Axalta posts Q2 sales decline

MOSCOW (MRC) -- Axalta Coating Systems Q2 sales fell 43.6% year on year as demand declined because of impact of the coronavirus, said the company.

The company swung to a Q2 net loss, driven primarily by volume decline impacts. Sequentially, sales improved month on month, following a bottom in April. June net sales were 82% higher than in April.

In the current Q3, Axalta continues to be impacted by the coronavirus pandemic across its business, although impacts on customer demand related to the virus continues to gradually improve month-to-month, it said.

In light of the “demand headwinds”, Axalta will undertake a global restructuring, aimed at addressing the continued effects of the pandemic and to improve its cost structure, it said.

The restructuring is expected to result in a net 5% reduction of Axalta's global workforce, or about 550 employees, with the potential for additional reductions from Europe, subject to works council consultations and local legal requirements.

The workforce reduction is expected to be completed over 24 months, generating savings of about USD50m, with USD40 million expected by the end of 2021.

As MRC informed earlier, Axalta Coating Systems Ltd. announced its financial results for the fourth quarter and full year ended Dec. 31, 2019. Net sales of USD1,098.4 million for the fourth quarter decreased 5.8 percent, including 1.3 percent negative foreign currency translation impact and a two percent impact from the sale of a consolidated Joint Venture interest in Q2 2019.

As MRC informed earlier, Axalta Coating Systems has completed its previously announced acquisition of the Spencer Coatings Group, a leading manufacturer of high performance industrial coatings for heavy-duty equipment, general industrial, oil and gas, and glass coatings segments.

As MRC informed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six 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-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.
MRC

Dow and Thong Guan unveil new range of bio-based plastic cling film

MOSCOW (MRC) -- US-based materials science specialist Dow and Malaysia-based plastic stretch cling film producer Thong Guan has introduced a new range of bio-based polyethylene (bio-PE) cling film for Asia Pacific region, according to BIO MARKET INSIGHTS.

According to Dow, this marks a milestone in the region’s commercialisation of a plastics offering made from renewable feedstock, enabling industry providers to produce high-performance plastics while reducing carbon footprint.

In a joint effort, Thong Guan will be using Dow’s bio-based resin derived from renewable feedstock. The feedstock comes from tall oil, a residue of paper production, from sustainably managed forests.

Unlike other alternative renewable feedstocks, it does not compete with the human food chain, and no extra land is required for its production, Dow said in a statement. Dow uses a mass balance approach, which encourages the use of renewable feedstock, by supporting sustainable systems for producing plastic. This approach enables the industry to transition away from its dependency on fossil fuels as a feedstock.

Nano Bio, the new range of stretch cling films by Thong Guan, will be made using Dow’s linear low-density polyethylene, ELITE 5230GC R Enhanced Polyethylene Resins. Without compromising on quality, the new bio-based stretch cling films will support brand owners in addressing Asia Pacific’s increasing demand for renewable plastics, Dow maintained.

“To achieve our new sustainability targets, Dow is committed to implementing and advancing technologies to manufacture products using fewer resources, thereby helping our customers to reduce their carbon footprint. Introducing Dow’s first bio-based polyethylene in Asia Pacific based on renewable feedstock is an important step in this direction,” said Bambang Candra, Asia Pacific commercial vice president at Dow Packaging and Specialty Plastics.

Candra added: “In addition, as a part of the new sustainability targets, Dow is also committed to stopping the leakage of plastic waste into the environment by enabling 1 million metric tonnes of plastic to be collected, reused or recycled by 2030 and closing the circular economy loop by having 100% of its products sold into packaging applications be reusable or recyclable by 2035.”

The Nano Bio range of stretch cling film is produced by state-of-the-art nanotechnology, downgauged with increased strength, flexibility, and durability. In addition to being environmentally friendly, this optimised packaging ensures pallet load stability and curtails damages and accidents during transportation.

“This is a landmark moment for Dow. Introducing bio-based resins for the first time in Asia Pacific, our fastest growing market, is key in advancing a circular economy. We are proud to embark on this journey with our long-term partner, Thong Guan, and further both our sustainability offerings in order to meet our environmental goals,” Eunice Ch’ng, senior marketing manager at Dow Packaging and Specialty Plastics, Asia Pacific.

“We are committed to preserving the environment and resources for the future world. The continuous collaboration with Dow illustrates our dedication to offering renewable products and promoting sustainability,” said Dato’ Ang Poon Chuan, managing director at Thong Guan Industries. “With Dow’s bio-based resins, our Nano Bio reduces the use of plastics while maintaining the same high-performance, thus meeting our customers’ business and sustainability needs.

David Ang, sales and marketing general manager at Thong Guan Industries said: “Sustainability is not just a buzz word. At Thong Guan, our commitment is not solely on our products, but also in our processes and daily consumptions. It is our unequivocal commitment to protect our home, reduce carbon footprint, and innovate our way towards an ecological balance for our future generations.”

Dow’s bio-based polyethylene portfolio is produced using bio-naphtha from tall oil, which is a by-product of paper pulp production. This new supply chain from bio-feedstocks enables a significantly lower carbon footprint compared to standard fossil-derived PE resins. In addition, our PE resins production is certified by ISCC (International Sustainability & Carbon Certification) based on a mass balance approach. This approach helps industries become more sustainable by supporting the sourcing of sustainable ingredients within complex manufacturing or production systems, meaning all steps meet traceability criteria.

As MRC reported earlier, Dow Chemical restarted three polyethylene (PE) plants it shut in April on improving demand after widespread economic shocks in April and May, confirmed a company spokeswoman July 23.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

Average run rate at Chinese PDH plants rises to 85% in June from 81% in May

MOSCOW (MRC) -- China's propane dehydrogenation plants operated at an average rate of 85% of capacity in June, up from a revised average rate of 81% in May and also from 81% a year earlier, S&P Global calculations based on data from domestic information provider JLC showed July 10.

The higher run rate in June was attributed mainly to two PDH plants raising run rates after maintenance in the month, although two other PDH plants lowered run rates due to technical glitches, according to JLC data.
Tianjin Bohai's PDH unit in northern China doubled its run rate to 80% in June from 40% in May, the data showed, after a period of unstable operations in May, sources said.

Yantai Wanhua in eastern Shandong province raised its run rate to 50% in June from 39% in May after restarting from scheduled maintenance June 10, the data showed. The plant was shut over May 14-June 10 for scheduled maintenance, S&P Global Platts reported earlier.

However, Shaoxing Sanyuan and Ningbo Haiyue in eastern Zhejiang provice both lowered their operating rates in June due to technical glitches. Shaoxing Sanyuan experienced glitches over June 18-22 that lowered its average operating rate to 67% in June from 80% in May, while Ningbo Haiyue experienced technical glitches over June 25-27 that lowered its run rate in the month to 90% from 100% in May, the JLC data showed.

Dongguan Juzhengyuan has had its PDH plant shut for maintenance since July 5 that was expected to take around six weeks, sources said.

The JLC monthly survey covered nine Chinese PDH units with a combined propylene production capacity of 5.66 million mt/year, which can use up to 6.79 million mt/year of propane as feedstock at full capacity.

Chinese PDH units' theoretical processing margin was estimated at Yuan 1,708/mt (USD241.11/mt) in June, up from Yuan 1,398/mt in May, and the highest since October 2019, Platts calculations showed. Market sources attributed the improving margins in June to a rise in domestic propylene prices in the month.

Saudi Aramco set its June contract price for propane at USD350/mt FOB, up USD10/mt month on month. Spot refrigerated propane cargoes on a delivered basis to East China averaged USD324/mt in June, up from USD307/mt inr May, Platts data showed.

Chinese PDH units typically secure half of their propane requirements under term contracts and the rest from the spot market. The average import cost for propane was estimated at Yuan 2,901/mt in June after taxes and fees, up Yuan 39/mt or 1.4% from May, the data showed.

Domestic propylene prices in East China, where most of the country's PDH units are located, were estimated at Yuan 6,689/mt in June, up Yuan 357/mt or 5.6% from May, according to JLC data.

Downstream polypropylene (PP) sales were stable through June, with the run rate at Chinese PP plants remaining healthy at 85%-88% of capacity, according to sources.

Strong global demand for packaging and medical applications, including masks and protective gowns, continues to provide support to China's PP market, Platts has reported.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

Jiangsu Sailboat resumes production at MTO plant in China

MOSCOW (MRC) -- Jiangsu Sailboat Petrochemical, also known as Jiangsu Shenghong, has restarted its methanol-to-olefins (MTO) plant following a turnaround, as per Apic-online.

A Polymerupdate source in China informed that the company resumed operations at the plant on July 27, 2020. The plant was shut owing to technical issues on July 17, 2020.

Located at Lianyugang in Jiangsu province of China, the plant has an ethylene production capacity of 360,000 mt/year and propylene production capacity of 470,000 mt/year.

As MRC reported earlier, Jiangsu Sailboat Petrochemical is only able to restart its two acrylonitrile (ACN0 plants on July 31, followed an unplanned shutdown of these production units on July 16. The company shut down both their two 260,000 mt/yr ACN plants along with its methanol-to-olefin unit at the same time.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Jiangsu Sailboat Petrochemical, part of the Shenghong Holding Group, is a major petrochemical manufacturer in China, including polyethylene (PE) and ethylene-vinyl-acetate (EVA). The company's production facilities are located in the new Xuwei Industrial Park in Lianyungang City, Jiangsu Province.
MRC

Iraq to sign USD4 billion oil refinery contract with JGC

MOSCOW (MRC) -- Iraq’s government agreed to sign a contract with JGC Corp to build a 55,000 barrels per day refinery in the southern region of Basra, reported Reuters with reference to the oil ministry's statement.

The refinery will produce fuels including liquified petroleum gas, gasoline and gasoil, it said, estimating the cost of the facility at USD4 billion.

As MRC wrote before, in early June 2020, Iraq and Kazakhstan submitted their plans to the OPEC+ alliance on how they will implement deeper oil production cuts in the coming months, following through on pledges to make good on violating their quotas in May. Kazakh energy minister Nurlan Nogayev had said June 9 that his country pumped 3.13 million barrels over its quota over May 1-12. Iraq produced nearly 600,000 b/d over its quota in May, according to Platts latest survey of OPEC output, and oil minister Ihsan Ismaael said June 15 that crude exports in June had already been slashed in an effort to comply with the deal. The OPEC+ alliance's overall compliance with the cuts was 87% for May, the committee said.

We remind that in late May, 2020, Borealis said it will not proceed with the development of a multi-billion-dollar integrated steam cracker and polyethylene (PE) project in Kazakhstan. “The decision to discontinue this project is based on a thorough assessment of all aspects of the prospective venture and impacted by the effects of the COVID-19 (coronavirus disease 2019) pandemic as well as the increased uncertainty of future market assumptions,” Borealis states.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC