Brenntag to acquire activated carbon firm in Italy

MOSCOW (MRC) -- Brenntag says it has agreed to acquire Comelt (Cernusco sul Naviglio, Italy) and its subsidiary Aquadepur (Cogliate, Italy), reported Chemweek.

The businesses focus on processing, marketing, and distribution of activated and reactivated carbon for applications such as water filtration and purification of air and flue gas. Warehouses and a laboratory in northern Italy are included in the transaction.

The acquired businesses generated combined sales of approximately EUR31.0 million (USD36.6 million) in 2019. Closing of the transaction is subject to certain contractual closing conditions and regulatory approvals and is expected in the fourth quarter.

“With Comelt we have acquired a strong distributor and important market player in the segment of activated carbon,” says Henri Nejade, Brenntag board member and CEO/EMEA and APAC. “The company has an established customer base and broad access to the Italian markets, but also a steady connection to European and Asian suppliers.”

Comelt is a full-service provider for activated carbon, including the collection and reactivation of exhausted activated carbon, according to Brenntag.

“We expect an increasing demand for activated carbon for years to come due to the stricter purity standards for air and water quality,” says Anthony Gerace, managing director/M&A at Brenntag. “(Comelt) has a competitive advantage through its full-service offering regarding activated and reactivated carbon. This is an opportunity for Brenntag to increase our market share in these important high-growth and significant market segments in Italy as well as in other European countries.”

As MRC informed earlier, Brenntag says it has acquired the operating assets of Suffolk Solutions’ (Suffolk, Virginia) caustic soda distribution business. Financial terms of the deal have not been disclosed.

We remind that August production of sodium hydroxide (caustic soda) in Russia were 99,200 tonnes (100% of the basic substance) versus 89,400 tonnes a month earlier, said MRC analysts. Russia's overall output of caustic soda totalled 837,600 tonnes in the first eight months of 2020, down by only 2% year on year.

PP imports to Belarus down by 1.6% in Jan-Aug 2020

MOSCOW (MRC) -- Overall polypropylene (PP) imports into Belarus dropped in the first eight months of 2020 by 1.6% year on year to 72,300 tonnes. Only propylene copolymers accounted for weaker demand, according to MRC's DataScope report.

August PP imports to Belarus rose to 9,500 tonnes, whereas this figure was 7,300 tonnes a month earlier, local companies raised their purchasing of all propylene polymers in Russia. Overall imports of propylene polymers reached 72,300 tonnes in January-August 2020, compared to 73,500 tonnes a year earlier, demand for propylene homopolymer (homopolymer PP) increased, whereas demand for propylene copolymers decreased.

The supply structure by PP grades looked the following way over the stated period.


August imports of homopolymer PP reached 7,100 tonnes versus 6,300 tonnes a month earlier, purchases of injection moulding homopolymer PP in Russia increased. Overall imports of homopolymer PP reached 53,000 tonnes in the first eight months of 2020, up by 7% year on year.

August imports of propylene copolymers to Belarus were 2,300 tonnes versus 1,000 tonnes a month earlier, local companies significantly raised their procurement of injection moulding block-copolymers of propylene (PP block copolymer) from Russian producers. Thus, overall imports of propylene copolymers reached 19,300 tonnes in January-August 2020, down by 19.6% year on year.

MRC

PVC imports to Belarus rose by 26.3% in Jan-Aug 2020

MOSCOW (MRC) -- Overall imports of unmixed polyvinyl chloride (PVC) into Belarus totalled about 32,600 tonnes in the first eight months of 2020, up by 26.3% year on year, according to MRC's DataScope report.

According to the statistics committee of the Republic of Belarus, in August of this year, local converters kept a high level of PVC purchases on the back of high seasonal demand for finished products, the total import figure was 5,700 tonnes, whereas a month earlier it was 5,600 tonnes. Russian PVC accounted for the main increase in purchasing.
Thus, imports of unmixed PVC reached 32,600 tonnes in January-August 2020, compared to 25,800 tonnes a year earlier.
Russian producers with the share of about 83% of the Belarusian market were the key suppliers of resin to Belarus over the stated period.

Producers from Ukraine and Germany with the share of 6% and 8%, respectively, were the second and third largest suppliers.

MRC

Hexcel net income plummets as dramatic volume decline continues

MOSCOW (MRC) -- Hexcel has reported net income down 87.9% year-on-year (YOY), to USD9.7 million, on net sales down 49.9%, to USD286.9 million. Adjusted earnings amounted to a 29 cents/share net loss, short of analysts’ consensus estimate of an 8 cents/share gain, as reported by Refinitiv (New York, New York), said Chemweek.

A dramatic decline in demand from the commercial aerospace sector has significantly impacted the company’s results. “As the year has progressed, the dramatic downturn especially in the commercial aerospace market has become clearer and, as a result, we believe these channel adjustments will take another two to three quarters to work through the system,” says Hexcel chairman and CEO Nick Stanage.

Commercial aerospace segment sales were down 66.6% YOY, to USD128.8 million. Space and defense segment sales fell 0.9% YOY, to USD108.8 million. Industrial segment sales fell 25.8% YOY, to USD49.3 million.

As MRC informed earlier, Hexcel and Arkema have signed a strategic alliance to develop thermoplastic composite solutions for the aerospace sector combining the expertise of Hexcel in carbon fiber and that of Arkema in PEKK. The partnership announced today aims to develop carbon fiber-reinforced thermoplastic tapes to produce lightweight parts for future generations of aircraft. In addition to lightweighting, these new composites will provide lower cost and faster production speeds for customers in the aerospace and the space and defense sectors.

We remind that Russia's output of chemical products rose in August 2020 by 5% year on year. At the same time, production of basic chemicals increased year on year by 5.3% in the first eight months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-July output. August production of benzene fell to 102,000 tonnes from 95,300 tonnes a month earlier due to scheduled shutdowns for maintenance at several producers. Overall output of this product reached 918,300 tonnes over the stated period, down by 0.9% year on year.

At the same time, August production of primary polymers rose to 888,000 tonnes against 838,000 tonnes in July due to increased capacity utilisation at ZapSibNeftekhim, Stavrolen and Gazprom neftekhim Salavat. Overall output of polymers in primary form totalled 6,630,000 tonnes over the stated period, up by 15.2% year on year.

Hexcel Corporation is a leading advanced composites company. It develops, manufactures and markets lightweight, high-performance structural materials including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered core and composite structures for use in commercial aerospace, space and defense and industrial applications.
MRC

Crude oil futures fall on bearish US export data, escalating coronavirus restrictions

MOSCOW (MRC) -- Crude futures fell during mid-morning Asian trade Oct. 16, extending overnight losses, as a decline in US exports and escalating coronavirus restrictions overshadowed the large draw in US crude inventories, reported S&P Global.

At 10.45 am Singapore time (0245 GMT), ICE Brent December crude futures were down 30 cents/b (0.7%) from the Oct. 15 settle to USD42.86/b, while the NYMEX November light sweet crude contract was down 26 cents/b (0.63%) at USD40.70 /b. Both international crude markets had dipped 0.37% and 0.19% to settle at USD43.16/b and USD40.96/b, respectively, on Oct. 15.

The drop in oil prices comes after the Energy Information Association released its latest data on Oct. 15, which showed that US crude exports had fallen to 2.135 million b/d in the week ended Oct.9, the lowest in 14 months.

While part of the reason for this could have been the shuttered production during Hurricane Delta, the figure nevertheless emphasized that export demand remained weak, with both market analysts and traders not expecting a recovery in the near term.

A trading source said: "Exports are tough in November, demand is weak and (arbitrage) isn't there." The trader added that he expects demand to be weak in December and January as well.

The export data casts a shadow on an otherwise bullish EIA report, which showed that in the week ended Oct. 9, US commercial crude stocks had dropped 3.82 million barrels to 489.1 million barrels, putting them just 10% above the five-year average inventory - the lowest supply overhang since mid-May.

The EIA report, however, may have failed to make a bigger impact on the market, as it was conservative compared with the American Petroleum Association's report released on Oct. 14, which had quantified the drop in crude inventories at 5.4 million barrels the same week.

The EIA also reported a 1.63 million-barrel and 7.25 million-barrel draw in US gasoline and distillate inventories, respectively. Refined products supplied, EIA's proxy for demand, jumped 1.13 million b/d to 19.48 million b/d, indicating that fundamentals in downstream oil markets were improving.

Stephen Innes, chief market strategist at AXI, said in an Oct. 16 note: "US oil and product stockpiles offered up some glimmer of hope that the fragile demand recovery is rebalancing at a better pace than expected in the world's largest consumer of oil, the US markets."

Meanwhile, the coronavirus pandemic continued to weigh down sentiment for oil, after France, Portugal and Italy all reported record high daily cases, and after the UK introduced new restrictions, including a ban on visiting others indoors in some parts of the country.

ANZ analysts said in an Oct. 16 note: "Crude oil started the session on the back foot, as investors became increasingly concerned about the economic fallout from the resurgence in coronavirus cases."

Amid the impending economic distress, OPEC Secretary General Mohammed Barkindo acknowledged that the outlook for oil looked bleak.

"We are on the course to recovery, but we have to be realistic that this recovery is not picking up pace at a rate that we earlier expected in the year," Barkindo said on Oct. 15 at the Energy Intelligence Forum.

Barkindo's statements in the forum reignited market talk that the OPEC+ alliance will extend the production cuts from 2021 instead of easing them as planned, even after UAE energy minister Suhail al-Mazrouei said on Oct. 13 that there are no such plans at the moment.

Innes said: "Barkindo suggested the 'OPEC Put' remains alive and well when replying to questions whether the market could handle another 2 million b/d if the OPEC+ further relaxes the current cuts in January as planned."

As MRC wrote before, US crude stocks moved lower last week as Hurricane Delta shut in Gulf of Mexico output and exports hit a 14-month low, according to US Energy Information Administration data showed Oct. 15.

We reming that in August, 2020, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC