Asahi Kasei Apr-Jun net income falls

MOSCOW (MRC) -- Asahi Kasei Corp’s net income fell in April-June this year compared with the same period in 2019 on lower earnings at its material segment due to the economic effects of the coronavirus pandemic, said the company.

Basic materials operating income decreased with reduced shipment volumes, effects of lower market prices for petrochemical feedstocks on inventories, and deteriorated terms of trade for acrylonitrile (ACN).

Performance products operating income decreased as an effect of broad declines in demand among automobile-related markets and apparel-related markets.

Specialty solutions operating income increased with favorable demand related to communications infrastructure and tablet PCs, while lithium-ion battery separator shipments increased firmly.

Operating income in the Homes and Health Care segments increased.

"Year-on-year, Q2 operating income is expected to decrease overall with a decrease in the material and homes segments and an increase in the health care segment," the company said in a statement.

Japanese petrochemical firm Asahi Kasei expects demand for petrochemical products, including acrylonitrile (AN) and functional polymers for automobiles, to recover in the second half of the April 2020-March 2021 fiscal year.

The company thinks demand for petrochemical products hit a bottom in April-June, although a second wave of Covid-19 infections has created further uncertainty in the market.

It forecasts that the use of polymers for automobiles will start to pick up in July-September following a rebound in Japan's domestic car production.

Asahi Chemical plans to close its polymethyl methacrylate (PMMA) plant in Kawasaki, Kawasaki, Japan in mid-October for scheduled maintenance. This enterprise with a capacity of 20 thousand tons of PMMA per year will be closed until mid-November for about 25 days.

Earlier it was reported that Asahi Chemical plans to close the production of methyl methacrylate (MMA) in Kawasaki (Kawasaki, Japan) in September for scheduled maintenance. This enterprise with a capacity of 100 thousand tons of MMA per year will be closed for about 50 days.

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

MOSCOW (MRC) -- Gail NSE -1.33 % (India) reported a 56.43 per cent year-on-year fall in net profit at Rs 654.33 crore for the quarter ended June 30, said Chemweek.

The figure stood at Rs 1,503.67 crore in the corresponding quarter last year. Consolidated revenue of the company declined 34 per cent YoY to Rs 12,180.62 crore.

The performance of the company was impacted due to nationwide lockdown, GAIL (India) said in a release. However, it added that the same is expected to reach to normal levels during upcoming period in FY 2020-21.

Segment wise, revenue from natural gas marketing declined 37.83 per cent YoY to Rs 11,635.38 crore. Likewise, topline from transmission services and city gas slipped 12 per cent and 35 per cent YoY, respectively.

However, revenue from petrochemicals increased 9.79 per cent YoY to Rs 1,221.69 crore. Shares of the company traded 0.87 per cent down at Rs 97.20 at around 2.20 pm (IST), while the benchmark BSE Sensex traded almost flat at 38,355.

As MRC informed earlier, GAIL (India) Ltd. has approved the revival of an existing liquefied petroleum gas (LPG) plant for conversion into a new polypropylene (PP) complex in Usar, Raigad district of Maharashtra, India. The "first of its kind project in India" will have 500,000 t/y of PP capacity, as well as an integrated propane dehydrogenation unit, at an estimated cost of Rs 8,800 crore. The project is scheduled to be commissioned by fiscal year 2023-2024.

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.

Gas Authority of India Limited (GAIL) is the largest state-owned natural gas processing and distribution company in India. It is headquartered in New Delhi. It has the following business segments: natural gas, liquid hydrocarbon, liquefied petroleum gas transmission, petrochemicals, city gas distribution, exploration and production, GAILTEL and electricity generation.
MRC

MOSCOW (MRC) -- Tronox reports a second-quarter loss of USD4 million, up from a loss of USD55 million in the year-ago period. Revenue totaled USD578 million, down 27% year-over-year from USD791 million, reported Chemweek.

Adjusted earnings per share of 3 cents beat the average analyst estimate of 2 cents as compiled by Refinitiv (New York).

Including the contribution of Cristal, which was acquired in April 2019, pro forma net income in the year-ago period was USD32 million and revenue totaled USD827 million.

"Tronox delivered solid financial results in the quarter despite the significant reduction in demand and other challenges associated with the COVID-19 pandemic,” says Jeffry N. Quinn, chairman and CEO. “Our results were consistent with the outlook provided at the time of our first quarter earnings release. TiO2 volumes declined 19% quarter-over-quarter, and TiO2 pricing was sequentially flat. Zircon sales volumes and price were both up by 2% sequentially owing to shipment timing and favorable product mix.”

Adjusted EBITDA came to USD142 million, and the adjusted EBITDA margin was 25%.

"As we look to the third quarter, we are encouraged by the momentum carried forward from June, the strongest month of the second quarter. While the timing of re-opening of economies across the globe remains uncertain and subject to week-by-week developments, as of today, we anticipate TiO2 volumes to continue to improve in the third quarter relative to the second quarter and for the zircon market to remain relatively stable as compared to the last several quarters.”

As MRC informed before, in late March, 2020, Tronox Holdings provided an investor update in light of the current global pandemic, to emphasize the strength of the company's cash flow, balance sheet, and sources of liquidity. The first quarter was expected to close better than anticipated, due to positive market trends and developments thus far in 2020. The company anticipated adjusted EBITDA in the first quarter to reach USD160–170 million, adjusted earnings per share of USD0.10–0.18, and revenue of USD700–730 million.

We remind that 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. June production of polymers in primary form fell to 791,000 tonnes from 820,000 tonnes in May partially because of a scheduled shutdown for maintenance at ZapSibNeftekhim. Output of polymers in primary form totalled 4,900,000 tonnes over the stated period, up by 14.8% year on year.

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

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased in the first seven months of 2020 by 14% year on year to about 23,000 tonnes. Sales of Ukrainian PVC to foreign markets rose by 14% year on year, according to MRC's DataScope report.

Last month's SPVC imports to the Ukrainian market dropped to 1,700 tonnes from 3,500 tonnes in June, the introduction of an 18% import duty significantly affected purchasing in foreign markets. Overall imports of suspension reached 23,000 tonnes in January-July 2020, compared to 26,900 tonnes a year earlier. The high level of capacity utilisation even amid strong demand from the domestic market allowed the Ukrainian producer to increase its exports.

European producers with the share of about 82% of the total imports over the stated period were the key suppliers of resin to the Ukrainian market. Producers from the USA with the share of about 16% were the second largest suppliers.

Karpatneftekhim was forced to reduce its export sales last month because of stronger demand from the domestic market, export sales of Ukrainian resin were 2,600 tonnes versus 12,700 tonnes in June. Overall, about 105,000 tonnes of PVC were shipped for export in January-July 2020, compared to 92,400 tonnes a year earlier.

MRC

MOSCOW (MRC) -- The U.S. Department of Energy has finished reviewing retroactive requests from refiners for exemptions from the nation’s biofuel blending laws and has sent recommendations on how to address those requests to the Environmental Protection Agency, Senator Chuck Grassley said, as per Hydrocarbonprocessing.

The EPA now has 90 days to review the recommendations, said Grassley, a senator from Iowa, the top ethanol-producing state. The agency will consider 58 pending requests for compliance years 2011 through 2018, EPA data showed.

Under the U.S. Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into their fuel, or buy credits from those that do. Small refiners that prove the rules would financially harm them can apply for exemptions.

The EPA is in charge of granting exemptions, after the Energy Department reviews applications and makes recommendations. EPA did not immediately provide comment.

The pending applications for blending exemptions would help bring oil refiners into compliance with a court ruling this year that had cast doubt over the EPA’s waiver program.

In January, the Denver-based 10th U.S. Circuit Court of Appeals ruled that waivers granted to small refineries after 2010 had to take the form of an “extension.” Most of the recipients of waivers in recent years have not continuously received them each year since 2010.

The waivers are controversial, as biofuel advocates say they hurt demand for corn-based ethanol, while the oil industry disputes that, and says blending requirements are too expensive.

As MRC informed earlier, The U.S. Environmental Protection Agency has proposed lifting the amount of biofuels that refiners must blend into their fuel next year to 20.17 billion gallons, from 20.09 billion this year, according to two sources familiar with the details of an agency draft proposal.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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