LG Chem sells much of its LCD polarizer business to Chinese company

MOSCOW (MRC) -- LG Chem has signed a conditional contract with Ningbo, China-based Ningbo Shanshan to sell a large portion of its liquid crystal display (LCD) polarizer business for USD1.1 billion, said Koreajoongangdaily.

The sale reflects LG's strategy of exiting from the LCD business as cut-price Chinese electronics makers, such as Beijing-based BOE Technology, dominate the business.

The battery and chemical company said that it will continue to transition to newer and pricey screens, such as those using organic light-emitting diode (OLED) technology.

LG Chem "will focus on OLED materials, considered as a promising future business," the company said in a statement. Polarizers for large-sized OLED television displays and small and mid sized plastic OLED screen were cited as the areas of focus.

The LCD polarizer for automobiles business is excluded from the deal with the Chinese company and will remain at LG Chem.

"The deal requires the approval of LG Chem's board and Shanshan's shareholders," it said, adding that changes in terms and conditions of the deal are possible in the process of receiving these approvals.

LG Display announced in January that it will stop producing large LCD screens for TVs this year. In line with the plan, the panel maker is set to sell its LCD factories in Gumi, North Gyeongsang.

As mRC informed earlier, LG Chem is carrying out emergency inspections at all 40 of its factories worldwide in response to two fatal accidents this month, including a leak of styrene vapour at the LG Polymers India plant in Visakhapatnam that killed at least 12 people. The inspections will be done by internal and external safety experts and will be completed by the end of June. Safety upgrades will be made as needed, but LG said any plants with questionable prospects for being made safe may be closed indefinitely. The company did not indicate if the inspections will disrupt production at the plants.

According to MRC's ScanPlast report, March 2020 estimated consumption of PS and styrene plastics dropped by 2% year on year, totalling 42,130 tonnes. The estimated consumption totalled 121,880 tonnes in the first three months of 2020, down by 2% year on year. Overall, Russian plants produced 42,790 tonnes in March 2020. Overall output of high impact polystyrene (HIPS) and general purpose polystyrene (GPPS) totalled 32,100 tonnes in March 2020. 98,390 tonnes of HIPS and GPPS were produced in January-March 2020. The decrease in Russian plants' output was 3%.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) -- Oil tankers that were sailing toward Venezuela have turned around and others have left the country’s waters as the United States considers blacklisting dozens of ships for transporting Venezuelan oil, according to shipping data and industry sources, said Hydrocarbonprocessing.

The threat of tighter sanctions is already disrupting the global shipping market. Chinese oil firms are considering whether to decline to charter any tanker that has visited Venezuela in the past year, no matter where the ship is now or for what voyage, four shipping sources told Reuters on Tuesday.

Washington is seeking to oust the socialist government of President Nicolas Maduro by choking the oil exports that provide its main source of income. The measures have contributed to a fall in Venezuelan oil exports to a 17-year low and deepened the country’s economic crisis, but Maduro has held on - to the frustration of U.S. President Donald Trump’s administration.

The United States may add dozens more tankers to an existing blacklist, U.S. sources told Reuters last week. That would make it more difficult for state firm PDVSA to deliver oil to refineries abroad. Exports dropped to about 452,000 barrels per day in May, the lowest since a national strike paralyzed the economy and hit exports between 2002 and 2003.

Venezuela’s Foreign Minister Jorge Arreaza said on Twitter on Tuesday that Washington was attacking Venezuela’s economy by blocking foreign revenue that could be used to import humanitarian goods, including food and medicine. The U.S. State Department did not immediately comment.

Malta-flagged tanker Seadancer, operated by Greek firm Thenamaris Ships Management and chartered by Thai refiner Tipco Asphalt, returned to Gibraltar after waiting in the Atlantic Ocean for a week, according to Refinitiv Eikon tracking data.

Tipco Asphalt told Reuters on Tuesday the company had dropped plans to use the vessel, which had previously been on course for waters off the coast of Venezuela at Amuay, according to the Eikon data and PDVSA’s export schedules. The Seadancer was scheduled to load 1 million barrels of Venezuela’s Boscan crude for shipping to Malaysia’s Kemaman refinery, operated by Tipco, according to the schedules.

Another vessel operated by Thenamaris that had loaded crude in Venezuela in February, the Seahero, was blacklisted by the U.S. Treasury Department last week. A second Malta-flagged tanker expected in Venezuela, the Novo, made a U-turn this week in the Caribbean. The vessel was scheduled to transport 1 million barrels of Hamaca crude in June to Singapore, Eikon and PDVSA data showed.

A loading window assigned for the Novo was canceled on June 6 after the chartering contract was suspended, according to the PDVSA schedules reviewed by Reuters. The tanker is operated by Dynacom Tankers Management Ltd, which also manages the Chios I, blacklisted last week by the U.S. Treasury.

PDVSA, Thenamaris Ships Management and Dynacom Tankers did not immediately reply to requests for comment. As word spread on the possibility of more Venezuela-related shipping sanctions to come, at least three more very large crude carriers (VLCCs) - Boston, Commodore and Respect - exited Venezuelan waters over the weekend to anchor in the Eastern Caribbean, the Eikon data showed.

Oil companies and merchants worldwide - not just in China - are becoming more wary of vessels that have recently transported Venezuelan oil, the sources said. “Anything on the potential sanctions list will just become toxic,” a source at a top oil trading company said. “No one will touch it until it’s clear what the rules will be.”

Broker Clarksons Platou Securities estimated that 77 tankers had called at Venezuela’s main oil ports since December, more than 2% of the global fleet, and so were potentially at risk of sanctions. Sanctions typically have a knock-on effect on the rest of the oil tanker market as energy companies and merchants scramble to swap blacklisted vessels for others.

Ethylene and propylene are feedstocks for producing PE and 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) -- Indian Oil Corp, the country’s top refiner, aims to operate its refineries at an average 90% capacity in June as fuel demand recovers with the easing of a coronavirus lockdown, the company said, said Reuters.

IOC, which along with subsidiary Chennai Petroleum Corp , controls about a third of India’s 5 million barrels per day (bpd) refining capacity, is operating its plant at about 83% capacity, a sharp increase from 39% at the beginning of April.

Refiners in Asia are cranking up runs as the lifting of lockdown restrictions is pushing up fuel demand. India’s fuel consumption in May increased significantly from April.

IOC said in a statement it was operating its naphtha cracker at Panipat refinery at full capacity as several downstream petrochemical industries have resumed operations.

The company said it was on track to spend the approved capital expenditure of 261.43 billion rupees (USD3.46 billion) for 2020-21. (USD1 = 75.5750 Indian rupees).

As MRC informed before, Haldia Petrochemicals’ plant and Indian Oil’s refinery in East Midnapore district have been put on high alert in the wake of cyclone Amphan.

Several measures have been taken by the Haldia Petrochemicals Ltd (HPL) management in view of the cyclone, said its plant head Ashok Ghosh.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- The almost two-month-long planned operational turnaround at the chemical plant in Litvinov is coming to an end, said the company.

The regular maintenance of all facilities on-site, during which the operation was entirely suspended, started on 9 April. To mitigate the risk of the spread of coronavirus, it was accompanied by extensive and unparalleled safety, hygienic and anti-epidemic measures.

“We are part of the Czech Republic’s critical infrastructure and are one of the pillars of the Czech economy. At one moment, we were facing two simultaneous challenges: to implement the needed and urgent general overhaul of our production facilities and to minimise the risks related to the spread of COVID-19. I am glad that we managed both challenges together with the neighbouring municipalities, the region, ministries, and a host of experts,” said Tomasz Wiatrak, Unipetrol Group’s CEO and Board Chairman.

The turnaround, in other words, a planned shutdown of the entire production, took place in the Litvinov plant after four years. The primary reasons were regular maintenance of onsite production technologies according to legislative and review requirements and the preparation of the facilities for the next operational cycle. “The majority of planned work has been completed, and now we are beginning to gradually put the production technologies back into operation. The shutdown and the start-up of each production unit always take several days and is the most sensitive part of the turnaround. It includes the controlled combustion of excess gases using safety field burners. We apologise in advance to all the inhabitants of the neighbouring municipalities for the related transient light and sound effects,” said Tomas Herink, member of the Board of Directors of the Unipetrol Group.

For seven weeks, six thousand maintenance tasks and a range of investment projects were implemented within the maintenance and renovation of production facilities. “The key projects included a repair of the furnace of the atmospheric crude oil distillation unit, the replacement of the cooling-water underground pipeline at the partial oxidation production unit as well as servicing of large compressors at the steam cracker,” listed Tomas Herink.

About one month before the start of the turnaround, an unexpected situation occurred – the whole of Europe was affected by the pandemic of a coronavirus causing COVID-19. It resulted in the respective governments adopting unprecedented measures restricting the free movement of citizens, the performance of many occupations, the offer of services and contact with abroad. “Within a few days, we had to change the planned schedule of individual tasks and mainly create and implement a system of safety, hygienic and anti-epidemic measures which we submitted to the Central Crisis Staff of the Government of the Czech Republic,” explained Tomas Herink.

All these changes had to be coordinated with dozens of large and small domestic and foreign suppliers. And since the measures against the spread of the coronavirus were adopted in other countries of Europe as well, foreign suppliers could not guarantee that their employees would be sent to the Czech Republic in this situation. “We opened our crisis staff to representatives of municipalities, the region, the police and the public health protection authority. We collaborated with the Ministry of Industry and Trade, the Regional Public Health Protection Authority, the police and the municipalities of Litvinov and Most on the preparation of measures inside and outside of our site. Our goal was to ensure the safety of our employees, suppliers and inhabitants around the plant,” described Tomasz Wiatrak.

Foreign workers who arrived in the end had to undergo 14-day work quarantine and were subjected to a special regime when they were not allowed to move freely and use public transport. “We created communication manuals in eight languages, organised isolated accommodation capacities for quarantine and disease, and designated special entrances to the site, separate catering locations and stores to minimise foreign workers’ contact with our employees and the inhabitants of the neighbouring municipalities. Also, everyone was tested for COVID-19,” Tomasz Wiatrak enumerated the key measures.

Already the start of the turnaround work confirmed that the decision to perform the turnaround according to the planned schedule was right. It prevented any risk of employees and inhabitants that could be caused by operating technologies that would not be reviewed according to the mandatory deadlines. “We saw what we had expected while planning the turnaround. Some parts of the technologies were reaching the limit of their lifecycle and putting off their revision or replacement would have meant an increased operational risk,” said Tomas Herink.

In conclusion, Tomasz Wiatrak, CEO of the Unipetrol Group, added: “We would like to thank very much all the authorities, institutions and organisations that were involved in the preparation and implementation of the safety, hygienic and anti-epidemic measures. At the same time, we thank the inhabitants for their understanding and patience. Together, we have experienced a situation that has no parallel in the history of the Czech chemical industry."

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

he Unipetrol Group is the largest refinery and petrochemical company in the Czech Republic. It focuses on crude-oil processing and on the production, distribution and sale of vehicle fuels and petrochemical products – particularly plastics and fertilisers. In all these areas, it belongs among the important players on the Czech and Central European market. The Unipetrol Group encompasses refineries and production plants in Litvinov and Kralupy nad Vltavou, Paramo with its Mogul brand in Pardubice and Kolin, Spolana Neratovice, and two research centres in Litvinov and Brno. Unipetrol also includes a network of Benzina filling stations in the Czech Republic and Slovakia. With 416 filling stations, Benzina is the largest chain in the Czech Republic. Unipetrol is one of the largest companies in terms of turnover in the Czech Republic. It earned over CZK 129 billion last year and employs more than 4,800 persons. In addition to its business development, Unipetrol is proud to be a socially responsible corporation. Therefore, it pays an equal amount of attention to initiatives which focus on the cultivation and support of sustainable development, education, local communities, and the environment. In 2005, Unipetrol became a member of the ORLEN Group, the largest crude-oil processor in Central Europe.
MRC

MOSCOW (MRC) -- Oil fell more than 1% to below USD41 a barrel after a report showed a rise in crude inventories in the United States, reviving concerns about oversupply and weak demand because of the coronavirus crisis, said Hydrocarbonprocessing.

The report from the American Petroleum Institute, an industry group, said crude stocks rose by 8.4 million barrels, rather than falling as analysts forecast. The U.S. government’s official stocks figures are due out later on Wednesday.

"Indications from the American Petroleum Institute show that stocks built quite a lot,” said Bjornar Tonhaugen of Rystad Energy. “What else can you do as a trader but rush to sell?" Brent crude LCOc1 was down 50 cents, or 1.2%, to USD40.68 a barrel at 1325 GMT. U.S. West Texas Intermediate (WTI) CLc1 also dropped 50 cents, or 1.3%, to USD38.44.

Both benchmarks had hit three-month highs on Monday. Brent has more than doubled since falling to a 21-year low below USD16 in April. But some analysts think the market has risen too far as the coronavirus pandemic continues.

“With equity markets edging lower, and a vast amount of good news baked into oil prices at these levels, it was no surprise that the oil market’s confidence wavered slightly,” said Jeffrey Halley, senior market analyst at OANDA. Official government figures on U.S. stockpiles from the Energy Information Administration are due later on Wednesday.

Prices have been supported by a record oil supply cut of 9.7 million barrels per day (bpd), about 10% of pre-coronavirus daily demand, by the Organization of the Petroleum Exporting Countries (OPEC), Russia and others, a group known as OPEC+.

An easing of government lockdowns that sought to limit the spread of the virus has revived demand by boosting travel and economic activity, also supporting the market. OPEC+ agreed on Saturday to extend the record cut for another month until the end of July.

While this helped prices, the market came under pressure after Saudi Arabia, Kuwait and the United Arab Emirates decided not to extend their extra voluntary supply reductions.

On June 6, the 23 members of the OPEC+ alliance renewed their April agreement to reduce production by 9.6 million b/d through July. Under the plan, Saudi Arabia is cutting its monthly output by at least 8.5 million b/d, which is down almost 30% from the 12 million b/d it said it was producing in April. The kingdom had previously agreed to institute an additional 1 million b/d in cuts for June but has indicated it would not be willing to continue those curbs in July.

Ethylene and propylene are feedstocks for producing PE and 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