DowDuPont reports second Quarter 2018 results

MOSCOW (MRC) -- DowDuPont Inc said it expects higher raw material costs to hit all its units for the rest of the year even as an uptick in its agriculture business helped the U.S. chemicals producer beat Street estimates for the fourth straight quarter, as per the company's press release.

"We see some discrete headwinds, most notably currency fluctuations, particularly in agriculture, and higher raw materials costs in all three divisions," Chief Financial Officer Howard Ungerleider said.

Dow and DuPont completed their USD130 billion merger last September to form DowDuPont. It will create three separately traded companies next year, splitting into companies that look at agriculture, plastics and specialty products.

On a conference call with analysts, CEO Ed Breen said trade tensions have increased volatility in agricultural commodity prices.

"U.S. soybean exports that normally go to China are simply being shifted to other countries."

Last month, Washington imposed tariffs on USD34 billion of Chinese imports. In return, China levied taxes on the same value of products from the United States, including soybeans and sorghum. Traders rushed shipments of U.S. soy to China before the tariff took effect on July 6.

However, the company, which has global operations and often sources materials locally, does not expect any tariff-related impact on overall business this year.

MRC

MOSCOW (MRC) -- Shenhua Ningxia Coal Industry Group (SNCG), a subsidiary of Shenhua Group, one of the largest petrochemical producers in China, has shut one of its two polypropylene (PP) units for a maintenance turnaround, as per Apic-online.

A Polymerupdate source informed that the company has halted operations at the unit on August 2, 2018. The unit is likely to restart in mid-August, 2018.

Located at Ningxia province of China, the PP plant comprising of two units have a production capacity of 200,000 mt/year each.

As MRC informed earlier, on March 29, 2018, SNCG restarted its HDPE/LLDPE swing plant following an unplanned outage. The plant was shut on March 1, 2018 on account of the fire occcured in ethylene tank on February 28, 2018. Located at Ningxia province of China, the HDPE/LLDPE swing plant has a production capacity of 450,000 mt/year.

Shenhua Ningxia Coal Industry Group Co., Ltd. engages in coal mining and washing, coal deep processing, coal chemical industry, electric power, real estate, and other businesses.
MRC

MOSCOW (MRC) -- Bharat Petroleum Corp will shut its 120,000 barrels-per-day (Mbpd) joint venture Bina refinery from mid-August for 45 days, a month ahead of the previous plan after a minor fire at the delayed coker, reported Hydrocarbonprocessing with reference to two sources.

The refiner has shut the delayed coker after a fire during the weekend and has decided to advance the September shutdown, one of the sources said. The sources did not wish to be identified as they are not authorized to speak to media.

During the 45-day shutdown, BPCL will carry out modifications at various units to raise the capacity of the plant to 156 Mbpd

BPCL’s head of refineries R. Ramachandran did not respond to calls from Reuters seeking comment.

The Bina refinery is operated by Bharat Oman Refineries Ltd (BORL), a 50-50 joint venture between Oman Oil Co and state-run BPCL.
MRC

MOSCOW (MRC) - August contract price of propylene in Europe was agreed up by EUR8/tonne from the level in July.
However, most European producers announced the roll over of July export PP prices for supply to the CIS markets in August, according to ICIS-MRC Price Report.

Negotiations on August prices of European PP began last week. All market participants reported the rollover of July export prices for propylene polymers from all producers for August supplies.

Deals for August supplies of homopolymer PP were discussed in the range of EUR1,170-1,230/tonne FCA, which corresponds to the July deals.

Deals for copolymers of propylene (PP block copolymers) were done in the range of EUR1,240 -1,300/tonne FCA.
Some companies reported temporary export restrictions due to scheduled shutdowns of capacities.
MRC

MOSCOW (MRC) -- Russian petrochemicals producer SIBUR is examining various options on capital markets, its chief executive told Reuters while declining to confirm concrete plans for an initial public offering (IPO).

Financial market sources told Reuters last month SIBUR was preparing an IPO that could raise USD2-USD3 billion and potentially take place by the end of the year.

"We are considering the different options on the capital markets as and when necessary. Now it’s to early to say about the concrete plans," Dmitry Konov said in an interview, without detailing the options.

Businessman Leonid Mikhelson, the head of and a major shareholder in Russia’s largest gas producer Novatek, owns 48.5 percent of Sibur, which is the largest petrochemical producer in Eastern Europe.

Mikhelson’s business partner Gennady Timchenko owns 17 percent, while China’s Sinopec and Silk Fund control 10 percent each.

A source familiar with the matter told Reuters last month that Mikhelson might sell part of his stake, while Timchenko and another shareholder, Kirill Shamalov, both subjected to U.S. sanctions, were likely to retain their shares.

Shamalov owns 3.9 percent in Sibur.

Given most of Sibur’s revenue is made in U.S. dollars, Konov said the largest part of the firm’s debt should also be denominated in the currency.

He said capital spending was peaking in 2018 as construction works at a petrochemical complex in western Siberia, known as ZapSibNefteKhim, were expected to be completed in May 2019.

The installation and start-up works need to be done before ZapSibNefteKhim, which will be one of the world’s five biggest petrochemical plants, is due to come on stream, he added.

SIBUR is considering building a second big plant, known as the Amur Gas Chemical Complex (GCC), and may make a final decision at the end of 2019, Konov said.

According to the company’s website, Amur GCC will have a capacity of 1.5 million tonnes per year of ethylene, to be further transformed into polymer products.

SIBUR said last month investment in this plant could total up to USD8 billion and it was looking to share the cost with partners from Asia.

As MRC wrote before, on 17 February 2015, SIBUR launched construction of ZapSibNeftekhim,a facility for deep hydrocarbon to polyolefin processing. ZapSibNeftekhim's project is designed to operate a steam cracker (by Linde AG, Germany) with a capacity of 1.5 mtpa of ethylene, around 500 ktpa of propylene and 100 ktpa of butane-butylene fraction (BBF), along with units with a total capacity to produce 1.5 mtpa of various grades of polyethylene (by INEOS, UK) and a polypropylene unit of 500 ktpa (by LyondellBasell, Netherlands).
MRC