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Tosoh swings to loss on COVID-19 impact

August 05/2020

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 companys 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 demandparticularly for cumenedue 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.
Author:Anna Larionova
Tags:petroleum products, crude oil, petrochemistry, Tosoh, Japan.
Category:General News
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