less than its targets, with the International Energy Agency (IEA) on Wednesday estimating that the group produced about 800,000 barrels per day (bpd) below its December targets.

The IEA said that while the oil market could be in a significant surplus in the first quarter of this year, inventories are likely to be well below pre-pandemic levels. The agency also upgraded its 2022 demand forecast.

As MRC informed earlier, global oil refining capacity fell for the first time in 30 years last year, as new capacity was outweighed by closures, said the International Energy Agency's (IEA) in its monthly oil market report on Wednesday. Refining capacity was down by 730,000 bpd in 2021, the IEA said, but net additions were expected to amount to 1.2 MMbpd in 2022.

We remind that China's refinery output hit a fresh high in 2021, up 4.3% from a year earlier on robust fuel demand especially in the first half of the year, and as refiners ramped up processing to fill a supply gap after a hefty new tax closed loopholes in blending fuel imports. Total refinery throughput last year reached 703.55 MM tons, or 14.07 MMbpd, data from the National Bureau of Statistics showed on Monday, roughly 620,000 bpd above the 2020 level.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
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KPIC to reduce run rates at its Onsan cracker by 15% in late January

KPIC to reduce run rates at its Onsan cracker by 15% in late January

MOSCOW (MRC) -- Korea Petrochemical Industry Co (KPIC) plans to cut capacity utilisation at its naphtha cracker in Onsan, South Korea by, at least, 15% by late January, 2022, due to negative profit margins, according to CommoPlast.

The cracker with the production capacity of 800,000 mt/year of ethylene and 410,000 mt/year of propylene will be operating at the reduced rates throughout February.

As MRC informed previously, in June 2017, KPIC finilized the expansion of its ethylene production capacity. Thus, KPIC started commercial operation at its Ulsan-based Naphtha Cracking Center (NCC) from Jun 23, 2017. Earlier, KPIC produced about 470,000 mt/year of ethylene from its Ulsan-based NCC. With the expansion, the company added 330,000 mt/year of ethylene, and its combined ethylene capacity reached 800,000 mt/year.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

KPIC is one of the key producers of ethylene in South Korea. The company's ethylene capacity accounted for about 6% of total ethylene production in South Korea before the expansion was completed, and now the company's market share will be increased to nearly 10%.
MRC

PE imports to Kazakhstan fall by 9% in Jan-Nov 2021

MOSCOW (MRC) -- Polyethylene (PE) imports into Kazakhstan fell in the first eleven months of 2021 by 9% year on year to 147,400 tonnes. At the same time, high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) accounted for the decrease in shipments, said MRC analysts.

November PE imports to Kazakhstan reached 15,900 tonnes versus 14,000 tonnes a month earlier, Russian producers and the Uzbek manufacturer increased their footprint in the local market after scheduled shutdowns for maintenance. Overall PE imports totalled 147,400 tonnes in January-November 2021, compared to 162,400 tonnes a year earlier. Purchases of low density polyethylene (LDPE) grew significantly, whereas HDPE and LLDPE imports decreased.

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


November HDPE imports rose to 11,800 tonnes from 10,500 tonnes a year earlier, Uzbek and Russian producers increased their export sales. Overall HDPE imports totalled almost 115,600 tonnes in the first eleven months of 2021, down by 14% year on year.

November LDPE imports virtually remained at the previous month's level, totalling 2,600 tonnes. Overall LDPE imports reached 21,600 tonnes over the stated period, up by 28% year on year.

November LLDPE imports grew to slightly over 1,400 tonnes versus 0,900 tonnes a month earlier. Overall LLDPE imports reached 10,400 tonnes in January-November 2021, down by 9% year on year.

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PP imports to Belarus rose by 1.5% in January-November 2021

MOSCOW (MRC) - Imports of polypropylene (PP) into Belarus increased to about 106,400 tonnes in first eleven months of this year, up 1.5% year on year. The greatest increase in imports accounted for homopolymer PP, according to MRC DataScope.

November PP imports into Belarus dropped to 9,000 tonnes from 9,100 tonnes a month earlier. Local companies increased their purchases of injection moulding propylene copolymers in Russia. Overall imports of propylene polymers reached 106,400 tonnes in January-November 2021, compared to 104,900 tonnes a year earlier. The volume of homopolymer PP imports increased, while the demand for propylene copolymers decreased.

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

November imports of homopolymer PP practically remained at a level a month earlier and amounted to less than 6,800 tonnes. Overall imports of homopolymer PP reached 78,800 tonnes in the first ten months of the year, up by 2.9% year on year.

November imports of propylene copolymers to Belarus were about 2,200 tonnes versus 2,300 tonnes a month earlier, local companies decreased significantly their procurement of injection moulding block-copolymers of propylene (PP block copolymer) from Russian producers.
Thus, overall imports of propylene copolymers reached 27,600 tonnes in January-November 2021, down by 2.4% year on year.

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