SCG Chemicals expected to start production at Long Son plant by September

Long Son Petrochemicals, owned by SCG Chemicals, will start commercial production at its petrochemical complex in southern Vietnam in September, as per Hydrocarbonprocessing.

The company is in the process of testing each operating unit at the complex, Siam Cement Group's Roongrote Rangsiyopash said on the sidelines of an industry event. Siam Cement Group owns SCG Chemicals. Testing will be completed in July or August, so commercial operations could start around September, Rangsiyopash said.

The $5.4-B plant in Ba Ria Vung Tau province will produce polyethylene, polypropylene and basic chemicals, he said. "The total demand for the country is around 3.3 million tons of both polyethylene and polypropylene combined, our complex (production capacity) is about 1.3-1.5 million tons. So, I would assume that the majority of the products that will be consumed locally," he added.

He also said for the first year, some of the products will be exported to countries in Southeast Asia like Thailand and Indonesia to balance the supply and demand until Vietnam can fully absorb the supply. Petrochemical demand has been struggling globally recently amid economic headwinds and poor demand in China. Refiners' profit margins on processing naphtha to make ethylene turned negative this month for the first time since October.

He said there is no recovery in sight in the second half of the year, as China consumption remains poor despite their reopening. Because of slowdown in demand and lower chemical product price, 2023 revenue growth will be flat from last year, even with the increase in capacities from the LSP complex startup, he further said.

Bulk of the plant's raw materials, naphtha and propane, will be imported from the Middle East, he added. Separately, the company could list 25.2% or 3.85 billion shares in an IPO this year. Rangsiyopash said they had time until October to decide on the IPO plans and it might be shelved depending on market conditions.

We remind, Vietnam's Binh Son Refining and Petrochemical will delay the maintenance at its refinery until next year, and said it expects profits to drop 88% this year due to rising costs, including higher taxes. Binh Son said the maintenance delay would allow the company to "maximize its production, revenue and profit" this year. The 130,000-barrel-per-day refinery was originally scheduled to undergo major maintenance from June 22 to August 11 in 2023. The maintenance will now take place early next year, the company said in a statement.

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Nigeria's petrol subsidy cost state oil firm NNPC Ltd USD2.41 B in the five months through May before the program was scrapped, a report seen by Reuters showed.

Nigerian President Bola Tinubu, who's embarking on the country's biggest reforms in decades to tackle issues including a high debt burden, scrapped the popular but expensive subsidy when he took office last month. NNPC spent $10 B on the subsidy last year, making it unable to remit funds to federal accounts.

The NNPC claims it is still owed unpaid subsidy receipts by the government. "The May 2023 subsidy amounted to 307.4 billion naira, thus the outstanding balance carried forward is 3.74 billion naira as of June 2023," it said. Nigeria imports almost all its refined fuel because local refineries were shut due to years of neglect.

NNPC has been the sole importer of petrol using crude swap contracts. Because it lacks cash, it pays a consortia of foreign and local trading firms in crude oil. The NNPC's import monopoly is set to end after the industry regulator licensed private firms to start importing petrol from July, the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority said this month.

We remind, Nigeria's state oil firm NNPC Ltd is winding down crude swap contracts with traders and will pay cash for gasoline imports, its chief executive told Reuters, adding that private companies could begin importing petrol as soon as this month.

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Turkey will again be the top destination for Russian diesel exports in June, while total shipments are set to rise after seasonal refinery maintenance, traders said and Refinitiv Eikon data showed, said Reuters.

Russia's estimated offline primary oil refining capacity for June could total 4.029 million tons versus 4.95 million tons in May, Refinitiv data shows. Since the full EU embargo on Russian oil products took effect on Feb. 5, traders have diverted diesel export supplies from Russian ports to Africa, Asia and the Middle East instead of Europe, which was previously the main buyer.

In June to date, Russia has sent about 0.9 million tons of diesel to Turkey versus 1.0 million tons the previous month, Refinitiv data shows. About 320,000 tons of that are still in transit with the port of discharge not yet confirmed.

Brazil is also among the top destinations of Russian seaborne diesel exports, totaling about 280,000 tons since the start of this month versus 450,000 tons in May, according to Revinitiv data. In June to date, about 550,000 tons of diesel have headed from the Russian ports to Africa, mainly to Ghana, Morocco and Togo.

In May, diesel loadings from Russian ports to Africa totaled about 575,000 tons, Reuters calculations based on Refinitiv data showed.

Nearly 375,000 tons of Russian diesel are destined in June for ship-to-ship loadings near the Greek port of Kalamata and also near Malta, Refinitiv data shows. The final destinations for these cargoes are not yet known. Most of those cargoes end up in Turkey and Middle Eastern countries, market sources said.

In May Russia sent about 410,000 tons of diesel to Saudi Arabia, but so far in June there is no sign of cargoes to this destination, Refinitiv data indicated.

We remind, 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.

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LG Chem said Monday that it has begun mass production of high-nickel single-crystal cathode materials for next-generation batteries at its plant in Cheongju, North Chungcheong Province, making it the first Korean company to do so, said Koreaherald.

"High-nickel single crystal cathode materials are an innovative solution that will transform the landscape of the future battery material market and address customers' needs,” said Vice Chairman and CEO Shin Hak-cheol. Cathodes are a core component that determines the power of lithium-ion batteries and account for about 40 percent of battery production costs.

Single-crystal cathode materials are made from various metals such as nickel, cobalt and manganese that are fused into a one-body form. They are considered the key to solving the core challenges of next-generation batteries, namely lifespan and capacity.

Conventional cathode materials have a polycrystal structure where metal particles aggregate into smaller clusters. As charging and discharging cycles repeat, this leads to gas generation between the particles and a gradual reduction in battery lifespan. This problem has been a barrier to the widespread adoption of electric vehicles and a main concern for clients.

LG Chem plans to remedy this issue by using durable single-crystal cathode materials. Doing so would minimize gas generation, resulting in more stability and extending battery lifespan by over 30 percent compared to conventional materials. In addition, these materials allow for higher density, increasing battery capacity by over 10 percent compared to conventional materials.

In the initial stages of production, LG Chem plans to mix single-crystal cathode materials with conventional cathode materials in a ratio of 2 to 8, then gradually transition to 100 percent single-crystal cathode materials. These materials will be applied to various products as well, including pouch-type batteries and 46-millimeter-wide, 80-millimeter-long cylindrical batteries.

The first batch of the cathodes will be shipped to client companies starting in July, the company said. LG Chem also plans to expand its production line for single crystal cathode materials at its plant in Gumi, North Gyeongsang Province, by 2027 and increase the production capacity to over 50,000 metric tons.

We remind, LG Chem has started recruiting young talent in Japan, indicating its intention to take advantage of thawing bilateral relations between Seoul and Tokyo, as other Korean companies are also doing. The chemical unit of LG Group said Friday that its top executives including CEO Shin Hak-cheol participated in the Business & Campus Tour event at the InterContinental Tokyo Bay on Thursday, to hire Japanese scientists and engineers.

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A Chinese company plans to invest USD1.5 billion in a cathode factory in Hungary, the latest big-ticket investment that the government says will make the eastern European Union nation a hub for the electric car industry, said Bloomberg.

Zhejiang Huayou Cobalt Co. will set up its first European factory in Hungary, Foreign Minister Peter Szijjarto told reporters on Wednesday. Hungary has become a meeting point for premium German car manufacturers such as Mercedes-Benz Group AG and BMW AG and Asian battery makers, mostly from China and South Korea. The government in Budapest says these investments, beyond helping to meet climate goals, also serve as a model for East-West economic cooperation at a time of tension.

But its close business ties with Russia and China, as well as a record of vetoing statements critical of Beijing, have led to criticism of Prime Minister Viktor Orban’s administration from key allies such as the United States and the European Union. As with some eastern European peers, Hungary has been a key car manufacturing site since the transition from communism more than 30 years ago.

Hungary has now vaulted to the regional lead when it comes to the transition to electric vehicles, with four of the 10 largest battery makers now having factories in the country or in the process of setting one up, Szijjarto said. In the past seven years, Hungary has announced 51 investments in the electric vehicle industry valued at 4 trillion forint, or almost USD12 billion, he said.

The biggest was from Contemporary Amperex Technology Co. Ltd, which last year announced plans to build a EUR7.3 billion (USD8 billion) battery plant in the eastern Hungarian city of Debrecen, in partnership with Mercedes Benz. The company cited the plant’s proximity to BMW, Stellantis NV and Volkswagen plants for the decision.

We remind, MOL’s Q1 2023 clean current cost of supplies (CCS) earnings before interest, taxes, depreciation and amortisation (EBITDA) for its petrochemical division slumped year on year to a loss of $48m as margins remained under substantial pressure. MOL’s petrochemical integrated margin fell 33% to EUR329/tonne in the first quarter of 2023 from EUR488/tonne in the first quarter of 2022. In the fourth quarter of 2022, it stood at €398/tonne. By April 2023, it was recorded at EUR371/tonne.

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