Solvay issues EUR500-million hybrid bond

MOSCOW (MRC) -- Solvay says it has issued a new perpetual EUR500-million (USD591 million) hybrid bond, to be used for general corporate purposes, including the possible repayment of other indebtedness, according to Chemweek.

The bond has a perpetual maturity with a first call date on 2 December 2025 and will pay a fixed coupon of 2.5% with corresponding yield of 2.625% until 2 March 2026, which is the first date the coupon resets, and will do so every five years thereafter, the company says.

Solvay says that in accordance with IFRS requirements, the notes will rank junior to all senior debt and will be recorded as equity, and coupons will be recorded as dividends. The hybrid bond will also benefit from 50% rating agency equity treatment by Moody’s and S&P, the company adds.

Solvay has concurrently launched a tender offer to repurchase any-and-all its EUR500-million perpetual hybrid bond with a first call date in June 2021, which bears interest at a rate of 5.118%, the company says. The offer will expire on 1 September 2020, it says.

As MRC wrote previously, through the acquisition of the Solvay polyamide (PA) business, BASF has enhanced its R&D capabilities in Asia Pacific with new technologies, technical expertise, and upgraded material and part testing services.

We remind that BASF-YPC, a 50-50 joint venture of BASF and Sinopec, undertook a planned shutdown at its naphtha cracker on 30 April 2020. The company initially planned to start turnaround at the cracker on April 5, 2020. The plant remained under maintenance unitl 18 June, 2020. Located in Jiangsu, China, the cracker has an ethylene capacity of 750,000 mt/year and propylene capacity of 400,000 mt/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.

Solvay is a science company whose technologies bring benefits to many aspects of daily life. With more than 24,100 employees in 64 countries, Solvay bonds people, ideas and elements to reinvent progress. The Group seeks to create sustainable shared value for all, notably through its Solvay One Planet plan crafted around three pillars: protecting the climate, preserving resources and fostering better life. The Group’s innovative solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices, health care applications, water and air purification systems. Founded in 1863, Solvay today ranks among the world’s top three companies for the vast majority of its activities and delivered net sales of EUR10.2 billion in 2019.
MRC

MOSCOW (MRC) - Private Chinese oil refiner and petrochemical manufacturers Hengli Petrochemical Corp and Rongsheng Petrochemical Corp have each hired a new executive for its Singapore trading desk, reported Reuters with reference to company officials' statement.

Hengli Petrochemical (Singapore) Pte Ltd, the trading unit for Hengli Petrochemical, hired James Zhang, formerly a commodities trading manager at ICBC Standard Bank, as its vice president in charge of finances, a company spokesman said.

Zhang started early this month, the spokesman said.

Separately, Zhu Yanyu, previously a veteran oil products trading manager at state-owned oil and gas company PetroChina , started in June at Rongsheng Petrochemical (Singapore) Pte Ltd as a deputy general manager in charge of refined products trading, said two company officials.

The Singapore operation is the international trading unit for Rongsheng Petrochemical Corp, which is a key stakeholder in Zhejiang Petrochemical Corp (ZPC), one of China's largest private refiners which operates a 400,000 barrels per day refinery in east China's Zhoushan.

ZPC became the first private Chinese refiner to win Chinese government quotas to export low-sulphur marine fuel in April, and in July the firm was granted a license to export other refined products.

As MRC informed previously, Zhejiang Petrochemical Co Ltd was running its new acrylonitrile (ACN) plant at 80% operating rate in July. The company started up new ACN plant on 23 June, 2020, and produced on specification material in the week ended 4 July. Based in Zhejiang, China, this plant is able to produce 260,000 tons/year of ACN.

Besides, earlier, Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December 2019 and its polyolefin plants in late December 2019-January 2020.

Ethylene and propylene are feedstocks for producing 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) -- KBR has been awarded two contracts by Ningxia Baofeng Energy Group Co. Ltd (Baofeng Energy) for its 500KTA coal to olefins project & 500KTA C2-C5 comprehensive utilization project to be built in Ningdong Town, Lingwu City, Ningxia, China, as per Hydrocarbonprocessing.

Under the terms of the contracts, KBR will provide process technology licensing and process design packages for this project, which will have an annual production capacity of one million tons of olefins. Once completed, the complex will be the largest single-train methanol to olefins (MTO) plant in the world.

KBR will use a combination of its best-in-class SCORE steam cracking and MTO recovery technologies to achieve Baofeng Energy's project objectives of highest yields and lowest capital investment. The SCORE steam cracking unit will convert the ethane and propane feedstock into ethylene and propylene, which are later separated and further purified in the MTO recovery section to ensure the quality needed to produce polymer grade ethylene and propylene. The MTO recovery process utilizes KBR's commercially-proven technology, which in addition to superior performance provides CAPEX and OPEX advantages over other technologies.

"We are proud that Baofeng Energy has selected KBR for this breakthrough world-scale MTO complex," said Doug Kelly, KBR President, Technology Solutions. "This award is a reaffirmation of our continued commitment to helping our clients maintain their competitive edge through technological advancements and delivering the best return on their investments."

For more than 50 years, KBR's Technology Solutions business unit has been delivering the technologies, flexible solutions and expertise that petrochemical manufacturers rely on to produce ethylene, propylene, acetyls, phenolics, vinyls and other specialty products from a variety of feedstocks in a safe, efficient, and sustainable manner.

As MRC reported earlier, Ningxia Baofeng Energy has brought on-stream its No.1 (methanol-to-olefins) MTO unit following a maintenance turnaround. Tje company resumed operations at this unit on August 2, 2020. The unit was shut for maintenance on 1 July, 2020. Located at Yinchuan, Ningxia, China, the MTO unit has an ethylene and propylene production capacity of 300,000 mt/year each.

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

1. Chinese July diesel exports hit five year low amid weak demand overseas

MOSCOW (MRC) -- China’s diesel exports fell for a fourth straight month in July,hitting their lowest level in five years, as tepid demand overseas due to the COVID-19 pandemic forced Chinese refiners to focus on domestic consumers, reported Reuters. China shipped out only 550,000 tons of diesel, about half of 1.04 million tons in June and a third of 1.58 million tons in July 2019, data from the General Administration of Customs showed on Sunday night. Gasoline exports were down 28% from a year earlier at 1.12 million tons last month, while jet kerosene exports were down 77% to 320,000 tons.

MRC

MOSCOW (MRC) -- Crude oil futures were stable in mid-morning trade in Asia on August 21 as planned compensation cuts by the OPEC+ coalition offset a bearish US jobs report amid worries of a slowing economic recovery, reported S&P Global.

At 10:37 am Singapore time (0237 GMT), the ICE Brent October crude futures were up 16 cents/b (0.36%) from the Aug. 20 settle at SUD45.07/b, while the new front-month NYMEX October light sweet crude contract was up by 9 cents/b (0.21%) at USD42.91/b.

The global crude complex was rangebound last week as a drawdown in US commercial crude and gasoline inventories was offset by a decline in total products supplied, US Energy Information Administration data released Aug. 19 showed.

Meanwhile, the headline OPEC+ Joint Ministerial Monitoring Committee meeting Aug. 19 proved to be supportive for prices as the coalition continued to put a strong focus on compliance and compensation cuts.

OPEC+ members that had exceeded their production quotas in May, June and July will have to cut a combined extra 2.31 million b/d as compensation by the end of September, S&P Global Platts reported earlier. Notably, Iraq and Nigeria were the two biggest laggards, overproducing by 851,000 b/d over the three months, while Nigeria was over its limit by 315,000 b/d.

"Industry reports estimate that approximately 1.2 million b/d of additional cuts through August and September are needed to offset oversupply to date, implying OPEC+ cuts fall to 8.9 million b/d in the current phase instead of the 7.7 million b/d target," Stephen Innes, chief global markets strategist at AxiCorp, said in a Aug. 21 note.

These factors combined allowed Brent crude futures to continue to trade in a tight range around the USD45/b level, while NYMEX WTI stayed slightly below USD43/b.

However, the continued spread of COVID-19 worldwide continues to weigh heavily on economic recovery, reviving concerns of energy demand.

US initial jobless claims for the week ended Aug. 15 was reported at 1.11 million, higher than analysts' expectations of a 925,000 gain and the 971,000 figure reported in the previous week, US Labor Department data released on Aug. 20 showed.

Global COVID-19 case counts stood at 22,539,975, while total daily infections worldwide shot back up to 273,374 cases, slightly lower than the record of 304,449 cases set on Aug. 14, latest data from John Hopkins University showed.

"On the health front, there is no question that traders are still peering into a cloudy view-finder as even with new COVID-19 cases declining across the US, we know that can change on a dime as evidenced by recent second wave breakouts around the world. And it is going to take some time for people to feel safe to move freely and possibly only when a vaccine is in hand," Innes added.

As MRC wrote before, US crude oil stockpiles fell in the second week of August even as net imports jumped sharply, while fuel demand dipped as well, according to the US Energy Information Administration's statement. Crude inventories fell by 1.6 million barrels in the week to Aug. 14 to 512.5 million barrels, less than analysts’ expectations in a Reuters poll for a 2.7 million-barrel drop. Net US crude imports rose by 1.1 million barrels per day to 3.6 MMbpd, the EIA said.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And 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 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