Hebei Haiwei restarts propylene production operations in China

Hebei Haiwei restarts propylene production operations in China

China's prominent petrochemical producer, Hebei Haiwei Group, has successfully resumed propylene production at its propane dehydrogenation plant in Hebei Province on January 28, said Chemanalyst.

The temporary shutdown was part of a scheduled maintenance initiative, as announced by the manufacturer. The specific unit affected by the maintenance was a propane dehydrogenation unit with an annual capacity of 500 thousand tons of propylene. The shutdown began on January 13 and was aimed at undertaking necessary repairs and ensuring the optimal performance of the facility.

This recent maintenance activity follows a similar occurrence in December when Hebei Haiwei Group resumed propylene production at the propane dehydrogenation unit in Hebei Province. The December shutdown was characterized as unscheduled maintenance, indicating the need for prompt repairs to address technical issues. In that instance, the same propane dehydrogenation unit with a 500 thousand tons per year propylene capacity was temporarily closed due to a technical breakdown. The swift action taken by Hebei Haiwei Group reflects its commitment to maintaining operational efficiency and addressing any unforeseen challenges promptly.

Established in 1992, Haiwei Group has become a key player in the petrochemical industry in China. The company is situated in Hebei Province and boasts a diverse portfolio of petrochemical products. Among the products manufactured by Haiwei Group are polypropylene, packaging film, polymer-modifiable bitumen, and various other petrochemical derivatives.

The resumption of propylene production is a significant milestone for Hebei Haiwei Group, marking the successful completion of the scheduled maintenance activities. Propylene, a crucial chemical compound, finds extensive applications in various industries, including the production of plastics and synthetic materials. Hebei Haiwei Group's ability to promptly restart production operations underscores its commitment to maintaining a steady and reliable supply of essential petrochemical products.

As a major contributor to China's petrochemical landscape, Hebei Haiwei Group's operational updates are closely monitored within the industry. The company's strategic location in Hebei Province positions it as a key player in the region's economic and industrial development. The diverse range of petrochemical products manufactured by Haiwei Group further solidifies its role as a comprehensive provider of essential materials for multiple sectors.

Hebei Haiwei Group's successful resumption of propylene production after scheduled maintenance reflects its dedication to operational excellence and reliable supply chain management. The proactive approach taken by the company in addressing both scheduled and unscheduled maintenance activities demonstrates its commitment to maintaining the efficiency and performance of its petrochemical facilities. The ongoing contributions of Hebei Haiwei Group to China's petrochemical sector underscore its significance in supporting the nation's industrial growth and meeting the demand for essential petrochemical products.

We remind, Alujain Corp.'s subsidiary, Alujain National Industrial Co. (LNIC), has taken a significant step in advancing its integrated propane dehydrogenation (PDH) and polypropylene (PP) project in Yanbu Industrial City, located in Saudi Arabia's Medina province. This milestone involves the awarding of a contract to Samsung Engineering Co. Ltd. for front-end engineering and design (FEED) services. The project aims to bolster the production of propylene and polypropylene in the region.


China's MA market faces 8.5% decline in second week of January 2024

China's MA market faces 8.5% decline in second week of January 2024

In the second week of January 2024, China's maleic anhydride (MA) market witnessed a significant 8.5% decline compared to the previous week, driven by a confluence of factors impacting the industry, said Chemanalyst.

Weakening demand from crucial downstream sectors, including furniture and tableware, alongside a slowdown in construction projects, played a pivotal role in this notable decrease.

One of the contributing factors to the decline was the presence of high inventory levels, a consequence of increased production towards the end of 2023. As a result, producers aimed to clear excess stocks, exerting downward pressure on MA prices. Government interventions, aimed at curbing price hikes, indirectly influenced the MA market by alleviating cost pressures on downstream industries, further contributing to the weakening demand for MA.

In the first week of January 2024, Maleic Anhydride prices have observed some improvement and prices were assessed at USD 1140/MT on FOB basis. While the prices have sharply fallen in the second week and the same trend has been observed in the next couple of weeks. In the European and the US market, MA prices have also witnessed stagnancy amidst stable market dynamics.

Despite the challenges, feedstock costs, particularly butane prices, remained elevated but relatively stable. This stability in feedstock costs limited significant cost-driven increases in MA production expenses. However, regional variations were apparent, with prices in Eastern China experiencing a slight dip due to higher inventory levels and lower transportation costs. Meanwhile, Western and Central China maintained relatively stable to slightly higher prices, influenced by elevated transportation costs and concentrated demand from furniture and tableware industries.

The impact on various industries within China was notable, resulting in lower MA prices that benefited users in sectors such as furniture, tableware, and resin production, particularly those facing cost pressures. The decline in prices is likely to have influenced the profitability of MA producers, with outcomes depending on individual production costs, hedging strategies, and inventory levels.

Looking ahead, the future trajectory of MA prices in China remains uncertain and contingent on several factors. Meanwhile, the European and US MA prices are likely to remain rangebound with minimum fluctuation in the second half of January 2024. The global economic recovery, fluctuations in feedstock costs, regional demand trends, and effective inventory management strategies will play crucial roles in determining the market's direction. Industry stakeholders are closely monitoring these factors to navigate the evolving landscape of China's MA market in the coming months.

We remind, PT Justus Sakti Raya, a prominent player in the petrochemical industry in Indonesia, has successfully resumed production at its maleic anhydride (MA) plant located in Jakarta, Indonesia, as of December 4, following a period of preventive measures and maintenance. The maintenance activities, targeting a facility with an annual MA production capacity of 14 thousand tons, commenced on November 6 of this year.


Drone attacks spark fires at Russian oil facilities

Drone attacks spark fires at Russian oil facilities

Over the course of the past month, Russia's energy infrastructure has fallen victim to a series of drone attacks and subsequent fires, contributing to the prevailing uncertainty in global oil and gas markets, which are already grappling with the ramifications of conflicts in the Middle East, said Chemanalyst.

The ongoing and intensifying conflict between Russia and Ukraine has led to a disturbing trend of targeted strikes on each other's energy infrastructure. Both nations appear to be employing such tactics as a means to disrupt supply lines, logistics, and undermine the morale of their adversaries in the relentless two-year-long war that shows no signs of abating.

In a recent incident, Ukraine attempted to target a Russian Baltic Sea oil terminal using a drone, although the endeavor ultimately proved unsuccessful. Simultaneously, Ukraine claimed to have successfully hit targets in St Petersburg with domestically-manufactured drones. The complexity and heightened stakes of these attacks underscore the strategic importance both nations attach to controlling vital energy assets.

On January 19, a significant development occurred when four oil tanks at a sizable storage facility in the town of Klintsy, situated in Russia's western Bryansk region, caught fire following the downing of a Ukrainian strike drone by the Russian military. Ukraine's military intelligence agency neither confirmed nor denied its involvement in the incident, leaving the circumstances surrounding the attack shrouded in ambiguity.

A few days later, on the same day, a fire ravaged the Ryazan oil refinery, Russia's third-largest. This incident marked a critical blow to the country's energy infrastructure, raising concerns about the resilience of key facilities amid the ongoing conflict.

Shortly thereafter, on January 21, the repercussions of these attacks resonated further as Russian energy giant Novatek was compelled to suspend certain operations at the expansive Baltic Sea fuel export terminal in Ust-Luga. Additionally, "technological processes" at a nearby fuel-producing complex were impacted due to a fire. The cascading effects of these disruptions began to manifest in the form of potential reductions in exports, particularly in the vital naphtha sector.

The ramifications of the attacks on Russia's refineries have led to significant concerns about the country's ability to maintain its usual export levels. Preliminary estimates suggest that Russia might reduce exports of naphtha by approximately 127,500-136,000 barrels per day. This reduction, constituting around a third of Russia's total exports, underscores the severity of the operational disruptions caused by the recent fires at key refineries located on the Baltic and Black Seas.

Adding to the litany of incidents, Rosneft's Tuapse oil refinery in southern Russia halted oil processing and output on January 26 due to a fire. This development, affecting one of Russia's major oil producers, exacerbates the challenges faced by the country's energy sector.

Furthermore, Russia's second-largest oil producer, Lukoil, has taken preventative measures in response to these escalating challenges. The company opted to halt a unit at NORSI, Russia's fourth-largest refinery, located near the city of Nizhny Novgorod, some 430 km (270 miles) east of Moscow, following an unspecified "incident." The decision to suspend operations highlights the critical need for immediate responses to safeguard against potential hazards and to assess the resilience of the industry amid heightened tensions.

We remind, Shell's departure from Nigeria's onshore oil sector has not only underscored the challenges faced by major oil companies in Africa's largest exporter but has also instilled hope that local firms could reverse the declining output in the Niger Delta. As a trailblazer in Nigeria's oil industry, Shell's exit from the Delta region, plagued by pollution, oil theft, and pipeline vandalism, is a significant development.


Moody’s downgrades INEOS credit rating on weak performance in cyclical downturn

Moody’s downgrades INEOS credit rating on weak performance in cyclical downturn

Moody’s Investors Service downgraded its credit rating on INEOS Group Holdings on weak performance amid an overall cyclical downturn in the chemical sector, said the agency.

Moody’s downgraded the corporate family rating (CFR) of INEOS Group Holdings one notch to Ba3 (S&P and Fitch equivalent BB-) from Ba2 (BB).

It likewise downgraded the instrument ratings on the backed senior secured facilities and backed senior secured bonds issued by Ineos Finance plc to Ba3 from Ba2, as well as the instrument ratings on the backed senior secured term facilities issued by Ineos US Finance LLC to Ba3 from Ba2.

Moody’s also assigned a Ba3 rating to the proposed backed senior secured term loan currently being marketed by Ineos US Finance LLC and Ineos Finance plc. It kept its ratings outlook on all entities at "negative".

“Today’s rating action reflects continuing weak performance of the company amid a cyclical downturn in the chemical industry with 2023 EBITDA (earnings before interest, tax, depreciation and amortization) of €1.7 billion, reflecting about 41% decline year over year,” said Moody’s in a report.

The downgrade also reflects uncertainty regarding the timing of the cyclical turnaround, as well as the fact that INEOS’ credit metrics have been outside the Ba2 rating guidance for close to a year, it added.

INEOS’ debt/EBITDA ratio is expected at around 6.3x for 2023 versus rating guidance of under 4x while net debt/EBITDA is expected at around 5.3x versus rating guidance of 3.5x. Moody’s also cited INEOS’ planned $700 million acquisition of LyondellBasell’s ethylene oxide (EO) and derivatives business which is expected to be financed with debt.

“While Moody’s acknowledges the value of purchasing assets during a cyclical downturn, as well as the benefits of the oxide assets being located close to INEOS’ existing facilities, the agency views this transaction as aggressive given its timing in the business cycle, the company’s currently high leverage and ongoing investments,” it said.

We remind, INEOS Inovyn has today announced the expansion of its PVC portfolio - to offer new products that meet society's everyday needs, with a significantly reduced carbon footprint and increased recycled content. In the area of carbon neutrality, BIOVYNTM, the bio-attributed PVC launched by INEOS Inovyn in 2019, is designed to become carbon neutral and the net zero option. BIOVYNTM has been used increasingly across various sectors from automotive, building and construction, to medical and fashion applications, where fossil-free solutions with a reduced carbon footprint are needed.


Nextchem awarded licensing and engineering design package for Norsk e-fuel’s first industrial scale e-fuel plants located in Norway

Nextchem awarded licensing and engineering design package for Norsk e-fuel’s first industrial scale e-fuel plants located in Norway

MAIRE announces that NEXTCHEM (Sustainable Technology Solutions), through its subsidiary NextChem Tech, has signed a contract with Paul Wurth S.A., a subsidiary of SMS group (‘Paul Wurth'), and Norsk e-Fuel AS for a licensing and engineering design package relating to NX CPO to be applied in the first industrial scale plant able to produce SAF from green hydrogen and biogenic CO2 in Mosjoen, Norway, said Hydrocarbonprocessing.

This will be the first factory being developed by Norsk e-Fuel AS a Norwegian project developer backed by a strong shareholder group including among others Paul Wurth. NextChem Tech will apply its proprietary NX CPO1 technology, an advanced innovative process to produce synthesis gas via a controlled partial oxidation, through a very fast reaction. When applied to synthetic fuel production, this versatile technology is contributing to improve carbon efficiency recovery yield.

The first plant developed by Norsk e-Fuel will have a production capacity of 40 000 tpa of e-Fuels to enter operation after 2026. Based on the initial design, two additional facilities with a capacity of approx. 80 000 tpa each are planned to be built by 2030. The aim is to effectively reduce current flight emissions by leveraging the use of cutting-edge technologies to produce e-Fuels. Alessandro Bernini, CEO of MAIRE, commented: “We are proud of being part of this breakthrough technological initiative with SMS group and Norsk e-Fuel aimed at industrializing e-Fuels production in Norway for aviation.”

“Our collaboration with NextChem Tech is another step towards improving carbon efficiency of our production processes while simultaneously reducing costs. We are grateful for this impactful partnership and look forward to the seamless integration of all technology components", says Karl Hauptmeier, CEO Norsk e-Fuel.

“Having NextChem Tech on board completes the overall picture of technology providers involved in the Project. This collaboration enables Nork e-Fuel to improve process efficiency and competitiveness in the e-Fuels market. With now all partners on board and having the FEED study started, we are confident to bring this project to an historical success” says Paul Tockert, Executive Vice President Metallurgy SMS group.

We remind, MAIRE announces that NEXTCHEM, through its biodegradable plastics technology licensor CONSER, has been awarded technology licensing and catalyst supply by a prominent client, as part of a larger project located in Northwestern China, said the company. The scope of work entails licensing, process design package for CONSER proprietary Duetto technology and technical assistance during project execution, up to commissioning and start-up. As part of the agreement, CONSER will also supply the hydrogenation catalyst.