PVC exports from Russia up by 62% in Jan-July 2019, imports more than doubled

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) in Russia reached about 122,100 tonnes in the first seven months of the year, up 62% year on year. Imports also increased by 112% year on year to 26,900 tonnes, according to MRC's DataScope report.

This year, Russian producers showed rather high volumes of polyvinyl chloride export even taking into account scheduled maintenance works of two large plants and high seasonal demand in the domestic market. Last month's exports of Russian suspension (excluding shipments to the countries of the Customs Union ) were about 21,900 tonnes, compared to 15,700 tonnes in June.

Thus, overall exports of PVC to Russia totalled about 122,100 tonnes in the first seven months of 2019, compared to 75,500 tonnes a year earlier. Indian buyers were the main foreign importers of Russian resin this year. Overall sales of resin were about 73,400 tonnes over the stated period.
High seasonal demand in the domestic market and scheduled maintenance works at two producers in the last two months have led to a serious increase in PVC imports to Russia.

July imports of suspension polyvinyl chloride (SPVC) in Russia increased to 13,700 tonnes, compared with 5,200 tonnes in June, with the main bulk of purchases occurred for US PVC (about 8,400 tonnes). Overall imports totalled about 26,900 tonnes over the stated period versus 12,700 tonnes a year earlier.
MRC

MOSCOW (MRC) -- Saudi Aramco unveiled a USD15 billion deal to expand its global refining footprint and held its first-ever earnings call with financial analysts, twin moves that could bolster investor confidence as the state-owned oil giant revs up plans to list shares, said WSJ.

Aramco's net income for H1 2019 was USD46.9 billion. This is actually a 12% decrease from its net income for the first half of 2018, but was expected because the price of the Brent oil benchmark has averaged $66 per barrel this year as opposed to USD69 per barrel last year. The company continues to diversify by growing its downstream sector as well as become more integrated.

Yet, the big questions concerning the strength of the company as a possible investment for outsiders remains undressed. Specifically, potential investors need to understand Aramco's relationship with the Saudi government. This was only addressed at one point during the call when an analyst asked about Aramco's dividend. According to figures provided by Aramco, the company paid USD26.4 billion to its shareholder in "Ordinary Dividends" in H1 2019. This was almost identical to the amount paid in H1 2018. However, Aramco paid another USD20 billion to Saudi Arabia in "Special Dividends." This reflects an increase of USD14 billion over last year's H1 dividend.

In answering the question, Aramco's CFO, Khalid al-Dabbagh, explained that Aramco's executives and board of directors policy regarding the Ordinary Dividend is based on three criteria: sustainability, affordability and a benchmark. According to al-Dabbagh, such a high dividend in 2019 was possible despite lower profits because Aramco made more than anticipated in 2018. However, he did not address the fact that this incomparably high dividend is given because it is needed to satisfy a significant part of Saudi Arabia's budget. Saudi Arabia, as a country, could not survive without this dividend and its royal family could not prosper.

Even more important are the implications of this dividend should Aramco go public. For example, will this type of dividend be available to the holders of publicly traded shares or will the Saudi government be the only recipient of "Special Dividends" or even the "Ordinary Dividends" from Aramco? If Aramco makes its lucrative dividend available to shareholders other than the Saudi government, then Aramco shares could prove highly valuable. On the other hand, if Aramco continues to fund the Saudi government through a dividend that is unavailable to other shareholders, then the public could very well find Aramco shares a highly unattractive prospect.
MRC

MOSCOW (MRC) -- Mittal Energy Limited (HMEL) has decreased production runs at Polypropylene (PP) plant owing to technical issues, said Apic-online.

A Polymerupdate source in India informed that the company has cut the production runs at the plant to around 60-70% of capacity levels in early-August, 2019. The plant is likely to operate at the same levels until the plant shuts for maintenance in last week of August 2019.

Located at Bhatinda, Punjab in India, the PP plant has a production capacity of 440,000 mt/year.

As MRC informed earlier, HPCL-Mittal Energy Ltd (HMEL) has recently received clearance from India’s ministry of environments for the polymer addition project at its Guru Gobind Singh refinery and Petrochemical complex.

Hindustan Petroleum Corporation Limited (HPCL) is an Indian state-owned oil and natural gas company with its headquarters at Mumbai, Maharashtra and with Navratna status. HPCL has about 25% marketing share in India among PSUs and a strong marketing infrastructure. The Government of India owns 51.11% shares in HPCL and others are distributed amongst financial institutes, public and other investors.
MRC

MOSCOW (MRC) -- Royal Dutch Shell Plc is restarting the Gas Olefins Unit 1 (GO 1) at its Norco, Louisiana, chemical plant on Monday, sources familiar with plant operations said, as per Reuters.

Shell plans to begin restarting the 25,000 barrels per day (bpd) coker in the adjoining 225,300 bpd Norco refinery this week, the sources said.

As MRC reported before, in March 2018, Shell EP Middle East Holdings B.V. completed the sale of the entire share capital of Shell Iraq B.V (SIBV), which held its 19.6% stake in the West Qurna 1 oil field, for USD406 million, to a subsidiary of ITOCHU Corporation.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Private equity firm Kohlberg & Co. LLC has completed the acquisition of Bemis Healthcare Packaging Europe from Amcor’s Flexible Packaging business unit, said Canplastics.

First announced in June, the deal will see the Bemis unit merged with Nelipak Corp., a global supplier of custom packaging for the medical device and pharmaceutical industries that Kohlberg acquired in July 2019.

In a statement issued at the time of sale, Australia-based Amcor said that the divestment was required by the European Commission at the time of approving Amcor’s acquisition of Bemis on 11 February 2019.

Bemis Healthcare Packaging operates facilities in Clara, Ireland; Derry, Northern Ireland, UK; and Elsham, UK.

Mount Kisco, N.Y.-based Kohlberg reportedly paid USD394 million for the three plants, which collectively generate annual sales of approximately USD170 million supplying flexible packaging to healthcare OEMs.

“We are excited about the addition of the Bemis European Healthcare Packaging business,” said Mike Kelly, president and CEO of Nelipak, said in a statement. “We will leverage the unique capabilities of both organizations to delight our customers with innovative designs, world-class quality and excellent service. This will significantly enhance Nelipak’s capabilities with the addition of flexible packaging alternatives for our global customers."
MRC