Mitsui Chemicals income decreased on lower output in April-September

MOSCOW (MRC) -- Mitsui Chemicals' net income in the April to September period 2020 fell on the back of lower production amid poorer demand caused by the coronavirus pandemic, the producer said.

All business segments saw lower sales during the period as compared to the previous year, weighed by lower sales prices due to the fall in naphtha and other raw materials and fuel prices.

Naphtha cracker operating rates were lower than the same period of the previous fiscal year due to decreased demand of downstream products, which was impacted by coronavirus.

The company's polypropylene (PP) was affected by slowing demand for automotive products.

"It is still unclear as to when the pandemic will be contained, and the impact on the group’s performance is difficult to fully predict," the company said in a statement. "Depending on how the pandemic progresses, the group may possibly incur further losses from the third quarter onward," it added.

As MRC informed earlier, Mitsui Chemicals operated its naphtha cracker normally following a maintenance turnaround. Company resumed operations at the cracker on July 19, 2020. The cracker was shut for maintenance on June 11, 2020. Located in Osaka, Japan, the cracker has an ethylene capacity of 500,000 mt/year and a propylene capacity of 280,000 mt/year.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
MRC

MOSCOW (MRC) -- BASF has restarted toluene diisocyanate (TDI) production at its 300,000-metric ton/year plant in Ludwigshafen, Germany, although output has not yet increased sufficiently for the company to lift a force majeure (FM) it declared in August, said Chemweek.

"BASF is in the process of starting up the TDI unit, [they] are currently producing but not yet at high enough levels to lift the force majeure,” says one market source close to the plant. “Downstream demand is good, and margins are strong, considering the fall in toluene contract price this month, hence [they] want to get up and running as soon as possible."

The company declared FM on 31 August after experiencing technical problems, and has tried to restart the plant since then, until now unsuccessfully, sources say. “We expect BASF to resume healthy production by end of November,” says a second market source. “They are online now but are not producing official levels to be able to lift force majeure."

The FM at Ludwigshafen has exacerbated tightness in the global TDI market, according to IHS Markit principal analyst James Elliott. BASF started operations at the Ludwigshafen TDI plant in November 2015, but has not been able to operate the site consistently at optimal rates due to production and technical issues that have caused delays and shutdowns, Elliott says. "The force majeure at our TDI plant in Ludwigshafen is still in place," a BASF spokeswoman says.

As MRC informed earlier, BASF had put a project to build a petrochemicals complex in India worth up to USD4 billion on hold due to the economic uncertainty caused by 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.
MRC

MOSCOW (MRC) -- Private equity company Wynnchurch Capital has acquired Drew Foam Companies for an undisclosed sum, the US based company said in a statement.

Monticello, Arkansas-based Drew Foam makes custom fabricated and moulded expanded polystyrene (EPS) products for the packaging, building products and OEM/consumer end markets. It offers both fabricated block and shape moulding capabilities across four manufacturing facilities in the Southeast US.

Drew is “well positioned” to benefit from growing product categories, particularly in geofoam for construction applications and insulated shipping containers for cold chain applications in markets such as food and healthcare, Wynnchurch said.

Wynnchurch bought Drew from private equity firm Branford Castle Partners.

As MRC informed earlier, Nova Chemicals (Calgary, Alberta, Canada) has agreed to sell its expandable styrenics business to a subsidiary of Alpek (Monterrey, Mexico) for an undisclosed sum. The transaction is expected to close in the fourth quarter, it says. The sale encompasses Nova’s expandable polystyrene (EPS) and Arcel-brand resin product lines, with manufacturing facilities in Monaca, Pennsylvania, and Painesville, Ohio, as well as commercial operations in Asia, it says. The plant at Monaca has an EPS production capacity of 123,000 metric tons/year, with 36,000 metric tons/year of capacity for Arcel, as well as an R&D pilot plant. The facility at Painesville has an EPS capacity of 45,000 metric tons/year, according to Alpek subsidiary Styropek, which is acquiring Nova’s business.

As per ICIS-MRC Price Report, prices of Chinese and Russian EPS were in the range of UAH42,000-45,000/tonne CPT Kiev, including VAT, in the domestic market this week. Demand for material was moderate. Some traders were still selling quantities of Chinese material that were purchased in the previous months at lower import prices. Prices of the future quantities were under an upward pressure from higher import prices.

Branford owned Drew since 2018, when it bought the company from Gladstone Investment Corp, along with members of management and an unnamed co-investor, according to information on Drew’s website.

Founded in 1965, Drew is a leading manufacturer of custom EPS block and shape molding products in the Southeast U.S. The Company offers a diverse product offering, high level of customer service and a differentiated just-in-time delivery model. The Company is headquartered in Monticello, Arkansas, and operates manufacturing facilities in Tennessee, South Carolina and Georgia.

Wynnchurch Capital, L.P., headquartered in the Chicago suburb of Rosemont, Illinois, with offices in California and Canada, was founded in 1999, and is a leading middle-market private equity investment firm. Wynnchurch’s strategy is to partner with middle market companies in the United States and Canada that possess the potential for substantial growth and profit improvement.
MRC

MOSCOW (MRC) -- As of 9 November, Westlake Polymers has left in force the declared on Aug. 31 force majeure on its North American polyvinyl chloride (PVC) and upstream vinyl chloride monomer (VCM) plants, after Hurricane Laura adversely impacted its Lake Charles, Louisiana, complex, reported S&P Global.

Westlake's shutdown of its Lake Charles complex idled 38% of its US VCM production, resulting in two VCM plants with a combined capacity of 952,318 mt/year going offline. The complex also has three upstream chlor-alkali plants with a combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda - 46% of the company's overall North American chlor-alkali capacity.

Westlake Chemical was in the process of a restart following the loss of electricity from Hurricane Laura on 27 August when the arrival of Hurricane Delta on 9 October interrupted the process.

Hurricane Delta appears to have wreaked minimal damage to chemical facilities in Lake Charles, Louisiana, just six weeks after Hurricane Laura blew through the region, severely damaging major electricity transmission lines that left facilities offline for weeks.

Westlake Chemical said in a statement on Oct. 12 that initial assessments after Delta's Oct. 9 landfall showed "very limited physical damage" to its Lake Charles complex, and facilities were "in the process of restarting."

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

MOSCOW (MRC) -- Formosa Plastics USA, part of Formosa Petrochemical, has left a force majeure on polyvinyl chloride (PVC) supplies from its Texas and Louisiana plants in force as of 09 November, reported S&P Global.

The force majeure circumstanced were announced in mid-August, 2020, due to difficulties to produce the product amid upstream steam cracker problems.

"Formosa Plastics Corporation, USA, on behalf of Formosa Plastics Corporation, Texas, and Formosa Plastics Corporation, Louisiana, has experienced unexpected difficulties in its upstream facility at Point Comfort, Texas, impacting the PVC production at both manufacturing sites," the company said in the letter as of Aug. 14.

As MRC informed before, in March, 2020, Formosa Plastics was emerging from a turnaround at its 798,000 mt/year PVC plant and upstream 753,000 mt/year vinyl chloride monomer unit at its Point Comfort, Texas, complex.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC