AkzoNobel Q3 net income falls by 46%

MOSCOW (MRC) -- AkzoNobel, the Dutch paints and performance coatings multinational, has reported net income falls by 46% to EUR162.0 mln, said the company.

AkzoNobel's third-quarter net income fell on a year-on-year basis on the back of higher contributions from discontinued operations in the same period of 2018. The company's third-quarter 2018 net income from discontinued operations stood at €152m. The company did not post any net income from discontinued operations in the third quarter of this year.

The Amsterdam-based company credited its Q3 performance to selected price hikes and cost savings. It said it is on target to achieve a 15% return on sales in 2020, up from 13.8% this year. An increasing ROS means a company grows more efficiently.

"We are delivering toward our 15% by 2020 strategy," said AkzoNobel CEO Thierry Vanlancker.

He added the Q3 profit “was a year-on-year increase for the fifth quarter in a row. Our profit improvement of 23% in the third quarter was strong, even though we had to deal with softer end market demand."

Vanlancker also announced his company will buy back EUR500m of its own shares, an investor-pleasing move bound to boost the value of their shares in the company.

AkzoNobel is active in several markets, including boatbuilding. It recently unveiled Awlgrip HDT (High Definition Technology), a new single-stage repairable topcoat.

Vanlancker says the global market is relatively “subdued” except in aerospace and powder coatings. He said that “continued pricing initiatives and cost-saving programs are in place to address the current challenges.” In recent years, AkzoNobel implemented cost savings of EUR19m.

As it was written before, 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.

As MRC informed earlier, BASF would expand the capacity of ethylene oxide and ethylene oxide derivatives at its Verbund site in Antwerp, Belgium. The total investment adds about 400 000 tpy to BASF’s production capacity for the corresponding products with an expected investment amount exceeding EUR500 million.

Ethylene is a feedstock for producing polyethylene (PE).

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.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

MOSCOW (MRC) -- Sinochem Hongrun's new 800,000 mt/year PX plant in the Weifang Binhai economic development zone in Shandong province was shut down last week, sources said, attributing the shutdown to technical issues, reported S&P Global.

Market sources said Hongrun had been selling MX cargoes in the domestic market, after the PX plant was shut down.

The shutdown is expected to last for two weeks, but that could not be immediately confirmed. The new PX plant was started in June.

Hongrun is expected to sell about 30,000 mt/month of PX to Yisheng Petrochemical, China's largest purified terephthalic acid (PTA) producer, which will be delivered by ship to the latter's PTA plants at Dalian.

As MRC informed before, China's Fuhaichuang Petroleum and Petrochemical, formerly known as Dragon Aromatics, shut one of its two PX lines at Gulei, Fujian province on 14 October also due to poor margins. The company has two lines that both can produce 800,000 mt/year of PX.

PX is a feedstock for the production of purified terephthalic acid (PTA). PTA is used to produce polyethylene terephthalate (PET), which, in its turn, is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.
MRC

MOSCOW (MRC) -- Dow Inc. reported lower quarterly profit and sales, citing a decline in global energy prices, said the company.

An oversupply of ethylene and polyethylene as well as the impact of U.S.-China trade tensions on demand for chemicals forced Dow in July to forecast lower-than-expected third-quarter revenue and cut its targets for full-year spending.

The company, which makes chemicals used in paints, cosmetics and plastics, said it had now saved about USD1.37 billion as part of a previously-announced cost reduction program, and had cut an additional USD40 million in expenses in the latest quarter.

Its main indicator of operating profit fell 32% to 91 cents per share but that was still 18 cents per share better than consensus forecasts.

It said sales volumes fell 2% in the third quarter, while prices declined 12%. Sales in EMEAI and the U.S. and Canada were down respectively 17.5% and 15.6%, while those in Asia-Pacific fell just 7.5%.

As MRC informed earlier, Dow Chemical's propylene dehydrogenation (PDH) unit in Freeport, Texas, is offline for a turnaround. Sources said the PDH unit went offline for scheduled maintenance September 26, and the work is expected to last 45-60 days. Originally, sources expected the turnaround to begin in early September, but then learned it had been delayed.

As MRC informed previously, Dow Chemical began major maintenance on the LHC 1 cracker at Terneuzen, Netherlands from 9 September, 2019. More than 1,500 extra employees from various external companies will carry out maintenance work in the subsequent period.

Propylene is a feedstock for producing polyprolypele (PP).

According to MRC's ScanPlast report, 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.

Dow believes that plastic waste has value and can be transformed into new products and energy. In addition to plastic roads, Dow is working with key partners in South America to use recycled plastics to develop construction materials for schools in Colombia. Dow is also at the forefront of developing and scaling chemical recycling technology to take recycled plastic waste back to feedstock for the creation of new products. By reimagining new ways to reuse, recycle and repurpose plastic waste, Dow and its partners are leading the way in the development of innovative circular economy solutions.

MRC

MOSCOW (MRC) -- An information technology incident was hampering the Finnish and Baltic regional operations of Finnish refiner and biofuels specialist Neste on 14 October, 2019, reported S&P Global.

Now In a statement, the company, based near Helsinki and a major supplier to the Baltic region, said its production operations in Finland and the Baltic were being affected by an "extensive information system failure".

"The situation affects Neste Finland and Baltic process, tank and terminal areas, and causes delays in product distribution," Neste said. "The situation is being investigated together with our service providers."

It did not say whether it considered the incident a hostile attack, and did not immediately respond to a request for comment.

Neste operates the 260,000 b/d Porvoo refinery, incorporating the Naantali refinery, which produces conventional oil products and some renewable diesel refined from waste and residues.

It also has two dedicated renewable diesel refineries, in Rotterdam and Singapore, claiming to be the world's largest producer of diesel of this type, but these facilities did not appear to be affected by Monday's incident.

About three quarters of the crude oil processed at the company's Finnish facilities is Urals crude, which is delivered by tanker.

The company's conventional refined product volumes totaled 3.52 million mt in the second quarter. The Baltic region accounted for 58% of sales of the conventional fuel it produced in Q2, with 30% sold elsewhere in Europe and 11% in North America, it said in a July statement.

As MRC wrote previously, Neste Oyj and Borealis Polymers Oy, in co-operation with the energy companies Fortum Power and Heat Oy, Helen Oy, Vantaan Energia Oy and Porvoon Energia Oy - Borga Energi Ab, will conduct a preliminary study on recovering and utilizing excess heat generated at the Neste and Borealis industrial manufacturing facilities in Kilpilahti, of which Neste informed in its June 2018 press release. The study will focus on the technical and economic impacts of recovering excess heat at these facilities and recirculating it into district heating systems in Porvoo and the Helsinki metropolitan region.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Neste creates sustainable solutions for transport, business, and consumer needs. The company's wide range of renewable products enable our customers to reduce climate emissions. The company is the world's largest producer of renewable diesel refined from waste and residues, introducing renewable solutions also to the aviation and plastics industries. It is also a technologically advanced refiner of high-quality oil products.
MRC

MOSCOW (MRC) -- Russian crude producer Lukoil is in talks with Saudi Aramco on potential joint projects outside Russia and Saudi Arabia, including some in Africa, reported S&P Global with reference to CEO Vagit Alekperov's statement Wednesday on the sidelines of the Russia-Africa Summit in Sochi.

"We are constantly discussing joint opportunities with them, including their interest in third countries, in Africa, but this is still at the stage of studying and talks," Alekperov told reporters.

He added that the companies are not currently in talks over cooperation in Uzbekistan.

Alekperov said that Lukoil is also looking to increase its cooperation with Eni in the Republic of Congo.

Earlier this year Lukoil acquired a 25% stake in the Marine XII license offshore the Republic of Congo, on which Eni is operator and holds a 65% stake. State-owned company Societe Nationale des Petroles du Congo also holds a 10% interest in the project.

Alekperov added that the company assumes an oil price of around USD60/b in its budget and other economic parameters, and that African projects that the company is looking into are commercially viable at this price.

Lukoil is planning to sign new agreements with African partners during the summit, Alekperov said.

"These are, as a rule, offshore projects, plus a number of African countries asked us to study and give possible comments on downstream," he said.

Finally he said Lukoil was not in talks with Brazil's Petrobras over a stake in two production projects in Nigeria. Earlier this month the Nigerian Petroleum Ministry indicated that Lukoil was interested in taking over Petrobras' stakes.

According to ICIS-MRC Price report, Stavrolen (part of Lukoil), Russia's major polyolefins producer, has resumed its polypropylene (PP) production in Budennovsk after a long scheduled turnaround. The plant's customers said Stavrolen had fully resumed its PP production after the long scheduled maintenance by 15 October. The outage began on 6 September. The start-up of the plant"s high density polyethylene (HDPE) production will take place with a week delay.

Lukoil is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. In Lukoil structure includes one of the largest Russian and Ukrainian petrochemical industries Stavrolen and Karpatneftekhim.
MRC