Eastman sales revenue decreases to USD2,205 mn in Q4 2019

MOSCOW (MRC) -- Eastman Chemical Company’s sales revenue decreased to USD2,205 million in Q4 2019 compared to USD10,151 million in Q4 2018, reported Fibre2Fashion.

The 2019 full-year revenue ending January 30, 2020, decreased to USD9,273 million compared to USD10,151 million for year 2018. Eastman is a global specialty materials company that produces products found in items people use every day.

"We demonstrated resilience in the fourth quarter despite continued difficult global economic conditions impacting consumer discretionary markets such as transportation," said Mark Costa, board chair and CEO. "Notwithstanding the challenging conditions, for the year, we continued to make strong progress growing new business revenue from innovation and market development initiatives, particularly in the Advanced Materials segment. In addition, with full-year free cash flow approaching USD1.1 billion, we once again showed our capability to generate strong cash flow. Although we don’t expect global economic conditions to improve in the coming year, we remain confident in our strategy and the strength of our cash flow going forward."

In Additives & Functional Products segment, sales revenue decreased primarily due to lower selling prices, lower sales volume, and an unfavourable shift in foreign currency exchange rates for the fourth quarter of 2019 compared to 4Q 2018.

In Advanced Materials segment, sales revenue decreased due to slightly lower sales volume and an unfavourable shift in foreign currency exchange rates in 4Q 2019.

In the Chemical Intermediates segment, sales revenue decreased primarily due to lower selling prices across the segment attributed to lower raw material prices and increased competitive activity.

In Fibers segment, sales revenue decreased primarily due to lower acetate tow sales volume attributed to weakened market demand resulting from general market decline and customer buying patterns.

"We enter 2020 in a period of significant uncertainty related to macro factors that are out of our control. In this environment, we are focused on what we can control, including growing new business revenue by leveraging our innovation-driven growth model, aggressive cost management, and disciplined capital allocation. We are currently assuming that slow growth continues in 2020 at levels similar to 2019, although with less inventory destocking. Taking all of this together, we expect 2020 adjusted earnings per share to be between USD7.20 and USD7.60 and free cash flow to be between USD1.0 billion and USD1.1 billion," said Costa.

As MRC informed previously, Eastman Chemical wanted to reduce its surplus ethylene and commodity intermediates in 2016, but did not intend to sell its cracker in Longview, Texas, said chief executive Mark Costa in February, 2016.

We also remind that on 31 January, 2020, the company shut its cracker No. 3 in Longview because of a technical glitch. This unit has a production capacity of 215,000 tonnes of ethylene per year. Eastman also operates cracker No. 4 at this site with the capacity of 355,000 tonnes of ethylene per year. This cracker was taken off-stream from 19 to 24 January, 2020, due to a leak.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in approximately 100 countries and had 2014 revenues of approximately USD9.5 billion. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 15,000 people around the world.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price increase for all polystyrene (PS) grades, acrylonitrile-butadiene-styrene (ABS) and acrylonitrile styrene copolymer (SAN) grades in Europe, according to the company's press release.

Effective February 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

-- STYRON general purpose polystyrene grades (GPPS) -- by EUR100 per metric ton;
-- STYRON and STYRON A-Tech and STYRON X- Tech high impact polystyrene grades (HIPS) - by EUR100 per metric ton;
- MAGNUM ABS resins - by EUR55 per metric ton;
- TYRIL SAN resins - by EUR55 per metric ton.

As MRC informed before, Trinseo increased its prices for all PS grades on 1 January 2020, as stated below:

- STYRON GPPS grades - by EUR75 per metric ton;
- STYRON and STYRON A-Tech HIPS grades - by EUR75 per metric ton;
- MAGNUM ABS resins - by EUR70 per metric ton;
- TYRIL SAN resins - by EUR70 per metric ton.

According to ICIS-MRC Price report, significant changes are not expected in the Russian PS market this month. Nizhnekamskneftekhim rolled over January prices of material for shipments in February. Penoplex also maintained its GPPS prices the same, whereas Gazprom neftekhim Salavat will finally set February prices this week, but no major changes are expected.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
MRC

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, brought capacity untilisation at its vinyl acetate monomer (VAM) unit in Clear Lake (Texas, USA) to 100% in late January 2020, as per the company's press release.

In October 2019, Celanese Corporation was progressing in restarting on-site production units after experiencing an emergency incident on Saturday, September 21, at its Clear Lake facility in Pasadena, Texas. The Fairway Methanol unit restarted in early October 2019 and approached full operating rates in mid-October. The acetic acid and VAM production units restarted at reduced rates during October, with full operating rates inititally expected for all production units at Clear Lake within the fourth quarter of 2019.

We remind that Celanese Corporation experienced an emergency incident at approximately 12:00 noon Central time on Saturday, Sept. 21, at the Celanese Clear Lake facility in Pasadena, Texas.

According to MRC's DataScope report, December 2019 EVA imports to Russia dropped by 4,1% year on year to 3,600 tonnes from 3,760 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation decreased in January-December 2019 by 17,8% year on year to 39,55 tonnes (48,09 tonnes in 2018).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2018 net sales of USD7.2 billion.
MRC

MOSCOW (MRC) -- A fire in Syria’s Homs refinery was put out by civil defense and the refinery firefighting unit on Tuesday, shortly after a gas compressor in the 6th project exploded, reported Reuters with reference to state TV.

No information was immediately available on whether production was affected.

The refinery, located west of Homs, is one of two main refineries covering most domestic demand for diesel, heating fuel, gasoline and other products, industry experts say.

As MRC informed earlier, at the end of last week, Militants attacked Syria’s Banias refinery near the Mediterranean coast, sending divers to plant explosives on underwater pipelines. The extent of the damage was not immediately clear, though state media reported that technicians were evaluating the damage and making repairs.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

MOSCOW (MRC) -- LG Chem's operating profit fell 60% in 2019 to 895.6 billion won (USD750 million), as it spent around 320 billion won to prop up its ailing battery business, reported NIKKEI Asian Review with reference to the company's statement Monday.

The South Korean chemical and battery maker was hit hard last year by problems with its energy storage systems, a number of which caught fire in South Korea. The batteries are designed to store electricity generated by solar and wind power systems.

LG Chem's sales of batteries for electric vehicles rose. Overall, the company's revenue increased 2% to 28.6 trillion won. However, operating profit fell for the second straight year.

The petrochemical business, which accounts for 54% of the company's sales, produced an operating profit of 1.42 trillion won. But the battery operations, which contribute less than 30% of sales, lost 454.3 billion won.

Despite the setbacks, LG Chem continues to invest heavily in EV batteries, including a joint venture with U.S. automaker General Motors to build a new factory that will produce batteries for electric cars. LG Chem forecasts battery sales will rise 79% to 15 trillion won in 2020, which would put the business on par with the petrochemical operations.

The company faces tough competition from Chinese rivals in EV batteries, weighing on its profitability, in addition to weak demand for smartphone batteries. In the EV battery market, China's Contemporary Amperex Technology Co. Ltd. and BYD are spending heavily on development and manufacturing, in tie-ups with big automakers.

As MRC wrote previously, LG Chem, a South Korean petrochemical major, has reduced its operational rates of its cracker to around 90-95% starting January 2020 due to weaker economic fundamentals. Based in Daesan, South Korea, the cracker is able to produce 1.27 million tons/year of ethylene and 650,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC