Petrochemical Industry Experiences a Roller Coaster Ride as Further Downside Awaits

1. Edition: 14th April 2020 #TheChemAnalystExpress Petrochemical Industry Key Headlines •ONGC Gas Output Drops to 15%, Lesser Demand Hits the Market •Indian Oil to Fill its Underground Reserves with First Oil Shipload Arriving from UAE •Oil Rebounds “But Little” After the Producers Sign Compromise Deal •Asia’s Methanol Industry Suffers Supply Glut as Exporters Target China •ExxonMobil Postpones Two Cyprus Energy Drills Asia Pacific Chemicals Pricing (Key Products) •Ethylene- Sluggish demand for downstream ethylene derivatives has continued to push down the prices of the product. Ethylene prices dropped to $350/tonne CFR South East Asia. •Benzene- Benzene prices witnessed an uptrend post recovery in line with rising value of upstream crude oil and stable downstream demand. CFR India prices of the product settled at $380/tonne, up by around $ 15/tonne than on Friday. •Butadiene- Butadiene tumbled in Southeast Asia due to bearish buying sentiments backed by high inventories. CFR Prices of Butadiene in Southeast Asia settled at $355/tonne, down by $85/tonne from previous revision. •PET- Prices of PET remained in doldrums on reduced consumption from industries at the back of production cut and turnarounds amid Coronavirus stress. PET plunged to $700/tonne CFR Southeast Asia with a fall of $10/tonne. Crude Oil Scenario Oil prices dived on Monday overpowering the gains made after major oil producers agreed for output cuts, pressured by concerns that the cuts will be too little to come out of the oversupply situation as the coronavirus pandemic incurs unprecedented slump in global crude demand. This deal was signed after four days of intense negotiations as the OPEC+ group of oil producers, comprising the OPEC countries, Russia and other countries, agreed to curtail their outputs by 9.7 million(bpd) in May and June. Brent crude futures slipped by 1.7%, at $30.96 a barrel by 08:10 GMT after opening at $33.99, however, US West Texas Intermediate (WTI) crude futures fell by 0.5%, to $22.64 but remained oscillating between positive and negative values throughout the day. Petrochemical Industry Experience Experiences s a a Roller Coaster Ride as Further Downside Awaits Roller Coaster Ride as Further Downside Awaits WTI Crude $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00

2. Analyst View on OPEC+ Deal Analysts believe that the deal signed to introduce production cuts is not enough to nullify the damage caused collectively by the price war and Covid-19. The apprehensions can be easily sensed from the crude prices on Monday which swung between gains and losses as players believe that nothing could offset the 19 million barrels per day average April-May demand loss due to the pandemic. It is henceforth being predicted that crude prices will decline further in the coming weeks as storage capacity becomes saturated and demand remains muted. Exclusive News & Analysis Covid Tough on Asia’s Methanol Industry Since the outbreak of novel coronavirus in China, which in short time began to grip several economies, Asia’s trade flows have incurred dramatic changes in its petrochemical sector. Prices of several petrochemicals have fallen to record breaking lows in the month of March and April with almost negligible margins. Looking at the current scenario, when bigger economies (like U.S. and Europe) are on the verge to slip into recession, it is anticipated that Asia is likely to become dumping ground for many chemicals. In addition, panic in the crude market is further stimulating huge volatility in Asia’s chemical sector. Traders are cautious as extended lockdown measures drag the petrochemical price downwards showing no signs of recovery, but huge volumes of methanol are expected to be traded in this month amid scarce tank storage space. As per several sources, China is about to welcome about 1.1 million mt of methanol imports in April. •India Methanol prices lowered in India as the players sense extension of the lockdown period due to rise in number of positive coronavirus cases in the country. There are indications that the duration of lockdown will be extended beyond April 14, the day when it was supposed to end as stated by the prime minister Narendra Modi in his speech on 24th March. Post the announcement, several methanol manufacturing units in India had announced plant closures backed by bearish market sentiments and supply glut. Methanol CFR JNPT prices dropped to $264 per MT in the second week of April following the international trend. •China China’s methanol-to-olefins (MTO) production slumped between February to March due to unprecedented demand slowdown and supply chain disruptions. However, as the country headed towards recovery by the end of March, traders and suppliers started targeting cargoes towards China due to subdued demand in U.S. and Europe. This poses a challenge among local manufacturers who are selling cargoes at reduced rates. Methanol prices CFR East China were assessed to be $248 on Friday. As per the analysts, Methanol prices will rebound in this week on the back of improved demand from Propylene and PP for making masks and other medical applications. Methanol Weekly Price Variation (India) 800 600 USD/MT 400 200 0 CFR JNPT Ex-Works Dibrugarh Methanol Weekly Price Variation (China) 300 250 USD/MT 200 150 100 50 0 CFR China

3. Industry Research International Plant Shutdown News •Exxon Mobil Halts Drilling Operations in Cyprus Energy Exxon Mobil, the U.S. based multinational oil and gas company, has announced suspension of its two Cypriot gas drills scheduled for July 2020 till September 2021. The decision was taken in consideration to the pandemic stress and acute volatility in the international petrochemicals market due to plummeting prices of oil. The company has blamed the logistical disruptions and rising cases in U.S. for its operational cuts. The company has also cancelled drilling activities in other parts of the world. This happened just few days after the CEO of the company announced to implement about 30% cut in its capital expenditure taking into consideration the impact of the pandemic to the energy market. •Ukraine suspends Plant Operating to Develop New Missile System Ukraine has announced temporary shutdown of its Pevlograd Chemical Plants engaged in manufacturing explosives and charging ammunitions. According to State Defence Order, lack of funding from government to finance operations and services has made corporation to shut operations till they are economically secured. With this plant shutdown, the complete missile project has come to a dead end with no ray of hopes to be seen for recovery. India Plant Shutdown News •GAIL Shuts Pata Plant Due to Demand Destruction GAIL(India) Ltd. has shut its petrochemical unit located in Pata, Uttar Pradesh joining the list of Petchem makers who have halted their production activities due to unprecedented slump in demand and supply chain disruption due to covid-19.The concerned authorities decided to first cut the capacity of the 400KTPA Polyethylene plant at the Pata complex by half. The company has also shut its PP plant and 210 KTPA HDPE/LDPE plant located in Pata. •IOC To Extend the Shutdown at Paradip Refinery Indian Oil Corporation, a state-owned oil and gas company has reported to maintain shutdown in its Paradip Refinery at the back of lockdown extension in Odisha amid rising concerns over Covid-19. Company’s Paradip plant is engaged in the production of Propylene and Ethylene with a capacity of 900 KTPA and 200 KTPA respectively. •IG Petrochemicals Announced Liquidation of IGPL Subsidiary IG Petrochemicals, a renowned company engaged in the business of phthalic anhydride, maleic anhydride and benzoic acid has announced liquidation at its IGPL subsidiary located in Taloja, from 12 April. This happened as the subsidiary is no longer undertaking any operations. Plant Resumptions •Taiwan’s CPC To Resume Operations at Linyuan Cracker from Next Week CPC refinery of Taiwan, a renowned name in the oil and gas sector, has planned to restart operations at its larger ethylene cracker unit having capacity of around 700 KTPA, from the next week. The refinery is in Linyuan and was on a halt since 13th February for scheduled maintenance. However, CPC's second and smaller 385 KTPA ethylene cracker in Linyuan continues to operate at full rates. •Khaitan Chemicals and Fertilizers Resumes Production in Plants Khaitan Chemicals, a company engaged in the manufacturing of straight inorganic fertilizers has reported to restart operations in its plants by undertaking approval from the government. The company has its plant facilities in Dahej (Gujarat), Somni, Jhansi & Malwan (U.P), Nimrani (M.P), Nimbahera (Rajasthan) and Rajnandgaon (C.G). Operations in these plants were suspended in response to the preventive measures put up by the government to constrain the spread of choronavirus.

4. Strategic Expansions •Yongtai Technology Planning to Invest in a New Project towards Industrialization of Fine Chemicals Zhejiang Yongtai Technology, a company engaged in manufacturing of aromatic fluorides has reported to invest in a Fine Chemical Industrialization Project in Inner Mongolia, China. Phase 1 of this industrialization project is anticipated to be completed within 2 years. The projects aim to contribute to a capacity of about 30000 tonnes of potassium fluoride and 18715 tonnes of fine chemicals along with co-production of several other chemicals like calcium chloride, calcium sulfate, sodium sulfate, hydrochloric acid, silicon dioxide and hydrobromic acid. Latest Technological Investments •DGIST Recently Announced the Success of New Photovoltaic Commercialization Technology DGIST, a Korea based university of science and research has recently announced the development of a technology based on Colloidal Quantum Dot Photovoltaic (PV) Devices which is anticipated to accelerate the production of next generation photovoltaic devices. This new technology aims at improving the stability along with improvising the performance of the PV devices. •Zymergen Aims for Fabrication of High-Performance Bioelectronics World Economic Forum Tech Pioneer, Zymergen introduced Hyaline, a new biofilm for electronic applications. Until recently, most electronic devices were manufactured on hard computer chips covered in transistors and other semiconducting elements. Those chips are inflexible, however making our smartphones, laptops, watches, and televisions rigid. Bio-based electronic films would support the manufacturing of appliances that are smaller, lighter, and more battery efficient at a lesser expenditure. Hyaline may be the first fermented electronic products and being widely used in flexible circuits, display touch sensors, and printable electronics. Get the Chemical and Petrochemical Industry News on Daily Basis, Weekly- Trend & Forecast and Monthly-Analyst Views Subscribe Today! News on WhatsApp/WeChat/Mail First 15 days free news WhatsApp No. +91-9914868686 For sales related query, dial +91-9958299626 or email at sales@chemanalyst.com About ChemAnalyst About ChemAnalyst ChemAnalyst is ‘one stop’ online portal that offers comprehensive market intelligence data and in-depth analysis on the Indian chemical and petrochemical industry. Our aim is to provide competitive advantage to the industry stakeholders by offering ‘cutting edge’ information and analysis that help our customers leverage on the emerging opportunities in their businesses. ChemAnalyst’s team of 100+ analysts are engaged in tracking Chemical Prices daily, production capacity, demand and supply outlook, manufacturing plant locations, foreign trade data and news/deals for more than 400 major chemicals produced in India. ChemAnalyst’s Interactive subscription platform provides the most comprehensive data and analysis in your industry to help you decide the future. ChemAnalyst is promoted by TechSci Research (TSR). TSR is an award winning research based management consulting firm providing market research and advisory solutions to the customers worldwide, spanning a range of industries including Chemicals & Material, Automotive, Consumer & Retail, ICT, Energy & Power, Aerospace & Defense, Water and Waste Management, BFSI and more. For more information, please visit us at www.chemanalyst.com