Nexam wins order to supply PET additives to foam manufacturer in US

MOSCOW (MRC) -- Nexam Chemical has received an order from an existing customer in the area of PET additives for deliveries to the USA, said Chemweek.

The customer is a market-leading manufacturer of PET foam. It is the single largest order in the United States and also one of the largest ever for Nexam Chemical globally. Nexam Chemical has previously delivered products to this customer and this order confirms good growth in the business. The value of the order is SEK 9 million and applies to deliveries up to and including the spring of 2021.

"It is very satisfying to be able to tell about this order. Mostly because we really see that we get the confidence to continue to grow with existing customers. Working with growing customers is a key component in a long-term growth strategy. ” says Johan Arvidsson, CEO of Nexam Chemical. "This is a cooperation we have had for just over 2 years, which is developing better than we originally could predict." continues Johan Arvidsson.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes in June. Russian plants reduced their PET output in January-June 2020 by 25% year on year. Overall PET chips production at four Russian plants reached 281,100 tonnes in January-June 2020.

Nexam Chemical develops technology and products that make it possible to significantly improve the production process and properties of most types of plastics in a cost-effective manner and with retained production technology. The improved properties include strength, toughness, temperature and chemical resistance as well as service life. The improvements in properties that can be achieved by using Nexam Chemical's technology make it possible to replace metals and other heavier or more expensive materials with plastics in a number of applications. In applications where plastic is already used, Nexam Chemicals products can improve the manufacturing process, reducing material use and enable more environmental friendly alternatives.
MRC

MOSCOW (MRC) -- On September 30, 2020, effective at midnight, BASF closed the divestiture of its Construction Chemicals business to an affiliate of Lone Star, a global private equity firm, said the company.

The purchase price on a cash and debt-free basis is EUR3.17 billion. The Construction Chemicals business now forms the newly founded MBCC Group, headquartered in Mannheim, Germany. “Lone Star has been a professional partner in this transaction and is committed to the future success of the business,” said Saori Dubourg, member of the Board of Executive Directors of BASF SE. “We highly appreciate the tremendous efforts to realize the carve-out and close the deal in such a fast and decisive manner. We wish the Construction Chemicals team much success for the future."

The divestment of the assets and liabilities of the Construction Chemicals business and the related disposal gain will be reflected in BASF’s financial reporting in the fourth quarter of 2020. Payments received in the context of the transaction until September 30 will be included in cash flows from investing activities in the Q3 2020 Statement of Cash Flows.

On December 21, 2019, BASF and an affiliate of Lone Star had signed a purchase agreement for the acquisition of BASF’s Construction Chemicals business. With around 7,500 employees, the Construction Chemicals business operates production sites and sales offices in more than 60 countries and generated sales of about EUR2.6 billion in 2019.

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. Dow to record restructuring charge of up to USD600 million, close manufacturing assets

MOSCOW (MRC) -- Dow says it will record a charge of between USD500-600 million in the third quarter for costs associated with the company’s ongoing restructuring program, and has outlined more details of its previously announced plan to close manufacturing facilities in the US and Europe to enhance its long-term competitiveness as the worldwide economy recovers from the COVID-19 pandemic, said Chemweek. Dow will rationalize its manufacturing asset footprint in its industrial intermediates and infrastructure business by “shutting down certain amines and solvents facilities in the United States and Europe as well as select small-scale downstream polyurethanes manufacturing facilities,” it says.

MRC

MOSCOW (MRC) -- Japan’s gasoline imports jumped 27.3% in August from a year earlier due to cheaper overseas prices and tighter local supply as refiners kept run rates low amid slumping demand for jet fuel, the Ministry of Economy, Trade and Industry (METI) said, as per Hydrocarbonprocessing.

Imports totaled 422,654 kiloliters (85,755 barrels per day), up from 332,030 kl a year earlier, but they fell 5.3% from 446,206 kl in July which was the highest monthly import figure since August 2011. Gasoline imports in January-August rose 74% on-year. "Overseas gasoline prices are extremely low, which is giving us an incentive to import,” Tsutomu Sugimori, president of the Petroleum Association of Japan, said last week.

"Also, we have been running refineries at low rates to reflect plunging demand for jet fuels, forcing us to import gasoline to cover some shortage," said Sugimori, also the chairman of Eneos Holdings Inc., Japan's top refiner. Japan's refinery run rate has been at around 60% in the past few months as fuel demand collapsed due to the COVID-19 pandemic, especially jet fuel which was hurt by global curbs on air travel.

But Sugimori said the run rate is expected to recover toward winter when kerosene demand picks up, leading to lower gasoline imports. Jet fuel and kerosene are closely related and belong to a grade of oil products called middle distillates. The ministry data also showed crude oil imports fell 23.9% on-year to 11.64 MM kl (2.36 million bpd), the lowest for the month of August since 1988.

It marked an eighth consecutive monthly decline and followed a year-on-year fall of 31-32% in June and July, when crude oil imports hit the lowest for the month since 1967 and 1968, respectively. Crude oil imports in January-August fell 16.9% on-year.

As MRC informed earlier, Sumitomo Chemical and Saudi Aramco have jointly loaned out a total of USD2bn to Rabigh Refining and Petrochemical Co (Petro Rabigh), which faced shortfall of working capital as “the market environment has rapidly deteriorated” since end-2019. This project has been undertaken by Rabigh Refining and Petrochemical Company (Petro Rabigh), jointly founded by both companies. The financial completion guarantee has been terminated as of 30 September 2020, as Sumitomo has confirmed its fulfillment of specific requirements for continuous performance and debt-repayment ability stipulated in the project financing agreements, after consultation with a syndicate of banks.

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) -- Sumitomo Chemical and Saudi Aramco have jointly loaned out a total of USD2bn to Rabigh Refining and Petrochemical Co (Petro Rabigh), which faced shortfall of working capital as “the market environment has rapidly deteriorated” since end-2019, said Hydrocarbonengineering.

This project has been undertaken by Rabigh Refining and Petrochemical Company (Petro Rabigh), jointly founded by both companies. The financial completion guarantee has been terminated as of 30 September 2020, as Sumitomo has confirmed its fulfillment of specific requirements for continuous performance and debt-repayment ability stipulated in the project financing agreements, after consultation with a syndicate of banks.

A financial completion guarantee is an arrangement whereby investing companies for a given project guarantee a full repayment of the loan to a lender on behalf of the project company during construction and for a specified period after the completion of the construction work, until confirmation is made that the project company is deemed capable of making repayment with continuous cash flow generated by stable operations.

In March 2015, Petro Rabigh signed project financing agreements with a syndicate of banks, including the Japan Bank for International Cooperation (JBIC) and the Public Investment Fund (PIF) of Saudi Arabia, to receive an aggregate loan of US$5.2 billion, which was 60% of the total cost of Rabigh Phase 2 Project (about USD9.1 billion). For these agreements, Sumitomo Chemical and Saudi Aramco have each offered a financial completion guarantee for 50% of USD5.2 billion based on the agreements with the syndicate of banks.

Petro Rabigh has already started the scheduled repayment of the debt principal since June 2019 (outstanding debt as of September 2020 is about USD4.6 billion). The company will continue to repay the balance of the loan out of cash flow generated from its operating activities.

Meanwhile, the market environment has rapidly deteriorated since the end of last year. Coupled with other factors including periodic shutdown maintenance, Petro Rabigh faced the shortfall of working capital. To cover this shortfall, Sumitomo Chemical and Saudi Aramco have decided to make a loan totalling USD2 billion (of which Sumitomo Chemical's portion is USD750 million, 37.5% of the ownership stake) to Petro Rabigh.

Sumitomo Chemical continues to provide necessary support so that Petro Rabigh can continue stable operation to achieve sustained growth.

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