Haldia Petro to put Rs.28, 700 cr in Odisha Refinery.

The Odisha government cleared a Haldia Petrochemicals proposal to invest Rs.28, 700 crore for setting up an integrated refinery and petrochem facility in Balasore.

A panel led by chief minister Naveen Patnaik approved the proposal. State-owned land will be allotted and fiscal concessions considered, said a state official said, “Haldia Petro has sought certain concessions. We are setting up a panel to examine it, “the official said. The government,

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Issue: CPMA/015/2019

March 2019

Monthly Newsletter from

1 | March 2019

RCEP members agree to push for trade pact.The 16 members of the RCEP group, including India and China agreed to intensify the ongoing negotiations for proposed mega trade agreement to resolve all issues and conclude the talks this year.

The progress of negotiations was reviewed during a meeting of the trade ministers of all 16 countires in Cambodia.

To ensure that progress is made towards meeting the leaders target for conclusion in 2019, the ministers agreed to intensify engagement for the remaining of the year, including by convening more intersessonal meetings, the commerce ministry said quoting a joint statement issued after the meeting.

Crude pares earlier losses as market searches for direction; WT crude futures hover below $59 after 1.6% drop.Crude oil prices toggled between gains and losses as anxious traders weighed a slowdown in the global economy with increasing tensions in OPEC member Venezuela.

Crude output continues to fall.Domestic crude oil output shrank 4% in the eleven months through February from a year earlier, continuing the declining trend for the seven fiscal year in a row and pushing up India’s dependence on imports.

Imports met 83.8% of local oil needs during April-Feb of 2018-19, up from 75.9% in 2011-12. Local production began falling in 2012-13 and has declined every year since despite billions of dollars of investments in sustaining production from ageing fields and finding new sources of oi.

All State-Run Oil Cos, exceed capex targetIndian Oil, Hindustan Petrochem, Bharat Petroleum,

Industry Snippets

continued on page 2

Member Companies in the News

CPMA

Global Oil MarketCrude oil prices increased for the third consecutive month in March and are trading near the middle of the range established over the previous year. Increasing crude oil supply disruptions and voluntary reductions in oil production from the Organization of Petroleum Exporting Countries are among the recent price drivers in the crude oil market. Recent manufacturing Purchasing Managers’ Indexes (PMI) in several European countries are showing continued contraction in their manufacturing sectors. In the US, the Treasury yield curve inverted in March for the first time since 2007, a phenomenon that indicates a combination of tight monetary policy, investment risk aversion, and lower long-term economic growth expectations. However, manufacturing PMI surveys in the US and China increased in March, and the US Federal Reserve indicated it is unlikely to increase interest rates for the remainder of 2019, all factors that could signify a reversal of some of the negative economic indicators and support economic growth, and consequently crude oil prices.

Commentary for the monthDue to a slightly tighter global oil market, the US Energy Information Administration, in its latest Short-Term Energy outlook, forecasts Brent spot prices to average $65/bbl in 2019, up $2/bbl from last month’s STEO forecast, and $62/bbl in 2020. These compare with an average of $71/bbl in 2018.

Oil climbed about 2% to new 2019 highs in March end, with Brent crude touching $69 a barrel, after positive signs for the global economy and tighter supplies drove both benchmarks’ largest first-quarter gains in nearly a decade. China’s manufacturing sector unexpectedly returned to growth for the first time in four months in March. U.S. manufacturing numbers also came in better-than-expected in March, helping investors overlook soft retail sales data for February. The United States and China have made a statement on progress in trade talks in Beijing, with Washington saying the negotiations were “candid and constructive” as the world’s two largest economies try to resolve their trade war. With OPEC putting on the breaks and US production declining, inventories could contract to send crude oil prices higher.

however, will not take any equity in the project.

HPCL may soon become a Maharatna, 9th in league.

The department of public enterprises (DPE) is in the process of conferring Maharatna status to Mumbai-based Hindustan Petroleum Corporation (HPCL). If cleared, the Oil and Natural

Gas Corporation (ONGC) arm will become the first subsidiary company of an existing Maharatna to get into this superior league among government-owned entities.

Indian Oil Corporation (IOC) will take 50 acre land on lease in Gorakhpur, the home turf of chief minister Yogi Adityanath, for setting up an ethanol plant costing nearly Rs 800 crore.

Indian Oil Corp (IOC) has declared a second interim dividend of Rs 1,412 crore for the current financial year and ONGC agreed to do so next week to help the government meet its tax revenue target.

Upcoming Events

Source: MosPI, Platts

2 | March 2019

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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 Pvt. Ltd. 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.

CHEMICALS AND PETROCHEMICALS MANUFACTURERS ASSOCIATION708, 7th floor, Kailash Building, 26 Kasturba Gandhi Marg, New Delhi – 110 001. l Telephone: 011-43612198 l Email: cpmai@airtelmail.in

Nl Attended the first meeting of the CII-DPIIT Sectoral Task force on Chemicals held under Co-Chairmanship of Secy DPIIT & DCPC. CPMA circulated a presentation highlighting the factors which need to be considered by the Task Force while addressing the issues in the chemicals sector in the backdrop of rapid economic growth in India going forward.

Nl CPMA delegation met MOEF officials on matter related to definition of “Single Use Plastic”.

Nl CPMA members and other industry representatives met Egyptian delegation at interactive meeting on enhancing investment organized by FICCI. The meeting was supported by ICC and CPMA.

Government Communications and Interactions

16-17 May 2019 | TAIPEI, TAIWAN

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Industry Snippetscontinued from page 1

Trade Statistics- Key Products

Sr.

No.Product

2017-18 2018-19 (Apr-Jan) Average monthly Imports

Imports

(KT)

Exports

(KT)

Imports

(KT)

Exports

(KT)

2017-18

(KT)

Apr 18-Jan 19

(KT)

%

Change

1 PVC 1861 20 1656 20 155 166 6.8%

2 LLDPE+HDPE 1418 435 991 780 118 99 -16.1%

4 PP 939 552 722 630 78 72 -7.7%

5 SM 789 5 664 6 66 66 1.0%

9 PTA 408 212 254 135 34 25 -25.2%

3 MEG 931 137 750 269 78 75 -3.3%

6 EDC 713 45 458 10 59 46 -22.9%

8 VCM 398 0 256 0 33 26 -22.8%

7 LDPE 465 108 270 17 39 27 -30.3%

10 ABS 82 0.3 60 0 7 6 -12.9%

11 PS 50 69 42 56 4.1 4 2.7%

12 SAN 7 1 6 0 0.6 1 7.9%

13 EPS 3 3 1 3 0.2 0 -52.6%

Source: DGFT

Key Economic Indicators

UoMOct 18

EndNov 18

EndDec 18

EndJan 19

EndFeb 19

EndMar 19

End

Forex Reserves US $ Bn 393.5 392.8 393.4 397.0 401.8 407.0

Exchange rates 1 US$ 74.0 69.7 69.8 70.8 70.8 69.7

1 Euro 83.8 78.9 79.8 80.1 80.6 78.7

100 Jap Yen 65.6 61.4 63.4 64.0 63.6 62.7

1 Pound Sterling 94.6 89.0 88.9 91.3 94.1 91.8

IIP %agePrev month end 8.4% 0.5% 2.4% 1.7% N.A. N.A.

Dubai Crude Oil US$/MT 79.4 65.6 57.3 59.1 64.6 66.9

Naphtha C&F SEA US$/MT 672 511 466 465 508 540

C2 C&F SEA UD$/MT 1032 889 799 812 1017 984

C3 C&F SEA US$/MT 1,070 867 849 880 864 828

and GAIL, have exceeded their capital expenditure targets for the current fiscal, having spent heavily on refinery upgrades, pipelines, and marketing infrastructure.

The combined capex target set for all state-run oil producers, refiners and marketers for 2018-19 is Rs.89,335 crore, or about 93%, in the 11 months through February.

The Asian petrochemicals market was largely weak across all product groups, namely olefins, aromatics, polymers and intermediates.For many domestic markets in China, the upcoming reduction in value added tax rates from April 1 has led to weaker spot prices as buyers held back to wait for the lower VAT rates to kick in. With the exception of benzene and polypropylene, bearish sentiment prevailed across markets.

The US exported record polyethylene volumes in 2018 amid a backdrop of increased production and weak domestic demand, Census Bureau data shows. The US exported a combined 4,316,232 mt of all grades of polyethylene (PE) in 2018, up 24.2% on the year and 11.4% over 2016, the data this week showed.

Petrochemical producer Dow Energy is aiming to supply 100,000 mt of recycled plastics in its products to customers in Europe by 2025, the company’s director of sustainability and advocacy, Kate Geraghty, said.

Market sources said Dow Chemical shut down its steam cracker in Boehlen, Germany, due to some problems. The steam cracker is able to produce 560,000 mt/year of ethylene, 310,000 mt/year of propylene and 104,000 mt/year of butadiene. The aromatics unit adjacent to the cracker has an annual benzene capacity of 320,000 mt/year.

Formosa Plastics is slated to launch a turnaround at the 513,000 mt/year polyvinyl chloride plant at its Baton Rouge, Louisiana, complex next week, according to sources familiar with company operations.