MEGlobal reduces ACP for April 2020 by USD40 per tonne

MOSCOW (MRC) -- MEGlobal has announced its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in April 2020, according to the company's press release.

Thus, on 16 March the company said ACP for MEG will be USD640/MT CFR Asian main ports for arrival in April 2020, down by USD40/MT from March.

The April 2020 ACP reflects the short term supply/demand situation in the Asian market.

As MRC reported earlier, MEGlobal announced its March ACP for MEG at USD680/MT CFR Asian main ports, down by USD60/tonne from February.

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

According to ICIS-MRC Price report, influence of two opposing trends sharply increased in the Russian market last week. On the one hand, a sharp rise in the dollar against the rouble put upward pressure on prices of Russian PET.
On the other hand, a decline in Asian prices had a downward effect, prices decreased significantly last week.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).
MRC

Lotte Fine postpones maintenance at caustic soda unit N. 1 in Ulsan

MOSCOW (MRC) -- Lotte Fine Chemical delays turnaround at its caustic soda unit No. 1 by two weeks, according to Apic-online.

A Polymerupdate source in South Korea informed that, the company is likely to start turnaround at the unit on March 19, 2020. The planned outage is expected to remain on force till end-April, 2020.

Located at Ulsan in South Korea, the caustic soda unit has a production capacity of 210,000 mt/year.

As MRC informed before, in December 2019, Lotte Chemical Corp., a major South Korean chemical company, said its merger with Lotte Advanced Materials Co. would be completed by 2 January 2020. The company announced the merger plans on 22 August 2019, when it unveiled its decision to merge with its wholly owned subsidiary as part of efforts to streamline its chemical business.

Lotte Chemical formerly owned a 90 percent stake in Lotte Advanced Materials after it acquired the company from Samsung Group in April 2016. It bought the remaining 10 percent stake from Samsung SDI Co. for KRW 279.5 billion (USD 231 million) on 30 July 2019.

Lotte Chemical said the move is intended to help boost the company's competitiveness by bringing specialty chemicals businesses under the same wing and maximizing efficiency in management. The merger will also boost its annual polycarbonate (PC) production capacity to 460,000 tons.

according to MRC's ScanPlast report, Russia's consumption of caustic soda increased to 1,071,500 tonnes in 2019, up 10% year on year (975,600 tonnes). Russia's imports of caustic soda were 32,300 tonnes in 2019, up 61% year on year (20,000 tonnes). Exports of caustic soda from Russia decreased to 245,400 tonnes in 2019, down 7% year on year (263,600 tonnes). Production of caustic soda in the country totalled 1,289,400 tonnes in the 2019, up 1% year on year (1,278,900 tonnes).
MRC

Ukrainian PE imports down by 5% in Jan-Feb 2020

MOSCOW (MRC) -- Overall polyethylene (PE) imports into the Ukrainian market dropped in the first two months of 2020 by 5% year on year to 39,900 tonnes. Linear low density polyethylene (LLDPE) and low density polyethylene (LDPE) accounted for the main decrease in shipments, according to MRC's DataScope report.

Last month's PE imports to Ukraine rose to 20,500 tonnes from 19,400 tonnes in January, local companies increased shipments of all ethylene polymers grades, except for ethylene-vinyl-acetate (EVA). Thus, overall PE imports reached 39,900 tonnes in January-February 2020, compared to 41,800 tonnes a year earlier.

The structure of PE imports by grades looked the following way over the stated period.


Last month's high density polyethylene (HDPE) imports grew to 8,100 tonnes from 7,800 tonnes, Ukrainian companies significantly raised their purchasing of film grade PE due to the shutdown of the domestic plant. Overall HDPE imports exceeded 15,900 tonnes in the first two months of 2020 versus 13,600 tonnes a year earlier.

February LDPE imports were slightly less than 6,500 tonnes, compared to 6,000 tonnes a month earlier, local companies raised their purchasing of LDPE in Russia before stronger demand in spring. Overall LDPE imports reached 12,500 tonnes over the stated period, compared to 12,800 tonnes a year earlier.

Last month's LLDPE imports were 5,200 tonnes versus 4,300 tonnes in January, with stretch films producers accounting for stronger demand for PE. Overall LLDPE imports reached 9,500 tonnes in January-February 2020, compared to 13,200 tonnes a year earlier.

Imports of other PE grades, including EVA, totalled about 2,000 tonnes over the stated period, compared to 2,300 tonnes a year earlier.

MRC

DOMO Chemicals to invest EUR12 million in new nylon plant in China

MOSCOW (MRC) -- DOMO Chemicals, a leading producer of high-quality engineering materials for a diverse range of markets, has announced plans for a new state-of-the-art plant in Zhejiang, China, as per the company's press release.

The new plant will be capable of producing 50,000 tons of sustainable and innovative engineered nylon compounds each year. The company signed a new factory project through “cloud contract” with PingHu DuShan port Economic Development District on February 20, 2020. Production is expected to commence in the fourth quarter of this year.

DOMO Chemicals will invest EUR12 million in the new plant, which will have more than 11,500m2 floor space. The company plans to install multiple production lines at the first stage of development, which would offer an estimated capacity of 25,000 tons/year. There will be enough additional space available to cope with future demand requirements. The move is in line with the company’s global growth strategy with a strong focus on the Asia Pacific (APAC) region.

Speaking during a video ceremony of the signing, Vice President Global Engineering Plastics, Mr. Ludovic Tonnerre stated: "DOMO Chemicals has only been operating in China since 2015, but we are growing rapidly. Despite the current coronavirus challenges, we are confident that China will lead the world in embracing a future generation of sustainability and e-mobility solutions. We are very grateful to the government and relevant departments for their patience and assistance and are confident in our long term cooperation, relationships and mutual opportunities."

The new plant will be located in the convenient transportation port area of DuShan Pinghu city, Zhejiang province, which is in close proximity to Shanghai and facing the East China Sea. The modern factory will integrate R&D, production, and sales. It will mainly develop and produce modified engineering plastics such as nylon 6, nylon 6.6* and high temperature nylon (HTN). These products meet the rising market demand for modified materials for the automotive, electronics and consumer industries.

DOMO will implement measures that exceed the requirements for environmental protection for the equipment, processes and technologies used at the new plant. The company will be investing in new air and water treatment technologies, and in the reduction of water and energy consumption. This is in line with the overarching DOMO Philosophy: "Caring is our formula."

The contract, which was signed remotely during the ongoing coronavirus situation, demonstrates DOMO’s long term commitment to the Chinese economy and the resilience of local Chinese colleagues and partners. DOMO has strictly complied with the government's protection requirements at all times and diligently checked on the wellbeing of the work personnel.

Fabrizio Cochi, General Manager Asia/Pacific at DOMO Chemicals concludes: "When DOMO Engineering Plastics started in China, we operated a small plant with two machines, with the aim of supplying our global automotive customers. In 2019, despite the slowdown of the Chinese economy, we were already selling 6,000 tons of engineering nylon compounds to diverse local applications. I believe that we are about to enter a period of rapid development in China once today’s hurdles are overcome. We remain strongly committed to China and the APAC region."

"DOMO does not sell or distribute any Technyl grades to customers and distributors outside the European Economic Area and Switzerland. TECHNYL is a registered trademark of Domo.

As MRC informed earlier, on January 31, 2020, BASF, the world's petrochemical major, closed the acquisition of Solvay's polyamide (PA 6.6) business. The transaction broadens BASF's polyamide capabilities with innovative and well-known products such as Technyl. This will allow BASF to support its customers with even better engineering plastics solutions, e.g., for autonomous driving and e-mobility. The transaction also enhances the company's access to growth markets in Asia as well as in North and South America.

We remind that, as MRC wrote before, BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

Domo Chemicals, based in Leuna, Germany, is a leading highly integrated Caprolactam/nylon6 company serving a global and broad customer base with high quality products in the field of nylon intermediates (Phenol, Cyclohexanone, Caprolactam), nylon 6 polymers, engineering plastics, fertilizers, nylon 6 packaging film and distribution of petrochemical products.
MRC

Sasol to consider rights issue, asset disposals as oil crash speeds investor flight

MOSCOW (MRC) -- South African petrochemicals group Sasol said it would consider raising funds by selling additional shares and disposing of more assets amid growing investor concerns about its debt levels after a crash in the price of oil, reported Reuters.

Around 76.5 billion Rand (USD4.6 billion) was wiped off the company's market value last week, with Sasol's shares hitting a 21-year low last Thursday, falling as much as 42% as oil prices plunged before recovering slightly to end the day down 29.36% at 37.24 rand.

Barring a significant recovery, this will be Sasol's worst week since listing in September 1989. The unexpected fall in oil prices has rattled investors who were already concerned about the company's high debt after it renegotiated some debt covenants last November. Reacting to the frantic selling, Sasol said it would consider a potential equity issue, reduce costs, reschedule some capital expenditure, expand asset disposals in excess of the current $2 billion target and engage lending groups. The company said cash and available facilities stood at around $2.5 billion rand with no significant debt maturities before May 2021. It has just completed a review of its assets in a bid to reduce debt. Seeking to assuage investors' fears the company could break its debt covenants, it said that at the current oil price of approximately R580/bbl, it would be within current covenant levels at 30 June 2020. Sasol's newly appointed chief executive officer Fleetwood Grobler said it was critical the company acted quickly and decisively. "We are therefore working towards a package of measures to ensure that the business is profitable even at low oil prices and that we continue to have a strong balance sheet to support it," said Grobler.

Monday's crude price crash further hobbled a company already battling to restore shareholder confidence after delays and cost over-runs at its Lake Charles Chemicals project (LCCP) in Louisiana forced its joint chief executives to resign late last year. "With the oil price collapsing, it's eroded the margin they were expecting on the project," said an investor who sold his Sasol shares on Monday. The destruction of value at one of South Africa's biggest companies adds to headaches for a government already grappling with a heavily-indebted state power company and airline. Although not a state-run company, Sasol's two top shareholders are state agencies - State asset manager the Public Investment Corporation has a 15.05% stake, while local development finance institution Industrial Development Corporation holds 8.53%, according to Refinitiv Eikon. Sasol said it would update the market in a conference call on Tuesday.

As MRC reported earlier, in mid December 2019, Sasol announced that the LCCP Ethane Cracker was increasing production rates following the successful replacement of the acetylene reactor catalyst. Sasol’s Ethane Cracker with a nameplate capacity of 1.54 million tons per year achieved beneficial operation in August 2019 but has run approximately 50-60% of nameplate capacity due to underperformance of the plant’s acetylene removal system. The company stated that the issue had been resolved then.

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.

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