Losses widen at Versalis on lower sales, production caused by COVID-19

MOSCOW (MRC) -- Versalis, the chemicals subsidiary of Eni (Rome, Italy), reports an adjusted operating loss of €66 million (USD77 million) in the second quarter, compared with a EUR28-million adjusted operating loss in the corresponding period of last year, said Chemweek.

Eni cites lower sales and production volumes caused by lower demand “in connection with the ripple effects on the economy” of the COVID-19 pandemic. A revenue figure for Versalis has not been disclosed.

Versalis’s petrochemical sales volume was 1.02 million metric tons in the second quarter, down by 9% year on year (YOY). The reduction was seen mainly in the business’s intermediates and elastomers product lines due to weaker demand from their main end-markets, particularly the automotive sector, as a result of the worldwide economic downturn following the lockdown measures to contain the spread of COVID-19. These trends have been partly mitigated by higher sales volumes for polyethylene (PE) and styrenics due to brisk demand for certain sub-segments tied to the COVID-19 emergency, such as packaging and single-use plastics, Eni says.

Versalis achieved a strong rebound in margins in the intermediates and PE segments driven by higher demand and lower availability of products imported from outside Europe. Styrenics and elastomers reported flat margins YOY as a result of the economic downturn. In particular, steam cracker margins had a strong recovery in March and April when oil market fell abruptly, driving down naphtha feedstock prices. This trend nevertheless began to reverse after the implementation of OPEC+ cuts, which supported feedstock prices, Eni says.

Eni says there was lower availability of products from Versalis's plants due to longer maintenance standstills at its main production hubs in response to the COVID-19 emergency, particularly at the Priolo and Brindisi, Italy, complexes. The average operating rate at Versalis’s petchem plants was 60% in the second quarter, down from 69% in the year-earlier period, Eni says.

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

Tosoh swings to loss on COVID-19 impact

MOSCOW (MRC) -- Tosoh Corporation is pleased to announce its consolidated results for the first quarter of fiscal 2021, from April 1, 2020, to June 30, 2020, said the company.

The company’s consolidated net sales totaled 156.5 billion (USD1.4 billion), down 36.3 billion, or 18.8%, compared with consolidated net sales in the first quarter of fiscal 2020. The decrease was attributable to a global-scale contraction in demand caused by the spread of coronavirus infection, which led to sudden decreases in naphtha prices and deterioration in overseas market conditions.

Operating income also decreased, ?17.0 billion, compared with operating income in the same period the preceding year, resulting in a loss of 900 million (USD8.4 million). The decrease resulted from the worsening trade conditions, which included a decline in sales volume and sales prices that exceeded the effect of decreasing raw fuel prices. Despite a decrease in foreign exchange losses, ordinary income fell 15.9 billion compared with ordinary income for the first quarter of fiscal 2020, resulting in a loss of 500 million (USD4.6 million). And net profit attributable to owners of the parent company decreased 11.1 billion, resulting in a loss of 2.0 billion (USD18.6 million).

During the first quarter of fiscal 2021 (April 1, 2020 to June 30, 2020), the Japanese economy has been impacted by the spread of coronavirus infection. Economic and social activity has been restricted, personal consumption and exports plunged suddenly, and employment conditions and capital spending have weakened. The impact of the coronavirus has also affected the global economy, pushing it rapidly toward a recession. As it is extremely difficult to predict when the situation will begin to normalize, there are concerns over potentially prolonged economic stagnation on a global scale.

Shipments of olefin products, such as ethylene and propylene, decreased in line with scheduled maintenance. Shipments were also affected by decreased demand—particularly for cumene—due to the impact of the spread of coronavirus infection. And product prices also fell, reflecting decreased prices for raw materials such as naphtha and declining overseas product market conditions.

Both domestic and export shipments of polyethylene resin decreased in line with falling demand caused by the spread of the coronavirus. And product prices decreased, reflecting lower prices for naphtha. Exports of chloroprene rubber, particularly to Asia, decreased due to demand being suppressed by the spread of the coronavirus.

As MRC reported previously, Japan's Tosoh Corp has brought on-stream its naphtha cracker following a planned outage. The company resumed operations at the cracker on April 20, 2020. The cracker was shut for maintenance on March 4, 2020. Located at Yokkaichi in Japan, the cracker has an ethylene production capacity of 527,000 mt/year and a propylene production capacity of 315,000 mt/year.

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.

Tosoh is one of the largest chlor-alkali manufacturers in Asia. The company supplies the plastic resins and an array of the basic chemicals that support modern life. Tosoh's petrochemical operations supply ethylene, polymers, and polyethylene.
MRC

Omega completes acquisition of Oiltanking Joliet chemicals terminal

MOSCOW (MRC) -- Oiltanking North America (ONA; Houston), a wholly owned subsidiary of Oiltanking (Hamburg, Germany), says it has completed the sale of its Joliet chemical terminal at Channahon, Illinois, to bulk liquid terminals operator Omega Partners Illinois, said Chemweek.

An initial agreement for the sale was announced in June. Following completion of customary preparatory steps, the transaction was completed with effect from 31 July, it says. Omega Partners (St. Louis, Missouri) owns and operates bulk liquid petroleum terminals in Illinois, Florida, Georgia, South Carolina, Nevada, and Kentucky. The value of the transaction has not been disclosed.

The Joliet terminal is dedicated primarily to the storage of specialty chemicals and has a capacity of approximately 44,600 cubic meters. Oiltanking acquired the facility from Dow Chemical in 2009.

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

Adnoc, Wanhua Chemical form JV to ship LPG feedstock

MOSCOW (MRC) -- ADNOC Logistics and Services (ADNOC L&S), a subsidiary of the Abu Dhabi National Oil Company (ADNOC) said on Tuesday it had formed a shipping joint venture with Wanhua Chemical Group, reported Reuters.

The new company, AW Shipping Limited, is incorporated in Abu Dhabi Global Market (ADGM), a statement by ADNOC said.

AW Shipping will own and operate a fleet of very large gas carriers (VLGCs) and modern product tankers.

The company will transport liquefied petroleum gas (LPG) cargoes and other petroleum products, sourced from the ADNOC Group and global suppliers, to Wanhua Group’s manufacturing bases in China and around the world.

It will also pursue other market opportunities to deliver maximum fleet efficiency, the statement said.

The formation of AW Shipping follows a 10-year LPG supply contract signed in November 2018 between ADNOC and Wanhua.

As MRC informed earlier, in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

Celanese Corporation declares quarterly dividend of USD0.62 per share

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, has declared a quarterly cash dividend of USD0.62 per share on its common stock, payable August 6, 2020, as per the company's press release.

The dividend is payable to stockholders of record as of July 27, 2020.

As MRC reported earlier, Celanese last raised its list and off-list selling Vinyl Acetate Monomer (VAM) prices for Europe, Middle East and Africa on July 1, 2020, by EUR100/mt.

VAM is the main feedstock for the production of ethylene-vinyl-acetate (EVA).

According to MRC's DataScope report, Junel EVA imports to Russia fell by 22,5% year on year to 2,940 tonnes from 3,800 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-June 2020 by 8,16% year on year to 17,440 tonnes (18,980 tonnes a year earlier).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
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