LyondellBasell touches 52-week high at USD110.67

MOSCOW (MRC) -- Shares of LyondellBasell Industries clocked a new 52-week high of USD110.67 on Aug 15, exceeding its previous high of USD110.49, said Zacks.

The stock pulled back a bit to end the trading session at USD110.60 on that day. The chemical giant, which has a market cap of around USD57 billion, has seen its shares rise roughly 40% so far this year, outperforming a roughly 7% rise in the S&P 500 for the period. Average volume of shares traded over the last three months is around 2,795.7K. The company’s long-term projected EPS growth is around 10.7%.

LyondellBasell’s profit for second-quarter 2014, reported on Jul 25, jumped around 27% year over year as it saw gains across all segments, especially the Olefins & Polyolefins – Americas division. Both revenues and earnings for the quarter comfortably beat Zacks Consensus Estimates. The company expects strong production of oil, natural gas and natural gas liquids (NGLs) in the U.S. to support margins going forward.

LyondellBasell, which emerged from Chapter 11 bankruptcy in 2010, continues to benefit from favorable North American natural gas environment and is executing its expansion projects to leverage the U.S. NGLs advantage.

LyondellBasell remains on track with its ethylene expansion projects. The company’s multi-plant ethylene expansion program, which started last year, represents a total investment of roughly USD1.3 billion across its Channelview, La Porte and Corpus Christi facilities which benefit from shale gas production. The expansion program, when in full swing, is expected to expand annual ethylene capacity by an estimated 1.85 billion pounds for an aggregate projected capacity of 11.8 billion pounds in North America.

LyondellBasell’s methanol plant at Channelview, TX (restarted in fourth-quarter 2013) along with its other major debottleneck projects (including expansion at La Porte) are expected to bring in new capacity at considerably lower cost than building new facilities. LyondellBasell expects to start production from the La Porte ethylene expansion project in the third quarter.

That said, LyondellBasell is exposed to volatility in raw material and energy costs and a still challenging European market.

As MRC wrote before, LyondellBasell Industries posted second-quarter earnings that topped analysts’ estimates as margins widened on higher prices. 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.

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

MOSCOW (MRC) -- OAO Gazprom, the only Russian gas exporter today, has written to the government asking it to block changes to the gas-export law that would let OAO Rosneft supply abroad from the Pechora LNG project in northern Russia, according to Hydrocarbonprocessing.

The bill "will strengthen the bargaining position of potential foreign buyers of Russian gas," creating excess competition among suppliers from the country, Deputy CEO Valery Golubev wrote to the Energy Ministry. The government already eroded Gazprom’s monopoly last year, allowing two planned LNG projects, one led by Rosneft, the right to ship fuel abroad.

Gazprom and Rosneft are maneuvering as Russian President Vladimir Putin is trying to shift energy exports toward Asia to benefit from economic growth and as the crisis in Ukraine damages relations with Europe. Oil producer Rosneft, led by Putin’s close ally Igor Sechin, has in turn lobbied for access to Gazprom’s planned pipeline to China.

Both current and new gas customers may put pressure on prices, cutting the state’s export duty revenue if Russia widens the number of suppliers, according to Golubev’s letter, written in late June. That was 282 billion rubles (USD8 billion) in the first half of the year, 4% of the state’s income, according to the Russian Treasury’s website.

China has already used the prospect of greater competition among Russia’s energy producers to gain the upper hand in negotiations over prices, Golubev’s letter said. Putin ended Gazprom’s monopoly on gas shipments from Russia last year, granting export rights to OAO Novatek’s planned Yamal LNG project and Rosneft’s proposed LNG plant in Sakhalin, Russia’s Far East. Gazprom currently maintains control over all export pipelines.

Russia needs an "effective mechanism for coordination of all exports" and to avoid overcapacity from "independent" gas-export projects, the letter said. The Moscow-based exporter signed its first 30-year supply contract with China on May 21 after more than a decade of talks, saying it will start negotiations on a new deal this year.

Russia’s parliament posted the proposed changes to the gas-export law May 26. The move would let Pechora LNG ship fuel abroad, the Ministry of Natural Resources said then. Parliament may start discussing the bill later this year, according to its website. By Sept. 1, the government is scheduled to report to Putin on whether it agrees on granting Rosneft access to the China gas pipeline, according to the Kremlin’s website.

Rosneft, which pumps 40% of Russia’s oil and 8 percent of gas, plans to get a majority stake in Pechora LNG project by next month, the company said May 23 after signing an agreement with owner Alltech Group. The plant, scheduled to start production as soon as 2018, may cost about USD4 billion and will export 2.6 million metric tons of LNG in the first phase from the Barents Sea coast, according to its website. The full capacity may reach as much as 10 million tons worth USD17 billion including infrastructure.

The Far East LNG project, which Rosneft plans to develop together with Exxon Mobil Corp, is expected to cost as much as USD8 billion and have 5 million tons of capacity at the first stage, starting production from 2018, according to Rosneft.

Gazprom, pumping more than 70% of Russia’s gas, has plans to expand its Sakhalin-2 project with Royal Dutch Shell Plc, which remains the country’s only producer of LNG. The Russian company is going to build an LNG plant in Vladivostok, Russia’s Far East, and a Baltic LNG project in the north-west of the country.
MRC

MOSCOW (MRC) -- Japanese materials firm Mitsubishi Rayon Co. Ltd. (MRC) has acquired a majority stake in Wethje Holding GmbH, a German producer of carbon-fiber-reinforced plastics (CFRP) for the auto market, said Plasticsnews.

Wethje currently is owned by Austrian industrial form Cross Industries AG. No purchase price for the 51% stake in Wethje that MRC is buying was included in an Aug. 15 news release announcing the deal.

Cross — based in Wels, Austria — employs 3,900 and posted sales of more than USD1.1 billion in 2013. Separate employee and sales totals for Hengersberg, Germany-based Wethje were unavailable. In the release, officials with Tokyo-based MRC said that the European auto industry, with its innovative center in Germany, "moves towards a full-scale adoption of CFRP parts."

As an example, officials cited BMW’s i3 electric vehicle, which uses CFRP parts for the complete vehicle structure.
"This development, together with stricter environmental policies, means a further strong push towards an increasing use of CFRP technology within the automotive industry," they said.

Wethje was founded in 1979 and uses both autoclave technology on small scale production and RTM technology for mid-scale serial production, MRC officials said, adding that MRC "will build a solid partnership with Cross by jointly owning Wethje on a long-term basis."

MRC will use Wethje as a development and production base for CFRP parts and will further strengthen the supply chain of the carbon fiber intermediates business for auto applications in Europe, officials said.

As MRC wrote before, Mitsubishi Rayon Co. (MRC) and Mitsui & Co. have signed a memorandum of understanding to undertake detailed feasibility studies for establishing a joint venture in the U.S. to build a methyl methacrylate (MMA) monomer unit. The plant, for which a specific location has not yet been decided, is expected to have 250,000 t/y of MMA capacity based on the Alpha technology developed by MRC's Lucite International subsidiary.

MRC employs more than 9,000 worldwide. Its plastic products include acrylic resin and sheet.
MRC

MOSCOW (MRC) -- Russia exported 61,200 tonnes of polyamide 6 (PA 6) to foreign markets over the first seven months of 2014, up by 23% year on year, according to MRC DataScope report.
KuibyshevAzot, Russia's key PA 6 producer, mainly focused on export shipments of material on the back of stronger demand in foreign markets than in the domestic market. KuibyshevAzot's material is mainly used in the textile industry. Various compounds and PA copolymers are also produced from Russian PA 6??.
Russian textile industry is underdeveloped because of lack of favorable economic conditions and high competition from imported material. A reduction of 3.3% was registered in this industry in the first half of 2014. Traditionally, the main PA 6 consumers in foreign markets are such countries, as China, India, Turkey, i.e. those countries, which receive significant amounts of textile products from the Russian market.

MRC

MOSCOW (MRC) -- Thailand's PTT Global Chemical Pcl is seeking a partner to expand the crude processing capacity of its planned joint petrochemical project with Indonesian state oil and gas firm Pertamina, as per Plastemart.

PTT Global is planning to triple the crude processing capacity of the project to 360,000 bpd, which would boost the estimated investment in the complex to as much as USD8 bln. PTT Global's initial plans with Pertamina had called for an investment of USD5 bln in the petrochemical complex at Balongan on Java island. The investment is part of PTT Group's plan to boost its presence in Southeast Asia as domestic demand slows after several months of political unrest that weakened the economy.

"The estimated investment is expected to rise to USD7-8 bln. PTTGC will focus on petrochemicals and we need to seek a partner to strengthen the refining part," as per CEO Bowon, adding the refinery will help supply feedstock to the petrochemical plant.

The company is studying details on how to finance the project and potential partners, a process it expects to conclude in early 2015. It aims to begin operations at the Indonesia complex in 2020, delayed from a previous completion target in 2018, Bowon said.

The proposed complex, which is scheduled to come on stream by 2019 in Balongan, West Java, is expected to include the production of about 1.2-million t/y of polyethylene and polypropylene and nearly 1-million t/y of other petrochemical derivatives such as monoethylene glycol and butadiene.

As MRC reported earlier, this week, PT Indo Thai Trading (ITT) launched operations as a joint venture of Indonesia's Pertamina and Thailand’s PTT Global Chemical (PTTGC). ITT will be responsible for the marketing and sales of all production from this complex.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC