Another Faucet Declares Force Majeure! ​A Number of Chemical Companies Have Been Suspended for Rectification!

Covestro Styrene declares force majeure

On the afternoon of July 6, 2022, Covestro declared force majeure on styrene following an unexpected shutdown of its propylene oxide/styrene (PO/SM) plant in Maasvlakte, Rotterdam, the Netherlands, which it co-owns with LyondellBasell.

The PO/SM plant in Maasvlakte, a joint venture between LyondellBasell and Covestro, produces 680,000 tonnes of styrene and 313,000 tonnes of PO annually. The plant, operated by LyondellBasell and started in 2003, consumes about 582,000 tonnes of benzene per year at the POSM plant.

Oil rebounds 5% on rising supply concerns

As international oil prices stopped falling, domestic crude oil futures rebounded sharply by nearly 5% on Friday, and plastic and PP futures also followed suit, rising nearly 200 CNY/ton within the day.

Despite lingering fears of a potential global recession, investors are refocusing on tight supply. Meanwhile, Russia ordered the suspension of a key export terminal in Kazakhstan, sparking fresh supply concerns.

Earlier EIA inventories showed that crude oil inventories rose by 8.235 million barrels in the week ended July 1, gasoline inventories fell by 2.497 million barrels, and refined oil inventories fell by 1.266 million barrels. Excluding the strategic reserves of commercial crude oil imports last week 6.839 million barrels / day, an increase of 841,000 barrels / day from the previous week; US crude oil exports last week decreased by 768,000 barrels / day to 2.612 million barrels / day. The four-week average supply of U.S. crude oil products was 20.017 million barrels per day, a decrease of 4.42% from the same period last year.

The agency commented that the EIA crude oil inventory report said that the outflow of more than 5.8 million barrels of crude oil from the strategic petroleum reserve last week largely offset the increase in crude oil inventories. At the same time, lower refinery operating rates and proactive production cuts have also contributed to an additional build in crude inventories.

On the supply side, traders are bracing for oil supply disruptions to the Caspian Pipeline Consortium (CPC), which a Russian court has notified to suspend activities for 30 days. The pipeline has traditionally exported more than 30 million barrels of crude per month, mostly Kazakh crude, overseas through the terminal.

The terminal is currently operating normally, but if the decree is implemented, it will be another shock to the European oil market. Due to the turmoil in Libya, supply has been cut by a large chunk, and oil from other regions is also expected to fall sharply. Azerbaijan, Kazakhstan, Libya, the North Sea and West Africa, Europe's main sources of oil supply, combined exports fell by 1.04 million barrels in June, according to tanker tracking data compiled by Bloomberg.

In addition, Washington tightened sanctions on OPEC member Iran on Wednesday, putting pressure on Tehran as it seeks to revive the 2015 Iran nuclear deal and free up its exports, further squeezing global supply.

15 styrene-added enterprises in key provinces were suspended for rectification

According to the news on the website of the Ministry of Emergency Management on July 6, in order to accurately prevent and control the major safety risks of hazardous chemicals and effectively improve the safety risk management and control capabilities of styrene enterprises, the Ministry of Emergency Management recently organized relevant associations and experts to conduct 71 A total of 2,422 hidden dangers were identified, including 71 major hidden dangers, and 15 enterprises that did not meet the conditions for safe production were ordered to suspend production for rectification, eliminating a number of major hidden dangers in time.

This work is another rectification and improvement measure for safety production in the high-risk segment of hazardous chemicals after the expert guidance services for nitrification, phosgene, silicone polysilicon, and fluorination enterprises. Through the guidance and service work, the safety production status of styrene enterprises was found out, and the in-depth diagnosis and analysis of the enterprises' low level of intrinsic safety design, low degree of automation control, insufficient risk identification in key links, poor professional quality of employees, and weak safety management foundation Such outstanding problems have promoted enterprises to implement the main responsibility for safe production, promoted local emergency management departments to strictly supervise and enforce the law, and played a positive role in promoting styrene enterprises to improve their intrinsic safety levels and effectively manage and control major risks.

In the next step, the Emergency Management Department will supervise the rectification of hidden problems, conscientiously do a good job in the rectification of common problems in the industry and prominent problems in key areas, and organize "look back" in a timely manner to ensure a closed loop of rectification; study and optimize the technical specifications for risk prevention and control in the styrene industry to form a long-term effect mechanism; promote technical exchanges and training, organize feedback exchange training sessions, further improve the level of intrinsic safety, resolutely prevent and contain major accidents, and promote the safe and high-quality development of the styrene industry.