Elkem swings to net loss due to one-off expenses

MOSCOW (MRC) -- Elkem (Oslo, Norway) has recorded net losses of 97.0 million Norwegian krone (USD10.5 million) in the third quarter compared with net profits of NKr220 million in the same period of 2019, said Chemweek.

The result is due to financial expenses of NKr157 million including net interest expenses, losses linked to negative currency effects, and other financial expenses, the company says.

Revenue increased 6% year on year (YOY), to NKr5.89 billion driven mainly by the company's silicones division and explained by higher sales volumes and the integration of Polysil, Elkem says. All divisions reported higher YOY sales volumes despite the challenging market conditions, the company says. However, EBITDA and EBIT fell by 20% and 65%, to NKr512 million and NKr99 million, respectively, due to low selling prices and lower sales of specialty products, Elkem says.

Silicon product sales increased almost 1% YOY, to NKr2.67 billion on 6% higher volumes. The business's EBITDA declined 25% YOY, to NKr124 million. Sales of Elkem’s carbon solutions business grew 5% YOY, to NKr452 million, on volumes almost 7% higher. Carbon solutions’ EBITDA went up 56% YOY, to NKr111 million.

The company says there are signs of recovery, but that the market outlook is still characterized by uncertainty. “Silicones demand in China is expected to remain stable, but the price development is uncertain as construction markets are entering low season. Silicones demand outside of China shows signs of recovery,” Elkem says. The market for carbon products is expected to remain stable, the company says.

To address the ongoing economic uncertainty caused by COVID-19, Elkem says it is working to accelerate cost reductions, optimize investments, and leverage on strong market positions.

As MRC informed earlier, Elkem (Oslo, Norway) says it has received 10.0 million Norwegian kroner (USD1.1 million) in financial support from Enova (Trondheim, Norway), a state enterprise owned by the Norwegian Ministry of Climate and Environment, to fund initial planning for a potential large-scale battery materials plant in Norway.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine 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-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.


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Indian refiner Nayara September oil imports halve from August

MOSCOW (MRC) -- India's Nayara Energy Ltd, part-owned by Russian oil major Rosneft, halved its oil imports in September from the previous month, reported Hydrocarbonprocessing with reference to data from the shipping industry and sources, ahead of a major maintenance shutdown at its 400,000 bpd Vadinar refinery in western Gujarat state from early October.

During September the refiner received 187,100 bpd oil, a decline of about 20% from a year earlier, the data showed. Nayara's overall imports in the first three quarters of 2020 averaged about 325,500 bpd, fell by 13.4% from a year earlier period, as the refiner had cut crude processing due to a decline in fuel demand, the data showed. The sources declined to be identified as they were not authorized to speak with the media.

As MRC informed previously, in January, 2020, Thyssenkrupp Industrial Solutions (India) signed a contract with Nayara Energy, under which it will provide project management consultancy (PMC) services for Nayara's new petrochemical project to be built at the site of Nayara's 20-million-t/y Vadinar refinery in India. The USD850-million project, which will mark Nayara's entry into the petrochemical sector, includes a 450,000-t/y propylene recovery unit, a 450,000-t/y Unipol polypropylene (PP) plant, a 200,000-t/y methyl tertiary butyl ether unit and associated off-sites and utility facilities. PCN earlier said the project was expected to be completed in 2022.

Prropylene is the main feedstock for the production of PP.

According to MRC's ScanPlast report, 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.
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Sipchem profit plunges on lower product netbacks, sales volumes

MOSCOW (MRC) -- Sipchem, one of the largest companies in the petrochemical sector in Saudi Arabia, posted a quarterly net profit in Q3, the first in the last four quarters, aided by improvement in product prices and a recovery in demand post easing lockdowns, said Chemweek.

However, Q3 earnings missed analyst’s forecast and market expectations despite a strong beat in the topline, according to Al Rajhi Capital Research.

While details are not fully known, it is suspected that this could have been because of marketing revenues and mostly similar extent of costs as gross profit came broadly in line with estimates.

Methanol prices are up on a sustainable recovery trend, up by ~11% q-o-q in Q3, on the back of tight supply due to unexpected production outages in Southeast Asia and the Middle East along with an improvement in demand, mainly from the MTO (made to order) and pharmaceutical sectors).

Methanol prices continue to maintain its upward trend in Q4 so far, rising ~14% q-o-q, indicating an improving the Methanol market fundamentals. However, the stock price has already gained ~30% since March, and consensus estimates do not factor material improvement in earnings.

While the company’s announcement of a share repurchase programme may have improved sentiments, it may lead to no dividends for 2020.

As MRC informed earlier, Sadara Chemical Company (Sadara) and Sahara International Petrochemical Company (Sipchem) have partnered to supply high-quality ethanol which is required for the manufacturing of hand sanitisers. The ethanol has been provided to local manufacturers free of charge to enable them to produce much-needed hand sanitisers, which in turn were donated to the Ministry of Health for distribution to the healthcare industry throughout the Kingdom of Saudi Arabia to combat the spread of the Covid-19 pandemic.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine 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-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.



Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
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Total and LanzaTech produce plastic bottle from industrial emissions

MOSCOW (MRC) -- LanzaTech (Skokie, Illinois), Total (Paris, France), and L’Oreal (Clichy, France) announced on Tuesday that they have produced a plastic bottle made from industrial carbon emissions, according to Chemweek.

The process involved LanzaTech converting captured industrial emissions into ethanol in a biological process. Total then dehydrated the ethanol to produce ethylene in a process developed in partnership with IFP Axens. The ethylene was then polymerized into polyethylene (PE) used by cosmetics giant L’Oreal.

“It is a technological and industrial success proving that industrial carbon emissions can be used to produce plastic packaging,” the companies say in a joint statement. “This world first demonstrates the commitment of the three partners to the development of a sustainable circular economy for plastics and paves the way for new opportunities for the capture and reuse of industrial carbon emissions.”

The three partners plan to scale production and “look forward to working with all those who want to join them in committing to the use of these new sustainable plastics.”

As MRC reported earlier, Total has agreed to sell its Lindsey refinery in the UK to fuel trader and marketer Prax Group, as the French oil major focuses on its integrated downstream assets and the coronavirus adds to the uncertainty over long-term demand for fuel.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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COVID-19 - News digest as of 27.10.2020

1. Chemicals maker Covestro Q3 profit beats on cost-cutting, demand recovery

MOSCOW (MRC) -- German chemicals maker Covestro reported a better-than-expected third-quarter profit on Tuesday, citing cost-cutting measures, improved volumes in Asia-Pacific and demand recovery after a coronavirus-induced slump, said Reuters. In the second quarter, the company had managed an unexpectedly swift rebound from a pandemic-related slowdown and finance chief Thomas Toepfer had said the trend would continue into the last months of the year. “In the third quarter, demand from our customer industries experienced a strong rebound,” Chief Executive Markus Steilemann said in a statement on Tuesday.

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