US chemical production edges lower in November

MOSCOW (MRC) -- The U.S. Chemical Production Regional Index (U.S. CPRI) fell by 0.4% in November following declines of 0.4% in September and 0.3% in October, according to the American Chemistry Council (ACC), said Americanchemistry.

Chemical output was lower than a month ago in all regions, with the largest declines in the Gulf Coast, home to much of the nation’s basic industrial chemical and synthetic materials capacity. The declines reflect sluggish output in several end-use manufacturing industries and weak export markets.

The U.S. CPRI is measured as a three-month moving average (3MMA) and was developed by ACC to track chemical production activity in seven regions of the United States.

On a 3MMA basis, chemical production within segments was mixed in November. There were gains in the production of coatings, adhesives, and other specialty chemicals; industrial gases; synthetic dyes and pigments; and other inorganic chemicals. These gains were offset by lower production of plastic resins; organic chemicals; synthetic rubber; manufactured fibers; consumer products; fertilizers and crop protection chemicals.

We remind, North American chemical railcar loadings fell for the 14th consecutive week for the week ending on 24 December, according to the latest freight rail data from the Association of American Railroads (AAR). In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, producers rely on rail to ship more than 70% of their products, with some exclusively using rail.
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MOSCOW (MRC) -- Evonik has concluded the divestment of its triacetonamine (TAA) derivatives business to Italian chemical company Sabo, said the German chemicals company.

Financial details were not disclosed. The deal had been announced in October.

Production sites in Marl, Germany and Liaoyang, China as well as 250 employees were included in the transaction.

TAA derivatives are a key raw material to produce light stabilisers, with the additives used in low concentration to protect and stabilise polymers against decomposing due to light, heat, or oxygen exposure, and can significantly increase the lifespan of plastics.

The materials are used in applications in a variety of end-use segments, including the automotive and construction industries, as well as in the production of agricultural films.

“We want to continue our profitable growth in the specialty chemicals businesses. And that includes divesting businesses that do not longer fit to our strategic focus and that could have a better future with new owners,” said Evonik’s chairman, Christian Kullmann.

We remind, Evonik has started manufacturing commercial quantities of ceramides - a special class of lipids - at its site in Dossenheim near Heidelberg in Germany. Maximizing capacity utilization at the Dossenheim site provides Evonik with further flexibility and supply security, including increased independence from alternative routes of supply, to cater to the growing demand for ceramides in the personal care market.
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MOSCOW (MRC) - Poland is prepared for a Russian ban on oil sales to countries implementing a price cap, the climate minister said, with the country having cut its intake of Russian crude and secured alternative supplies from producers such as Saudi Arabia, said Reuters.

The Group of Seven (G7) nations and allies including Poland this month agreed a $60 per barrel price cap on Russian seaborne crude. In response, President Vladimir Putin on Tuesday signed a decree that bans the supply of crude oil and oil products from Feb. 1 for five months to nations abiding by the cap.

Poland has been gradually reducing its intake of Russian oil, and after the start of the war in Ukraine stopped buying seaborne Russian oil, top refiner PKN Orlen said. The company says it has secured alternative oil supplies via its partnership with Saudi Aramco.

"We are prepared to process all types of crude oil, this is our advantage," Minister of Climate and Environment Anna Moskwa told a news conference. Moskwa also said that she believed the next EU sanctions package would include a decision on banning Russian oil.

Poland is seeking German support to slap EU sanctions on the Polish-German section of the Druzhba crude pipeline so Warsaw can abandon a deal to buy Russian oil next year without paying penalties, two sources familiar with the talks told Reuters in November.

Poland and Germany promised in spring to try to end imports of Russian oil via Druzhba's northern leg by the end of year, but Orlen remains tied to its contract with Russian oil and gas company Tatneft.

"We believe that the next sanctions package will include a decision on oil," Moskwa said. "The sanctions cancel the contract with Tatneft."

We remind, Transneft has received requests from Poland and Germany for oil in 2023, the state oil pipeline monopoly's head told Rossiya-24 TV, adding that supplies via the Druzhba pipeline's southern spur are expected to hold steady next year. The EU has pledged to stop buying Russian oil via maritime routes from Dec. 5, with Western nations also imposing price caps on Russian crude oil, but the Druzhba pipeline remains exempt from sanctions. Transneft's comments are at odds with suggestions last month that Poland aimed to abandon a deal to buy Russian crude.

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MOSCOW (MRC) -- Mexican state oil company Pemex said it has been falling behind in a global race to transition from fossil to renewable energy sources, and that stricter demands from environmentally conscious investors pose a threat, said Reuters.

Investors have for years considered Pemex a laggard as rivals worldwide moved to dramatically decrease emissions from energy production and consumption over climate change concerns. In its updated business plan for 2023 to 2027, Pemex said its environmental, social and governance (ESG) record risked hurting its financing.

"Limitations from ESG financing" are posing a threat, as is the "acceleration in energy transition that is decreasing the market for Pemex's crude oil and products," the company said. Further weaknesses are "important gaps in reaching net-zero-emissions" and operational challenges, particularly in gas exploration and production.

Julia Gonzalez, an expert on energy and infrastructure at law firm Gonzalez Calvillo, said Pemex urgently needed private investment and that Mexico should not exclusively rely on public funds to maintain or improve infrastructure.

"Pemex has to make significant efforts if it intends to access financing," said Gonzalez. "It's increasingly important to prevent and mitigate risks associated with ESG, including, of course, climate change."

While the business plan reiterated promises made by President Andres Manuel Lopez Obrador to reduce Pemex's emissions, it focused on oil and gas production and exploration as well as refining rather than shifting toward renewables.

Lopez Obrador says he inherited a company weakened by decades of mismanagement and corruption under his predecessors. Even so, his energy policies have limited participation by private companies that could bring in funds.

This year, Pemex has come under increased pressure to reduce the vast amounts of natural gas it burns off - including at two of its top priority fields, Ixachi and Quesqui - to the detriment of the environment.

As per MRC, Pemex requested this week almost USD6.5 bn in additional funding from the government to pay for works at the"'Dos Bocas" refinery this year. The additional funding is to cover works not initially included in the project's proposal, higher construction and startup costs, according to the document and sources. Mexican President Andres Manuel Lopez Obrador considers the new refinery a signature project and has argued it will help the country cut a longstanding dependence on gasoline and diesel imports.

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MOSCOW (MRC) -- A fire at the Lanaz refinery in the northern Iraqi city of Erbil has been brought under control by civil defence teams, said Reuters.

The director of civil defence teams in Erbil said no casualties were reported.

Photos shared earlier by INA showed a big blaze and dark fumes at the Lanaz refinery, located on al-Kuwayr-Erbil road.

The cause of the fire was not clear and no further information was immediately available.

As pre MRC, on 28 of December, a fire broke out in a refinery in Iraq's northern city of Erbil and attempts by firefighting teams to get it under control are ongoing.

We remind, Lanaz Co has let a contract to Honeywell UOP LLC to deliver technology licensing and equipment for a project to increase production of cleaner-burning transportation fuels at the operator's 100,000-b/d refinery at Erbil in the Kurdistan region of Iraq. As part of the contract, Honeywell UOP supplied basic engineering design, licensing, and full-modular units equipped with its proprietary naphtha hydrotreating and fixed-bed platforming process technology for the Lanaz clean-fuels upgrading project, the service provider said in a 10 Jan 2022.

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