rongsheng petrochemical linkedin quotation

Rongsheng Petrochemical Co., Ltd. announced earnings results for the full year ended December 31, 2020. For the full year, the company announced sales was CNY 107,265.000 million compared to CNY 82,499.880 million a year ago. Operating income was CNY 16,681.410 million compared to CNY 3,138.606 million a year ago. Net income was CNY 7,308.588 million compared to CNY 2,206.876 million a year ago. Basic earnings per share from continuing operations was CNY 1.14 compared to CNY 0.35 a year ago.

On September 30, 2020, Rongsheng Petrochemical Co., Ltd. (SZSE:002493) closed the transaction. The company issued 459,242,250 shares at aprice of CNY 17.42 per share for gross proceeds of CNY 7,999,999,995. The transaction included participation from Horizon Kinetics LLC for 60,275,545 shares, existing investor Caitong Fund Management Co., Ltd. for 57,118,254 shares, Hangzhou Fenhua Investment Partnership (Limited Partnership) for 37,887,485 shares, Bank of Communications Schroder Fund Management Co., Ltd. for 33,696,900 shares, Fullgoal Fund Management Co., Ltd. for 30,137,772 shares, Huayi No. 1 Private Equity Securities Investment Fund, a fund managed by Zhejiang Invest Equity Investment & Management Co., Ltd. for 24,684,270 shares, Quanying No. 5 Private Securities Investment Fund, a fund managed by Zhejiang Invest Equity Investment & Management Co., Ltd. for 21,814,006 shares , Shanghai Orient Securities Asset Management Co., Ltd. for 15,154,994 shares, JT Assets Management Co., Ltd. for 14,064,293 shares, Guotai Asset Management Co., Ltd. for 13,490,241 shares, Morgan Stanley & Co. International plc for 13,203,214 shares, Nuode Asset Management Co,. Ltd. for 13,203,214 shares, Bosera Asset Management Co., Ltd. for 13,203,214 shares, Hangzhou Jintou Shengnan Investment Partnership (Limited Partnership) for 20,780,711 shares, Shenzhen Boyi Anying Asset Management Co., Ltd. for 13,203,214 shares, Ningbo Meishan Free Trade Port Zone Junheng Investment Partnership Enterprise (Limited Partnership) for 13,203,214 shares, Qian Xiaomei for 24,110,218 shares, Qiao Xiaohui for 20,206,659 shares and Qi Guohong for 20,091,848 shares. The company has raised net proceeds of CNY 7,959,500,709.86

RONGSHENG PETROCHEMICAL CO., LTD. is a China-based company principally engaged in the research, development, manufacture and distribution of chemicals and chemical fibers. The Company’s main products include aromatics, phosphotungstic acid (PTA), polyethylene terephthalate (PET) chips, terylene pre-oriented yarns (POYs), terylene fully drawn yarns (FDYs) and terylene draw textured yarns (DTYs), among others. The Company distributes its products in domestic market and to overseas markets.

Iran plans to establish a shipping line to handle its petrochemical exports, Financial Tribune daily reported on Monday quoting an Iranian petrochemical industry official as saying.

Iran will host an international petrochemical conference on November 26-27 and will try to seek 70 billion U.S. dollars from investors to boost petrochemical sector, Financial Tribune daily reported on Tuesday.

Iran is negotiating with major European enterprises from France, Germany and Britain on developing its petrochemical industries, Iran local media reported on Thursday.

This section contains information and comments on China´s chemical industry, as posted from January 2020 onwards to December2021. Entries are not revised later. For older entries, see separate sections. For daily updates, please join the LinkedIn group "News and Trends in China´s Chemical Industry".

Comment MCC: The catalog includes 34 water-saving technologies in the petrochemical and chemical industry which range from very general ("chemical waste water recycling") to very specific ("a dry trapping device for isophthalonitrile")

Dec 06, 2021:During the period of the 14th Five-Year Plan, Jiangxi province has specific targets for the chemical industry, including 150 billion yuan for the petrochemical industry, 100 billion yuan for the fine chemical industry, 80 billion yuan for the new chemical materials industry, and 80 billion yuan for the chlor-alkali chemical industry.

Nov 29, 2021: The China Petroleum and Chemical Industry Federation is working on the establishment of a carbon accounting system for the petrochemical industry and related standards for carbon neutrality. The likely threshold for inclusion is annual carbon dioxide emissions of more than 26,000 tons in any year during 2013-2018. The Petrochemical Federation is conducting pilot projects in some sub-sectors such as oil refining, chlor-alkali, and calcium carbide.

Nov 25, 2021: Sinopec"s crude oil steam cracking to ethylene industrial test jointly developed by Beijing Research Institute of Chemical Industry, Engineering Construction Co., Ltd. and Tianjin Petrochemical Company showed a single-pass chemical yield of 48.24% based on crude oil.

Nov 11, 2021:While in 2019 about 60% of all petrochemical products in the Chinese market faced excess supply or severe excess supply, this share is expected to rise to 75% by 2025.

Oct 01, 2021:Shenghong Group"s Serbon Petrochemical and Iceland Carbon Recycling Company signed a contract in Beijing for a carbon dioxide capture and utilization project.

Sep 14, 2021:During the period of the 14th Five-Year Plan, Shandong province aims to reach an output value of the chemical industry of 2.65 trillion yuan, higher than Guangdong"s petrochemical industry scale of over 2 trillion yuan and Zhejiang"s 1.8 trillion yuan expectation.

Sep 13, 2021: Several private domestic companies including Zhejiang Hongji Petrochemical and Baofeng Energy have entered the field of metallocene polyolefins.

Comment MCC:The list reflects several trends - the growing relative importance of the Chinese companies (all 6 Chinese top 50 companies rose in the rankings), the growing importance of some of the independent players (e.g., Hengli rose from rank 27 to rank 14) and the strong position of Sinopec (ranked 2) and ChemChina (ranked 7, from8). It also raises some questions with regard to its accuracy. On rank 44, there is a new entrant, Shanghai Petrochemical. It is somewhat puzzling that this should be a separate entrant as it is a Shanghai-based petrochemical subsidiary of Sinopec and thus presumably already included with its sales in the Sinopec entry.

Sep 01, 2021:Saudi Basic Industries, a world-renowned diversified chemical company, and Fujian Petrochemical Group will establish a JV to build and operate a 40 bn Yuan petrochemical complex at the Gulei Petrochemical Base in Fujian Province, China. Planned output includes 1.5 million tons of ethylene as well as downstream production of PE, PP, PC and EG.

Aug 26, 2021:The Ministry of Industry and Information Technology announced the first batch of technologies and product catalogs encouraged to be promoted and applied by the petrochemical and chemical industries.

Aug 01, 2021: A recent report comparing the petrochemical industry in China and the US sees advantages for China related to low project investment costs, the concentration of downstream markets, and reduced operating costs due to large-scale optimization capabilities.

Comment MCC:The authors of the report believe that these advantages can compensate for the lack of local raw materials, and are particularly optimistic about the large integrated private companies such as Hengyi Petrochemical, Hengli Petrochemical, Rongsheng Petrochemical, Dongfang Shenghong.

Jul 09, 2021: Sinopec launched the construction of China"s first megaton-level CCUS (Carbon Dioxide Capture, Utilization and Storage) project, the Qilu Petrochemical-Shengli Oilfield CCUS project .

Jul 06, 2021: Kanghui Dalian New Material Technology Co., Ltd., a subsidiary of Hengli Petrochemical, plans to invest 1.8 billion yuan to build a 450,000-ton PBS biodegradable plastic project

Comment MCC: This is in line with government targets to finish relocalization of even the biggest chemical plants by 2025. It also offers PetroChina the opportunity to shift Dalian Petrochemical"s focus from being a fuel-based to a chemical-based refinery. This step will assure that the refinery will remain relevant even if the demand for fuel decreases.

Jun 13, 2021:Wanhua Chemical and Hengyi Group will cooperate in all aspects of petrochemical downstream industrial chain projects, research, and development, trade, overseas project operations, etc. Both parties will establish a JV in Brunei as the main investor to carry out cooperation business.

Jun 05, 2021: Several cities and provinces have set requirements for the operation time of coatings, chemical, petrochemical, and other production enterprises and the spraying process to reduce VOC emissions particularly during the hottest time of the day.

Comment MCC:As a consequence of government measures to promote biodegradable plastics, major petrochemical players such as Hengli now are entering the market despite these materials so far accounting for less than 1% of plastics consumption

May 13, 2021: Zhejiang province has issued the 14th Five-Year Plan for the petrochemical industry, aiming at increasing refining capacity of more than 100 million t/a, olefin capacity of 15 million t/a and aromatics capacity of 14 million t/a by 2025

May 08, 2021:The Oriental Fortune Research Center released the 2020 China Top 500 List of Listed Companies in Revenue. 23 chemical-related production companies are on the list: Sinopec, PetroChina, China Shenhua, Yanzhou Coal, CNOOC, Hengli Petrochemical, China Coal Energy, Rongsheng Petrochemical, Hengyi Petrochemical, Zhongtai Chemicals, Shanghai Petrochemical, Wanhua Chemical, Sinochem International, Yuntianhua, Xinfengming, Kingfa Technology, Huajin Co., Ltd., Donghua Energy, Huayi Group, Qixiang Tengda, Oriental Shenghong, Tianyuan Co., Ltd., Sinochem Fertilizer . Among them, Sinopec and PetroChina are ranked first and second, while Hengli Petrochemical, Rongsheng Petrochemical, and Kingfa Technology have risen by more than 20 places

Comment MCC: As the long-term future of the petrochemical industry will probably depend more on producing chemicals than fuel, Sinopec already adapts its portfolio accordingly in order to stay relevant. Of course, one could also call this "mission creep".

Apr 26, 2021:Many chemical plants of LG Chem, Yanshan Petrochemical, CNOOC, Fushun Petrochemical, Sinopec Mitsubishi and others are scheduled to be shut down for maintenance or under maintenance in May. May is historically the month with the highest overhaul intensity.

Apr 22, 2021: 6 Chinese companies (12%) are among the top 50 chemical companies listed by C&EN, namely Sinopec, Formosa Plastics, PetroChina, Hengli Petrochemical, Syngenta and Wanhua Chemical.

Comment MCC: Given that Sinopec"s EBIT in chemicals shrank by about 47% in 2020, the increased investment indicates a strong long-term focus on chemicals. Presumably, partly this is due to the partial shift of Sinopec"s focus on the hydrogen economy, which will have a much larger impact on fuel demand than on demand for petrochemicals.

Mar 27, 2021:SK Global Chemical has partnered with Chinese chemicals firm Zhejiang Satellite Petrochemical to build an eco-friendly packaging plant in Lianyungang, China (Chemical Technology). The 60/40 JV will produce ethylene acrylic acid (EAA), an adhesive copolymer widely used in packaging materials. The planned capacity is 40 kta.

Mar 24, 2021: In a recent speech, Fu Xiangsheng of the CPCIF discusses the challenges of the chemical industry to meet the "2030 peak carbon" and "2060 carbon neutrality" targets, pointing out that the petrochemical industry accounts for about 10% of all of China"s emissions.

Comment MCC:Interestingly, he sees the relatively low targeted GDP growth figure of 6% as an indicator of a shift from volume to quality. He also highlights the opportunities to innovate in the petrochemical industry, e.g., new technologies for energy conservation and emission reduction, new green technology, and the production of chemicals using carbon dioxide as raw materials.

Mar 02, 2021:Xu Wenhua, a representative of the Municipal People"s Congress, deputy secretary of the Party Working Committee of Ningbo Petrochemical Development Zone, promotes establishing a China Chemicals Futures Exchange in Ningbo.

Feb 17, 2021: Brand Finance, a brand valuation company, valued Rongsheng Chemical at number 11 of its most recent ranking of global chemical companies. The next Chinese entry is Xinjiang Zhongtai.

Comment MCC: According to the company, Rongsheng`s brand value is about 1.6 bn USD compared to leading BASF`s 7.3 bn USD. To me, the exercise of determining these values seems relatively murky, and I doubt anybody would pay that much for Rongsheng as a stand-alone brand name (BASF might be a different matter). Still, the valuation company achieves its goal of getting some publicity, such as getting mentioned in this post.

Comment MCC:This indicates a shift of profitability towards the more specialized, more downstream parts of the petrochemical value chain. Even within the chemical segment, this shift is visible as the annual operating income and profit of basic chemical products decreased (-5.2%, -2.6%) while that of pesticides (+6.1%, +0.5%) and specialty chemicals (+1.6%, +13.4%) increased.

Feb 07, 2021: Ongoing 2020 performance forecasts by domestic listed chemical companies show substantial increases in profit margin. For example, the profit of Rongsheng Petrochemical is expected to increase by about 230% yoy.

Jan 19, 2021:Hunan Province issued a "Five-Year Action Plan for the Industrial Chain of New Chemical Materials in Hunan Province (2021-2025)", focusing on new petrochemical synthetic chemical materials, fluorine chemical materials, functional coatings, new chemical materials, and rail transit applications. The target is to achieve a total output value of 120 billion yuan, with 480 new chemical material companies that have passed the certification, 3 companies with more than 10 billion yuan, and 20 companies with more than 1 billion yuan.

Comment MCC: While the rankings of the three major petrochemical SOEs are somewhat lower than before, several others have gone up the ranks, including Tianci Materials, Dongfang Shenghong, Xinyubang and Sankeshu. This indicates that the market views companies active in new materials and related areas very favorably.

Jan 12, 2021: According to a ranking of the world`s top brands, there are 10 oil and petrochemical brands among the top 500. Four of these are Chinese: Petrochina, Sinopec, CNOOC, Sinochem

Comment MCC: The activities of the major state-run petrochemicals will have a significant impact on China`s performance regarding carbon dioxide emissions, making this an encouraging development.

Dec 05, 2020:According to data from the National Enterprise Bankruptcy and Reorganization Case Information Network, in recent years there have been more than 4,000 bankruptcy cases in the Chinese chemical industry, including segments such as coatings, petrochemicals, coal chemicals, biochemicals, dyes and other fields.

Nov 28, 2020: Among the top 100 companies in the Yangtze River Delta, 11 are petrochemical and chemical companies, including Hengli Group ranked fourth

Nov 17, 2020: Shandong Provincial Development and Reform Commission published a list of 9 leading high-end chemical companies: Shandong Huifeng Petrochemical Group Co., Ltd., Shandong Shouguang Luqing Petrochemical Co., Ltd., Luxi Chemical Group Co., Ltd., Shandong Rongxin Group Co., Ltd., Shandong Shangshun Chemical Co., Ltd., Shandong Linglong tire Co., Ltd., Yankuang Lunan Chemical Co., foreshore Group Co., Ltd., Shandong Taihe water treatment Technology Co., Ltd .

Comment MCC:This is part of a policy of the provincial government to replace small independent refiners - some of which may have to close depending on their size - with large, integrated petrochemical complexes.

Comment MCC: Probably this number will be reduced in the future, following the lead of Shandong province, where only 85 of the original 199 chemical parks were identified as worth keeping. On the other hand, the current rate of petrochemical enterprises in chemical parks is only about 50%, meaning there will be much more demand for locations in parks if the relocation policy is to be implemented in full.

Oct 30, 2020: In the first half of 2020, the petrochemical industry"s operating income fell by 11.9%, total profits fell by 58.8%, and total imports and exports fell by 14.8%, a consequence of Covid-19.

Oct 29, 2020: Chen Jianhua and Fan Hongwei, the owners of Hengli Petrochemical, are the wealthiest Chinese with activities in the chemical segment. They rank no. 20 in the list of wealthiest Chinese people according to the "Hurun Rich List", with a wealth of 135 billion RMB.

Oct 25, 2020: In the first eight months of 2020, the number of enterprises above designated size in the petrochemical industry has decreased by nearly 500 while last year, the number of enterprises above designated size in the petrochemical industry dropped by 1,500.

Comment MCC:The list clearly shows that rich provinces coastal provinces such as Shanghai, Jiangsu and Zhejiang will primarily focus on higher-end, R&D-oriented specialties (with some exceptions for coastal petrochemicals) while the bulk of basic chemical production is to be done in inland provinces such as Anhui and in the Western provinces.

Oct 12, 2020: Hailun Petrochemical, a subsidiary of Sanfangxiang, plans to expand its current production capacity of 1.8 million tons of PTA to 5 million tons

Oct 03, 2020: According to the Ningbo Municipal Bureau of Economics and Information Technology during the "14th Five-Year Plan" period, Ningbo will invest nearly 400 billion yuan to build a batch of major new chemical materials projects and become a world-class green petrochemical industry cluster.

Comment MCC:The goal is to triple the current petrochemical output of the city. Ningbo is well placed, as environmental policy favors coastal sites over those on the Yangtze river. However, from the information available so far, it is hard to see what is particularly green about this plan.

Sep 29, 2020: Hengyi Petrochemical is planning to spend USD 13.65bn to build the second phase of a refinery and petrochemical complex in Brunei, adding (among others) 2.5 million t/a of PTA capacity.

Sep 28, 2020: Currently about 20 polycarbonate projects are in progress in China with a combined production capacity about 3.15 million tons per year, including Zhejiang Petrochemical and Pingmei Shenma, Cangzhou Dahua, Hainan Huasheng, Zhongsha Petrochemical, and Shell.

Comment MCC:This is increase supply security for these petrochemicals and includes activities in Russia (PE, PP, NBR), Saudi Arabia (YASREF refinery project), the Netherlands (VESTA liquid bulk storage project) and Singapore (lubricants plant and supporting jetty project)

Sep 13, 2020:In the first quarter of 2020, three private Chinese refining companies substantially increased their yoy net profits: Hengli Petrochemical (+324%), Rongsheng Petrochemical (+103%) , Hengyi Petrochemical (+83%).

Sep 09, 2020: Fu Xiangsheng of the China Information Weekly describes four main points of the upcoming 14th Five-Year Plan for the chemical industry: strengthening the overall power of the petrochemical industry, pursuing innovation and environmental improvement, focus on high-quality development, and dealing with both domestic and international markets (which includes the aspect of local self-sufficiency).

Aug 30, 2020: The trial against Baota Petrochemical Group Co., Ltd. and Sun Hengchao has started. Both are accused of bill fraud while some other people involved in the case are accused of bribery or accepting bribes.

Comment MCC:Sun Hengchao, the chairman of the privately owned Baota Petrochemical Group, had already been arrested in Nov 2018. Apparently, since 2013, Baota Petrochemical Group had experienced large-scale losses, which the chairman tried to cover up by establishing a finance company. As I am not an accountant, I will leave it at this rather superficial level.

Aug 27, 2020:Saudi Aramco has suspended plans to participate in a JV to build a $10-billion refining and petrochemicals complex at Liaoning, China, as the company cuts spending in response to continued low oil prices (Bloomberg)

Aug 13, 2020:BASF acquired alkoxylates production assets from Sinopec Shanghai Petrochemical Company (SPC). This includes SPC"s land, buildings and assets that are located adjacent to its facility in Jinshan, China.

Aug 11, 2020:After a hazardous chemical leakage event at Changlian Petrochemical in Jan 2020, the GM was barred from leading a production unit for 5 years.

Aug 11, 2020:Wanhua Petrochemical, a subsidiary of Wanhua Chemical, and ADNOC L&S, a shipping logistics company under the Abu Dhabi National Oil Company, announced the establishment of a strategic joint venture company AW Shipping

Aug 07, 2020: The Shandong Provincial Department of Industry and Information Technology announced the " Top 100 Shandong Private Enterprises in 2020 ". 32 were petrochemical and pharmaceutical companies.

Jul 29, 2020:The C&E 2019 list of the top 50 global chemical companies has four Chinese entries: Sinopec (2, same as in 2018), PetroChina (13, from 12 in 2018), Hengli Petrochemical (26, not listed in 2018) and Wanhua (32, from 40).

This low number of major domestic chemical companies indicates the relative fragmentation and lack of global reach of China`s chemical segment. It also means that the Chinese market is the one that will be the most fought over by the global players as it is fragmented and still shows strong growth compared to Western markets. While part of this growth is being captured by Chinese players such as Wanhua, which has become the world`s biggest MDI producer, and Hengli Petrochemical, which at rank 26 now ranks one higher than the chemical sales of a company as established and traditional as Bayer at 27, there is still substantial room for foreign players to increase their sales. This is particularly true in specialty chemicals, an area which is not the strength of any of the four Chinese players, though Wanhua is increasingly directing new investment in this direction.

Comment MCC: In this list, the chemical segment lags behind other segments by number of entrants, e.g. finance (76 companies), medical and biological (61 companies), information technology (59 companies), and electronics (46 companies). And excluding petrochemical companies, the biggest chemical player, Wanhua, only comes in at number 104. This indicates the relatively high degree of fragmentation and low relative market value of the chemical segment in China.

May 24, 2020: Shell and CNOOC will expand their petrochemical joint venture in Huizhou, China. The project will include a 1.5 million-metric-ton-per-year ethylene cracker, as well as styrene, propylene oxide, polyols, ethylene glycol, polyethylene, and polypropylene units (C&EN).

May 22, 2020: In 2019, among 325 major listed Chinese basic chemicals companies, Wanhua had the highest profit, reaching 10.1 billion RMB followed by Hengli Petrochemical with 10.0 billion RMB.

May 10, 2020:Among the listed companies in the Chinese basic chemical industry in 2019, Hengli Petrochemical ranked first in operating revenue of 101 billion yuan; Rongsheng Petrochemical ranked second with operating revenue of 83 billion yuan; and Hengyi Petrochemical ranked third in operating revenue with 80 billion yuan.

Comment MCC: That puts these companies solidly into the global top 100, even though none of them was included in the 2019 ICIS list of top 100 chemical companies. For example, Hengli Petrochemical would roughly rank no. 25, slightly below Shin-Etsu but above illustrious companies such as DSM and AkzoNobel.

margin of the petrochemical sector (which includes PX production) was as high as 22%, while that of other sectors was only 5%. Likely, this will strengthen the already strong believe among China`s chemical companies that upstream integration is almost always beneficial.

Comment MCC: Not surprisingly, Covid-19 had a substantial negative effect both on average MDI prices and on volumes sold. The much bigger impact on profits than on revenue is partly due to the high fixed costs of petrochemical business.

Apr 24, 2020: On April 22, the ExxonMobil Huizhou Ethylene Project with a total investment of 10 billion US dollars started construction in the Daya Bay Petrochemical Zone in Huizhou, Guangdong. The wholly foreign-owned foreign investment has a planned capacity of 1200 kt/a metallocene PE, 470 kt/a LDPE and 860 kt/a PP.

Mar 06, 2020: Wanhua and state-owned Fujian Petrochemical Group are setting up an 80-20 joint venture diisocyanate business. The JV will build a planned 400 kt/a MDI plant in Fuzhou.

Comment MCC: However, he also mentions some of the challenges to the industry, namely the competition from petrochemical products due to rising local refining capacity and low oil prices, and environmental issues. The latter seems particularly relevant as China aims to increase the sustainability of its economy. For example, coal-to-oil projects emit about 7-8 times more carbon dioxide than oil refining projects. Any expansion of coal chemical projects thus contradicts China`s efforts to protect the environment.

Comment MCC:From Jan to Oct 2019, sales of the petrochemical industry in Hubei province increased by 3.2% while profits increased by 25.3% year-on-year, indicating that the companies not closed down seem to profit from the government measures. On the other hand, 28% of the companies affected were closed down. Also, the funds budget looks relatively small, with only about 3 million RMB per company, which may be sufficient for some smaller upgrades but certainly not for a full-scale relocation.

Comment MCC: While this is somewhat below china GDP growth (6.2% in 2019, 5.7% forecast for 2020), it is still much higher than in the other big chemical markets. The relative increase of chemical growth compared to GDP growth (2020 vs. 2019) primarily reflects the localization of petrochemical production in China, a strategic objective of China`s government.

The newly-built highly-integrated mega Chinese refinery-cum-petrochemical complexes are immensely more efficient than the 50-60 year-old clunkers that they are replacing across the globe spanning from the U.S. west coast to the Philippines, bringing a new paradigm to the oil market, they said.

Even though Chinese refineries are built primarily to cater to the domestic market, the export market is a safety valve whenever there is an imbalance in fuel or petrochemical demand, which easily amounts to 1 million b/d in an average month. Such volumes weigh heavily on inefficient, standalone sites that are increasingly exposed and consequently shuttered.

The new sites coming onstream in China typically have processing capacities of 300,000 b/d or more and are integrated with petrochemical units that allow them to swing from a so-called petrochemical to an oil-product mode as the economics dictate.

One of the export quota recipient, Zhejiang Petrochemical Corp. (ZPC) was given 1 million mt. The company, which is majority owned by Rongsheng Petrochemical Co., is in the final stages of getting the second phase of its 800,000 b/d refinery up and running.

In the petrochemical sector, demand for polyester, derived from purified terephthalic acid (PTA), paraxylene and mixed xylene (MX), could improve as a life returns to normal, a petrochemical producer said.

A bumper 10 million-barrel spot crude oil purchase by Rongsheng Petrochemical suggests it is keen to get the second phase of its massive 40 million mt/yr, or 800,000 b/d, refinery and chemical project at subsidiary Zhejiang Petrochemical Co. Ltd (ZPC) running in the coming months, trading sources said.

Rongsheng announced in August plans to begin trial runs at the second 400,000 b/d tranche of the project in the fourth quarter of 2020 and looks set to achieve this aim despite COVID-19-related construction delays due to social distancing restrictions earlier in the year.

Market participants said Rongsheng was absent from the spot market for a couple of months and returned this week to buy the medium-sour Middle East cargoes, which led some to believe it was restocking but added that the scale of the purchase does point to some use in the new facility.

The petrochemical units include a 1.4 million mt/year ethylene and a 4 million mt/year paraxylene plants as well as related downstream polymer and polyester units. It also has a 600,000 mt/year propane dehydrogenation (PDH) unit.

Phase II is centered around a similar 400,000 b/d CDU as the first phase, placing ZPC in conjunction with Hengli Petrochemical as operators of the largest independent refining-cum-petrochemical complexes in China. Once completed there will be two such 800,000 b/d sites in the country.

On Wednesday, Hanwha Total Petrochemical (HTC) bought HFRN for H1 Nov. to Daesan at a discount of $5/mt or larger to Japan prices, said sources. An HTC company source declined to comment.

The U.K.-based Grangemouth petrochemicals plant operated by Ineos will shut down at the beginning of October, according to sources with links to the plant Tuesday.

Naphtha usage as petrochemical feedstock was crimped by poor aromatics margins as downstream polyester and other derivative demand started to slow down in the face of the prolonged economic downturn wreaked by COVID-19. However, consumption in China for use in olefin production remains robust, a source said.

YNCC settled at a premium of around $7/mt to Japan naphtha price, two sources said. LG Chem concluded at plus $6-$7/mt while Korea Petrochemical Industry Co. settled at around plus $3/mt, according to several sources. Formosa Petrochemical Corp. (FPCC) bought cargoes for Oct. 2020-Sept. 2021 at plus $4-$5/mt.

Asia naphtha demand as a petrochemical feedstock will continue to grow as new crackers begin operations even as below-capacity refinery utilization rates in some countries squeeze supply further, they said.

Buyers currently in 2021 CFR term discussions include Hanwha Total Petrochemical for splitter grade, or heavy full range naphtha (HFRN), and Lotte Chemical Titan for light naphtha, sources said

Asian petrochemical makers plan to use more liquefied petroleum gas (LPG) in August for a second straight month as gas cracking economics improved following a jump in naphtha prices due to strong downstream and gasoline demand.

The petrochemical manufacturers had planned to crack 310,000 mt in July, according to the previous poll published on June 5. They used 306,000 mt in June.

Hanwha Total Petrochemical Corp. (HTC) bought one 22:22 lot for end-July delivery to Daesan via a tender with propane at a single-digit discount to the Far East quotes and butane at a discount of $30s/mt to the Japan naphtha quotes, according to sources.

Mitsubishi Chemical, Maruzen Petrochemical and Mitsui Chemicals are on track to restart their crackers over the next two weeks after completing scheduled maintenance works, as reported earlier.

Mitsubishi Chemical will crank-up its 539,000 mt/year plant in Kashima this week, while Maruzen Petrochemical will resume its 525,000 mt/year unit in Ichihara next week. Mitsui is also on track to complete maintenance at the 500,000 mt/year Osaka facility on July 20.

Asian naphtha markets strengthened with the CFR Japan price on Monday reaching a four-month high of $406.500/mt, according to OPIS data, supported by healthy petrochemical demand, tight supply and increased gasoline consumption following relaxations of lockdowns over the coronavirus disease 2019 (COVID-19).

Methodology: OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. OPIS, a unit of IHS Markit, checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. OPIS surveys 16-20 companies a month.

Supply of all naphtha grades tightened as refiners worldwide operated at below capacity to counter the loss in fuel demand stemming from coronavirus disease 2019 (COVID-19) mobility restrictions. At the same time, resilient petrochemical demand kept Asia cracker run rates at more than 85%, widening the supply shortfall, they said.

Growing buyer resistance to the naphtha price escalation is seen in the recent withdrawal of H1 and H2 Aug. purchase tenders by Hanwha Total Petrochemical, Yeochun NCC and LG Chem.

Prices of naphtha and gasoline rose on the back of easing coronavirus disease 2019 (COVID-19) lockdown measures that rekindled road transportation fuel demand, with naphtha buoyed by both stable intake as a petrochemical feedstock and its diversion into the gasoline pool as a blendstock, they said.

"The steps to destroy unwanted jet stream is to first blend it into diesel up to the upper limit, blend it into cracker (petrochemical) feedstock, switch to dumbbell-like crude slate...if these are not enough then a refiner may need to lower runs as a last resort," she said.

Ethane prices will be driven higher by increasing outright natural gas prices due to the loss of associated gas production and the need to drill for gas from drier fields. Demand will be flattish in 2020 before recovering through to 2025 on growing US petrochemical consumption and boosted by new export capacity to start up at the end of the year.

As crude oil prices recover, the favourability of ethane over LPG and naphtha as a petrochemical feedstock to produce ethylene will exist for US Gulf Coast crackers even with the increases in ethane prices, said Mehta. Still, there will be some periods, especially during the summer months, when LPG prices become more favourable.

Energy Transfer"s Orbit ethane export facility in the US Gulf Coast, the group"s joint venture with China"s Satellite Petrochemicals, will be in service in the fourth quarter. The export terminal will have the capacity to export 180,000 b/d alongside 800,000 bbl of refrigerated ethane storage, the group said at the conference.

Supply of all naphtha grades tightened because of lower global refinery runs due to fuel demand loss stemming from coronavirus disease 2019 (COVID-19) mobility restrictions. At the same time, resilient petrochemical demand has kept Asia cracker run rates at more than 85% in recent months, widening the supply shortfall, they said.

For H1 August delivery, Hanwha Total Petrochemical (HTC) and GS Caltex bought HFRN at premiums of $11-$13/mt while Korea Petrochemical Industry Co. Ltd. (KPIC) paid $13-14/mt for light naphtha with minimum 70% paraffin, as reported.

LPG"s competitiveness as a cracker feedstock has increased although the gas can only replace up to 20% of naphtha, according to the latest Asian Petrochemical Feedstock Market Outlook weekly report.

The restart of the 300,000 b/d Petronas-Saudi Aramco joint venture Pengerang Refining and Petrochemical (PRefChem) facility after an explosion was pushed back due to manpower issues leading to the sale of several million barrels of crude oil that were in floating storage, trading sources said.

The refinery also provides feedstock to an integrated petrochemical complex with a nameplate capacity of 3.3 million mt/year. The cracker has a capacity to produce 1.26 million mt/year of ethylene, 600,000 mt/year of propylene and 180,000 mt/year of butadiene, according to IHS Markit data.

Propane"s discount to CIF NWE naphtha deepened for July, ending at minus $46/t mid-week, from minus $8/t at the start of June, according to the data in the OPIS Europe LPG & Naphtha Report. Early-June bidding for CIF ARA propane by a petrochemical major in NW Europe had continually pitched buyside levels between $10 and $15/mt deeper when compared to propane/naphtha spreads at the time.

Northwest Europe naphtha values strengthened against the refinery complex in April and May, with support coming from higher arbitrage flows to Asia alongside burgeoning petrochemical feedstock demand, while other refined products in Europe saw demand crumple due to the confinement measures brought about by the coronavirus 2019 disease (COVID-19).

Naphtha did not experience the same demand crushing effect COVID-19 lockdown measures had on transport fuels in April and first-half May as support came from the petrochemical sector amid discounted prices to rival gas liquids feedstocks.

Paraffinic naphtha sank to discounts of minus $18/t to parity with the flat price in April before partially recovering to the minus $7.50/t to plus $2/t band in May, with more buying interest from the petrochemical sector compared to OSN due to its higher paraffin content.

The petrochemical sector in northwest Europe continued to cut its intake of LPG feedstock in May as propane values maintained significant premiums to rival feedstock naphtha, leading to a slash in LPG import flows from the U.S.

CIF ARA propane prices extended its two-month run holding a premium to CIF NWE naphtha, with propane/naphtha trading at +$53/mt at the start of May, down from a high of +$131/mt recorded on April 21, but still atypical going into the summer months when propane usually trades at a discount due to the lack of heating demand. By comparison, the propane/naphtha spread was minus $139/t in May 2019. A petrochemical producer with feed-flexible coastal facilities in the Netherlands and Spain made repeated propane cargo resale attempts last month.

Demand attrition for finished goods in the petrochemical chain due to coronavirus disease 2019 (COVID-19) gathered pace in May, with Dow Chemical among other producers announcing the idling of some downstream chemical units (see OPIS alert April 30, 2020).

Petrochemical operators relied more on local North Sea supply, with 81% of their May LPG intake from North Sea countries Norway and the U.K., while 11% came from the Russian Baltic region and 8% from the U.S. East Coast.

Looking ahead, LPG has come back into favor as a petrochemical feedstock as naphtha prices have rebounded harder on rising Brent crude oil values. The propane/naphtha spread tipped negative for the first time in two months to minus $6/t on May 26, and has since deepened to minus $24/t at last look, spurring a petrochemical producer to resurface seeking propane cargoes.

Asian petrochemical producers plan a modest increase of liquefied petroleum gas (LPG)cracking in July from the lower levels intended this month, while gas usage will grow further in August when demand for heating fuels in the northern hemisphere eases, according to a poll.

The petrochemical manufacturers had planned to crack 350,000 mt in June, according to the previous survey published on May 13. They used 321,000 mt in May, lower than initial plans of 357,000 mt.

A petrochemical producer in Northeast Asia raised cracker runs to full in June from around 90%, given the strong market, an official at the company said.

Methodology: OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. OPIS, a unit of IHS Markit, checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. OPIS surveys 16-20 companies a month.

Plans by the Chinese provincial Shandong government to build a mega refining-cum-petrochemical complex is unlikely to lead to a glut of oil products due to its high integration and the probable closure of several teapot plants as part of a consolidation exercise, analysts and trading sources said.

The Yulong project will be the most sophisticated yet in the string of mega refineries that have come onstream in the past year including the 400,000 b/d each of Hengli Petrochemical and Zhejiang Petrochemical (ZPC), according to IHS Markit.

The Yulong complex is designed to convert over 60 % of a barrel of crude into petrochemical products and feedstocks through a combination of hydrocracking and intensive catalytic cracking technologies, IHS Markit said.

"If such design is carried through, China will be able to take its crude-oil-to-chemicals (COTC) achievements one big step forward from where the operating Hengli and ZPC currently stand, consolidating the country"s world leading position in the realm of refining and petrochemical integration," it said in the report.

Nayara Energy restarted a 110,000 b/d unit at Vadinar in late April after a over two-week closure, Bharat Petroleum Corp. Ltd resumed operations at its 100,000 b/d crude unit in Kochi this week following a three-week shutdown, while Mangalore Refinery & Petrochemicals Ltd also did the same after works at a 144,000 b/d unit for about a month, the report showed.

Overall oil consumption in China is forecast to contract by more than 1 million b/d in 2020 from a year ago due mainly to the drag in transport fuels while demand for petrochemical feedstocks, including naphtha and liquefied petroleum gas (LPG), are expected to post modest growth, the IHS report showed.

Nghi Son Refinery and Petrochemical (NSRP), for example, will not export any spot diesel cargoes in May and June, according to sources with knowledge of the matter.

While many petrochemical markets have been affected by demand that dropped rapidly amid quarantines around the world related to the coronavirus disease 2019 (COVID-19), toluene has been hit particularly hard.

LPG usage for petrochemical production in June is set to decline 2% on-month to 350,000 mt, according to an OPIS poll completed on May 11. Revised figures show that in May, gas cracking volume is to fall to 357,000 mt from 436,000 mt in April, according to the survey.

Maruzen Petrochemical also idled its 525,000 mt/year cracker in Ichihara on May 11 for scheduled turnaround expected to last two months, according to a company source.

Some petrochemical makers in Asia maintained lowered runs on expectations that downstream demand may weaken again with the COVID-19 hurting the global economy. The Asian Manufacturing PMI, compiled by IHS Markit, fell to 43.9 in April, the lowest since March 2009, from 48.3 in March, indicating a deterioration in regional business conditions.

"We are considering further run cut, even probably to around 80%," said the buyer at a petrochemical manufacturer in Northeast Asia, adding their cracker has been operating at around 90%.

Methodology: IHS Markit OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. IHS Markit OPIS checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. IHS Markit OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. IHS Markit OPIS surveys 16-20 companies a month.

In northwest Europe, LPG cargo trade over the course of April began to react to the coronavirus disease 2019 (COVID-19) related lockdowns across Europe and resulting fall in demand for products and goods. The effects on LPG were latterly felt the most in the petrochemical feedstocks sector and followed an abrupt fall in demand for distillates, mainly gasoline.

Overall LPG trade was down by an estimated 23% compared to March, with intake as petrochemical feedstock down by 19% at 515 kt. Despite the intake fall, the level was considered fairly robust, as the same period saw more severe demand falls in other products sectors such as gasoline and naphtha.

Since gasoline demand has tumbled, naphtha is not going into the gasoline blending pool, said a Singapore-based market source, adding that naphtha barrels were being pushed to Asia for petrochemical use.

Asian petrochemical manufacturers plan to crack less liquefied petroleum gas (LPG) in May for a second straight month, but this is unlikely to support naphtha consumption much with the coronavirus disease 2019 (COVID-19) denting downstream demand.

LPG usage for petrochemical production in May is set to fall 6.8% on-month to 449,000 mt, according to an IHS Markit OPIS completed on April 7. This month, gas cracking volume is to decline 7.7% to a revised 482,000 mt from 522,000 mt in March, according to the poll.

Petrochemical producers typically find it more attractive to crack naphtha instead of LPG when the ratio rises above 90%. But that"s not the case now as the COVID-19 hit the global economy and consumption, analysts and traders said.

"In theory, lower LPG cracking volume may support naphtha consumption, but overall petrochemical demand is too weak to see solid naphtha demand," said Matthew Chew, principal researcher at IHS Markit in Singapore.

Naphtha prices tumbled on poor gasoline and petrochemical demand with the CFR Japan naphtha falling on April 1 to $165.750/mt, the lowest on the IHS Markit OPIS data going back to July 2014.

"Cracking margins are good in numbers, but we cannot raise runs due to the slowing economy," said a feedstock procurement manager at a petrochemical producer in Northeast Asia, which has been operating its cracker at 90% since January.

Methodology: IHS Markit OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. IHS Markit OPIS checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. IHS Markit OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. IHS Markit OPIS surveys 16-20 companies a month.

Oil product exports in the first 25 days of March rose 33.8% in terms of volume and petrochemical shipments grew 17.5%, although overseas sales for the whole month in terms of value fell 5.9% and 9%, respectively, in line with the price crash seen across the energy complex, data from the ministry showed.

--The U.K."s largest oil refinery, the 270,000-b/d Fawley plant, has cut runs but remains online after discussions between operator ExxonMobil and British government officials. ExxonMobil cut refinery runs at Fawley by around 70,000-b/d at the beginning of the week after taking the Pipestil 1 unit offline. Fawley is a critical part of the U.K."s energy infrastructure because of its links to the nation"s largest cities and airports. Eighty-five percent of the refinery"s output is pumped through underground pipelines as far away as London, Birmingham and Bristol. Pipelines connect the refinery to Heathrow and Gatwick airports. Diesel represents 29% of the refinery"s output, while gasoline, jet and petrochemical feedstocks make up 28%, 11% and 9% of output.

Among refiners that are now considering cuts include Taiwan"s CPC Corp. while others such as Shell in Singapore, SK Energy in South Korea and Trans Pacific Petrochemical Indotama (TPPI) have scheduled maintenance shutdowns, according to industry sources.

Formosa Petrochemical (FPCC) already closed an 84,000 b/d residue fluid catalytic cracking (RFCC), a 180,000 b/d crude distillation unit (CDU) and an 85,000 b/d residue desulfurization unit (RDS) for maintenance works earlier this month, as reported earlier.

Asian petrochemical producers may consume less liquefied petroleum gas (LPG) than originally planned in the coming months as cracking economics shift in favor towards naphtha, market sources said .

"Naphtha looks more economical than LPG right now as the propane/naphtha ratio is high," said a senior feedstock procurement official at a Northeast Asian petrochemical company that had participated in the cracking survey.

Petrochemical producers typically find it more attractive to crack LPG instead of naphtha when the ratio dips below 0.90. The ratio surged to 1.039 on Monday, the highest since Oct. 30 2017, IHS Markit OPIS data showed.

Cracker operators meanwhile have been cutting run rates in face of weak downstream demand. Taiwanese private sector refiner Formosa Petrochemical Corp (FPCC) reduced the average run rates of its three naphtha crackers in Mailiao to around 90% from March, down from around 99% to 100% in January and February respectively, a company official said.

South Korea"s LG Chem reduced run rates at its crackers in Daesan and Yeosu from March 1, while YNCC is planning to cut the run rate for its No.2 cracker in Yeosu for 2-3 weeks, according to IHS Markit"s Asia Light Olefins Weekly published on March 6. Fellow South Korean petrochemical producer shut a 1.1 million mt/year cracker after an explosion on March 4.

Japan"s Maruzen Petrochemical and Keiyo Ethylene were due to cut run rates in March, while Mitsui Chemicals reduced run rates in late February, according to industry sources.

"The probability of downside risk for petrochemical products, which already have been impacted by COVID-19, has increased further after the plunge in oil prices," IHS Markit said in a report on March 10.

Methodology: IHS Markit OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. IHS Markit OPIS checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. IHS Markit OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month.

--Petrochemical companies in Japan and South Korea have scaled back their naphtha crackers amid COVID-19 concerns. This has caused a potential market for U.S. propane to dry up.

Bloomberg quoted another industry executive as saying that the economic decline that gripped China earlier this year amid the lockdowns is now over and refining rates are on the rise. Gasoline consumption has also picked up and will lead the rebound in fuel demand, Chen Hongbing, deputy general manager at Rongsheng Petrochemical said at the industry event.

The state-owned oil giant signed an MoU to acquire a 9 percent stake in Zhejiang Petrochemical’s 800,000 barrels per day integrated refinery and petrochemical complex, located in the city of Zhoushan.

“Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region,” Aramco said.

The companies plan to build a large scale retail network over the course of the next five years in the Zhejiang province, to be integrated with the Zhejiang Petrochemical complex as an outlet for the refined products produced.

The China Petroleum and Chemical Industry Federation (CPEC) and the China Chemical Industry Association (CCEA) have jointly released the “2021 List of Top 100 Petroleum and Chemical Companies in China”. The list is ranked according to the main business revenue of major petroleum and petrochemical companies in 2020 and the public data of listed companies, among which China National Petroleum Corporation(CNPC), China Petroleum & Chemical Corporation(SINOPEC), and Hengli Group are the top three on the list.

In terms of country distribution, chemical companies from the U.S., Japan, China, and Germany predominate, with 28, 16, 13, and 9 companies from the four countries on the list, respectively. Among the 13 Chinese finalists, Hengli Petrochemicals and Rongsheng Petrochemicals rose significantly in ranking, with Hengli Petrochemicals rising from 27th to 14th last year and Rongsheng Petrochemicals rising from 51st to 24th last year. 2021 Ranking2020 RankingCompany(Headquarters)Chemicals Sales in 2020(Billion Dollar)

The following is a rough introduction to the 4 domestic companies Sinopec, Hengli Petrochemical, Rongsheng Petrochemical, and Wanhua Chemical 2021 quarter 1 and 2 results.

In addition, in the first half of the year, Sinopec completed four sets of hydrogen purification production units in Yanshan Petrochemical, Guangzhou Petrochemical, Gaoqiao Petrochemical, and Hainan Refinery respectively.

As the earliest and fastest leader in the development of the whole industry chain strategy of polyester new materials, Hengli Petrochemical has been vigorously expanding the upstream and downstream high-end production capacity in recent years to build a world-class integrated platform development of “crude oil – aromatics, olefins – PTA, glycol – polyester – civil yarn, industrial yarn, film, plastic”. model.

On the evening of August 12, 2021, Rongsheng Petrochemical released its 2021 semi-annual report, during which the listed company achieved operating revenue of 84.416 billion yuan, up 67.88% year-on-year, and a net profit of 6.566 billion yuan, up 104.69% year-on-year, with basic earnings per share of 0.65 yuan.

For the reasons for the change in performance, Rongsheng Petrochemical said that the overall production of refining and chemical projects is steadily climbing, contributing to the incremental performance of the company; the spread of raw material products has expanded, and the profitability space is significantly improved. In addition, since this year, the global economic resonance recovery, downstream demand rebounded significantly, crude oil-PX-PTA-polyester and crude-chemical industry chain boom continued to recover, so the company’s industry chain product costs and product spreads have expanded, and profitability increased significantly.