Huhtamaki Q2 results meet analyst expectations

MOSCOW (MRC) - Finnish packaging maker Huhtamaki on Friday reported second-quarter operating profit in line with market expectations and stood by its outlook for trading conditions to remain relatively stable in 2014, said Reuters.

The company, known for making paper cups for McDonald's , posted April-June underlying operating profit of 54 million euros (USD73 million) compared to a mean forecast of 53.6 million in a Reuters poll of analysts and year-ago 49.2 million.

Sales in the quarter amounted to 628 million euros, also in line with analyst expectations.

Huhtamaki said earlier on Friday it will start evaluating options for its Films business and could eventually divest the operation.

As MRC wrote before, Huhtamaki, the Finnish-based consumer packaging specialist with worldwide operations, will build a moulded fibre egg packaging unit adjacent to its existing packaging facility in the greater Moscow area.
The new unit will concentrate on a narrow range of high-volume premium egg packaging, with complementary products sourced from other Huhtamaki units and technology licensees. This supply network enables the company to start sales and deliveries while the new unit is still under construction. The company already has a specialised fresh foods sales force in Russia.
MRC

Egypt proposes three petrochemical projects at an outlay of US540 mln tonnes

MOSCOW (MRC) -- Egypt has proposed three petrochemical projects to the UAE for a total investment of USD540 mln, according to a senior official at the Ministry of Petroleum, said Plastemart.

The projects included establishing a factory to produce bio-ethanol from molasses, the output of which would reach 100,000 tons of molasses annually, with investment in the project totaling USD250 mln. The project would be implemented in the next fiscal year (FY), according to the ministry’s plan.

Another proposal focused on building a plant for production of bio-ethanol from rice straw, with annual capacity of 100,000 tons of rice straw. The investment in this project would be USD240 mln and would be implemented through the FY 2016-2017.

The third project would increase polyvinyl chloride (PVC) production, used in making pipes, with the target implantation date as FY 2016-2017. Close to 40,000 would be produced annually, while the investment in the project is estimated at USD50 mln.

The UAE has expressed its willingness to invest in the petroleum sector and is currently evaluating which project to go forward with in the coming period.

As MRC wrote before, Toyo Engineering has been jointly awarded with ENPPI, an engineering company under the Egyptian Ministry of Petroleum, a contract to build a 400,000 tpa polyethylene plant in Egypt. The new facility will be a part of Ethydco's petrochemical complex to be established in Alexandria, the Arab Republic of Egypt, and owned by ETHYDCO (The Egyptian Ethylene and Derivatives Company) under the investment law No. 8/1997 of Egypt. This will be the largest polyethylene plant in Egypt.
MRC

Russian crude exports fall to six-year low as Putin emphasizes refining

MOSCOW (MRC) -- Russia’s crude exports on tankers are poised to fall to the lowest in at least six years as a government push to improve and expand domestic refineries means more oil is exported as fuels like diesel, reported Hydrocarbonprocessing.

Seaborne crude shipments from the world’s biggest energy exporter via the state-run pipeline system in August will fall 9.2% from this month to 2.215 million bpd, according to loading programs obtained by Bloomberg News. That’s the lowest since Bloomberg began tracking the data in 2008.

Russia’s two biggest crude terminals, Primorsk and Novorossiysk, will both export the least on record.

Russian oil companies are refining more crude domestically after President Vladimir Putin pushed them to spend billions of dollars modernizing plants. Output of diesel and fuel oil are the highest since at least 2009, Energy Ministry data show.

This puts pressure on European refiners who are already receiving less Russian crude as flows are diverted to China, which has been less critical of the Kremlin’s role in Ukraine, according to KBC Energy Economics.

"This trend of falling crude exports means we’re finally seeing results from the refinery modernization push," said Alexander Nazarov, an oil analyst at OAO Gazprombank in Moscow. "Refining is picking up and crude output has peaked."

Russia produced 10.55 million bbl of crude in June, up 0.1% from a month earlier in the first increase since January, according to the Energy Ministry’s CDU-TEK unit. The country’s refineries operated at the highest rate in two years on June 26, with offline daily processing capacity falling to 26,000 metric tons, before rising to 48,500 tons on July 23, according to CDU-TEK.

As MRC wrote previously, Russia will give all the necessary support to Shell in the Anglo-Dutch supermajor’s projects in the country, said President Vladimir Putin in April 2014. Putin, under pressure from international powers over continued destabilisation in Ukraine, met with Shell’s chief executive Ben van Beurden in Moscow in late April. "I am very pleased that your company plans to expand its area of activities in Russia," Russian news agency Itar-Tass quoted the president as saying to van Beurden. Shell has a large presence in oil and gas-rich Russia, including at the Sakhalin-2 project off the country’s far eastern region.
MRC

LyondellBasell reports widening polymer margins

MOSCOW (MRC) -- LyondellBasell Industries, the world’s biggest maker of polypropylene plastic, posted second-quarter earnings that topped analysts’ estimates as margins widened on higher prices, said Hydrocarbonprocessing.

Net income was USD2.23/share, compared with USD1.61 a year earlier, London-based LyondellBasell said in a statement Friday. Income from continuing operations was USD2.22, which exceeded the USD1.92 average estimate of 18 analysts compiled by Bloomberg. Sales were USD12.1 billion, compared with USD11.1 billion a year earlier, beating the USD11.5 billion average estimate.

CEO Jim Gallogly is expanding LyondellBasell’s US chemical plants as hydraulic fracturing in shale rock formations boosts supplies of natural gas and cuts raw-material costs. Polypropylene, used in bottle caps and carpets, and polyethylene, used in plastic bags, is mostly made from gas in North America.

"Integrated polyethylene margins in the US were up as much as 4 cents a pound, so that’s a big positive," Hassan Ahmed, a New York-based analyst at Alembic Global Advisors who recommends buying the shares, said yesterday by phone.

Operating earnings at LyondellBasell’s Americas olefins unit, which makes polyethylene and polypropylene, rose 3% on higher product prices, it said.

As MRC wrote before, LyondellBasell has received a key permit required in the company's multi-plant ethylene expansion program which, when fully operational, is expected to increase annual ethylene capacity by an estimated USD3.12 billion, for a total estimated capacity of USD19.9 billion in North America. The ethylene expansion program began in 2013 and represents a total investment of approximately USD1.3 billion in the company's Channelview, La Porte and Corpus Christi, Texas plants which benefit from shale gas production.

LyondellBasell moved its tax residence to the UK from the Netherlands last year to avoid payments on dividends and gain flexibility in managing its cash. LyondellBasell is run from Houston and remains incorporated in Rotterdam.

LyondellBasell Industries NV is a manufacturing company. The Company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
MRC

PVC imports to Kazakhstan surged by 68% in H1 2014

MOSCOW (MRC) -- Imports of polyvinyl chloride (PVC) into Kazakhstan rose by 68% over the first six months of 2014 and reached 31,000 tonnes, according to MRC DataScope report.


June PVC imports to Kazakhstan dropped to 6,000 tonnes after the peak April and May (6,500 tonnes and 6,900 tonnes, respectively).

Thus, the overalll PVC imports to the local market rose to 30,000 tonnes from January to June 2014 versus 18,500 tonnes a year earlier.

Producers from China are the main PVC suppliers to the local market because of the geographical factor. They account for over 95% of the local market this year.

MRC