SSESSMENTS petrochemicals digest January 17:
Energy & Feedstocks
- Oil prices hiked on Monday as investors bet supply will remain tight amid restrained output by major producers with global demand unperturbed by the Omicron coronavirus variant; Brent crude futures rose 42 cents (0.5%) to $86.48/barrel by 0022 GMT, while US West Texas Intermediate crude gained 62 cents (0.7%) at $84.44/barrel
- National Iranian Oil Refining and Distribution Company (NIORDC) inked a memorandum of understanding (MoU) with the privately-owned Bank Mellat for cooperation in the construction of a new 150,000 bpd oil products pipeline valued at EUR372 million ($424 million); the near 1,000km pipeline will supply northeast Iran, and possibly also help the flow of products to its eastern neighbors
- Brazil's Petrobras trimmed its 2022 production target by 70,000 bpd of oil equivalent amid expectations that its share of output from the Atapu and Sepia fields will be reduced by pending co-participation agreements; the company expects to pump 2.6 million boe/d in 2022, dropped from an initial forecast of 2.7 million boe/d made in November
- US Energy Information Administration (EIA) in January Short-Term Energy Outlook (STEO) forecast that the natural gas spot price at the US benchmark Henry Hub will average $3.79 per million British thermal units (MMBtu) in 2022, slightly less than its 2021 average of $3.91/MMBtu; they also expect the price to decline slightly in 2023, averaging $3.63/MMBtu, as growth in dry natural gas production outpaces growth in domestic demand and exports
- Gas flow via Yamal-Europe pipeline, which usually sends Russian gas west into Europe, from Germany to Poland on Saturday (January 15) morning were down sharply at hourly volumes of 1.5 million kilowatt-hours (kWh/h)
- China's December import of coal dropped by 11.7% from November to 30.95 million tons, as domestic coal miners boosted output to record levels and utilities slowed the pace of replenishing inventories
- A fire broke out in Kuwait during maintenance work at a major oil refinery on Friday (January 14), killing two workers and critically injuring five others; this is the second fire to erupt at the Mina al-Ahmadi oil refinery in as little as three months
- The Motiva refinery in Port Arthur, Texas, a subsidiary of Saudi oil giant Aramco, is one of six firms to purchase 18.1 million barrels of crude oil from the US Strategic Petroleum Reserves (SPR)
- The US government held talks with several international energy firms on contingency plans for supplying natural gas to Europe in case the conflict between Russia and Ukraine disrupts Russian supplies; the US is concerned Russia is preparing for the possibility of a new military assault on the country it invaded in 2014 but Russia denies it plans to attack Ukraine
- Over the first 10 days of 2022, sales of gasoline and diesel in India, which together make up more than half of the country’s overall petroleum consumption, slipped by 2-3% from a year earlier
- China's import of crude oil increased by 19.9% year on year to 10.91 million bpd in December 2021, as independent refineries tried to use up new crude import quotas allocated in November
- Brazil's Petrobras imported a record 23 million cu m/d of LNG in 2021, which surged from 7.5 million cu m/d in 2020
Earnings, Investments, M&A, Restructuring
- Royal Dutch Shell will hand the Deer Park refinery in Houston, Texas to Petroleos Mexicanos (Pemex) on January 20; Shell had agreed in May to sell its majority stake in the Deer Park refinery, which can process up to 340,000 barrels per day (bpd), to Pemex, its long-time partner in the plant, for about $596 million
- Indian Oil Corp (IOC) aims to invest INR70 billion ($944 million) to build gas sales network infrastructure, including pipelines; IOC has obtained nine licenses to sell gas to households, automobiles and small industries, representing about a third of the demand potential in 61 geographical areas in various states that were recently auctioned by the Petroleum and Natural Gas Board
Economy
- Indonesia’s subsidy bill, which may surge beyond its current seven-year high due to soaring energy costs, is forcing the government to seek a balance between fiscal discipline and rising consumer prices; the country's state subsidies reached IDR243.1 trillion in ($17 billion) in 2021, exceeding its budget allocation by 39% and marking the highest since 2014
- US manufacturing output unexpectedly decreased by 0.3% in December, dragged by a decline in output at motor vehicle plants amid an ongoing global semiconductor shortage; however, the manufacturing production increased at a 4.9% annualized rate in the fourth quarter
- Bank Negara Malaysia (BNM) will wait until at least July before raising interest rates from a record low as it waits for the economic recovery to take hold; 23 economists suggested the BNM will keep its overnight policy rate at 1.75% until the end of June
- China's foreign trade in US dollar terms came at $6.05 trillion for the first time in 2021, as the economy continued a solid recovery over the past year, the reading exceeding the $5 trillion mark before topping $6 trillion in the same year, eight years after the country achieved $4 trillion in foreign trade
- China's gross domestic product (GDP) is expected to expand by 3.6% in the October-December quarter from a year earlier, the weakest pace since the second quarter of 2020 and slowing from 4.9% in the third quarter, dragged by weaker demand due to a property downturn, curbs on debt and strict Covid-19 measures, raising the heat on policymakers to roll out more easing steps
Logistics
- Container volumes at Singapore port climbed by 1.6% year on year to 37.5 million twenty-foot equivalent units in 2021, the highest annual volumes since 2011; however, container throughput at the port in December declined by 2.2% year on year
- All-inclusive container shipping rates from North and Southeast Asia to North America hit record high levels as backed by the restocking activity ahead of the Lunar New Year holiday; all-inclusive rates from China to West Coast North America consolidated mostly in the $16,000-$20,000/FEU range, while rates to the East Coast of North America were similarly range-bound at $17,000-$21,000/FEU
- Suez Canal Authority (SCA) said that the waterway's expansion project is expected to be completed after two years of work in July 2023; SCA announced accelerated plans to extend a second channel of the canal and to enlarge an existing channel after the Ever Given container ship ran aground and blocked the waterway for six days last year.
Sustainability
- Big brands including Coca-Cola and PepsiCo called for a global pact to combat plastic pollution that includes cuts in plastic production, so far, it remains unclear whether any deal will focus on waste management and recycling or take tougher steps such as curbing new plastic production, a move that would likely face resistance from big oil and chemical firms and major plastic-producing countries like the US
Technology
- PJSC LUKOIL lets a contract to Lummus Technology LLC to license technologies and provide equipment for a grassroots plant that will produce blending components for the production of cleaner, high-octane gasoline to be built at subsidiary LLC LUKOIL-Permnefteorgsintez’s 13.1-million tons/year refinery in Russia’s North Urals region
Monomers
- All of the major units, a 1.8 million tons/year cracker, two polyethylene units with each capacity of 650,000 tons/year, and a 1.1 million tons/year monoethylene glycol plant, at ExxonMobil and SABIC's new joint-venture petrochemical complex in Texas are operational
- US ethylene imports from Mexico increased by five-digits in Jan-Nov 2021 compared to Jan-Nov 2020
- US ethylene imports from Colombia dropped by more than 10,000 tons in Jan-Nov 2021 compared to Jan-Nov 2020
- US butadiene exports to Mexico slipped by more than 15,000 tons in Jan-Nov 2021 compared to Jan-Nov 2020
- US butadiene exports to Australia climbed in Jan-Nov 2021 compared to Jan-Nov 2020
- US butadiene imports from Canada slumped by more than 5,000 tons in Jan-Nov 2021 compared to Jan-Nov 2020
- US butadiene imports from South Korea rose by five-digits in Jan-Nov 2021 compared to Jan-Nov 2020
Aromatics
- US benzene imports from India climbed by five-digits in Jan-Nov 2021 compared to Jan-Nov 2020
- US benzene imports from South Korea in Jan-Nov 2021 trimmed by more than 100,000 tons compared to Jan-Nov 2020
- US isoprene exports to the UK hit three digits in Jan-Nov 2021
- US isoprene exports to Canada in Jan-Nov 2021 fell by more than 100 tons from Jan-Nov 2020
Intermediates
- US ethylene dichloride (EDC) exports to Brazil reduced by more than 200,000 tons in Jan-Nov 2021 from Jan-Nov 2020
- US ethylene dichloride (EDC) exports to Spain boosted by five-digits in Jan-Nov 2021 from Jan-Nov 2020
Polymers
PE
- The leading Indonesian polyolefins producer's new polyethylene (PE) price list for the week commencing January 17, 2022, surfaced at a stable level across all grades, except for mLLDPE C6 which increased by IDR220,000/ton ($15/ton), all compared to the previous price list announced on January 10, 2022
- Local HDPE Film and LLDPE Film C4 offers from the leading Philippines polyolefins producer, as well as localized offers for Indonesian and Thai HDPE Film cargoes remain stable over the week
- The inventory level at the two Chinese polyolefins producers was recorded at 610,000 tons as of Monday, January 17 morning, posting an increment of 85,000 tons over the weekend
- A Malaysian plastic products end manufacturer was asked by a Saudi polyethylene (PE) producer to take more volume for February shipment, citing the Lunar New Year holiday in China so the producer has to divert more quantity to the Southeast Asia market
- Late last week, import offers from a Middle Eastern producer to Malaysia and Indonesia fell by $20-30/ton for LDPE Film and $20/ton for LLDPE Film C4, both on a weekly comparison…
- US polyethylene (PE) exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 reduced by more than 250,000 tons compared to Jan-Nov 2020
- US polyethylene (PE) exports to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 decreased by six-digits compared to Jan-Nov 2020
- US HDPE exports to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) dropped by more than 50,000 tons in Jan-Nov 2021 from Jan-Nov 2020
- US HDPE exports to Thailand rose by four-digits in Jan-Nov 2021 compared to Jan-Nov 2020
- Export volume of LDPE from the US to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) contracted by more than 50,000 tons in Jan-Nov 2021 from Jan-Nov 2020
- US LDPE exports to Vietnam in Jan-Nov 2021 trimmed by five-digits compared to Jan-Nov 2020
- US LLDPE exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 slumped by more than 250,000 tons compared to Jan-Nov 2020
- Export volume of LLDPE from the US to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 dropped by six-digits from Jan-Nov 2020
PP
- The leading Indonesian polyolefins producer released a new polypropylene (PP) price list for the week commencing January 17, 2022, with an increase of between IDR280,000-510,000/ton ($20-36/ton) across different grades, except for PP Random Copolymer Injection decreased by IDR430,000/ton ($30/ton), all changes are compared to the price list issued on January 10, 2022
- A Vietnamese plastic products end manufacturer received import offers for BOPP cargoes at $1,260/ton for Thailand origin and $1,300/ton, both on CIF basis and increased between $30-80/ton from deals concluded mid-December
- Import offers for PP Homo Injection and PP Homo Raffia cargoes from Vietnam to Indonesia increased by $20/ton from last week
- Late last week, local offers from an Indonesian polypropylene (PP) producer hiked by IDR300,000/ton ($21/ton) for PP Homo Thermoforming, IDR400,000/ton ($28/ton) for PP Homo Raffia and PP Homo Film, and by IDR450,000/ton ($31/ton) for PP Homo Injection, all on a weekly comparison
- US polypropylene (PP) exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 slashed by more than 25,000 tons compared to Jan-Nov 2020
- US polypropylene (PP) exports to Thailand in Jan-Nov 2021 expanded by four-digits compared to Jan-Nov 2020
- US polypropylene (PP) copolymer exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 gained by three-digits compared to Jan-Nov 2020
- US polypropylene (PP) copolymer exports to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 slipped by more than 5,000 tons compared to Jan-Nov 2020
PVC
- Local offers for acetylene-based PVC cargoes in China via traders hiked between CNY250-300/ton ($39-47/ton) as compared to the level seen at the beginning of last week, following the increase in coal prices last week
- Last week, a Turkish plastic products end manufacturer received import ethylene-based PVC offers for early February shipment from a Russian producer with an increment of $25/ton on a weekly comparison, standing at $1,765/ton CIF basis
- The total inventory of acetylene-based PVC in coastal China recorded at 165,400 tons as of January 14, increased by 9,100 tons as compared to January 7's level; in detail, the inventory in East China stood at 134,800 tons, rose by 13,400 tons, while the inventory in South China stood at 30,600 tons, dropped by 4,300 tons, all during the same time frame
- European polyvinyl chloride (PVC) prices to the CIS countries reportedly stable since November as supported by steady ethylene prices in the region for the second month in a row coupled with the strong resin demand, including demand from some export markets
- US polyvinyl chloride (PVC) exports to Vietnam in Jan-Nov 2021 slipped by five-digits compared to Jan-Nov 2020
- US polyvinyl chloride (PVC) exports to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) rose by three-digits in Jan-Nov 2021 from Jan-Nov 2020
PET
- The availability of polyethylene terephthalate (PET) cargoes in China’s domestic market is currently very tight; no supply for prompt delivery and most suppliers have finished sales for April delivery; hence, they started offering for Q2 2022
- US polyethylene terephthalate (PET) exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 surged by more than 5,000 tons compared to Jan-Nov 2020
- Export volume of polyethylene terephthalate (PET) from the US to Indonesia cut by three-digits in Jan-Nov 2021 from Jan-Nov 2020
Styrenics
- US polystyrene (PS) exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 climbed by more than 1,000 tons compared to Jan-Nov 2020
- Export volume of polystyrene (PS) from the US to Indonesia slashed by triple-digits in Jan-Nov 2021 from Jan-Nov 2020
- US acrylonitrile butadiene styrene (ABS) exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) surged by close to 10,000 tons in Jan-Nov 2021 from Jan-Nov 2020
- US acrylonitrile butadiene styrene (ABS) exports to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 increased by three-digits compared to Jan-Nov 2020
EVA
- US ethylene vinyl acetate (EVA) exports to Vietnam in Jan-Nov 2021 slumped by almost 5,000 tons compared to in Jan-Nov 2020
- Export volume of ethylene vinyl acetate (EVA) from the US to the Philippines in Jan-Nov 2021 hiked by three-digits from in Jan-Nov 2020
Engineering Plastics
Polycarbonate
- US polycarbonate exports to Malaysia (Malaysia ports are widely used as Bonded Warehouse for transit cargoes to Asia) in Jan-Nov 2021 gained by four-digits compared to Jan-Nov 2020
- Export volume of polycarbonate from the US to Singapore (Singapore ports are widely used as Bonded Warehouse for transit cargoes to Asia) cut by more than 5,000 tons in Jan-Nov 2021 from Jan-Nov 2020
