COVID-19 - News digest as of 26.10.2020

1. BorsodChem eyes third quarter 2021 startup for aniline plant in Hungary

MOSCOW (MRC) -- BorsodChem (Kazincbarcika, Hungary) is planning to start production at its new 200,000-metric ton/year aniline plant in Kazincbarcika during the third quarter of 2021, reported Chemweek with reference to market sources. The facility in northern Hungary has received around EUR45 million (USD53 million) in state subsidies from the Hungarian government, which were approved by the European Commission in 2018. Production was initially scheduled to start in the second quarter of next year, but progress has been delayed due to COVID-19 and other “unforeseen issues,” according to market sources.

Synthomer also says that its new 60,000-metric tons/year nitrile butadiene latex capacity at Pasir Gudang, Malaysia, is on schedule for start-up in the fourth quarter of 2021. The plant’s current capacity is 90,000 metric tons/year. Synthomer made the announcements as part of a recent third-quarter update that it says shows “strong trading momentum across all three business divisions.” As a result, the company has raised its full-year EBITDA guidance by 10%. Volumes and margins at the company’s performance elastomers business are ahead of the prior-year period reflecting strong demand in nitrile butadiene latex following the COVID-19 pandemic and improved conditions in SBR through the third quarter, the company says.

MRC

Toyobo and Indorama forms JV to produce automobile airbag yarns in Thailand

MOSCOW (MRC) -- Toyobo Co., Ltd. has agreed to set up a joint venture firm to produce yarns for automobile airbags with Bangkok-based Indorama Polyester Industries PCL (IPI), which is under the umbrella of the world’s largest polyethylene terephthalate (PET) producer, Indorama Ventures PCL (IVL), as per Toyobo's press release.

The joint company plans to build a new plant on the IPI factory site in Rayong Province, Thailand, and start operations in 1st Quarter of 2022.

The airbag market is expected to continue growing at three-four percent annually thanks to an increase in the number of airbags installed per vehicle and growth in the proportion of vehicles equipped with airbags in emerging economies. In 2014, Toyobo and IVL jointly acquired PHP Fibers GmbH (PHP), a German airbag yarn maker that held the second-largest share in the world at that time. Since then the relationship has grown stronger with many joint activities carried out between Toyobo and PHP.

Toyobo has long maintained a partnership with IVL, which is committed to expanding its mobility-related business. Given that Toyobo and the IVL group are capable of effectively using their resources in Thailand, they agreed to establish the joint venture company to produce PA66 airbag yarns and ramp up efforts to expand their airbag business. The JV will be integral part of the Indorama Mobility Group.

IVL, with its presence in Thailand, is undertaking the manufacturing for the proposed JV, with 100% offtake by Toyobo for its weaving plant.

Toyobo will diligently meet global clients’ needs as the sole manufacturer capable of producing and supplying airbag materials ranging from yarn to fabrics at our five operations hubs in Japan, Thailand, China, the United States and Europe.

As MRC reported earlier, IVL restarted its PET plant at Map Ta Phut on February 6, 2020. The plant was shut in mid-January, 2020 for maintenance. Located at Map Ta Phut, Thailand, the PET plant has a production capacity of 110,000 mt/year.

According to ICIS-MRC Price report, contract prices of Russian plants increased by Rb1,000-1,500/tonne this month under the pressure from the growth of the dollar exchange rate against the rouble.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 24,000 employees worldwide and consolidated revenue of USD 11.4 billion in 2019.
MRC

Ineos confirms big sequential improvement in third-quarter earnings

MOSCOW (MRC) -- Ineos has provided a trading update and says that, based on unaudited management information, its third-quarter EBITDA was EUR431 million (USD509 million), down from EUR514 million in the third quarter of 2019 but significantly up from EUR260 million in the second quarter of 2020, according to Chemweek.

“Overall core market conditions for all of the businesses are now improving from the lows seen in the second quarter,” the company says. “The second quarter of 2020 was the low point of the current crisis. Since then countries across the world have opened up their economies after lockdown and market conditions have gradually improved during the third quarter. The automotive and durables sectors are still weak, but are now slowly improving, and there are encouraging signs from the construction sector.”

Ineos’s olefins and polymers (O&P) North America business reported third-quarter EBITDA of EUR123 million, down from EUR215 million a year earlier. Ethylene markets remained stable, although margins reduced in the quarter due to lower spreads over raw material costs and the impact of increased industry capacity on supply/demand balances, Ineos says. Polymer demand was generally solid and continued to strengthen during the quarter, aided by strong consumables demand and improving automotive and durables markets. Margins remained relatively weak as the business continued to recover from the crisis, the company says.

The O&P Europe business reported EBITDA of EUR135 million, down from EUR159 million in the prior-year period. Demand in the ethylene market remained stable in the quarter, although demand for butadiene was weak as a result of the general slowdown in the automotive sector, Ineos says. Margins were lower due to weak demand, particularly for butadiene and benzene, and reduced prices in the quarter. European polymer demand was relatively balanced, with strong food and packaging markets and gradual improvements in the construction and automotive sectors, the company says.

The chemical intermediates business reported an increase in third-quarter EBITDA to EUR173 million from EUR140 million a year earlier. All the businesses in the chemical intermediates segment saw an improvement in performance as the quarter progressed, Ineos says.

Ineos says it has “implemented a number of measures to conserve cash during this uncertain period.” These include policies to control all discretionary fixed costs. The company has also reviewed all capital projects in each of the businesses and taken decisions to defer or reduce discretionary expenditure and scheduled turnarounds where it is safe to do so. Further details have not been disclosed.

All Ineos sites have continued to operate fully during the pandemic and supply chains have operated without significant disruption, the company says.

As MRC informed previously, Ineos, one of the world’s largest manufacturing companies halted operations at its No. 1 olefins unit at Texas cracker for maintenance on September 18, 2020 owing to technical issues. Further details on duration of the shutdown could not be ascertained. Located at Chocolate Bayou in Texas, the No. 1 olefins unit has an ethylene production capacity of 1.07 million mt/year and propylene production capacity of 235,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Ineos is a global manufacturer of petrochemicals, specialty chemicals and oil products employing 22,000 people. It has 34 businesses, with a production network spanning 183 manufacturing facilities in 26 countries.
MRC

Synthomer to close SBR plant in Finland

MOSCOW (MRC) -- Synthomer (Harlow, UK) says it has decided to close its styrene-butadiene-rubber (SBR) production site at Oulu, Finland, by the end of the first quarter of 2021, said Chemweek.

The company confirmed in August that it was in a consultation process with employees at Oulu concerning future options for the facility. Meanwhile, consultations are continuing at Synthomer’s Marl, Germany, SBR site with an outcome expected in the fourth quarter. Synthomer earlier launched a review of its SBR business. The company says it “remains committed” to the SBR market in Europe and is “confident of being able to service customers from its Central European asset base."

Synthomer also says that its new 60,000-metric tons/year nitrile butadiene latex capacity at Pasir Gudang, Malaysia, is on schedule for start-up in the fourth quarter of 2021. The plant’s current capacity is 90,000 metric tons/year. Synthomer made the announcements as part of a recent third-quarter update that it says shows “strong trading momentum across all three business divisions.” As a result, the company has raised its full-year EBITDA guidance by 10%.

Volumes and margins at the company’s performance elastomers business are ahead of the prior-year period reflecting strong demand in nitrile butadiene latex following the COVID-19 pandemic and improved conditions in SBR through the third quarter, the company says. The functional solutions business continued to benefit from the integration of Omnova Solutions and is trading ahead of the year-earlier period although some market sectors are demonstrating stronger resilience than others, Synthomer says. The performance of the industrial specialties business continued to improve in the third quarter following a weaker second quarter impacted by COVID-19. Current run-rate volumes and margins are on or above prior-year levels, the company says.

Synthomer’s revised guidance is for 2020 EBITDA of about GBP232 million (USD302 million), 10% higher than the forecast made in August of GBP211 million, which was at the time broadly in line with analysts’ consensus estimate.

The company says that the integration of Omnova is proceeding ahead of schedule. Synthomer confirms expected synergies leading to annualized cost cuts of USD20 million by the end of this year, up from a previous assumption of USD15 million, and USD40 million by the end of 2022, up from USD30 million.

"This is a very encouraging performance with all business divisions performing ahead of prior year,” says Calum MacLean, CEO of Synthomer. “Alongside this strong momentum, we have made significant strategic progress, with a decision to close our site in Oulu and the integration of Omnova continuing ahead of our initial expectations. This underpins our confidence for the remainder of this year and beyond."

According to MRC's ScanPlast report, September total production of unmixed PVC grew to 86,000 tonnes from 75,500 tonnes a month earlier, SayanskKhimPlast and RusVinyl increased their capacity utilisation. Overall output of polymer were 718,500 tonnes in the first nine months of 2020 versus 720,500 tonnes a year earlier, only two producers raised their production volumes, and RusVinyl cut its output.
MRC

West Virginia Methanol announced USD350 million investment for new plant

MOSCOW (MRC) -- West Virginia Methanol has selected a site in Pleasants County in northern West Virginia, USA for a USD350 million methanol plant, according to Kemicalinfo with reference to Washington Times.

The plant will produce 900 metric tons per day of high-purity methanol from natural gas in the Appalachian Basin.

West Virginia Methanol, with headquarters in Charleston, West Virginia, is working on permitting and final design details.

It expects to make a final investment decision on the project near Parkersburg, West Virginia, in the first half of 2021. Operations could begin as early as mid-2023, officials said.

The company said it will use a technology developed by Haldor Topsoe to produce methanol in three units at the plant.

The plant site has access to roads, railroad and river transportation and is near a major natural gas pipeline. Other required utilities are on site or nearby, the statement said.

Methanol is used in chemical industry production and is a mainstay in the automotive industry as a fuel blend. Its diverse use also includes the making of plastics and plywood.

As MRC reported earlier, in late April, 2020, the first phase of Connell Chemical Industry Ltd.'s 600 KTA MTO complex, a 300 KTA MTO plant, successfully started up and produced on-spec ethylene and propylene. This project is the first large-size chemical project brought online during period when China was in the process of restarting the economy while fighting COVID-19 pandemic. The MTO plant started feed-in at 8:18 AM on April 15, produced on-spec propylene at 7:00 AM on April 18, and produced on-spec ethylene at 4:00 AM on April 20.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC