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.
MRC

LDPE prices continue to rise dynamically in Russia

MOSCOW (MRC) - The first days of August led to another price rise of low density polyethylene (LDPE) in Russia, while the dynamics of the rise in prices for polyethylene increased significantly, including due to scheduled maintenance works of some producers, according to the ICIS-MRC Price Report.

Two Russian producers in Angarsk and Salavat shut their production capacities for long-term scheduled maintenances in late June - early July, which immediately affected the market balance and led to an increase in LDPE prices.

Only the Angarsk Polymer Plant had resumed production after the shutdown by the beginning of August, while in September three more producers are expected to stop for turnaround. Good demand and limited supply of polyethylene from most producers led to another surge in prices.

At the same time, for some items the rise in prices turned out to be more significant in comparison with July. Angarsk Polymer Plant shut its capacities for 30 days turnaround from 22 June, however, the plant managed to resume production of polyethylene after the repair only by 3 August.

The situation is similar with Gazprom neftekhim Salavat, the shutdown started on 1July and was planned to last for 30 days. But the company's clients said LDPE production was likely to begin in the second decade of August.

Demand for LDPE was at a good level in July, and some sellers sold all their monthly quotas by the middle of the month. A similar situation with demand is expected in August.

Another series of scheduled maintenances are expected in September. Shutdowns are expected at the facilities of Tomskneftekhim and Ufaorgsintez in the first days of the first month of autumn, although the turnarounds will not be so long.

Kazanorgsintez will shut down its capacities for scheduled maintenance works from 17 September to 13 October.
Supply of LDPE was limited in the spot market in the first days of August, some sellers were in no hurry to sell their August volumes, expecting further price growth.

Price offers for 108 PE started from Rb83,000/tonne FCA, including VAT. Price offers for 158 PE started from Rb88,000/tonne FCA, including VAT.

MRC

Eastman misses estimates on lower volumes, capacity utilization

MOSCOW (MRC) -- Eastman Chemical has reported second-quarter net earnings down 89.5% year-on-year (YOY), to USD27 million, on sales down 18.6%, to USD1.92 billion, reported Chemweek.

Adjusted earnings fell 57.2% YOY, to 85 cents/share, short of analysts’ consensus estimate of USD1.05/share, as reported by Refinitiv (New York, New York). Lower volumes, lower selling prices, and reduced capacity utilization hit both sales and profits, as the COVID-19 pandemic cut into demand in key end markets, including transportation, construction, and consumer durable goods.

“Our sales revenue in the first half of the year was relatively solid, demonstrating the value of a diverse set of end markets and the benefit of our innovation-driven growth model,” says Eastman board chair and CEO Mark Costa. “And, we moved swiftly to aggressively manage costs to offset meaningfully lower capacity utilization.”

Additives and functional products segment sales declined 16.8% YOY, to $685 million, while segment adjusted EBIT fell 51.0%, to USD72 million. The declines were driven by lower sales volumes and capacity utilization, as well as a less-favorable product mix.

Advanced materials segment sales were down 18.5% YOY, to USD567 million, while segment adjusted EBIT declined 55.9%, to USD64 million. The pandemic resulted in volume declines and reduced capacity utilization, with the consumer durable goods and transportation end markets showing particularly sluggish demand.

Chemical intermediates segment sales declined 26.9% YOY, to USD461 million, while segment adjusted EBIT fell 65.1%, to USD22 million. The COVID-19 pandemic cut into demand, reducing sales volumes and selling prices, and lower crude oil prices made U.S. olefins production less globally competitive.

Fibers segment sales were down 0.9% YOY, to USD211 million, while segment adjusted EBIT decreased 9.8%, to $46 million. Sales were flat as higher acetate tow volumes nearly offset lower demand for textile products.

Eastman is “seeing demand for products serving the auto, tires, building and construction, and consumer durables end markets begin to recover sequentially from the low levels of the second quarter leading to increased capacity utilization, particularly in advanced materials,” Costa says.

As MRC reported earlier, in 2016, Eastman Chemical's chief executive Mark Costa announced that the company wanted to reduce its surplus ethylene and commodity intermediates, but did not intend to sell its cracker in Longview, Texas.

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.

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in more than 100 countries. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 14,500 people around the world.
MRC

Russiian Lukoil agrees to take 40% stake in RSSD project offshore Senegal

MOSCOW (MRC) -- Russia's Lukoil said July 27 that it has reached an agreement with Cairn Energy to take a 40% stake in the Rufisque, Sangomar and Sangomar Deep (RSSD) project offshore Senegal for USD300 million, reported S&P Global.

Lukoil is expanding its presence in Africa at a time when the Russian government has identified the continent as a priority for expanding overseas energy cooperation. Lukoil is playing a key role in this strategy. Late last year it won a license for a gas-rich exploration block off Equatorial Guinea that contains the stalled Fortuna LNG project. It also has stakes in projects in Egypt, Ghana, Nigeria and Cameroon.

The RSSD project includes blocks covering an area of 2,212 square kilometers, located 80 kilometers offshore, at a sea depth of 800-2,175 meters. It includes two discovered fields – Sangomar and FAN.

A final investment decision on the Sangomar field was taken in early 2020 and field development has begun. Recoverable hydrocarbon reserves at the field are estimated at 500 million barrels of oil equivalent. Launch of production is scheduled for 2023, with a designed production volume of 5 million mt of crude oil per year. This is equivalent to around 100,410 b/d.

Development of the RSSD project is being carried out under a production sharing agreement, with Woodside holding a 35% stake and acting as project operator. Other participants are FAR with a 15% stake, and state-owned Petrosen with a 10% stake.

"Entering a project with already explored reserves at an early stage of development is fully in line with our strategy and allows us to reinforce our presence in West Africa. Joining the project with qualified international partners will allow us to gain additional experience in development of offshore fields in the region," Lukoil CEO Vagit Alekperov said in a statement.

The deal is subject to approval by the Senegalese government. It also provides for a potential bonus payment to Cairn Energy of up to USD100 million when production begins.

As MRC wrote before, the European refineries of Russia’s No.2 oil producer Lukoil were only processing Russian oil in H2 April-early May, 2020.

We remind that Stavrolen (part of Lukoil), Russia's major polyolefins producer, resumed its polypropylene (PP) production in Budennovsk after a long scheduled turnaround. The plant's customers said Stavrolen had fully resumed its PP production after the long scheduled maintenance by 15 October 2019. The outage began on 6 September. The start-up of the plant"s high density polyethylene (HDPE) production took place with a week delay.

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.

Lukoil is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. Lukoil's structure includes one of the largest Russian petrochemical plant - Stavrolen.
MRC

Insulation foam applications drive MDI demand recovery, TDI recovery more subdued

MOSCOW (MRC) -- MDI and TDI demand have been showing signs of recovery throughout June and July, albeit to different degrees of intensity. Demand for polyurethane insulation foams (rigid and spray) in the construction industry is driving up demand for MDI in Europe and North America, says James Elliott, associate director /polyurethanes at IHS Markit.

In Asia, demand for polyurethane insulation foams in the appliance manufacturing and cold chain sector is the contributing factor to improved MDI consumption, Elliott says. However, the TDI demand recovery in flexible foams used in the furniture and bedding sectors is more protracted. The automotive end-use sector is hindering the MDI and TDI demand recovery, too Elliott adds.

According to IHS Markit Purchasing Managers Index ® (PMI), sentiment regarding new housing starts, workforce availability, and future projects have improved as construction sites are opened and work restarts. Social distancing is more easily practiced in this sector, allowing for a higher pace of demand recovery for those products linked to construction.

"When it comes to insulation, polyurethane foams (PU foam) have better properties versus expandable polystyrene (EPS) and rock wool. Selection of one over the other comes down to price,” says Elliott. “MDI prices, currently at an all-time low, and this is lending support to PU foam demand versus alternative products. While MDI prices have started to move up, short-term fundamentals will benefit PU foam demand over other options."

Longer-term, the polyurethane industry is optimistic that the sustainability agenda and continued push for more efficient solutions tips the balance in favor of PU insulation foams, boosting Demand, Elliot remarks.

Meanwhile, estimates on the side of the appliance suggest. Demand has been moving back to at least 80% of pre-lockdown levels, according to IHS Markit data. TDI demand has also begun recovering on all fronts since the second half of May, the same data shows, with recovery picking up during June. However, the comfort sector --key for TDI demand into flexible polyurethane foams-- is finding the pace of recovery slow.

"The COVID-19 pandemic’s impact on unemployment rates means consumers are more cautious with their spending," Elliott says. “Demand from the comfort sector was severely hit as lockdown measures caused bricks and mortar shops to close. Shops are reopening as lockdown measures ease, and there are signs of recovery in Europe, particularly where demand into this segment has exceeded expectations in the past month. However, TDI demand is still below pre-COVID levels.

Meanwhile, TDI demand into the automotive sector remains very weak, due to high inventories along with the automotive supply chains and lower automotive operations, Elliott adds. “There is still poor demand for vehicles. So, the automotive sector is much more of a drag on demand vs. the comfort segment."

As it was written before, Covestro announced a pause of 18-24 months on work at its planned expansion in Baytown, Texas. The company had been planning to build a new 500,000 tonnes/year MDI plant in Baytown by 2024, after which the company was planning to close an older 90,000 tonnes/year unit.

Wanhua also revised its initial plans to build a new 400,000 tonnes/year MDI plant along the US Gulf Coast to a plan to build an MDI splitter along the US Gulf Coast. The splitter would allow the company to convert lower-value crude MDI to higher-value polymeric MDI (PMDI) and monomeric MDI (MMDI).
MRC