OMV declares force majeure at its cracker in Germany

MOSCOW (MRC) -- OMV has declared force majeure on supplies from its cracker in Burghausen Refinery, Germany, reported NCT with reference to market sources.

The news was not directly confirmed by the company at the time of press.

The 450,000 tons/year cracker of the refinery faced a technical glitch by late August, said local media sources. Some industry participants expect the malfunction to be solved by early September.

According to the company’s website, the Burghausen Refinery has a crude oil processing capacity of 3.8 million tons/year. OMV operates three refineries in Schwechat (Austria), Burghausen (South Germany) and Petrobrazi (Romania), with a total annual refinery capacity of 17.8 million tons.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

MOSCOW (MRC) -- South African producer Sasol announced that a technical problem that interrupted the start-up at its new ethane cracker in Lake Charles, the US, for several days was successfully resolved on 26 August and the start-up resumed, reported NCT.

The company stated that it is currently halfway through achieving beneficial operations and that the 1.5 million tons/year cracker is currently operating at a capacity utilization rate of around 50%, in line with Sasol’s ramp-up plans.

The company expects to lift operation rates further after all operational issues are resolved.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
MRC

MOSCOW (MRC) -- BASF and the fine chemical company DIC have reached an agreement on the acquisition of BASF’s global pigments business. The purchase price on a cash and debt-free basis is EUR1.15 billion, as per BASF's press release.

The transaction is expected to close in the fourth quarter of 2020. The divestiture is subject to the approval of the relevant competition authorities.

"We have achieved our goal to find an owner who considers pigments a core strategic business," says Dr. Markus Kamieth, member of the Board of Executive Directors of BASF SE, responsible for the Industrial Solutions segment. "DIC pursues ambitious growth plans and has announced to further develop the business in the coming years. We are convinced that the pigments business will be able to unfold its full potential within DIC."

DIC is a Japanese company listed at the Tokyo Stock Exchange with about 20,000 employees globally. The company headquartered in Tokyo was founded in 1908, is active in more than 60 countries and generated sales of approximately 800 billion yen in 2018. This corresponds to about €6.8 billion. Under the slogan "Color & Comfort," DIC is active in three segments: Packaging & Graphics, Functional Products and Color & Display. Color & Display includes a portfolio of pigments.

"We have outlined a clear growth path for DIC with the target to increase our sales to 1 trillion yen, i.e. approximately EUR8 billion, by 2025. In this context, BASF’s pigments portfolio is an important strategic addition in meeting our goals more expeditiously. It will allow us to expand our position as one of the leading pigment suppliers globally and offer our customers even more versatile solutions," Kaoru Ino, President and Chief Executive Officer of DIC comments on the agreement reached.

For Dr. Alexander Haunschild, Senior Vice President and Managing Director at BASF’s pigment-focused subsidiary BASF Colors & Effects, the agreement is a chance to continue the growth path started in 2016: "We see DIC as an owner who is willing to invest, committed to innovations and interested in the longer term success of the business."

Myron Petruch, DIC Executive Officer and Chief Executive Officer of DIC’s group company being active in the pigments market, Sun Chemical, adds: "As a long-standing business partner of BASF, we value the expertise and engagement of BASF’s employees in the pigments business. By combining our businesses, DIC/Sun confirms the ambition to be one of the most innovative pigment suppliers globally."

BASF’s pigments business with around 2,600 employees globally generated sales of approximately EUR1 billion in 2018.

As MRC reported earlier, in December 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of around EUR63 billion in 2018.
MRC

MOSCOW (MRC) -- There was an acute shortage of material in the Russian polystyrene (PS) market in late August-early September 2019, according to ICIS-MRC Price report.

A general purpose polystyrene (GPPS) producer reported converters' increasing complaints about the shortage of material.

A similar situation was seen in the high impact polystyrene (HIPS) market.

A major converters are in a better position, and they are usually provided with sufficient quantities of material.

At the same time, small- and medium-sized converters were forced to look for PS from other, larger market players.

The market is expected to return to a situation of the balanced supply and demand closer to mid-autumn. Penoplex and Gazprom neftekhim Salavat should return to the standard operational mode of PS production in September.

In addition, the plant's sources told MRC on Monday Nizhnekamskneftekhim plans to operate its production capacities iin a standard mode in September.
MRC

MOSCOW (MRC) -- Gazprom neftekhim Salavat, one of Russia's largest production complexes for oil refining and petrochemicals, has begun resuming its low density polyethylene (LDPE) production after a scheduled turnaround, according to ICIS-MRC Price report.

The plant's customers said Gazprom neftekhim Salavvat had started commissioning works to resume its LDPE production after the scheduled maintenance since last weekend. Gazprom neftekhim Salavat's LDPE annual production capacity is 120,000 tonnes/year.

It is worth noting that the outage at LDPE production capacities in Salavat started on 1 July and was planned for 30 days. But the launch of the unit was postponed a month later due to a shortage of ethylene.

OAO "Gazprom neftekhim Salavat" (formerly OAO "Salavatnefteorgsintez") is one of the leading petrochemical companies in Russia, carrying out a full cycle of processing hydrocarbon material. The list of products manufactured by the plant includes more than 140 items, including 76 grades of the main products: gasoline, diesel fuel, kerosene, fuel oil, toluene, solvent, liquefied gases, benzene, styrene, ethylbenzene, butyl alcohols, phthalic anhydride and plasticizers, polyethylene, polystyrenes, silica gels and zeolite catalysts, corrosion inhibitors, elemental sulfur, ammonia and urea, glycols and amines, a wide range of household products made of plastics, surfactants and much more.
MRC