Ferro swings to loss as COVID-19 reduces volumes

MOSCOW (MRC) -- Ferro has reported a second-quarter net loss of USD5.5 million, compared with a profit of USD10.9 million in the year-ago quarter. Net sales fell 21.5% year-on-year (YOY), to USD204.8 million, reported Chemweek.

Adjusted earnings totaled 12 cents/share, slightly ahead of analysts’ consensus estimate of 11 cents/share, as reported by Refinitiv (New York, New York). Profit margins improved during the quarter, while volumes fell by 20% YOY.

“Our second quarter performance, although down from last year, was in line with our expectations and, as we moved through the quarter, established what we see as a trend of meaningful improvement from the macro-economic low point,” says Ferro chairman and CEO Peter Thomas. “Order patterns in the later part of the quarter showed our customers beginning to have more visibility into their business needs for the second half of 2020, and we now expect the third quarter to track in the same favorable direction that we experienced coming out of the second quarter.”

Functional coatings segment net sales were down 19.6% YOY, to USD131.7 million, while segment gross profit fell 26.7%, to USD36.1 million. Color solutions segment sales declined 24.8% YOY, to USD73.1 million, while segment gross profit was down 9.1%, to $27.0 million.

As MRC informed before, on October 14, 2016, Ferro signed a definitive agreement to acquire 100% of the stock of Belgium-based Cappelle Pigments for EUR50.5 million (approximately USD56 million) on a cash-free and debt-free basis.

We remind that Braskem USA is planning to start up its new polypropylene (PP) plant in the third quarter this year. Based in La Porte, Texas, United States, the plant has a production capacity of 450,000 tons/year. The new PP plant is known as the Delta project, which costs investment of USD675 million and the construction has begun since 2017.

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.

Ferro Corporation is a leading global functional coatings and color solutions company that supplies technology-based performance materials, including glass-based coatings, pigments and colors, and polishing materials. Ferro products are sold into the building and construction, automotive, appliances, electronics, household furnishings, and industrial products markets. Headquartered in Mayfield Heights, Ohio, the Company has approximately 4,900 employees globally.
MRC

US refining capacity poised for first big drop in nearly a decade

MOSCOW (MRC) -- US oil refining capacity this year could decline by the largest amount in nearly a decade as pandemic-related travel curbs and a fire shut several plants, reversing years of small gains, reported Reuters.

Refiners globally have been idling plants as the COVID-19 pandemic slashed fuel demand as much as 30%. In the United States, Marathon Petroleum Corp will close California and New Mexico plants in response to the demand slump.

Philadelphia Energy Solutions closed and sold its refinery to a property developer after a fire and series of explosions tore through the plant last summer.

The three processed a combined 523,000 barrels per day of oil, or nearly 3% of total US refining, reducing capacity to 18.5 million bpd, according to Reuters calculations.

The last large drop was in 2012 when a refinery in the US Virgin Islands was shut, reducing overall capacity by 408,000 bpd. An investor group acquired the plant and aims to restart it this year, which would add 200,000 bpd, and could dampen the sharp fall in capacity.

But the pandemic also is rolling back planned additions and some analysts think additional plants may close. Exxon Mobil Corp recently delayed until 2023 an expansion of its Beaumont, Texas, refinery that would nearly double its capacity.

Past recessions temporarily cut growth, but this year’s sharp drop likely will halt expansions for some time, said David Hackett, president of fuels consultancy Stillwater Associates.

“COVID-19 has taught us people really can work from home,” he said, estimating demand for motor fuels could remain depressed through 2021.

US refiners increased overall capacity most years even as the number of refineries has fallen since 1981. Total capacity last fell by more than half a million bpd in 1992 when 575,000 bpd was lost following the 1990-1991 recession.

Overall gains could resume in 2021, said John Auers, an executive vice president at oil and petrochemical consultants Turner, Mason & Co.

But he cautioned a return to historical annual increases “will really be driven by the ability to grow exports” of gasoline, diesel and jet fuel.

As MRC wrote before, ExxonMobil Corp is preparing deep spending and job cuts, according to people familiar with the matter, as it fights to preserve a 8% shareholder dividend with a multi-billion-dollar quarterly loss looming. It was unclear how extensive the cuts will be. The largest US oil company slashed this year’s budget by 30% in April, but Chief Executive Darren Woods’s turnaround through rebounding demand and increased asset sales have not panned out and losses are climbing.

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.

Exxon Mobil Corporation, doing business as ExxonMobil, is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 30, 1999 by the merger of Exxon (formerly the Standard Oil Company of New Jersey) and Mobil (formerly the Standard Oil Company of New York). ExxonMobil's primary brands are Exxon, Mobil, Esso, and ExxonMobil Chemical. ExxonMobil is incorporated in Texas. One of the world's largest companies by revenue, ExxonMobil from 1996 to 2017 varied from the first to sixth largest publicly traded company by market capitalization. ExxonMobil is one of the largest of the world's Big Oil companies.
MRC

Venator swings to loss on COVID-19 volume decline

MOSCOW (MRC) -- Venator (Wynard, UK) reports a second-quarter loss of USD19 million, down from USD21 million in the year-ago period. Sales totaled USD456 million, down 21% year-over-year (YOY) from USD578 million, said Chemweek.

Economic disruption created by the COVID-19 pandemic cut into volume, but the company was able to keep average pricing stable in the titanium dioxide segment and to increase it in the performance additives segment.

Adjusted earnings per share came to a 3-cent loss, down from a 13-cent profit in the year-ago period and ahead of the average analyst estimate of an 8-cent loss as compiled by Refinitiv (New York).

"Our business performed well in the second quarter notwithstanding the severe headwinds due to the COVID-19 pandemic,” says Simon Turner, president and CEO. “TiO2 volumes declined 16% sequentially, in-line with our expectations. Our average TiO2 price remained stable, consistent with our customer-tailored approach, and our decisive cost actions helped mitigate the acute impact of lower demand."

Titanium dioxide segment revenue totaled USD338 million, down 23% YOY, mostly the result of a 21% decline in TiO2 sales volume, says Venator, while average selling price was stable. Volume declined in all product categories and regions owing to the impact of COVID-19. Adjusted EBITDA came to USD35 million, down 36% YOY on lower sales volume, partially offset by lower costs.

The performance additives segment turned in revenue of USD118 million, down 15% YOY. A 16% decrease in sales volumes and the unfavorable impacts of product mix and currency translation were partially offset by a 3% increase in average selling price. Venator attributes the volume decline mainly to the effect of COVID-19 on demand in the color pigments and functional additives businesses. Average selling price increased mainly on favorable mix within the color pigments and timber treatment businesses. Adjusted EBITDA was USD13 million, down 19% on lower volume, partially offset by lower costs.

As MRC informed earlier, Venator Materials PLC announced the completion of the strategic review of its Pori, Finland TiO2 manufacturing facility. As a result of unanticipated cost escalation and extended timeline now understood to be associated with the reconstruction of the Pori, Finland TiO2 facility, Venator will transfer certain technology, and the production of select product grades, to other facilities within its current manufacturing network, which will become more efficient with greater flexibility. The Pori, Finland facility will continue to operate at reduced rates through the transition period, which is expected to last through 2021.

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

Lubrizol acquires Avid Product Development

MOSCOW (MRC) -- US lubricant additives and specialties producer Lubrizol has acquired 3D printing company Avid Product Development for an undisclosed sum, said the company.

The 3D printing industry continues to rapidly grow, creating an immense opportunity for companies leveraging 3D printing services as part of their portfolios. Today, OEMs (original equipment manufacturers) interested in 3D printing are seeking partners who can assist in their efforts to integrate this new technology into their processes. Lubrizol’s materials, application and testing expertise coupled with Avid’s 3D printing design, prototyping and post-processing know-how will enable development of differentiated solutions for customers? and accelerate adoption of 3D printing in key industries.

"Lubrizol continues to invest in opportunities that bring new differentiated solutions to our customers,” says Gert-Jan Nijhuis, General Manager, 3D Printing Solutions, Lubrizol Engineered Materials. “The acquisition of Avid Product Development greatly enhances our ability as a 3D printing solution provider, offering complete product solutions from material development to printing and post processing services, delivering end-use products for our key markets."

“As a result of this acquisition, we will have vast opportunities to demonstrate our capabilities in engineering, design and manufacturing with the support of an industry leader in materials development, applications and testing,” added Doug Collins, founder of Avid Product Development.

Avid is headquartered in Loveland, Colorado and serves customers in the footwear, consumer goods, industrial and medical markets. Avid won the 2019 Colorado Company to Watch award, and continues to create innovative solutions, including designing and 3D printing of critical personal protection equipment (PPE) to meet the urgent needs of healthcare workers and essential businesses during the COVID-19 pandemic.

As MRC informed previously, in February 2016, speciality chemicals major Lubrizol Corporation announced the commencement of its USD50 million chlorinated polyvinyl chloride (CPVC) compounding plant in Dahej. This was the company's first CPVC compounding plant in the country, and it claimed that it is the first such in India by any global major.

According to ICIS-MRC Price report, negotiations over August shipments of suspension polyvinyl chloride (SPVC) to the domestic market began in the Russian market on Wednesday. Local producers announced a further price increase. Last month, amid a major rise in polyvinyl chloride (PVC) prices in foreign markets and a significant fall in supply due to scheduled outages for maintenance, Russian producers achieved a price increase of Rb6,000/tonne and higher. Russian producers also intend to raise their August prices by Rb1,500-2,000/tonne partially because of the weakening of the rouble against the dollar and high prices in Asia and Europe.

The Lubrizol Corporation, a Berkshire Hathaway company, is an innovative specialty chemical company that apart from its production develops and supplies technologies to customers in the global transportation, industrial and consumer markets. Lubrizol is providing innovative solutions for its customers high-performance application needs and remains committed to ongoing investment in its CPVC capabilities that support future growth. With headquarters in Wickliffe, Ohio, Lubrizol owns and operates manufacturing facilities in 17 countries, as well as sales and technical offices around the world. Founded in 1928, Lubrizol has approximately 8,000 employees worldwide.
MRC

Global сhemicals output rebounds in June

MOSCOW (MRC) -- Data collected and tabulated by the American Chemistry Council (ACC) show that due to growth in China, global chemicals production rose by 0.6 percent in June, an improvement from the 0.5 percent decline in May, said Americanchemistry.

Production has been declining throughout this year, with the last monthly gain occurring in December 2019. During June, chemical production fell in major regions except Asia-Pacific. Headline global production was off 7.2 percent year-over-year (Y/Y) on a three-month moving average (3MMA) basis and was off 7.4 percent from the peak December level. Global output stood at 109.8 percent of its average 2012 levels.

During June, global capacity was stable and was up 2.6 percent Y/Y. With improving production, capacity utilization in the global chemical industry increased by 0.5 points to 75.3 percent. This is down from 83.2 percent last June and below the long-term (1987-2017) average of 86.5 percent.

Among chemical industry segments, June results were generally positive, with gains in segments except bulk petrochemicals and organics and coatings providing support. Compared with a year earlier, growth was absent in all segments, with a strong decline in coatings.

ACC’s Global Chemical Production Regional Index (Global CPRI) measures the production volume of the chemical industry for 33 key nations, sub-regions, and regions, all aggregated to the world total. The index is comparable to the Federal Reserve Board (FRB) production indices and features a similar base year where 2012=100. This index is developed from government industrial production indices for chemicals from more than 65 nations accounting for about 98 percent of the total global chemical industry. This data set is the only timely source of market trends for the global chemical industry and is comparable to the U.S. CPRI data, a timely source of U.S. regional chemical production.

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