Saudi Kayan announces the annual financial results 2019

MOSCOW (MRC) -- Saudi Kayan swung to a net loss in 2019 following a drop in selling prices, despite a rise in sales volumes, said Tadawul.

The reason for achieving a net loss is due to the decrease in the average selling prices of the products, despite an increase in the quantities produced and sold and a decrease in the average cost of feedstock and general and administrative expenses.

Saudi riyals (SR) million 2019 2018 % change
Sales 9,536.40 12,263.15 -22.2
Operational profit 379 2,660.58 -85.8
Net profit -636.77 1,702.24

Full-year earnings were also weighed by the decrease in the average cost of feedstocks as well as higher general and administrative expenses, the company said in a filing to the Saudi bourse, Tadawul.

As MRC informed earlier, Saudi Kayan announced a 21-day scheduled maintenance shutdown for its ethylene glycol (EG) and ethylene oxide (EO) facilities at Jubail, Saudi Arabia, starting on 1 February. The company says that some of its other facilities that rely on EG and EO feedstocks will also undergo periodic maintenance and improvements.

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).

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic, 35%). Saudi Kayan is the fifth-largest petrochemical manufacturer by market value in Saudi Arabia.
MRC

ADNOC positioned to raise supply in April

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) aims to increase its supply of oil in April, 2020, reported Hydrocarbonprocessing.

ADNOC Group CEO, H.E. Dr. Sultan Ahmed Al Jaber comments on recent market developments:

"Today, as a result of the steps we’ve taken over the last four years, ADNOC is far stronger and better positioned to respond to current market conditions. Our focus on driving performance, profitability and efficiency has made us more resilient, agile and responsive to market dynamics. These guiding principles remain unchanged as we move forward with projects across our value chain.

"In line with our production capacity growth strategy announced by the Supreme Petroleum Council, we are in a position to supply the market with over 4 MMBPD in April. In addition, we will accelerate our planned 5 MMBPD capacity target.

"In response to market conditions, and to provide better forward visibility to our customers, ADNOC will shortly announce forward prices for the months of March and April 2020. This decision has been made to ensure that our customers have visibility of the price so they can plan accordingly.

"As announced in November 2019, ADNOC remains firmly committed to moving from its current retroactive pricing mechanism to a new forward pricing mechanism for its flagship Murban crude oil. This will be traded on a new independent exchange, ICE Futures Abu Dhabi (IFAD), which is expected to launch after the necessary regulatory approvals are obtained.

"As planned, we remain committed to creating and maximizing value from across our portfolio, while we advance our smart growth strategy."

As MRC informed earlier, in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

Shell in talks to book tankers for crude floating storage

MOSCOW (MRC) -- Royal Dutch Shell is in discussions to charter at least three supertankers to store around 6 million barrels of crude oil at sea, reported Reuters with reference to shipping sources' statement.

Shell has provisionally booked the vessels, known as very large crude carriers (VLCCs), for storage options for at least three months, the sources said, adding that the fixtures were still to be concluded.

A Shell spokeswoman declined to comment.

If fully fixed, these would be the first tankers to be used for floating storage after the recent fall in oil prices.

The shipping sources said at least one of the vessels had an option to store oil in the United States.

Oil prices and the broader crude market pricing structure collapsed in recent days after OPEC and other major producing nations ended an output cut deal.

A glut of crude oil in global spot markets is forcing the price of oil for immediate delivery below forward futures costs, known as a contango structure, making it potentially profitable to buy oil, store it offshore onboard vessels and sell it later at higher prices.

Brent crude futures for nearby delivery are trading at their biggest discount to the November contract in over four years, according to Refinitiv data.

As MRC reported earlier, Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 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 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

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

Linde earnings higher on price gains, cost savings

MOSCOW (MRC) -- Linde reported a strong fourth-quarter as "solid operating leverage" from higher prices and cost savings offset modest volume gains, according to Chemweek.

The company reported fourth-quarter adjusted income from continuing operations of USD1.0 billion, up 22% year on year (YOY) on higher price and margin improvement. Sales were USD7.1 billion up 1% YOY; volumes were also up 1%. Excluding currency impact, sales for the quarter were up 3% YOY.

Reported earnings were USD1.89/share up 25% YOY and 4 cents/share above consensus estimates as reported by Zacks Investment Research.

Linde expects full-year 2020 earnings per share (EPS) in the range of USD8.00–8.25, up 10–13% YOY excluding currency impacts. "Looking ahead to 2020, we anticipate continued softening of macroeconomic conditions, but project double-digit EPS growth from our industry-leading backlog and continued efforts to optimize the business," says Linde CEO Steve Angel.

Americas segment operating profit was USD676 million in the fourth quarter, up 11% YOY. Segment sales were USD2.7 billion, up 2%. Volume gains were led by "the resilient end markets of healthcare, food, and beverage," Linde says.

Europe, Middle East, and Africa segment operating profit was USD353 million, up 19% YOY. Sales of USD1.7 billion were down 3% YOY. Excluding unfavorable currency and cost pass-through, sales increased 1%. Pricing was 3% higher but partially offset by negative volumes primarily due to weaker manufacturing activity, Linde says.

Asia Pacific segment operating profit was USD299 million, up 22%. Segment sales of USD1.4 billion were down 3% YOY. Sales were flat versus prior year excluding negative currency and cost pass-through. Price increased 2% but was offset by negative volumes driven by weaker economic conditions in South Pacific, lower electronics end market activity, and higher sale of equipment in the prior year, Linde says.

Engineering segment operating profit was USD93 million, up 21% YOY. Sales were USD770 million, up 8%. Operating profit grew due to strong project execution, productivity and better cost absorption, Linde says.

Linde also set out updated sustainability goals, including plans to lower its greenhouse gas emissions intensity 35% by 2028. Linde says it will invest at least USD1 billion in decarbonization projects and spend one-third of R&D budget on decarbonization initiatives through 2028. Linde also plans to double its purchase of renewable power by 2028.

As MRC wrote previously, in H1 February 2020, Linde PLC commissioned a new air separation unit (ASU) in Freeport, Texas, as part of a long-term agreement to supply MEGlobal Americas Inc.’s new monoethylene glycol (MEG) plant at Oyster Creek petrochemical complex in Freeport. The new ASU will supply oxygen and nitrogen to MEGlobal Oyster Creek for use in its MEG manufacturing process. The ASU also will supply Linde’s industrial gas pipeline system, adding new argon capacity, Linde said.

We remind that MEGlobal Americas officially began production at its 750,000 ton per year MEG plant in October last year to meet the growing demand for ethylene glycol products in the US and Asia-Pacific markets, as well as its strategy to expand globally.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia decreased by 16% year on year in December 2019. Russia's overall estimated PET consumption totalled 696,810 tonnes in 2019, up by 1% year on year (690,130 tonnes in 2018).
MRC

PTTGC to restart LDPE plant in Thailand following emergency shutdown

MOSCOW (MRC) -- State-owned PTT Global Chemical Public Co Ltd would be able to resume operation at its low density polyethylene (LDPE) units by 17 March 2020 following an emergency shutdown during mid of February 2020, reported CommoPlast.

The unit is designed to produce 400,000 tons/year and has been shut longer than expected, which players attributed to the draught issue in Thailand recently.

The maker is unable to supply LDPE cargoes to regional buyers throughout March due to the shutdown. Offers would be resumed for April shipment.

As MRC informed before, PTT Global Chemical (PTTGC) fully restarted its No. 2 cracker in Map Ta Phut last week after a planned turnaround. The company started resuming operations at the cracker by end-February, 2020. This cracker was shut for maintenance on January 20, 2020.

The company also operates No. 1 cracker at the same site with a capacity of 515,000 tonnes of ethylene and 310,000 tonnes of propylene per year, which was also shut on 23 January, 2020, for a 40-day turnaround.

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

According to MRC's ScanPlast report, Russia's January estimated LDPE consumption decreased to 43,110 tonnes from 50,910 tonnes a year earlier. On the back of the increased output, some domestic producers significantly raised their export sales in the first month of the year.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC