CVR Refining, HollyFrontier cut jobs at US refineries

MOSCOW (MRC) -- CVR Refining and HollyFrontier Corp have cut their workforce in recent weeks, reported Reuters with reference to three sources, as demand falls due to the ongoing coronavirus pandemic.

In recent weeks CVR Refining has laid off approximately 50 salaried employees and HollyFrontier has cut at least 12 jobs, the sources said. HollyFrontier previously said it would lay off about 130 workers at its Cheyenne, Wyoming, refinery as it converts to a renewable diesel facility.

CVR and HollyFrontier both declined to comment.

Refining margins have dropped due to the coronavirus pandemic, reducing profit. Independent US refiners are operating at just 75% of capacity and in the first quarter, refiners announced millions of dollars in cuts to capital and operating expenses.

HollyFrontier will allow Cheyenne refinery employees to apply for some 40 positions across its other refining operations, according to two of the sources.

“The company needed to tighten up their belt ... 20 years of record margins disappeared to the coronavirus and an oil glut so they are cutting costs where they can,” said one of the sources, a refinery worker.

US refineries have been running at reduced rates due to falling demand for products such as gasoline and jet fuel. At this time last year, US refinery utilization was roughly 95%, as refiners met demand for busy summer driving months.

Gasoline demand has recovered somewhat from its weakest levels in April and May, but coronavirus cases are surging in populous states like California and Texas, the country’s biggest consumers of road fuel, according to the US Energy Department. Governors there and in other states have closed bars and restaurants and halted other plans to relax restrictions meant to stop the spread of the virus.

As MRC wrote previously, Valero Energy Corp’s Memphis, Tennessee, crude oil refinery is operating at two-thirds of its 180,000 barrel-per-day (bpd) capacity because of low demand in the COVID-19 pandemic. The Memphis refinery cut production by as much as 50% in early April and has been raising production gradually since 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 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
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Eastman partners with IMCD Group to expand its distribution network for specialty plastics in EMEA

MOSCOW (MRC) -- Eastman Chemical B.V. has announced that, beginning 1 August 2020, it is expanding and reinforcing its strategic partnership with IMCD Group for the distribution of its specialty plastics, said the company.

Eastman offers the world’s largest portfolio of thermoplastic polyester materials. IMCD will distribute these over a wide range of markets and applications, including medical, consumer durables, cosmetics, personal care, packaging and more. Currently, IMCD distributes Eastman specialty plastics in Spain and Portugal. Under the expanded distribution agreement, IMCD will also start serving an expanded EMEA market, including Algeria, Austria, Belarus, Belgium, Bosnia-Herzegovina, Croatia, the Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Ireland, Latvia, Lithuania, Luxembourg, Macedonia, Montenegro, Morocco, the Netherlands, Norway, Poland, Portugal, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Tunisia, Ukraine and the United Kingdom.

Eastman’s proven portfolio of specialty polymers and compounds includes Eastman Tritan™ copolyester, Eastar™ copolyesters, DuraStar™ polymers, and Eastman Treva™ engineering bioplastic, among others. These solutions coupled with Eastman’s advanced recycling technologies help address technical, regulatory, and growing sustainability challenges faced by many industries.

"IMCD is already a strategic partner in the distribution for various Eastman specialty materials, with demonstrated synergies and processes alignment,” says Eastman sales director Oliver Osborne. “We believe this expanded partnership will ensure a smooth transition for our specialty plastics customers whose distribution arrangements with incumbent distribution partners finish at the end of July. We encourage anyone who has questions to contact their Eastman representatives, who remain at our customers’ disposal."

“The expansion of our long-term partnership with Eastman Chemical B.V., a market leader within specialty plastics in the EMEA region, reflects IMCD’s commitment and ambition to offer world-class innovation and technical expertise, complementary product lines and strategic alignment, in particular with regards to sustainability and sustainable solutions,” said Olivier Champault, IMCD advanced materials business group director.

As MRC informed earlier, Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May. Production of benzene was 110,000 tonnes in May 2020, which equalled the figure a month earlier. Overall output of this product reached 615,000 tonnes over the stated period, up by 1.7% year on year.

Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company's innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive and diverse company, Eastman employs approximately 14,500 people around the world and serves customers in more than 100 countries. The company had 2019 revenues of approximately USD9.3 billion and is headquartered in Kingsport, Tennessee, USA.

In 2019, Eastman became the first company to begin commercial-scale chemical recycling for a broad set of waste plastics that would otherwise be landfilled or, worse, end up in the environment. Eastman Advanced Circular Recycling technologies process waste plastics traditional mechanical recycling methods cannot—including polyesters, polypropylene, polyethylene, and polystyrene—derived from a variety of sources, including single-use packaging, textiles, and carpet. These technologies provide a true circular solution of infinite recycling for materials, allowing them to be reused repeatedly.
MRC

ExxonMobil expects lower prices, margins to hit second-quarter results

MOSCOW (MRC) -- ExxonMobil says lower oil and gas prices could negatively impact its upstream earnings in the second quarter by up to USD3.1 billion compared to the first quarter of 2020, while its chemical segment earnings will be relatively stable, according to Chemweek.

The company advises in a US regulatory filing that the quarter-on-quarter change in chemical margins in the second quarter could impact its chemical segment earnings within a range of plus or minus USD100 million. It also gave the same financial range for the estimated effects of planned changes in scheduled maintenance on the chemicals business. ExxonMobil’s chemicals segment in May reported first-quarter earnings of USD144 million, down 72% year on year (YOY).

Lower refining margins could also hit its downstream earnings by up to USD900 million, according to the filing. In the first quarter ExxonMobil reported a downstream profit of USD1.3 billion.

The SEC filing covers factors related to market dynamics, seasonal patterns, and planned activities that the company’s management believes will impact second-quarter earnings relative to the prior quarter, and is not meant to be a comprehensive estimate.

The US major is scheduled to release its financial results on 31 July.

As MRC informed before, boiler work at the ExxonMobil-operated 830,000-metric tons/year ethylene plant at Mossmorran, UK, was scheduled for completion in June, 2020. Two of the three boilers at the plant exploded in August 2019, resulting in the plant being taken offline until the end of February. OPIS sources said in May that the plant was currently able to operate at full capacity with two boilers in operation but that the third boiler would be working by June.

We remind that in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

Gazprom neftekhim Salavat shut PE production

MOSCOW (MRC) -- Gazprom neftekhim Salavat has shut down its polyethylene (PE) production for a scheduled maintenance, reported MRC analysts.

The plant's customers said Gazprom neftekhim Salavat took off-stream its PE production for a scheduled turnaround on 1 July. The plant's low density polyethylene (LDPE) production was shut for 30 days, whereas its high density polyethylene (HDPE) production was taken off-stream only for one week.

As reported earlier, Angarsk Polymers Plant (Rosneft) shut its LDPE production capacities for a long maintenance on 22 June. Due to the coronavirus pandemic, Tomskneftekhim (SIBUR) postponed a turnaround from 15 July to 31 August, the outage is planned to last for two weeks.

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

COVID-19 - News digest as of 03.07.2020

1. Formosa expects gasoline exports to halve in 2020

MOSCOW (MRC) -- Taiwan's Formosa Petrochemical Corp expects to cut its gasoline exports by about half in 2020 as the coronavirus crisis dents demand, a spokesman said, said Hydrocarbonprocessing. Formosa's monthly average volume is estimated to drop to about 100,000 tonnes a month from some 200,000 tonnes per month in 2019, KY Lin said, adding: "Domestic demand has picked up in June but overseas demand is not great and we do not want to be caught in a situation where we have to struggle with excess cargoes to export."


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