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Issue: CPMA/004/2018
March 2018
Monthly Newsletter from
1 | Mar 2018
First US shale gas arrives at Dabhol
India’s first liquefied natural gas (LNG) cargo from America landed at the Dabhol regasification terminal in Maharashtra on Friday the 31st March, 2018. This is a part of a $32-billion supply deal for 20 years that GAIL signed with the Dominion Energy Cove Point project in Maryland and Cheniere Energy Inc’s Sabine Pass Project in Louisiana. India’s trade with America is expected to see large scale import of LNG and crude oil in the coming years.
Asia’s Feb Iran oil imports hit 2-month low.
Imports of Iranian crude oil by major buyers in Asia fell by nearly a fifth in February from the same month a year earlier, hitting a two-month low.
Oil Briefly Hits $71, with US supply, Middle East Focus.
London: Oil hits $71 a barrel before retreating supported by concern about possible disruption to Middle East supply but capped by fast rising global output and a dollar recovery.
Plastic makers protest ban in Maharashtra
Fearing closure of 4,000 odd units, plastic manufacturers have urged the government of Maharashtra to review its blanket ban on multiple plastic products.
The government issued a notification ordering a ban on several types of plastic products effective March 24, 2018. It has given 30 days
for manufacturers, distributors and even consumers to dispose of all plastic items in storage and use.
Consumer demand seen driving new petrochemical technology, feedstocks
Growing global demand for plastics combined with a greater emphasis on sustainability will fundamentally change the petrochemical industry, driving the need for new infrastructure and innovation, a research analyst said. Roughly 275 million mt of plastics are recycled annually, “and those numbers remain set to increase as demand continues to rise globally,”said Paul Bjacek, research lead for Accenture Chemicals and Natural Resources. He made the comments during the American Fuel and Petrochemical Manufacturers’ International Petrochemical Conference, which concluded recently in San Antonio.
OPEC’s plan to boost oil prices in trouble
OPEC’s attempts to underpin crude oil prices are being undermined by the US oil industry.
Merger
Saudi Arabia’s Sahara Petrochemicals Company and Saudi International Petrochemical Company, or Sipchem, will resume merger discussions that have been postponed since 2014, the companies said in a statement.
Industry Snippets
continued on page 2
The petrochemicals world is seeing a new balancing act in the international trade area. The trade war between USA and China is heating up. US imposed tariffs on the Chinese imports. China also retaliated by imposing additional duties on US imports into China. China imposed duties on 106 different products from major product categories like Food items, Beef, Passenger cars, other Vehicles, Aircrafts, Chemicals and Polymers. Specific products of interest to us included in 106 products are Polyethylenes, ACN and PVC.
USA has cost advantage for producing PE and PVC due to shale gas. They necessarily have to produce and export and can’t cut back on production. On the other hand, China’s share of US imports are relatively small and can be met by importing from Mid-East or Europe. The trade war will lead to some shift into export destinations of USA and import sources of China. USA exports app 3 MMT of PVC annually which is likely to grow in years to come. If US exports of PE and PVC are directed towards high cost naphtha based countries, they may also resort to certain tariff barriers on USA. We are bound to see some interesting readjustments taking place in the current year in international trade. India is net importer of PVC of 1.6 MMT.
Back home in India, plastic consumption has to readjust to certain restrictions being put on the processing industry related to sustainability aspects. Maharashtra has imposed ban on plastic films for packaging. National Green Tribunal wants the industry to meet the deadline for complete phasing out of lead based stabilizers used in PVC products. The plastics industry is doing its level best to put forth the view point of the industry for reconsideration of the restrictions being imposed.
Trade wars and sustainability issues have taken a central stage now and not the demand supply or prices.
Commentary for the month
2 | Mar 2018
CPMA MembersChemplast Sanmar Ltd. l DCM Shriram Ltd. l DCW Ltd. l Engineers India Ltd. l Finolex Industries Ltd. l GAIL (India) Ltd. l Gujarat State Fertilizers & Chemicals Ltd. l Haldia Petrochemicals Ltd. l Hindustan Petroleum Corporation Ltd. l HPCL – Mittal Energy Ltd. l Indian Oil Corporation Ltd. l Indian Synthetic Rubber Private Limited l INEOS Styrolution India Ltd. l LG Polymers (India) Pvt. Ltd. l MCPI (Materials Chemicals and Performance Intermediates Private Limited) l Mangalore Refinery and Petrochemicals Ltd. l ONGC Mangalore Petrochemicals Ltd. l ONGC Petro Additions Ltd. l Reliance Industries Ltd. l Supreme Petrochem Ltd. l Tamilnadu Petroproducts Ltd.Associate Members: Braskem SA l HPL Additives Ltd. l ICIS l Indorama Industries Ltd. l Jindal Poly Films Ltd. l SABIC India Pvt Ltd.
PETCHEM BUZZ
CHEMICALS AND PETROCHEMICALS MANUFACTURERS ASSOCIATION708, 7th floor, Kailash Building, 26 Kasturba Gandhi Marg, New Delhi – 110 001. l Telephone: 011-43612198 l Email: [email protected]
CPMA submitted the information regarding India-EU BTIA as a part of stakeholders’ recommendations to DOC to keep key petrochemical products under Negative List. List of products was also provided where India wants tariff concessions from the EU for exports from India.
Government Communications and Interactions
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Petchem Trade Statistics - Key ProductsSr. No.
Product2017-18 (Apr - Jan18)
Imports (KT) Exports (KT)1 PVC 1502 15
2 LLDPE+HDPE 1207 333
3 MEG 931 55
4 PP 792 428
5 SM 633 3
6 EDC 590 38
7 PTA 408 203
8 VCM 398 0
9 LDPE 393 72
10 ABS 82 0.2
11 PS 38 58
12 SAN 7 1
13 EPS 2 3Source: DGFT
OMPL, MRPL merger will make Mangalore a major economic hub Union petroleum minister Dharmendra Pradhan said that the coastal city will emerge as a new economic hub after the merger of ONGC Mangalore Petrochemicals Ltd (OMPL) and MRPL. “The merger of OMPL and MRPL is in the final stage, after which the company will concentrate more on petrochemical and chemical products.
ONGC likely to buy out GAIL in Gujarat petrochemical project.State-owned Oil and Natural Gas Corp (ONGC) might buy out gas utility GAIL India in its Dahej mega petrochemical project in Gujarat to take control of the recently commissioned plant. GAIL had in 2008 picked a 19 per cent stake in ONGC Petro Additions Ltd (OPAL) which was then building the mega petrochemical complex at Dahej in Gujarat.
IOC, BPCL may buy 26% stake each in GAIL IndiaState-owned Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) may buy 26% stake each in gas. The source said IOC and BPCL too can follow the same model and split the government’s stake equally among themselves. GAIL will become their subsidiary and will continue to operate as a listed company with an independent board.
Key Economic Indicators
UoM Jan End Feb End Mar End
Forex Reserves US $ Bn 414.9 421.7 422.5
Exchange rates 1 US$ 64.0 64.9 65.1
1 Euro 80.0 80.7 79.8
100 Jap Yen 58.3 61.4 60.7
1 Pound Sterling 91.1 90.1 91.4
IIP%age
Prev month end7.10% 7.50% ----
WTI Crude Oil US$/MT 60.05 66.35 64.94
Naphtha C&F SEA US$/MT 592 563 601
C2 C&F SEA UD$/MT 1268 1195 1285
C3 C&F SEA US$/MT 1,030 1,000 920
Note: IIP for March has still not been announced
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Upcoming Events
ONGC seeks shareholder nod for HPCL deal.Oil and Natural Gas Corp (ONGC) has sought shareholder approval for its decision to buy government’s 51.11 percent stake in Hindustan Petroleum Corn Ltd (HPCL) for Rs.369.15 billion. With government also being a majority shareholder in ONGC, the acquisition fell in the definition of related party transaction for which shareholder nod is needed according to the laws, the company said. Oil and Natural Gas Corp may sell stake in its mega petrochemical project in Gujarat to fund acquisition of Hindustan Petroleum Corp Ltd. ONGC had borrowed money from banks to buy government’s 51.11 per cent stake in HPCL for INR 36,915 crore.
Member Companies in the NewsCPMA
Industry Snippetscontinued from page 1
Postponed to 20-21 August 2018
ASIAN PETROCHEMICALS MARKET CONFERENCE
June 28-29, 2018 Carlton Hotel • Singapore
7th Annual
