China state refiners shun new Russian oil trades

China state refiners shun new Russian oil trades

MOSCOW (MRC) -- China's state refiners are honoring existing Russian oil contracts but avoiding new ones despite steep discounts, heeding Beijing's call for caution as western sanctions mount against Russia over its invasion of Ukraine, reported Reuters.

State-run Sinopec, Asia's largest refiner, CNOOC, PetroChina and Sinochem have stayed on the sidelines in trading fresh Russian cargoes for May loadings, according to sources. Chinese state-owned firms do not wish to be seen as openly supporting Moscow by buying extra volumes of oil, after Washington banned Russian oil last month and the European Union slapped sanctions on top Russian exporter Rosneft and Gazprom Neft.

China and Russia have developed increasingly close ties in recent years, and as recently as February announced a "no limits" partnership, and China has refused to condemn Russia's action in Ukraine or call it an invasion.

China has repeatedly criticized western sanctions against Russia, although a senior diplomat said on Saturday that Beijing is not deliberately circumventing sanctions on Russia. China, the world's largest oil importer, is the top buyer of Russian crude at 1.6 MMbpd, half of which is supplied via pipelines under government-to-government contracts.

Sources expect China's state firms to honor its long-term and existing contracts for Russian oil but steer clear of new spot deals.

A drop in China's imports of Russian oil could prompt its giant state refiners to turn to alternative sources, adding to global supply concerns that had driven benchmark Brent oil prices to 14-yr highs near USD140/bbl in early March after Russia invaded Ukraine on Feb. 24.

Brent futures have since eased to below USD110 after the US and allies announced plans to release stocks from strategic reserves.

Risk control and compliance first. Before the Ukraine crisis, Russia supplied 15% of China's oil imports: half of that via the East Siberian and Atasu-Alashankou pipelines and the rest by tankers from its Black Sea, Baltic Sea and Far East ports.

Unipec, the trading arm of Sinopec and a leading Russian oil buyer, has warned its global teams at regular internal meetings in recent weeks against the risks of dealing with Russian oil. According to a source, the message and tone are clear - risk control and compliance comes before profits. Another of the sources with a refinery that regularly processes Russian crude said his plant was told by Unipec to find replacement to maintain normal operations.

Unipec loaded 500,000 metric t (tonnes) of Urals from Russia's Baltic ports in March, the highest volume in months, supplied by Surgutneftegaz on spot and under a Rosneft export tender that Unipec won for loadings between September 2021 and March 2022, according to traders and shipping data.

Other state buyers - PetroChina, CNOOC and Sinochem - have shunned Russia's ESPO blend for May loading, sources said. Sinopec is facing payment problems even for deals agreed earlier as risk-averse state banks look to scale down financing Russian oil-related deals, the second source said.

As MRC wrote previiously, amidst the ongoing conflict between Russia and Ukraine in Eastern Europe, key industry players are releasing announcements regarding their stand on this topic. From taking firm actions such as retracting services to provide humanitarian resources, there is a lot happening around the globe. In this curated piece, get a clear understanding on plastic additives industry’s take and the measures they are adopting that will alter the market trends and developments moving forward.
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NextChem completes construction of first demonstration plant in Italy for chemical recycling of PET and polyester from textiles

NextChem completes construction of first demonstration plant in Italy for chemical recycling of PET and polyester from textiles

MOSCOW (MRC) -- NextChem, Maire Tecnimont's energy transition technology company, has completed the construction of the first demonstration plant in Italy for the chemical recycling of polyethylene terephthalate (PET) and polyester from textiles, as part of the European Union’s DEMETO project, as per the company's press release.

The plant is located in Chieti, in the Abruzzo Technology Park.

The depolymerization technology adopted, based on the reaction of alkaline hydrolysis with the use of microwaves, allows the plant to chemically recycle PET and polyester textile fiber waste and obtain pure monomers to produce new polymers.

The DEMETO project has been co-funded by the European Union under the Horizon 2020 program with NextChem as coordinator of a consortium of 14 partners, covering the entire value chain (NextChem, 3V Tech, SPINDOX UK, Technical University of Denmark, The European Outdoor Group, EuPC, The Fricke and Mallah GmbH, gr3n, H&M Group, NEOGROUP, RECUPRENDA, PETCIA, SUPSI, Synesis).

NextChem is the developer and co-licensor of the depolymerization technology, owned by the Swiss start-up gr3n, as well as designer and constructor of the plant. Various types of materials, including polyester-based textile fibers, will be tested in the plant, which is capable of recycling almost 100% of the incoming material, amounting to 1 MM kg/yr. The project has been supported by an Industrial Advisory Board, which includes companies such as Unilever, Coca-Cola, Oviesse, Danone, Henkel and several others.

This innovative technology could contribute to the solution of some still-unresolved problems in textile waste recycling, such as mixed fibers. In Italy alone, tracked textile waste amounted to 157.7 Kt in 2019, of which 47% consisted of single and mixed synthetic fibers. In Italy 5.7% of unsorted waste is composed of textiles, with a total estimated at 663 Kta. In Europe, each inhabitant uses 26 kg of textile material each year and disposes of 11 kg, with a total production of textile waste estimated at about 5 MMt/y.

As MRC reported before, in July 2020, Eni and NextChem, the Maire Tecnimont Group’s subsidiary for green chemistry, strengthen their partnership one year after their first agreement. This partnership will conduct research for a new project to be developed in Taranto, in addition to ongoing engineering studies for a waste-to-hydrogen production plant at the Eni bio refinery in Venice, Porto Marghera, and for a waste-to-methanol production plant at the Eni refinery in Livorno.

According to MRC's ScanPlast report, Russia's estimated PET consumption in January, 2022, rose by 4% year on year.
MRC

Indian refiners to reduce buying Saudi crude oil in May

Indian refiners to reduce buying Saudi crude oil in May

MOSCOW (MRC) -- At least two Indian refiners plan to buy less Saudi oil than usual in May, after the kingdom raised the official selling price to record highs for Asia, as India increases purchases of cheap Russian crude, reported Reuters.

India, the world's third biggest oil importer and consumer, has been hit hard by rising crude values, with pump prices in some states touching record highs.

State oil producer Saudi Aramco, the world's top oil exporter, has raised crude prices for all regions, with those to Asia hitting all-time highs.

The Middle East accounts for the bulk of India's oil imports, with Iraq and Saudi Arabia the top two suppliers to Asia's third largest economy.

The sources at the two Indian refiners declined to be named, citing confidentiality.

They did not disclose the volumes refiners would buy, and said the reductions in May would be marginal because they have to lift the amount they have committed to under annual contracts.

To mitigate the rising cost of oil imports, India has turned to Russian barrels that are available at a deep discount to the dated Brent benchmark, citing "national interests".

Some companies and countries have shunned Russian crude after the country began its invasion of Ukraine on Feb. 24.

Indian refiners have bought at least 16 MM barrels of cheaper Russian oil for May loading on a delivered basis, similar to purchases for the whole of 2021, according to Reuters calculations.

The companies have mostly bought Russian Urals, a grade similar in quality to medium sour crude produced in the Middle East and West Africa, mainly Angola.

As MRC informed before, in mid-March, 2022, Indian Oil Corp, the country's top refiner, bought 3 mln bbl of Russian Urals from trader Vitol for May delivery, its first purchase of the grade since Russia invaded Ukraine. Western sanctions against Russia have led many companies and countries to shun its oil, depressing Russian crude to record discount levels. IOC said in late February it would buy Russian oil on delivered basis to avoid any complication relating to fixing vessels and insurance.

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 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased significantly.
MRC

SIBUR completed commissioning of maleic anhydride production in Tobolsk

SIBUR completed commissioning of maleic anhydride production in Tobolsk

MOSCOW (MRC) -- SIBUR has completed commissioning in Tobolsk at a new maleic anhydride (MAN) production facility located on the territory of Zapsibneftekhim, the company said.

The production will reach its design capacity before the end of the year. The unit has a design capacity of 45,000 tons/year and is expected to ramp up through the year and is expected to cover all domestic MA demand in the country this year, with work ongoing to ensure steady operation and build out a supply chain as production ramps up, the company said.

Solid and liquid product will be marketed domestically and abroad, SIBUR added.

As per MRC, at the end of 2018, SIBUR announced the launch of a project to build a maleic anhydride production facility with a capacity of 45,000 tonnes per year in Tobolsk. Maleic anhydride is now used in construction, agriculture, automotive, paints, furniture, pharmaceuticals and other industries.

Maleic anhydride is a raw material for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids and a number of chemicals for agriculture.

Plasticizers are substances introduced into a polymer material to give it elasticity and plasticity during processing and operation. In particular, plasticizers are used to produce polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

SIBUR Holding is the leader of the petrochemical industry in Russia and one of the world's largest companies in the sector with more than 23,000 employees. Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth about 1 trillion rubles.
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SABIC partners with Mattei to incorporate certified renewable polymers globally

SABIC partners with Mattei to incorporate certified renewable polymers globally

MOSCOW (MRC) -- SABIC has announced a collaboration with Mattel to incorporate certified renewable polymers from SABIC’s TRUCIRCLE program across Mattel’s products offering, according to Hydrocarbonprocessing.

The first Mattel toy products to enter the market in 2022 using certified renewable SABIC polypropylene (PP) polymers will be from MEGA and Matchbox, with more to follow.

Heading the initiative will be MEGA BLOKS Green Town, the first-ever toy line available at mass retail to be certified carbon neutral. These new construction playsets, including the grow and protect farm and the build and learn eco house, embrace the sustainable material choice and help teach kids green behaviors. From the Matchbox brand, all Action Driver playsets and the Matchbox Recycling Trucks contain SABIC materials, which supports the brand’s “Driving Toward a Better Future” initiative, to make all Matchbox die-cast cars, playsets and packaging with 100% recycled, recyclable or bio-based plastic materials by 2030, in line with Mattel’s corporate goal.

“The collaboration with Mattel is an important step in providing our customers with materials that can help lower their carbon footprint across a wide range of consumer markets, and Mattel serves as a pioneer in the toy industry,” said Lada Kurelec, General Manager for PP & E4P Business, SABIC. “Our materials from renewable sources facilitate the change-over from existing fossil-based applications without compromise on purity and quality. We are happy to establish such a good cooperation with Mattel and create value with more sustainable material choices through our TRUCIRCLE portfolio.”

Mattel is the first company in the toys market to work with SABIC in a mass balance approach designed to return second-generation renewable feedstock into high-quality new plastic applications.

The partnership directly supports Mattel’s goal to achieve 100% recycled, recyclable or bio-based plastic materials in its products and packaging by 2030, and is an important step forward in their transition towards a circular economy.

As MRC informed previously, in January 2022, ExxonMobil and SABIC announced the successful startup of Gulf Coast Growth Ventures world-scale manufacturing facility in San Patricio County, Texas. The new facility will produce materials used in packaging, agricultural film, construction materials, clothing, and automotive coolants. The operation includes a 1.8 MM metric tpy ethane steam cracker, two polyethylene (PE) units capable of producing up to 1.3 MM metric tpy, and a monoethylene glycol (MEG) unit with a capacity of 1.1 MM metric tpy.

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 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas shipments of PP random copolymers decreased significantly.


Saudi Basic Industries Corporation (SABIC) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC