Clariant sales, EBITDA decline on lower volumes, currency effects

MOSCOW (MRC) -- Clariant says its third-quarter sales declined 14% year on year (YOY) to 893.0 million Swiss francs (USD979.5 million) due to lower volumes and negative currency effects that also squeezed profitability, with EBITDA for the period lower by 16% YOY, to SFr127 million, according to Chemweek.

The company’s EBITDA margin recorded a slight YOY decrease of 0.3 percentage points, to 14.2%. Net profits have not been disclosed.

Clariant’s care chemicals and catalysis businesses recorded higher EBITDA margins due to more favorable product mixes, cost mitigation, and efficiency improvement, the company says. Natural resources posted a lower EBITDA margin, mainly due to lower volumes in industries affected the most by COVID-19 such as automotive, textiles, and oil, the company says.

Clariant expects third-quarter sales to be the lowest of the first three quarters of 2020. Its natural resources business was affected the most, with all three segments of the business impacted negatively by oversupply in oil markets and the pandemic. Sales in care chemicals and catalysis softened only slightly, it says.

Natural resources' EBITDA fell 38% YOY, to SFr44 million on 22% YOY lower sales, to SFr356 million, due to lower volumes resulting from weaker demand, especially in the oil and mining services segment. Care chemical sales decreased 9% YOY, to SFr330 million, but EBITDA increased 16% YOY, to SFr72 million, due to performance measures and a favorable product mix, the company says. Sales of Clariant's catalysis business were 9% lower YOY, to SFr207 million, and EBITDA decreased 5%, to SFr42 million.

“Over the first nine months of 2020, we successfully upheld the profitability of our continuing operations despite an exceedingly challenging environment. Although the COVID-19 pandemic had a significant negative impact on several of Clariant’s key end markets in the third quarter, the performance resilience clearly validates the success of our strategic focus on the three core specialty business areas,” says Hariolf Kottmann, executive chairman ad interim at Clariant.

Clariant anticipates that the COVID-19 pandemic will have a continued, but slightly less negative impact on sales and profits in the fourth quarter of 2020 compared with the third quarter. The company says it will continue with its performance programs to achieve above-market growth, higher profitability, and stronger cash generation in the midterm.

Clariant says it will also continue its transformation program, which has reshaped the company's portfolio through the divestment of healthcare packaging in October 2019 and masterbatches in July 2020, and that it is “progressing with the planned divestment of pigments while preparing the rightsizing of the organization.”

As MRC reported before, earlier this month, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

Propylene is the main feedstocks for the production of polypropylene (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.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

Shell posts Q3 2020 results

MOSCOW (MRC) -- Royal Dutch Shell reported an 80% slump in adjusted earnings for the third quarter of 2020 to USD955 million, as it continues to suffer from lower prices and output as global demand suffered from the COVID-19 pandemic, reported S&P Global.

The result, however, was well above consensus estimates of a USD42 million adjusted profit for the period.

During the third quarter, Shell saw a 14% slide in year-on-year upstream production volumes of 2.2 million boe/d reflecting OPEC+ curtailments, lower gas demand and hurricanes in US Gulf of Mexico.

It's integrated, LNG-linked gas assets produced 844,000 boe/d in the quarter, down 12% on the year after higher maintenance and lower well performance, partly offset by the transfer in the first quarter 2020 of the Rashpetco operations in Egypt from the upstream segment. It said its LNG liquefaction volumes decreased mainly as a result of more maintenance activities in Australia.

Combined, Shell's total third-quarter production was 3.08 million boe/d down 14% on the year.

Looking ahead, Shell said it expects its upstream production to average 2.3 million - 2.5 million boe/d and its LNG-related gas production to average 830,000 - 870,000 boe/d. LNG liquefaction volumes are expected to be approximately 7.9 million - 8.5 million mt.

"As a result of COVID-19, there continues to be significant uncertainty in the macroeconomic conditions with an expected negative impact on demand for oil, gas and related products. Furthermore, global developments and uncertainty in oil supply have caused volatility in 2020 in commodity markets," Shell said.

Downstream, Shell saw its earnings bounce back from a loss in the previous quarter, helped by strong marketing margins and favorable deferred tax movements.

Oil product segment earnings were USD2.09 billion, down 14% on the year, reflecting weaker refining margins and lower sales volumes due the COVID-19 pandemic.

Refinery utilization was 65% compared with 78% in the third quarter 2019, mainly due to lower demand and economic optimization of the plants.

Crude throughputs in the quarter slipped 22% on the year to 1.97 million b/d while oil product sales were 30% lower at 4.74 million b/d.

As MRC informed before, Royal Dutch Shell plc. said earlier this month that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant’s costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are feedstocks for producing 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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

Nearly 85% of US Gulf oil offline from Zeta; refiners restart after power outages

MOSCOW (MRC) -- Producers took 85% of the US Gulf's crude oil flows ahead of Hurricane Zeta and, now that the storm has passed, some Louisiana refineries are beginning to restart after suffering from the widespread power outages throughout the New Orleans area, reported S&P Global.

The strong Category 2 hurricane made landfall Oct. 28 along the Louisiana Coast and caused disruptions at Shell's 227,400 b/d Norco Refinery, PBF Energy's 190,000 b/d Chalmette Refinery and potentially others, but damages were limited and the restart processes have begun, the companies said.

As for offshore, an estimated 1.57 million b/d of crude production and 1,561 MMcf/d of natural gas production was shut in, reflecting 84.8% and 57.6% of US Gulf output, respectively, according to the US Bureau of Safety and Environmental Enforcement. About 35% of the Gulf's platforms and rigs, or 231 facilities, were evacuated, BSEE said.

Zeta was the 27th named storm of the year, tying the 2005 record with more than a month remaining in the hurricane season.

Shell kept most of its offshore production online as Zeta trekked through the Gulf, but Shell did decide Oct. 29 to shut-in production at its Mars corridor and Appomattox platforms, citing "downstream impacts" after the Norco Refinery was temporarily knocked out of commission. Earlier, Shell had shut in its Stones FPSO, but kept its other Gulf platforms in operation.

"The Shell Norco Manufacturing Complex did experience power outages resulting in the shutdown of some units, but those units are now being returned to operational status," said Shell spokesman Curtis Smith in a statement.

Likewise, PBF's Chalmette Refinery is restarting the reformer and other units that came down due to power outages. Market sources expect it will take three to five days to get it back fully online.

BP, Chevron, BHP and Eqinor confirmed they had shut-in production at all of their operated platforms in the US Gulf. BP, for instance, shut-in its four operated platforms - Atlantis, Mad Dog, Na Kika and Thunder Horse - and evacuated personnel. Chevron also shut down its Fourchon and Empire terminals in Louisiana, as well as their related pipeline systems.

Occidental Petroleum, Murphy Oil and others shut-in some production, but did not specify which platforms were impacted.

Oil and gas volumes in the US Gulf were yet again severely disrupted from the record-setting 2020 Atlantic hurricane season, although production could start returning shortly.

"As conditions continue to improve today and tomorrow, we are beginning the process of redeploying personnel to our assets," Shell said Oct. 29.

Earlier in October, Hurricane Delta forced more than 90% of the US Gulf's nearly 1.9 million b/d of crude production to be shut in, and Zeta nearly took as much offline.

Named storms Zeta, Delta, Beta, Sally, Marco, Laura, Hanna and Cristobal have all disrupted activities in the Gulf from June through October.

Zeta's path through southeastern Louisiana targeted roughly 757,400 b/d of refining capacity, down from a wider cone of 2.7 million b/d earlier in the week.

Refiners all opted to continue operating during the storm, based on their hurricane readiness and response plans. The Louisiana Department of Environmental Quality said it didn't received any notifications of plans to shut down any refineries or plants ahead of Zeta, although disruptions were subsequently reported during the hurricane.

Citgo Petroleum's and Phillips 66's Lake Charles refineries recently came back online after sustaining damages from Hurricane Laura in August. Phillips 66's Alliance Refinery in Belle Chasse also remains offline for maintenance work.

Also, the Cameron Highway Oil Pipeline System, known as CHOPS, that originates in the Gulf of Mexico is expected to stay offline at least into late November after an associated offshore platform was damaged by Laura.

We remind that Royal Dutch Shell plc. said earlier this month that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant’s costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are feedstocks for producing 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

Output of polymer products in Russia up by 0.9% in January-September

MOSCOW (MRC) -- Russia's output of products from polymers grew in September 2020 by 6.6% year on year.
However, this figure increased by 0.9% year on year in the first nine months of 2020, reported MRC analysts.

According to the Russian Federal State Statistics Service, September production of unreinforced and non-combined films dropped to 117,600 tonnes from 126,300 tonnes a month earlier. Output of films products grew in January-September 2020 by 8.2% year on year to 980,700 tonnes.

September production of non-porous boards, sheets and films dropped to 39,300 tonnes from 38,700 tonnes in August. Thus, overall output of these products reached 311,200 tonnes over the stated period, up by 4.6% year on year.

September production of porous polymer boards, sheets and films was 31,800 tonnes, up by 1% month on month.
Overall output of these products reached 229,500 tonnes in the first nine months of 2020, compared to 200,900 tonnes a year earlier.

September production of plastic bottles and flasks grew to 1.71 bln items from 1.92 bln items a month earlier.
Overall output of these plastic products totalled 16,4 bln units over the stated period, compared to 15,4 bln units a year earlier.

Last month's production of polymer pipes, hoses and fittings exceeded 68,300 tonnes versus 71,800 tonnes in August. Overall output of these products was 523,200 tonnes in January-September 2020, up by 7.2% year on year.

September production of sacks and bags from ethylene polymers reached 2,881,000,000 units, compared to 2,431,000,000 units a month earlier. Overall output of these plastic products totalled 22,716 bln units in the first nine months of 2020, compared to 19,184 bln units a year earlier.

Last month's production of linoleum and floor coverings decreased 17,4 mln square metres, compared to 18,4 mln square metres in August. Overall output of these products totalled 116,2 mln square metres over the stated period versus 112,3 mln square metres a year earlier.

September production of plastic windows and door blocks reached 2,915 mln square metres and 112,500 square metres, respectively, versus 2,749 mln square metres and 104,800 square metres a month earlier. Overall output of these plastic products totalled 19,685,000 square metres and 737,300,000 square metres, respectively, compared to 17,949,000 square metres and 732,900 square metres a year earlier.
MRC

PE production in Russia rose by 63% in Jan-Sept 2020

MOSCOW (MRC) -- Russia's overall polyethylene (PE) production totalled 2,204,200 tonnes in the first nine months of 2020, up by 63% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output, according to MRC's ScanPlast report.

September PE production in Russia was 233,200 tonnes, whereas this figure was 258,700 tonnes a month earlier, in the first month of autumn several producers stopped their capacities for repairs at once. Thus, overall PE output reached 2,204,200 tonnes in January-September 2020, compared to 1,349,000 tonnes a year earlier. Production of all PE grades rose, but LLDPE accounted for the greatest increase, which was provided by ZapSibNeftekhim.

The structure of PE output by grades looked the following way over the stated period.

September production of high density polyethylene (HDPE) in Russia exceeded 156,200 tonnes, compared with 169,000 tonnes in August; Kazanorgsintez shut its capacities for scheduled turnaround in September-October. Russian plants' overall HDPE output reached 1,365,600 tonnes in January-September 2020, up by 96% year on year.

September total low density polyethylene (LDPE) production decreased to 28,300 tonnes from 50,300 tonnes in August, as Ufaorgsintez, Tomskneftekhim and Kazanorgsintez shut their facilities for scheduled maintenance works. Thus, overall production of this PE grade totalled 468,200 tonnes over the stated period, down by 2% year on year.

September LLDPE production rose to 48,700 tonnes from 39,300 tonnes a month earlier, ZapSibNeftekhim increased its capacity utilisation. Overall LLDPE production grew to 370,400 tonnes in the first nine months of 2020 from 174,000 tonnes a year earlier.


MRC