Sasol cuts production, sales target on coronavirus impact

MOSCOW (MRC) -- South African petrochemicals giant Sasol Ltd cut its guidance for synthetic fuel production and liquid fuel sales for this financial year due to a three-week nationwide lockdown linked to coronavirus, said Hydrocarbonprocessing.

Sasol is now expecting to produce approximately 7.3-7.4 million tons of synfuel against the previously guided range of 7.7–7.8 million tons, the company said in a statement to the Johannesburg Stock Exchange. It is also targeting sales of 50–51 million barrels of liquid fuel for the financial year 2020, against 57–58 million barrels previously, it said.

Synfuel or synthetic fuel is a form of liquid fuel made from coal in South Africa. Sasol is the world’s biggest producer of motor fuel from coal. South African President Cyril Ramaphosa imposed a nationwide lockdown at the end of March to contain spread of the deadly coronavirus, which has already infected 1,749 people in the country and killed 13.

The lockdown, which prompted rating agency Moody’s to downgrade the country’s sovereign rating to junk, crashed domestic demand at a time when the economy had already slipped into a recession.

It is projected to contract further in the current financial year. “Sasol’s management team is in the process of proactively identifying further measures to provide an additional buffer against short-term volatility,” said the company in its statement, referring to the fall in demand in the country.

The group, which is also facing high debt levels and falling oil and chemical prices, said it has decided to suspend production at its inland crude oil refinery Natref from April 9.

“A decision was also made by Sasol to reduce daily production rates at our Secunda Synfuels Operations (SSO) by approximately 25%,” it said. A further reduction in rates may be required depending on further developments in the fuels market, the company added.

However, Sasol said despite the suspension of output at the Natref refinery and lower production rates at SSO, the country’s current demand for fuels and chemicals, including sanitisers, will be met.

It had said on March 31 that its full-year results could be hit by potential disruptions to production, supply chains and construction as the coronavirus continued to spread across the world.

As MRC wrote 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

1. Coalition ramps up face shields output in response to Covid-19

MOSCOW (MRC) -- A coalition initiated by 3D printing company Stratasys (Eden Prairie, Minnesota / USA) is ramping up production of disposable face shields for use by medical personnel in response to the Covid-19 pandemic. Stratasys said the number of companies and universities involved in the coalition now exceeds 150 and members include Toyota, Boeing and medical technology company Medtronic (Minneapolis, Minnesota). Requests from hospitals and other organisations for the shields, which include a 3D-printed frame and a clear plastic shield covering the entire face, now exceed 350,000 shields.



MRC

MOSCOW (MRC) -- Gazprom neftekhim Salavat, one of Russia's largest production complexes for oil refining and petrochemicals, has reduced its April indicative polystyrene (PS) prices for Russian buyers, according to ICIS-MRC Price report.

Thus, the decrease was Rb8,000/tonne. At the same time, prices of general purpose polystyrene (GPPS) have not yet been set for small- and medium-sized buyers.

Demand has been subsiding rapidly in the construction segment of the Russian PS market. Buyers reduced their orders for April purchasing of material from some traders by half. A number of small- and medium-sized converters were forced to temporarily suspend production because of the tightening of the quarantine conditions. Demand for finished products remained strong in the food packaging segment.

OAO "Gazprom neftekhim Salavat" (formerly OAO "Salavatnefteorgsintez") is one of the leading petrochemical companies in Russia, carrying out a full cycle of processing hydrocarbon material. The list of products manufactured by the plant includes more than 140 items, including 76 grades of the main products: gasoline, diesel fuel, kerosene, fuel oil, toluene, solvent, liquefied gases, benzene, styrene, ethylbenzene, butyl alcohols, phthalic anhydride and plasticizers, polyethylene, polystyrenes, silica gels and zeolite catalysts, corrosion inhibitors, elemental sulfur, ammonia and urea, glycols and amines, a wide range of household products made of plastics, surfactants and much more.
MRC

MOSCOW (MRC) -- Hanwha Total Petrochemical, a South Korean petrochemical major, has halted operations at its LPG cracker owing to technical glitch, according to Apic-online.

A Polymerupdate source in South Korea informed that, the company halted operations at the cracker on April 7, 2019. The cracker is likely to remain off-line for about 2-3 days.

Located at Daesan, South Korea, the cracker has an ethylene capacity of 310,000 mt/year and propylene capacity of 120,000 mt/year.

As MRC informed earlier, Hanwha Total Petrochemical restarted its Deasan cracker on 10 June, 2019, following a maintenance and debottlenecking exercise. The cracker was shut for maintenance and expansion in end-March, 2019. Following the expansion, the ethylene capacity has been increased by 310,000 MT and propylene capacity by 120,000 MT. The main production capacities of the company's Daesan cracker is 1.09 million mt/year of ethylene and 640,000 mt/year of propylene.

We also remind that Hanwha Total Petrochemical is investing approximately USD500m to further expand its Daesan integrated refining and petrochemical complex in South Korea. The company operates as a 50/50 joint venture (JV) between Total and Hanwha. The planned investment is expected to increase annual polypropylene capacity by almost 60% to 1.1 million tonnes and ethylene capacity by 10% to 1.5 million tonnes by the end of 2020.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- DuPont, which operates one of the Richmond region’s largest manufacturing plants, confirmed Monday that five local employees have tested positive for the coronavirus, but the company’s local manufacturing operations are still functioning, according to Richmond Times-Dispatch.

All five employees who tested positive for COVID-19 are "quarantined and recovering," DuPont spokesman Ryan Smartt said.

"We have not made any adjustments to our workforce at this time," Smartt said. "Employees who have tested positive for COVID-19 or are being quarantined continue to be paid. We continue to monitor and respond to the situation and will adjust our plans and protocols as needed."

The Wilmington, Del.-based industrial company’s largest US factory, called the Spruance plant, is on Jefferson Davis Highway in Chesterfield County. The factory employs about 2,200 people, including about 1,800 DuPont employees and several hundred contractors.

The production areas for Tyvek, Kevlar and Nomex are all operating, the spokesman said.

Those products are deemed "essential" during the coronavirus outbreak, including Tyvek, a water and microbial-resistant material used in a variety of applications, including protective personal garments worn by first responders and medical professionals.

The company reported in March that it was responding to a surge in demand for Tyvek apparel because of the coronavirus outbreak, and that production of Tyvek had increased about 20% so far this year compared with the same period last year.

The plant also makes the bullet-resistant material Kevlar and the fire-resistant material Nomex, used by the military, police officers and firefighters, as well as in industrial environments.

"The safety and well-being of our employees continues to be our top priority," Smartt said in an emailed response to questions. "We have implemented safety plans and protocols based on World Health Organization and Centers for Disease Control guidelines and recommendations to help prevent the spread of the virus, and to ensure we continue providing a safe and healthy workplace for our essential employees."

The company said that all employees who are not needed for the continuous operation of its manufacturing processes are now working from home.

"We have limited visits to the site, and are practicing social distancing and sanitizing common areas in the plant more frequently," Smartt said.

DuPont is at least the third manufacturing plant in Virginia that has been hit by the coronavirus outbreak.

Cigarette maker Philip Morris USA, a subsidiary of Henrico County-based tobacco giant Altria Group Inc., announced on March 19 that it was suspending operations for two weeks at its cigarette factory just off Interstate 95 after two employees tested positive for COVID-19. In addition, Altria’s chairman and chief executive officer, Howard A. Willard III, was diagnosed as having the virus that causes COVID-19 and temporarily stepped aside from his job for medical leave.

Altria said it would restart operations at the plant this week with a limited staff. Employees must complete a health questionnaire before they return to work. Anyone entering the factory will first need to stop at an off-site location to get his or her temperature checked.

Goodyear Tire & Rubber Co. also has temporarily suspended operations at its factory in Danville due to a sudden decline in market demand because of the COVID-19 pandemic.

As MRC wrote before, Chemical maker DuPont will spend USD220 million to build new production assets at its specialty films plant in Circleville, Ohio. In a statement, Wilmington, Del.-based DuPont said that the new assets will expand production of its Kapton-brand polyimide film and Pyralux-brand flexible circuit materials to meet what it calls "growing market demand in automotive, consumer electronics, telecom, and defense." DuPont expects the new assets to be operational by 2021.

Besides, rising demand for DuPont’s Tyvek nonwoven materials has prompted DuPont Safety and Construction, a business unit of DowDuPont Inc., to invest more than USD400 million to expand capacity for the materials at its facility in Luxembourg. The expansion will include the addition of a new building and third operating line at the site. The new capacity will come on stream in 2021.

We also remind that an employee at the Port Arthur Total refinery has tested positive for the coronavirus. The company confirmed Tuesday that the employee who tested positive is in self-quarantine and hasn't been at the site since March 26. Total says it has 'implemented its pandemic response in the case of a positive COVID-19 test, which includes disinfecting and sanitation of the potentially-affected areas.'

In November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC