Venezuelan petroleum coke contract dispute fuels tanker queues, hunt for options

Venezuelan petroleum coke contract dispute fuels tanker queues, hunt for options

MOSCOW (MRC) -- The sudden suspension of a Venezuelan contract that had boosted its exports of petroleum coke has led to a bottleneck of tankers waiting to load and sent customers scrambling for alternative supplies, according to sources and data, said Hydrocarbonprocessing.

A 2017 contract between Venezuelan state oil company PDVSA and Geneva-based Maroil Trading helped the country's exports of the oil byproduct to grow seven-fold between 2021 and 2022. But the deal was suspended last month amid a dispute over accounts receivable and the extension of the contract.

Venezuela's petcoke exports dropped to 56,000 metric tons in June, from more than 620,000 tons in January. So far this month, only one 70,000-ton cargo has been authorized by PDVSA to load. But as of Tuesday the vessel had not sailed, shipping data seen by Reuters showed.

Eight other vessels are near Venezuelan ports waiting to load a combined 350,000 tons, according to the data. Petcoke is largely used to fire cement kilns in countries from France to China. PDVSA did not reply to a request for comment. A law firm representing Maroil did not provide immediate comment.

Venezuela last year exported some 3.3 million metric tons of petcoke, mostly traded by Maroil, which in recent years has signed commercial agreements with other companies to reach final customers. A senior executive from a cement company in southern India said its Venezuelan petcoke supplier has canceled three contracts since last month, citing uncertainties related to its ability to deliver the product.

"We expect someone else to step in, in place of Maroil now," the company executive said, declining to disclose the name of its suppliers. PDVSA has in recent months approved new buyers and intermediaries for its petcoke sales, a move to expand its customer roster and directly reach overseas buyers. "No Indian buyer should attempt to get Venezuelan material without a guarantee that payment would only be made on discharge," said another customer, citing past delivery delays.

International petcoke prices have fallen this year amid supply-demand imbalances, according to Gujarat-based trader I-Energy Natural Resources. But a similar drop in coal prices, which is an alternative fuel, has motivated some importers in Asia to switch away from Venezuelan petcoke. Venezuela-origin petcoke sold at USD105 per ton at the end of last week. In contrast, Saudi-origin petcoke was priced at USD103 per ton, and U.S. Gulf Coast petcoke for India delivery traded at USD105 per ton in the same period, according to I-Energy.

We remind, Russia's gasoline exports rose in January to June despite the introduction of the European Union's embargo, thanks to healthy supplies of the fuel to Africa and Asia. Gasoline production at Russian refineries rose by about 4% year-on-year in the first half of 2023 to about 21.6 million metric tons, but fuel exports jumped by 30% to almost 3.5 million tons, according to the sources' data and Reuters calculations. That was up from 2.7 million tons exported in January - June 2022.

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Oil rises as US inflation cools

Oil rises as US inflation cools

MOSCOW (MRC) -- Oil benchmark Brent futures breached USD80 a barrel for the first time since May on Wednesday after U.S. inflation data suggested the interest rate hike cycle in the world's biggest economy is set to finally cool, said Hydrocarbonprocessing.

Data released on Wednesday showed U.S. consumer prices rose modestly in June and registered their smallest annual increase in more than two years as inflation continued to subside. Markets expect one more interest rate rise, but that the U.S. rate-hiking cycle has likely peaked. Higher rates can slow economic growth and reduce oil demand.

"This is the lowest number since the pandemic ... but it is important to keep in mind that this is still a transitory situation. But overall, traders are cheering this event," said Naeem Aslam, chief investment officer at Zaye Capital Markets, describing the inflation figures.

Brent futures were 51 cents up at USD79.91 a barrel by 1256 GMT, having risen as high as $80.05 earlier. U.S. West Texas Intermediate (WTI) crude was up 62 cents at USD75.45 a barrel. A weaker dollar, optimism surrounding Chinese stimulus and U.S. stockpile data were also supporting the positive sentiment, said Fiona Cincotta, senior financial markets analyst at City Index.

Meanwhile, forecasts from the U.S. Energy Information Administration (EIA) and the International Energy Agency (IEA) point to the market tightening into 2024. The IEA expects the oil market to stay tight in the second half of 2023, citing strong demand from China and developing countries combined with supply cuts from leading producers. New forecasts from the IEA are expected this week.

"The oil balance gets tighter either when supply is downgraded, or demand is revised up. If both happens at the same time the change can be seismic," said PVM analyst Tamas Varga referring to the EIA's outlook. "Clearly, it is not worried about inflation-induced recession that could potentially dent global oil consumption." Top producer Saudi Arabia pledged last week to extend a production cut of 1 million bpd in August, while Russia will cut exports by 500,000 bpd.

We remind, Oil prices dipped on Monday after weak economic data from top consumers the United States and China, though expected crude supply cuts from Saudi Arabia and Russia limited losses. Brent crude futures fell 19 cents, or 0.2%, to USD78.28 a barrel by 1416 GMT. U.S. West Texas Intermediate crude was down 24 cents, or 0.3%, at USD73.62.

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BASF Group achieves Q2 2023 EBIT before special items in line with analyst consensus and adjusts outlook for 2023

BASF Group achieves Q2 2023 EBIT before special items in line with analyst consensus and adjusts outlook for 2023

МОСКВА (MRC) -- BASF has released preliminary figures for the second quarter of 2023. Sales declined by an expected 25% in the second quarter of 2023 to EUR17,305 million (Q2 2022: EUR22,974 million), said the company.

This was mainly driven by considerably lower prices and volumes; negative currency effects also contributed to the sales decline. Sales were thus lower than average analyst estimates for the second quarter of 2023 (Vara: EUR19,355 million).

EBIT before special items of BASF Group amounted to an expected €1,007 million, a decline of 57% compared with the strong prior-year quarter (Q2 2022: EUR2,339 million) but in line with analyst consensus for the second quarter of 2023 (Vara: EUR1,018 million). Compared with the prior-year quarter, the earnings contributions of the Chemicals and Materials segments were particularly weaker.

BASF Group’s EBIT amounted to an expected EUR974 million in the second quarter of 2023, below the figure for the prior-year quarter (Q2 2022: EUR2,350 million) and almost at the level of analyst consensus (Vara: EUR1,003 million).

Net income reached an expected €499 million, below the figure in the prior-year quarter (Q2 2022: EUR2,090 million) and below average analyst estimates for the second quarter of 2023 (Vara: EUR729 million).

We remind, BASF celebrated the opening of Europe’s first co-located center of battery material production and battery recycling in Schwarzheide, Germany. The inauguration of a state-of-the-art production facility for high-performance cathode active materials and the unveiling ceremony for a battery recycling plant for the production of black mass represent important steps toward closing the loop for the European battery value chain – from the collection of used batteries and the recovery of mineral raw materials to their use in the production of new battery materials. Major step in Europe to participate in the rapidly growing global battery market.

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Borealis completes Stenungsund cracker furnace revamp

Borealis completes Stenungsund cracker furnace revamp

MOSCOW (MRC) -- Borealis announces the successful completion of a major upgrade to its steam cracker operation in Stenungsund, Sweden, said the company.

The seven-year construction project is a resounding success with respect to health, safety, and the environment (HSE), with no major accidents and no process safety incidents whatsoever. This capital investment ensures that the Stenungsund cracker – already one of the most feedstock-flexible in all of Europe – can operate even more reliably, and with greater energy efficiency. As a key supplier of ethylene and propylene to the Stenungsund Chemical Cluster, the OMV Group, and the Borealis Group’s international customers, its enhanced reliability is especially needed to support the rapidly growing wire and cable industry.

The Stenungsund steam cracker, which has a nameplate capacity of 625 kilotons per year, is a facility that thermally “cracks” feedstock – such as ethane, naphtha, propane, butane, and liquefied petroleum gas (LPG) – into smaller molecules. Furnaces are the “heart” of every cracker. In the Stenungsund revamp, four existing furnaces have now been upgraded and revamped to modern process safety, reliability, and thermal efficiency standards. Three other furnaces will augment their output, while two aging furnaces will be decommissioned and shut down completely at the end of the year. Because scheduled cracker productions continued nearly uninterrupted throughout the construction period, considerable operational restrictions prevailed, for example limited room to maneuver for cranes and other heavy lifting equipment. Each furnace had to be removed, demolished, then rebuilt separately, one after the other.

Despite pandemic-related complications, the Stenungsund project is distinguished by its excellent safety record, with no major accidents (personal safety) and no incidents (process safety) due to heightened safety protocols.

We remind, Borealis will acquire Italian mechanical recycled polypropylene (R-PP) compounder Rialti. Rialti has a nameplate output capacity of 50,000 tonnes/year of compounded R-PP. The announcement comes amid tough trading conditions for flake and pellet producers and compounders in the R-PP chain. As a result of tough trading conditions, players across recycled polymers have been predicting consolidation would occur in the chain since Q4 - either through mergers and acquisitions or through bankruptcy.

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BASF signs NPG supply deal with China’s Zhejiang Guanghua

BASF signs NPG supply deal with China’s Zhejiang Guanghua

MOSCOW (MRC) -- BASF and China’s Zhejiang Guanghua Technology Co (KHUA) have signed a Letter of Intent for the supply of neopentyl glycol (NPG) from BASF’s Zhanjiang Verbund site to KHUA, BASF said in a news release.

KHUA, a manufacturer of saturated polyester resins for the powder coatings industry, is planning to build a 100,000 tonne/year production plant for high-end powder coatings resins in Zhanjiang, where BASF is building an 80,000 tonne/year NPG plant.

The new NPG facility in Zhanjiang is expected to come on stream in the fourth quarter of 2025, boosting BASF’s global capacity of the product to 335,000 tonne/year from 255,000 tonne/year.

This strategic move will create synergies that benefit both parties, including enhanced collaboration and supply reliability, faster delivery, access to shared resources, and reduced costs.

In addition, this partnership will help to meet the growing demand for eco-friendly powder coatings in China and the wider Asia Pacific region, according to the statement.

We remind, BASF celebrated the opening of Europe’s first co-located center of battery material production and battery recycling in Schwarzheide, Germany. The inauguration of a state-of-the-art production facility for high-performance cathode active materials and the unveiling ceremony for a battery recycling plant for the production of black mass represent important steps toward closing the loop for the European battery value chain – from the collection of used batteries and the recovery of mineral raw materials to their use in the production of new battery materials. Major step in Europe to participate in the rapidly growing global battery market.

mrchub.com