Recyclers feeling the strain as prices tumble

The European recycled plastics market is under severe pressure because of extremely low demand and lengthening supply, said Sustainableplastics.

While some recycling plants have been shut down, most others are operating at reduced rates in order to avoid excess stocks from developing. However, weak levels of demand mean that recyclers’ stock levels are steadily rising.

This situation applies to all recycled plastics sectors, but the situation is particularly precarious for PET recyclers where a fierce price war between R-PET and virgin PET means that it is very difficult to operate the recycling plants economically.

Despite a severe price reduction of €250/tonne for clear flake material and a fall of €200/tonne for clear food-grade pellets since the beginning of May, converters are increasingly switching to virgin PET where prices have tumbled in recent months. In mid-June, virgin PET prices were trading at €1150-1200/tonne compared to €1670-1880/tonne for clear food-grade pellets and €1140-1300/tonne for clear flake.

European R-PET recyclers have also expressed concern about the record high levels of competitively-priced imported material, which has diverted demand way from locally-produced recyclate. Other recycled plastics materials are also under downward price pressure due to very weak demand, competition from virgin material and lengthening supply.

R-HDPE blow moulding prices have declined by a total of €80/tonne since the beginning of May while injection moulding grades fell by €40/tonne over the same period. R-LDPE natural film prices have fallen by €60/tonne over the last two months, with R-LDPE translucent film prices down by €80/tonne. R-PP prices have fallen by €90-100/tonne since the beginning of May and R-HIPS prices are down €40/tonne during the same period.

In July, recycled plastics prices are likely to remain under downward pressure as the beginning of the summer holiday season also weighs heavily on demand.

We remind, PureCycle Technologies Inc.'s flagship polypropylene recycling facility in Ironton, Ohio, is "days away" from beginning the start-up phase of commercial pellet production.

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PAO Novatek plans to build a small-scale LNG plant in Russia’s Tula region, said the company.

A cooperation agreement signed by Leonid Mikhelson, chairman of the management board of Novatek, and Alexei Dyumin, governor of the Tula Region, at the St. Petersburg International Economic Forums in mid-June, provides for construction of a 126,000 tonnes/year LNG plant on the territory of the special economic zone Uzlovaya.

The LNG plant, the largest in the Central Federal District of the Russian Federation, will supply LNG as motor fuel through an LNG fueling network and as an off-grid energy solution, Novatek said in a release June 15.

We remind, PAO Novatek increased its year-over-year hydrocarbon production by 2% in 2022. For the year, the company’s production totaled 638.9 MMboe, including 82.14 billion cu m (bcm) of natural gas and 11.9 million tons of liquids (gas condensate and crude oil), resulting in an increase of 12.6 MMboe compared with full year 2021.

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A fire at Romania's Black Sea crude oil refinery Petromidia, the largest in the country, was being brought under control after a blaze broke out on Wednesday, a government emergency response unit said, as per Hydrocarbonprocessing.

An Environment Ministry unit reported the fire occurred after an explosion at the refinery, located in Constanta county, halfway up Romania's coast and 240 km (149 miles) east of the capital Bucharest. Refinery representatives could not be immediately contacted.

No victims from the blaze were reported, and the emergency response unit said no dangerous substances were detected in the air. Television footage had earlier shown black smoke rising from the area next to the refinery. "At the moment the fire is no longer aflame," an emergency response spokesperson said.

"Because there is a risk it will be re-ignited, technical staff (of the company) are emptying out the installation and firefighters are continuing with cooling measures." The refinery is owned by Rompetrol Rafinare, which is majority controlled by KMG International (KMGI), part of Kazakh state oil firm KazMunayGaz. The Romanian state holds a 45% stake.

The refinery sources crude oil from Kazakhstan. In 2022, it processed 5.26 million tons of raw materials, according to its website, with 63% of the 4.1 million tons of fuels it produced - including gasoline, diesel and aviation fuel - directed to the domestic market.

We remind, Axens has signed an agreement with KazMunayGas (KMG) to supply the process design package for its proprietary AlphaButol technology for producing high-purity 1-butene, which is required for producing PE. KMG has plans for a 1.2 million t/y PE plant in Atyrau, Kazakhstan. French technology and engineering group Axens has signed an agreement with KazMunayGas (KMG) to supply the process design package for its proprietary AlphaButol technology that produces high-purity 1-butene, which is required for producing PE. KMG plans to build a 1.2 million t/y PE plant in the Atyrau region of Kazakhstan – a timescale for the project has not been disclosed.

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Two crude cargoes loaded from China's Penglai oilfields arrived at Singapore and Malaysia in May and June, Refinitiv data showed, an unusual export from the world's largest crude importer, said Hydrocarbonprocessing.

Aframax-sized tanker Elephant loaded about 48,000 metric tons of Penglai crude from the field in Bohai Bay at the end of May and arrived at Singapore in mid-June, the data showed. Earlier, 80,000 tons of Penglai crude was loaded on Aframax vessel Yang Ning Hu in April and arrived at Malaysia in May.

Penglai crude was last exported in March 2022, Refinitiv data showed. The cargoes were likely headed to Singapore and Malaysia to be blended with other oils to create low-sulphur fuel oil for ships, trade sources said.

Penglai crude is a low-sulphur heavy crude similar to Australian Vincent crude, which is also used in fuel oil blending. The Penglai oilfields are a group of offshore oil fields operated by the China National Offshore Oil Corp (CNOOC) in the Bohai Bay in northeast China.

CNOOC holds a 51% interest in Penglai, while the remainder is held by subsidiaries of ConocoPhillips.

We remind, Nigeria's state-owned oil company NNPC Ltd said on Thursday it had renewed a production sharing contract with Total, China National Offshore Oil Corp and others, a major step to resolving disputes on a deepwater oil block in the Niger Delta. Oil Mining Lease 130 is located offshore Niger Delta at water depths of over 1000 meters. The block contains the producing Akpo and Egina fields and the Preowei discovery.

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Thyssenkrupp Uhde and Johnson Matthey (JM) have installed a new process to increase ammonia production capacity at Koch Fertilizer's facility in Fort Dodge, IA, US, as per Petrochemical-news.

During a USD140 M revamp of the plant, Thyssenkrupp Uhde and JM installed a combination of Uhde dual-pressure process for ammonia production, which was installed upstream of the existing ammonia synthesis loop, and Katalco 74-1 catalyst from JM.

The project is expected to increase ammonia production capacity at the facility by 85,000 tonnes/y.

We remind, Honeywell announced that SASA Polyester Sanayi A.S. will build the world’s largest Propane Dehydrogenation (PDH) unit in Yumurtal'k, Turkiye using the latest generation of Honeywell Oleflex technology. The facility will have the capacity to produce 1 million tons of propylene per year. The Honeywell UOP Oleflex process is used to produce light olefins through the catalytic dehydrogenation of light paraffin and provides users with an on-purpose source of polymer grade propylene and/or isobutylene.

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