Eastman Chemical to cut 2020 capex by 24%

MOSCOW (MRC) -- Eastman Chemical will reduce planned 2020 capital spending to USD325M-USD375M, a 24% reduction at the midpoint from the previous expectation of USD450M-USD475M, which it says will provide a strong foundation during the coronavirus, reported Seeking Alpha.

The company expects Q1 earnings to come in above the prior year period and above previous expectations, and sees breakeven free cash flow for Q1, which it says is well above typical Q1 free cash flow in prior years.

Eastman says its balance sheet is "solid" with no long-term debt maturities in 2020 and a "manageable" amount of debt due in 2021; it expects to reduce debt by more than $400M in 2020 by retiring certain existing borrowings.

Separately, Citi upgraded Eastman shares to Buy from Hold.

As MRC reported earlier, in 2016, Eastman Chemical's chief executive Mark Costa announced that the company wanted to reduce its surplus ethylene and commodity intermediates, but did not intend to sell its cracker in Longview, Texas.

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. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 15,000 people around the world.
MRC

MOSCOW (MRC) -- Polypropylene (PP) imports into Russia grew in the first two months of 2019 by 36% year on year to 32,100 tonnes. All grades of propylene polymers accounted for the greatest increase in imports, according to MRC's DataScope report.

Russian companies reduced their PP imports in February: imports were 15,100 tonnes versus 17,000 tonnes a month earlier, shipments of propylene homopolymers (homopolymer PP) from Turkmenistan decreased. Thus, overall PP imports to Russia totalled 32,100 tonnes of propylene polymers in January-February 2020, compared to 23,500 tonnes a year earlier. The volume of purchasing of all grades of propylene polymers in foreign markets increased, with imports of homopolymer PP raffia accounting for the most noticeable increase.

Overall, the structure of PP imports by grades looked the following way over the stated period.

February imports of homopolymer PP were 4,800 tonnes, compared to 7,700 tonnes a month earlier, Russian companies reduced shipments of homopolymer PP raffia from Turkmenistan by several times after the surge in January. Thus, overall imports of homopolymer PP to Russia totalled about 12,600 tonnes in the first two months of 2020, compared to 7,000 tonnes a year earlier.

Last month's imports of propylene block-copolymers (PP block copolymers) were 5,300 tonnes versus 4,300 tonnes in February, demand for pipe grade PP increased from Russian companies. Imports of PP block copolymers into Russia reached 9,500 tonnes in January-February 2020, compared to 6,600 tonnes a year earlier.

February imports of statistical copolymers of propylene (PP random copolymers) dropped to 2,300 tonnes from 2,500 tonnes a month earlier, Russian companies reduced purchasing of film grade PP. Overall imports of this propylene copolymers grade were 4,900 tonnes in January-February 2020, compared to 4,400 tonnes a year earlier.

Imports of other propylene polymers totalled 5,100 tonnes over the stated period versus 5,500 tonnes a year earlier.

MRC

MOSCOW (MRC) -- India's private-sector Haldia Petrochemicals (HPL) declared force majeure on supplies on 23 March, a day before the lockdown announcement in the country, reported Argus.

The Indian government announced a complete lockdown from midnight 25 March for 21 days

HPL's cracker complex is expected to close soon, and it is unclear when operations will resume. HPL's sister firm, purified terephthalic acid (PTA) producer MCPI, which has around 1.27mn t/yr of capacity in West Bengal, has also declared force majeure and is expected to completely shut down operations.

HPL operates a cracker with nameplate capacity of 700,000 t/yr of ethylene, 340,000 t/yr of propylene, 150,000 t/yr of benzene, 100,000 t/yr of butadiene and 98,000 t/yr of methyl tert-butyl ether (MTBE). The producer also has 350,000 t/yr polypropylene, 345,000 t/yr high-density polyethylene (HDPE) and swing 365,000 t/yr linear low-density polyethylene (LLDPE) production lines.

As MRC wrote before, on 20 September 2019, a major fire broke out at Haldia Petrochemicals’ cracker in India. The company's plant restarted operations in early October, 2019, after a nearly 10-day closure caused by a September 20 fire that had claimed the lives of two employees.

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).

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are PE and PP.
MRC

MOSCOW (MRC) -- Shandong Chambroad Petrochemicals, has taken its No.1 propylene unit off-stream for a turnaround, according to Apic-online.

A Polymerupdate source in China informed that, the company has started maintenance at the plant on March 25, 2020. The plant is likely to resume production on May 8, 2020.

Located at Shandong province of China, the No. 1 plant has a production capacity of 125,000 mt/year.

As MRC informed before, in September 2018, LyondellBasell announced that Shandong Chambroad Petrochemicals Co. Ltd., (Shandong Chambroad), had selected the LyondellBasell Hostalen "Advance Cascade Process" (Hostalen ACP) technology. The low-pressure slurry process technology will be used for a 350KTA high-density polyethylene (HDPE) unit to be built in their petrochemical complex in Binzhou city, Shandong province, P.R. China.

Propylene is the main feedstock for producing polypropylene (PP).

According to MRC's ScanPlast report, 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.

Shandong Chambroad Petrochemicals Co.,Ltd is founded in 1988,whose predecessor is Boxing lubricating oil factory.After more than 20 years of trails and hardships,Chambroad has now developed into a large-scale private petrochamical enterprise intergrating petroleum refining and chemical industry. Besides, Chambroad has successively been awarded "one of top 500 manufacturing enterprise of China" and "one of top 500 chemical enterprise of China".
MRC

MOSCOW (MRC) -- Sinopec Mitsui Chemicals, is presently running its Bisphenol A (BPA) plant at curtailed capacity levels, according to Apic-online.

A Polymerupdate source in China informed that, the company cut down run rates at its plant, to around 80-85% of production capacity levels on March 18, 2020. The lower run rates has been attributed to shortage of feedstock.

Located at Shanghai, China, the plant has a production capacity of 120,000 mt/year.

As MRC reported earlier, Sinopec Mitsui Chemicals Co undertook a planned shutdown for maintenance at its BPA plant in China on August 16, 2018. The plant remained shut until mid-September 2018. Located in Shanghai, China the plant has a production capacity of 120.000 mt/year.

BPA is the main feedstock for the production of polycarbonate (PC).

According to MRC's ScanPlast report, Russia's overall consumption of PC granules (excluding exports from Belarus) totalled 6,700 tonnes in January 2020, up by 43% year on year (4,300 tonnes a year earlier).

Shanghai Sinopec Mitsui Chemicals Co. Ltd. manufactures and distributes chemical products. The company produces and sells bisphenol A and other related chemical products.
MRC