Trinseo evaluates sale of SM/PBR assets in Germany

MOSCOW (MRC) -- Trinseo evaluates sale of SM/PBR assets in Germany, a manufacturer of plastics, latex binders, and synthetic rubber, says that it is looking at disposing its styrene monomer assets in Boehlen, Germany, and its polybutadiene rubber (nickel and neodymium-PBR) assets in Schkopau, Germany, said Rubberjournalasia.

The combined Adjusted EBITDA of these operations in 2019 was approximately negative USD18 million. It added that these steps followed a thorough analysis and pursuit of numerous alternative options for improving the financial performance and competitiveness of these facilities.

The Boehlen, Germany styrene facility has capacity of approximately 300 kilotonnes. Average production over the past three years was approximately 200 kilotonnes, below capacity due to several factors, including upstream supply issues. In 2019, production was approximately 150 kilotonnes reflecting the previously disclosed unplanned outages. The Schkopau polybutadiene rubber line has capacity of approximately 30 kilotonnes. Trinseo says it will continue its other operations at the Schkopau site, including polystyrene, SSBR, and ESBR.

Meanwhile, in its other financial results, with a strong start to the year in January and February, weaker business conditions started to emerge in mid-March, particularly in the automotive and tyre markets. However, Trinseo adds that there has been relative strength in polystyrene and latex binders into food packaging applications as well as Performance Plastics into medical applications.

From a production standpoint, Trinseo says it has been able to continue operations at all of its manufacturing locations other than its API Plastics site in Mussolente, Italy, which is complying with a government mandated closure of all non-essential commercial activities throughout the country.

Frank Bozich, President/CEO of Trinseo, commented, “As the coronavirus pandemic has spread from China and Asia, to Europe and the Americas, Trinseo has been actively responding through our crisis management plan and adjusting our business operations accordingly. We are taking decisive action to adapt to the current conditions and are implementing a wide array of safeguards to protect the health of our people. We continue to monitor the situation daily and will take further action as needed.”

Due to the uncertain demand outlook caused by Covid-19, Trinseo is withdrawing its previously issued 2020 full-year financial guidance.

Bozich stated, “In this environment, we are taking aggressive actions to improve cash flow by reducing working capital, capital expenditures, and discretionary spending. We’re reducing our anticipated capital expenditures for 2020 from USD100 million to between USD80 and USD85 million."

As MRC reported earlier, Trinseo and its affiliate companies in Europe have announced a price reduction for all polystyrene (PS) grades in Europe. Effective March 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below went down as follows:
-- STYRON general purpose polystyrene grades (GPPS) -- by EUR65 per metric ton;
-- STYRON and STYRON A-Tech and STYRON X- Tech high impact polystyrene grades (HIPS) - by EUR65 per metric ton.

According to ICIS-MRC Price report, prices of Russian PS remained unchanged until the end of the first quarter. Nizhnekamskneftekhim rolled over February prices of its material for shipments in March. Penoplex and Gazprom neftekhim Salavat also maintained their GPPS prices the same.

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) -- US crude oil stockpiles soared while fuel demand slumped last week, each by their most in one week ever, government data showed on Wednesday, as the US oil industry felt the full brunt of efforts to stem the spread of the coronavirus pandemic, reported Reuters.

The oil markets have crashed as the pandemic has sapped fuel demand, virtually shutting down commercial aviation worldwide and cutting off gasoline demand as people stay home and businesses remain shuttered.

US fuel demand has dropped by about one-third in the last three weeks, according to the US Energy Information Administration, with last week’s fall of 3.4 million barrels per day (bpd) the most ever. The declines have been particularly sharp in gasoline demand, which has been cut nearly in half in the last three weeks alone.

“It’s really stunning if you look at the gasoline demand. That’s almost half of where we were at the peak of gasoline demand,” said Phil Flynn, an analyst at Price Futures Group in Chicago.

The weekly figures on refining activity and oil production show the industry making the painful adjustments to throttle back activities as worldwide demand is expected to drop by roughly 30%. US refiners are now operating at just 75.6% of their capacity USOIRU=ECI, the lowest rate since September 2008, while production was cut by 600,000 bpd to 12.4 million bpd in the week to April 3.

“The industry response is apparent and rapid and there’s only more of these cutbacks coming,” said John Kilduff, partner at Again Capital LLC in New York.

Crude stocks USOILC=ECI rose by 15.2 million barrels, their biggest-one week rise, and inventories at the key Cushing, Oklahoma storage hub USOICC=ECI rose by 6.4 million barrels last week, EIA said, most in one week ever.

US physical crude prices have plunged dramatically as pipelines expect storage to fill rapidly.

US gasoline stocks USOILG=ECI rose by 10.5 million barrels in the week, just shy of an all-time record. Gasoline product supplied in the most recent week slumped by 24% to 5.1 million bpd. US Gulf Coast refining output fell to 82% of capacity, lowest since September 2017, when Hurricane Harvey hit.

“We do think refiners need to go lower,” said Tom Kloza, founder of the Oil Price Information Service. “We’re seeing the first step which is cutting across systems. But we need to see more.”

Major world oil producers including Saudi Arabia and Russia are trying to wrangle a deal to cut production, but they want the United States to participate through mandated cuts, which the country usually does not do; U.S. officials have pointed out that cuts are happening organically as the price crash hits producers.

“Somebody should send the report to the Saudis and Russia to show that we have, in fact, cut 600,000 barrels per day already,” said Kilduff.

As MRC wrote previously, 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.

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) -- 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