Poland's Azoty ramps up PDH/PP operations at Police

: LPG, Petrochemicals
24/11/08

Polish chemical conglomerate Grupa Azoty said it is making progress in ramping up production at its new 437,000 t/yr propane dehydrogenation (PDH) and 429,000 t/yr polypropylene (PP) complex in Police, although it needs time to stabilise output and ascertain the unit's economic feasibility.

Azoty said both units are operating even though formal commissioning of the entire project has not yet been yet completed. It is in negotiations with the contractor to undertake final improvements and overcome some defects, it said. Azoty expects to agree with the contractor on final terms of commissioning by the end of this year.

Since the start of its operations, the PP plant has produced more than 200,000t and sales of PP reached 60,000t in the third quarter, Azoty said.

Azoty sees healthy demand for its PP products from European buyers that want to diversify their supply portfolio to reduce risk in delays to imports from Asia-Pacific.

"We see end users want have at least 30pc of their (PP) supplies to come from local European supplies," said plant manager Andrzej Dawidowski.

He said the company sells PP through its own distribution as well as through traders that market in Europe and elsewhere. Azoty expects to make adjustments to this model as soon as it stabilises output, which would enable buyers to determine their demand for Azoty's product.

Azoty said the Police plant is yet to generate positive earnings, and it requires stable supplies of feedstock propane. It said it is working with suppliers to secure financing to ensure steady propane supplies.

Azoty also said the letter of intent with Polish integrated Orlen, about a possible sale of a stake in the PDH/PP project was extended until end of 2024, giving them more time to discuss the possibility of co-operation.

By Tomasz Stepien

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24/11/08

Gatun Lake to reach all-time high in Dec: Panama Canal

London, 8 November (Argus) — Water levels at Gatun Lake that supplies the Panama Canal will reach an all-time high in December, according to forecasts from the Panama Canal Authority (ACP). This is a significant shift from the start of the year, when water levels were at the lowest January level since 1965 following an extensive El Nino induced-drought in 2023 ( see chart ). ACP expects water levels at the lake to hit 88.9ft on 7 December and then 89ft on 18 December, which if confirmed would break the 88.85ft record registered on 5 December 2022. This time last year water levels were in an 80-82ft range, the lowest on record for the November-December months, which prompted ACP to enforce rigorous transit restrictions that sent shockwaves through LPG and other shipping markets . The change in water levels reflects the transition from El Nino to La Nina, which typically brings more rainfall to Panama. Higher water levels from the onset of the rainy season in May allowed the ACP to gradually lift transits back to full capacity by August . This has helped keep auction prices for transits at the larger Neopanamax locks near initial $100,000 bidding levels — and even outpace demand, with many slots turned away without receiving any bids . Argus ' average weekly auction prices have ranged from $112,900 to $209,389 since July, settling at $136,750 by last week. This is a complete turnaround from a year earlier, when shippers paid as high as nearly $4mn for a single transit. On average, Neopanamax auction prices cost $2.1mn in November 2023. This probably helped support Panama Canal's profits in its financial 2024 year, to $3.45bn from $3.2bn a year earlier despite a 20pc fall in transits because of water-saving restrictions implemented. The ACP said the results reflected strategies such as the "freshwater surcharge, improved water yield through structural and operational upgrades, system enhancements for reservations and auctions, and maritime service operations." Water levels are forecast to gradually decrease again from 23 December with the start of the dry season, which usually lasts by May. By Yohanna Pinheiro Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Hungary’s Mol cuts forecast for 2024 refinery runs

24/11/08

Hungary’s Mol cuts forecast for 2024 refinery runs

Budapest, 8 November (Argus) — Hungarian integrated oil firm Mol has revised down its 2024 forecast for crude runs at its two landlocked refineries after a "turnaround-heavy" third quarter, it said today. The company expects to refine around 11.5mn t of crude combined at the 161,000 b/d Szazhalombatta plant in Hungary and the 115,000 b/d Bratislava complex in Slovakia this year, down from its previous guidance of about 12mn t. The two refineries processed 8.25mn t of crude in January-September, down from 9.09mn t a year earlier. Their combined crude throughput was down by 11pc on the year at 2.81mn t in the third quarter. Mol carried out scheduled maintenance at Szazhalombatta between 26 July and 19 September and expects to complete maintenance work on petrochemical units at Bratislava in the first half of November. Crude intake at Mol's third refinery, the 90,000 b/d Rijeka plant on Croatia's Adriatic coast, rose by 2.6pc on the year to 802,000t in the third quarter and was largely unchanged year-on-year at 1.26mn t in January-September. The company's crude throughput forecast only includes the Hungarian and Slovakian refineries. Mol cut the share of imported crude in its overall slate to 3.35mn t, or 93pc, in the third quarter from 3.8mn t, or 97pc, a year earlier, while it almost doubled intake from its own crude production to 255,000t in July-September from 129,000t in the same period last year. Szazhalombatta and Bratislava mostly process Russian crude received through the Druzhba pipeline system under an EU oil ban waiver, while Rijeka mainly takes non-Russian seaborne crude. The profitability of Mol's refining business was hit by a 71pc year-on-year fall in its refinery margin indicator — calculated based on the Dated Brent crude benchmark — to just $3.70/bl in July-September. Its oil product sales fell by 4.2pc from a year earlier to 4.88mn t in the third quarter. This included 1.52mn t of products Mol had to buy from third parties to complement its own output and satisfy demand, a significant rise from 1.25mn t of third-party oil products it sold a year earlier. The firm's upstream oil and gas production rose by 11pc on the year to 96,100 b/d of oil equivalent (boe/d) in the July-September quarter. It has raised its full-year forecast to about 92,000-94,000 boe/d from previous guidance of around 90,000 boe/d. Mol's profit fell to 111.5bn forint ($295mn) in the third quarter from Ft175.8bn a year earlier. By Béla Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Braskem eyes PE, PP gains from tariff hike

24/11/07

Braskem eyes PE, PP gains from tariff hike

Sao Paulo, 7 November (Argus) — Brazilian petrochemical giant Braskem expects to increase its domestic share of polyethylene (PE) and polypropylene (PP) markets because of higher import tariffs that took effect last month. The Brazilian government's decision to increase import tariffs to 20pc, up from 12.6pc, effective from 15 October and valid for one year, is also expected to boost first-quarter sales by $30mn, the company said Thursday. Additionally, Braskem's operating rates for plastic resins, including polyvinyl chloride (PVC), are expected to rise in the first quarter from 64pc currently, following the seasonally weak fourth quarter. Braskem acknowledged that the higher import tariffs are a temporary government measure. The company is working to boost competitiveness in the petrochemical industry through conversion to renewables, improved technology and greater tax incentives for the industry, among other structural measures, Braskem chief financial officer Pedro Freitas said during the company's earnings call. To bolster the competitiveness of plastic resins made in Brazil, Braskem and fellow PVC producer Unipar Carbocloro have jointly requested the Brazilian government to increase the anti-dumping tariffs already imposed on PVC produced in the US, currently at 8.2pc. Both companies are also monitoring other polymers produced abroad for potential anti-dumping tariff requests. On the investment side, Freitas said Braskem may as much as double capacity at its petrochemical complex in Rio de Janeiro, where the company's cracker operates 100pc on ethane feedstock, and also increase capacity at its petrochemical complex in Bahia, which partially uses ethane. The company is monitoring the regulation of natural gas in Brazil to ensure greater availability of ethane present in the natural gas extracted from Petrobras' offshore operations in the country. The use of this ethane is in the company's plans, according to Freitas. Braskem also stated that it will invest around $60mn in a 30-40 day scheduled maintenance shutdown at its Mexican joint venture Braskem Idesa. The company's cracker in Duque de Caxias, Rio de Janeiro, also is expected to be shut for scheduled maintenance down next year. In the US, Braskem said it is studying potential investments to produce green PP. Looking ahead to next year, Braskem said Donald Trump's victory this week in the US presidential election could lead to greater protectionism in the US, which would be beneficial for Braskem's US operations, or it could lead to weakened domestic demand in Brazil if overseas products that would typically have gone to the US instead shift to Brazil. Freitas said that even with the better outlook for next year coming from the tariff hike on polymers in Brazil, the Trump factor and other global issues such as the currently low petrochemical cycle are causing Braskem to consider possible capacity rationalization, with a possibly decision next year. 3Q production and sales Braskem's domestic resin sales fell by 2pc in the third quarter from a year prior, with volumes also falling in the US, Europe and Mexico. Domestic sales declined mostly because of higher levels of PE and PVC inventories in the transformation chain, Braskem said. Domestic resin sales reached 869,000 metric tonnes (t) in the third quarter, down from 884,000t a year earlier. Compared to the second quarter, the company's Brazil resin sales were up by 6pc on higher volumes of PP after operations at the Rio Grande do Sul petrochemical complex resumed after severe flooding, and greater demand from the hygiene and cleaning sectors. PVC volumes were supported by greater commercial opportunities in the civil construction and sanitation sectors. In Mexico, PE sales through the Braskem Idesa joint venture fell by 3pc on the year to 208,000t because of lower demand. Sales declined by 17pc from the second quarter mainly on inventory management and the expectation of a reduction in PE prices in the international market in the following periods. Third-quarter PP sales were 501,000t, according to consolidated numbers for the US and Europe, down by 8pc from a year earlier and little changed from the previous quarter. The declines were mainly because of lower availability of products for sale in both regions. Braskem narrowed its third-quarter loss to $106mn from a $497mn loss in the same period last year. The loss was largely attributed to a negative exchange rate variation of R$1.2bn ($211mn). By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India proposes provisional s-PVC anti-dumping duties

24/11/05

India proposes provisional s-PVC anti-dumping duties

Singapore, 5 November (Argus) — India is proposing to implement anti-dumping duties (ADDs) on suspension polyvinyl chloride (s-PVC) imports originating from China, Indonesia, Japan, South Korea, Taiwan, Thailand and the US. These will apply to s-PVC imports with a k-value of between 55 and 77, excluding cross-linked PVC, chlorinated PVC, paste PVC, mass PVC, co-polymer PVC and blending resins. Indian authorities are inviting interested parties to submit comments on the proposal within 30 days of publication in the Indian Gazette, which happened on 30 October. It is unclear when the ADDs will be implemented, with participants anticipating potential introduction towards the end of the fourth quarter for now. These preliminary findings come after an initial anti-dumping investigation on s-PVC imports was initiated by three out of five Indian s-PVC producers on 26 March. Current findings show there is a significant disparity between domestic and import s-PVC prices in India, with margins by the investigated countries forming the basis of the proposed ADDs. The investigation suggests these duties would provide a future level playing field between s-PVC exporters into India and local s-PVC producers, with the former having increased market share in India over recent years while the latter faced elevated inventories and poor margins. ADDs on paste PVC and chlorinated PVC imports to India are already in place. India set to become self-sufficient on supply The Indian market is, and will likely remain, one of the largest PVC demand drivers globally for years to come. Indian demand for PVC is set to grow to 5mn t/yr by 2027, with imports surpassing 3.2mn t in 2023 and likely to replicate that this year. The global market is long on PVC supply, and with Indian output at 1.6mn t/yr, local producers are willing to increase capacity and regain market share from imports. Argus estimates India will increase domestic PVC capacity across various grades by 3.8mn t/yr by 2028, which would surpass current annual imports and provide additional selling opportunities for future demand growth. ADDs on s-PVC imports are one way for this new PVC capacity to easily find a home among Indian plastic converters, many of which now import large amounts of more competitively priced s-PVC from northeast Asia and north America to fulfill their requirements. Lower PVC production cash costs in these regions allowed exporters to gain favourable market share in India over recent years, but proposed ADDs will probably limit this growth in the long-term. Upcoming BIS quality restrictions will also contribute to a drop in imports, albeit to a lesser extent presuming regular exporters to India are certified by the date of implementation, since this would mainly target PVC grades produced from the carbide-route, which are already being imported less into India due to quality concerns. All these factors are likely to create renewed import competition into the Indian market over the coming years, leading global participants to consider potential rationalisation of some PVC capacity, delays to new capacity projects and new demand outlets, should global supply remain above overall consumption. By Michael Vitiello India s-PVC ADD list $/t Country of origin Country of export Producer Duty China China Chiping Xinfa Polyvinyl Chloride 125.0 China China Chiping Xinfa Huaxing Chemical 125.0 China China Tianjin Bohua Chemical 82.0 China China Qingdao Haiwan Chemical 92.0 China China Non-sampled producers 97.0 Any China Any 167.0 Indonesia Indonesia PT Asahimas Chemical 73.0 Indonesia Indonesia PT TPC Indo Plastic & Chemical 61.0 Indonesia Any Any 200.0 Any Indonesia Any 200.0 Japan Japan Kaneka Corporation 54.0 Japan Japan Shin-Etsu Chemical 73.0 Japan Japan Non-sampled producers 66.0 Japan Any Any 147.0 Any Japan Any 147.0 Korea PR Korea PR LG Chem 51.0 Korea PR Korea PR Hanwha Solutions Corporation 0.0 Korea PR Any Any 161.0 Any Korea PR Any 161.0 Taiwan Taiwan China General Plastics Corporation 25.0 Taiwan Taiwan CGPC Polymer Corporation 25.0 Taiwan Taiwan Ocean Plastics Co. 40.0 Taiwan Taiwan Formosa Plastics Corporation 74.0 Taiwan Any Any 163.0 Any Taiwan Any 163.0 Thailand Thailand Thai Plastics and Chemicals 53.0 Thailand Thailand AGC Vinythai Public Company 80.0 Thailand Any Any 184.0 Any Thailand Any 184.0 US US Westlake Chemicals & Vinyls 164.0 US US Westlake Vinyls 164.0 US US Westlake Vinyls Company 164.0 US US Shintech Incorporated 104.0 US Any Any 339.0 Any US Any 339.0 Source: Ministry of Commerce and Industry Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US railroad-labor contract talks heat up

24/11/04

US railroad-labor contract talks heat up

Washington, 4 November (Argus) — Negotiations to amend US rail labor contracts are becoming increasingly complicated as railroads split on negotiating tactics, potentially stalling operations at some carriers. The multiple negotiating pathways are reigniting fears of 2022, when some unions agreed to new contracts and others were on the verge of striking before President Joe Biden ordered them back to work . Shippers feared freight delays if strikes occurred. This round, two railroads are independently negotiating with unions. Most of the Class I railroads have traditionally used the National Carriers' Conference Committee to jointly negotiate contracts with the nation's largest labor unions. Eastern railroad CSX has already reached agreements with labor unions representing 17 job categories, which combined represent nearly 60pc of its unionized workforce. "This is the right approach for CSX," chief executive Joe Hinrichs said last month. Getting the national agreements on wages and benefits done will then let CSX work with employees on efficiency, safety and other issues, he said. Western carrier Union Pacific is taking a similar path. "We look forward to negotiating a deal that improves operating efficiency, helps provide the service we sold to our customers" and enables the railroad to thrive, it said. Some talks may be tough. The Brotherhood of Locomotive Engineers and Trainmen (BLET) and Union Pacific are in court over their most recent agreement. But BLET is meeting with Union Pacific chief executive Jim Vena next week, and with CSX officials the following week. Traditional group negotiation is also proceeding. BNSF, Norfolk Southern and the US arm of Canadian National last week initiated talks under the National Carriers' Conference Committee to amend existing contracts with 12 unions. Under the Railway Labor Act, rail labor contracts do not expire, a regulation designed to keep freight moving. But if railroads and unions again go months without reaching agreements, freight movements will again be at risk. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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