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Orlen Unipetrol shuts PP plant amid refinery outage

  • Market: Petrochemicals
  • 16/08/24

Czech Republic-based refiner and petrochemical producer Orlen Unipetrol shut its 300,000 t/yr polypropylene (PP) plant in Litvinov on 15 August after an unplanned outage at its 108,000 b/d refinery.

The PP plant shutdown was a result of issues with the steam and nitrogen supply systems. A restart timeline remains unclear, but no force majeure declaration has been made so far.

The company's 200,000 t/yr and 270,000 t/yr high density polyethylene (HDPE) plants at the Litvinov site remain operational, sources added.

Orlen Unipetrol declared force majeure on PE and PP supplies on 29 July because of a cooling system malfunction at Litvinov. The company said an outage at a cooling water system supplying its ethylene cracker had resulted in an emergency shutdown of the unit.

The company subsequently lifted the force majeure on 7 August as the cracker outage was short-lived.


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16/08/24

US housing construction weakens in July, PU steady

US housing construction weakens in July, PU steady

Houston, 16 August (Argus) — Housing permits and starts both fell in July to four-year lows as persistently high borrowing costs continue to weigh on the housing market, even as polyurethane (PU) demand has remained steady. Total housing starts fell by 6.8pc to a seasonally adjusted annual rate of 1.238mn in July from June's revised numbers, according to the US Census Bureau and the Department of Housing and Urban Development. This is down 16pc from July 2023, the month the Federal Reserve hiked its target lending rate to its current level, the highest in 23 years. The starts in July were at the lowest rate since 1.053mn in May 2020, when the Covid-19 pandemic had closed down much of the US economy. PU demand in the construction sector saw continued strong but steady demand in July while supply was balanced to tight, according to market participants. The building blocks of polyurethanes, such as isocyanates like polymeric MDI (PMDI), go into insulation, roofing applications and carpet underlay. One producer was still under force majeure on MDI through July but the upstream issues had been resolved and the producer was rebuilding inventory after Hurricane Beryl hit in early July. Supply and demand fundamentals along with cost pressures drove price increase announcements and implementation, pushing up monthly PMDI contracts in July. Argus assessed the US polymeric MDI (PMDI) contract price increasing by 5¢/lb to a midpoint at 100.5¢/lb in July. Additional price increases are expected for August contracts, according to market participants. Housing permits were issued at a rate of 1.396mn in July. This is down 4pc from June and 7pc down from July 2023. This was the lowest rate of permit issuance since June 2020. High borrowing costs appear to have a more acutely negative impact on the housing market the longer they remain elevated. Starts and permits were both at their lowest rate since the middle of 2020 when Covid-19 paralyzed a large portion of the US housing market and the economy was just emerging from a brief, sharp recession. Single-family starts extended their decline into a fifth month, down 14pc to a rate of 851,000 in July from the prior month and off by 15pc from July 2023. Starts on multifamily structures of five or more units climbed 12pc to 363,000 units started in July from the prior month but were down by 24pc from a year earlier. Single-family housing permits were issued at a rate of 938,000 units in July, down 0.1pc from June and marking the sixth straight month of decreases. This was 1.6pc lower than July 2023. Multifamily permits fell by 12.4pc on the month. The Federal Reserve is widely expected to start lowering borrowing costs at its next policy meeting next month after holding its target rate at a 23-year high of 5.25-5.5pc since July of last year. Consumer inflation eased to an annual 2.9pc in July, the lowest in three years. The labor market has also shown signs of weakening among other softer data, including recent slides in stock prices, that triggered recession concerns. This has all led futures markets to give near certain odds of rate cuts beginning next month. They will be too late to shore up the housing market this year, but a sustained pace of rate cuts into 2025 may boost construction and sales next year. By Cole Sullivan, Aaron May and Catherine Rabe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US housing construction weakens in July, PVC steady


16/08/24
News
16/08/24

US housing construction weakens in July, PVC steady

Houston, 16 August (Argus) — Housing permits and starts both fell in July to four-year lows as persistently high borrowing costs continue to weigh on the housing market, even as PVC demand has remained steady. Total housing starts fell by 6.8pc to a seasonally adjusted annual rate of 1.238mn in July from June's revised numbers, according to the US Census Bureau and the Department of Housing and Urban Development. This is down 16pc from July 2023, the month the Federal Reserve hiked its target lending rate to its current level, the highest in 23 years. It represents the lowest rate of housing starts since 1.053mn in May 2020, when the Covid-19 pandemic had closed down much of the US economy. The polyvinyl chloride (PVC) market has reported fairly steady demand for much of the summer, but buyers and converters were increasingly warning of softening order books as the months progressed. Some market participants have even said the focus is shifting to inventory management, a discussion that rarely happens this early in the year. Despite the broadly flat demand, higher feedstock costs and supply disruptions from Hurricane Beryl in early July led producers to secure a 1¢/lb increase for PVC contracts in July, with Argus assessed contract prices at 61.5¢/lb. PVC contract prices are up from 57.5/lb in July 2023. Permits were issued at a rate of 1.396mn in July. This is down 4pc from June and 7pc down from July 2023. This was the lowest rate of permit issuance since June 2020. High borrowing costs appear to have a more acutely negative impact on the housing market the longer they remain elevated. Starts and permits were both at their lowest rate since the middle of 2020 when Covid-19 paralyzed a large portion of the US housing market and the economy was just emerging from a brief, sharp recession. Single-family starts extended their decline into a fifth month, down 14pc to a rate of 851,000 in July from the prior month and off by 15pc from July 2023. Starts on multifamily structures of five or more units climbed 12pc to 363,000 units started in July from the prior month but were down by 24pc from a year earlier Single-family housing permits were issued at a rate of 938,000 units in July, down 0.1pc from June and marking the sixth straight month of decreases. This was 1.6pc lower than July 2023. Multifamily permits fell by 12.4pc on the month. The Federal Reserve is widely expected to start lowering borrowing costs at its next policy meeting next month after holding its target rate at a 23-year high of 5.25-5.5pc since July of last year. Consumer inflation eased to an annual 2.9pc in July, the lowest in three years. The labor market has also shown signs of weakening among other softer data, including recent slides in stock prices, that triggered recession concerns. This has all led futures markets to give near certain odds of rate cuts beginning next month. They will be too late to shore up the housing market this year, but a sustained pace of rate cuts into 2025 may boost construction and sales next year. By Cole Sullivan and Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Repsol, Honeywell explore biofuel production pathways


13/08/24
News
13/08/24

Repsol, Honeywell explore biofuel production pathways

London, 13 August (Argus) — Spanish integrated energy firm Repsol and US engineering company Honeywell have agreed to work together to develop new production pathways for biofuels and sustainable polymers. The companies plan to scale up and commercialise Honeywell technologies at Repsol refineries to produce sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) from waste feedstocks. Renewables are a key element of Repsol's strategy. The company is targeting renewable fuel production capacity of 1.5mn-1.7mn t/yr in 2027, up from 1mn t/yr in 2023. Repsol is also considering using Honeywell technology for turning waste plastics into recycled polymers, which are a feedstock for new plastics. The firm recently announced an agreement to supply the airline group IAG with over 28,000t of SAF over the next six months. By Simone Burgin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Genesis secures more gas to curb New Zealand shortages


13/08/24
News
13/08/24

Genesis secures more gas to curb New Zealand shortages

Sydney, 13 August (Argus) — New Zealand upstream firm and utility Genesis Energy has secured emergency gas supplies for its dual gas- and coal-fired Huntly power station on the North Island. Genesis has secured 3.2PJ (86mn m³) of gas to allow the 400MW No.5 unit at Huntly to reach full capacity for the first time this winter, it said on 13 August, describing the electricity grid as facing "unprecedented pressure". An agreement has been reached with Canadian methanol manufacturer Methanex, which will shut its Motunui plants in the North Island's Taranaki province until the end of October to allow for more gas-fired power generation, Genesis said. The commercial arrangements regarding the gas transfer are structured to provide Methanex with a base price for each unit of gas delivered, with further incremental value shared between the parties depending on electricity pricing over the period, it said on 12 August. Methanex's 1.72mn t/yr plant in Motunui has paused production in the past, also diverting feedstock natural gas to support electricity generation in the winter of 2021 . The 953MW Huntly — New Zealand's largest power station by capacity and the country's only coal-fired unit, has been under significant strain as dry, cold conditions have led to increased demand during winter as hydroelectricity inflows remain low. New Zealand has also experienced light winds cutting expected wind-powered generation this winter, with Genesis planning coal imports for the first time since 2022 in response to lower domestic gas output and rapidly falling coal stocks. LNG imports investigated New Zealand energy minister Simeon Brown told parliament on 7 August his administration was investigating two separate options to ease the gas shortfall in the short to medium term. Industry body the Gas Industry Company (GIC) is studying the feasibility of importing LNG, while also considering policies to increase investment in flexible gas-fired generation, Brown said. Data from upstream firms released earlier this year show a significant drop in proven plus probable reserves, falling from 1,635PJ to 1,300PJ, he added. Gas production into open access pipelines was 58.8PJ during January-June, GIC said in its April-June quarterly report, 20pc down on 73.7PJ a year earlier, while gas-fired power demand grew by 10pc against April-June 2023. New Zealand's National Party-led government is aiming to overturn a 2018 ban on new oil and gas exploration with legislation to be introduced to parliament later this year. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Japan’s Sekisui to boost Thai CPVC compound output


09/08/24
News
09/08/24

Japan’s Sekisui to boost Thai CPVC compound output

Tokyo, 9 August (Argus) — Japanese petrochemical producer Sekisui Chemical plans to expand production capacity of its chlorinated polyvinyl chloride (CPVC) compound in Thailand, following the launch of its new office in India where demand for CPVC has been growing. Sekisui Chemical announced on 8 August that it has opened the new Indian office of its Thai subsidiary Sekisui Specialty Chemicals Thailand on 1 June. The company expects demand for its CPVC compounds to increase further as metal pipelines have been replaced with CPVC resin pipelines, while construction demand has been rising along with economic growth in India and the Middle East. It aims to boost output capacity of its CPVC compounds, which are generated by blending CPVC and additives, at its Thai plant in Rayong. But it did not disclose the planned expansion capacity of CPVC compound, current capacity or detailed timelines. The firm has 60,000 t/yr of CPVC production capacity in Thailand. Japan's PVC production during January-June was 675,586t, down by 5.2pc from the same period a year earlier, according to its Vinyl Environmental Council. PVC exports totalled 272,012t during the period, down by 4pc. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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