America plastic makers invite collaboration with Congress to create circular and sustainable systems

MOSCOW (MRC) -- As part of its recognition of America Recycles Day, America’s plastic makers called on Congress to work with industry to prioritize recycling legislation in 2021, said Americanchemistry.

"The plastics industry has set an ambitious goal of reusing, recycling or recovering 100% of plastic packaging in the U.S. by 2040,” said Joshua Baca, vice president of plastics for the American Chemistry Council (ACC). “All of us have an interest in ensuring that plastics are collected and recycled into new and valuable products instead of ending up in our environment, and success will require many forms of collaboration. We look forward to working with Congress on ways to create more circular solutions for plastics. Last month we released a Roadmap to Reuse, a framework that outlines steps to grow recycling and recovery in the U.S., and guiding principles for eliminating plastic waste that can help shape legislation and other actions to help grow recycling and recovery of plastics."

Multiple approaches are outlined in our guiding principles to help grow and modernize plastics recycling domestically, including: National standards for recycling programs, education, and plastic bales, to harmonize best practices and greatly scale buying and selling of recycled plastics;

Multi-material packaging fees and higher disposal fees to support funding for basic collection, access to infrastructure and consumer education;

Recycled content legislation, which would help facilitate greater use of recycled plastics in new packaging and other goods;

Earlier in 2020, ACC signed a Memorandum of Understanding with the Department of Energy to support innovations in plastics recycling and recovery technologies and strengthen domestic supply chains while improving economic and environmental outcomes. ACC also works closely with other partners including The Recycling Partnership, Closed Loop Partners and the Association of Plastic Recyclers on a variety of plastics recycling projects.

As MRC informed earlier, Swedish polymer product and component maker Nolato Group has completed its acquisition of U.S. medical technology company GW Plastics. First announced in August 2020, the deal sees GW Plastics’ seven global manufacturing facilities joining Nolato’s 25-plus facilities around the world. Bethel, Vermont-based GW Plastics has also subsequently rebranded to Nolato GW Inc.

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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1. Imperial Oil to boost spending, slightly raise output amid volatile recovery

MOSCOW (MRC) -- Canada's Imperial Oil , one of the country's biggest crude producers and refiners, said that it would raise capital spending and production next year as a volatile recovery of energy demand continues, reported Reuters. Chief Executive Brad Corson said at the company’s virtual investor day presentation that a recovery in global energy demand looked to be “highly uncertain” and dependent on the spread of COVID-19. Pandemic travel restrictions have crushed fuel demand, depressing oil prices and forcing producers to cut costs and jobs.



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MOSCOW (MRC) -- Elementis (London, UK) has announced the closure of its production plant at Charleston, West Virginia, effective 20 November, said Chemweek.

The decision will result in about 30 job losses. The closure follows a review of Elementis's North American manufacturing operations to improve efficiency and capacity utilization, the company says. Production will be consolidated at Elementis’s plant at St. Louis, Missouri, it says.

The company says that the closure underpins the delivery of a previously announced $10 million of annualized supply-chain savings. Elementis has accelerated these savings by a year to start from 2021, which means that one-off cash costs of approximately USD5 million will be incurred in 2021, it says.

As MRC informed earlier, Elementis (London, UK) says it has committed to reducing waste by 10%, water usage in operations by 10%, increasing energy efficiency by 20%, and reducing greenhouse gas emissions by 25% by 2030, as part of its environmental sustainability goals.

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.

Elementis plc is one of the UK's largest speciality chemicals business. The Company comprises three businesses: Specialty Products, Surfactants and Chromium. Both Specialty Products and Chromium hold leading market positions in their chosen sectors. Elementis employs over 1,200 people at more than 30 locations worldwide.
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MOSCOW (MRC) -- Having face-to-face interaction as part of the M&A process is difficult during the pandemic, which has created a new norm in the M&A world, making due diligence “more critical than ever,” reported Chemweek with reference to Kevin Yttre, president and managing director at Grace Matthews.

However, Yttre and Mukta Sharma, managing director/chemical consulting at IHS Markit, said during a discussion on Thursday at CW’s Chemical Industry Financial Outlook and Sustainability Forum and Awards 2020, held in a virtual format, that chemical companies could prefer M&A to investing in new projects in the current environment, due to the growth slowdown caused by COVID-19.

The chemicals investment climate in the pre-pandemic period was strong, especially in the US, due to availability of feedstock there and in Asia, including China, with consumer demand and the pursuit of self-sufficiency driving investment, Sharma said. Nevertheless, there were “indications of demand and growth easing” in 2019, she said. This resulted in a gradual increase in inventories, which intensified with the fall in demand caused mainly by the response of governments to the threat of COVID-19, especially in the second quarter of 2020, leading to overcapacity and a growth slowdown, Sharma said.

“Finding ways to show growth” is very important for a seller’s mindset in the current M&A climate, according to Yttre. He noted that despite the challenges in the current environment there are many “strategic buyers who are active” and many private equity funds that have raised “a lot of capital and need to put it work.”

There is a “frothy M&A environment” despite challenges and “deceleration of deals” caused by the pandemic, and it is perhaps difficult to believe the "M&A world has been robust even during the pandemic," with Grace Matthews closing 11-12 chemical transactions, Yttre said.

Meanwhile, from a buyer’s point of view, Yttre noted that “sweetheart deals” could be available in some cases during the crisis, but most of the time buyers will still have to pay the market price. The biggest challenge for buyers is to make sure “you get what you pay for,” because in the current environment face-to-face interaction that enables a more accurate assessment of the “intangibles” of a deal is restricted, Yttre said. This is the case for buyers and sellers since “the M&A world is a people business,” he said.

Sharma confirmed that bargains due to COVID-19 are rare and “most buyers are going into conversations which start with a baseline of historical or recent norms and a discussion on the shape of the recovery.” A process that evaluates the health of the sector a company operates in, its consumer base, and its resilience can help mitigate the challenges to due diligence caused by COVID-19, Sharma said.

Using a recent M&A due-diligence process as an example, she noted that the resilience of the company concerned, under the current circumstances, was evaluated through looking into its performance in the second quarter of 2020, the management’s outlook for the full year, and the long-term sustainability and regulatory environment that may affect its business.

Mark Douglas, president and CEO of FMC, in a presentation to the forum about strategic scenario planning, said companies should “set out a vision (and) have belief in that vision despite the fact that you will face inflection points.”

Long-term planning combined with the ability to react are important for the success of the vision, Douglas said. This requires staff that are “agile” and able to adjust and deal with adversities, because reaching a company’s long-term targets also depends on its organizational culture, he said.

This formula helped FMC evolve from a “conglomerate of unrelated chemical businesses” into the “largest pure-play agrochemical, crop protection company” today, with 6.5-7.0% of its sales invested in R&D, and investments in biologicals, precision agriculture, and sustainable application technologies, he said.

Douglas noted that FMC's asset swap with DuPont in 2017 played a fundamental role in the evolution of FMC into a leading ag solutions business. When looking for investment and M&A opportunities, FMC’s approach starts with short-term financial considerations before it surveys the “landscape,” looking for attractive markets to survive and grow in, he said.

As MRC informed previously, the COVID-19 period will be viewed “as an inflection point for the global energy transition,” according to Mark Eramo, global vice president/oil markets, midstream, downstream, chemicals at IHS Markit. The impact of the pandemic going forward on the decarbonization of energy consumption “causes a faster pace of change, versus what we’ve seen in the past,” said Eramo, speaking at the Chemical Industry Financial Outlook & Sustainability Forum 2020, being held in a virtual format and hosted by IHS Markit.

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 year on year by 6.1% 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. September production of primary polymers decreased to 852,000 tonnes against 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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MOSCOW (MRC) -- Crude oil prices rose Nov. 20 on news that the first COVID-19 vaccine doses could be available by the end of the year, but the reaction was tempered by rising coronavirus cases in North America and Europe and the fear of family gatherings during the upcoming US Thanksgiving holiday further escalating the pandemic, reported S&P Global.

On the final day of trading for the NYMEX WTI December contract, front-month NYMEX WTI rose 52 cents to settle at USD42.42/b for the week while ICE January Brent jumped 76 cents to settle at USD44.96/b.

"Crude prices are set for a third consecutive weekly gain on vaccine optimism, but the near-term outlook will likely prevent any significant moves higher as the likelihood of more lockdowns grows," said Edward Moya, senior market analyst with OANDA.

"A lot of Americans may ignore the CDC recommendation to cancel Thanksgiving plans and that will keep the energy markets prepared for further and longer lockdowns across the US throughout December," he added, citing the recent advisory from the US Centers for Disease Control and Prevention.

While there is longer-term optimism on crude prices and demand, and front-month NYMEX WTI hit its highest settled price since Sept. 2, WTI futures contracts are still sitting just below USD43.50/b in 11 months.

Pfizer and its German partner BioNTech applied Nov. 20 for emergency approval to start delivering COVID-19 vaccine doses by the end of December, although a much larger rollout would drag out well into 2021.

The announcement comes shortly after they said the vaccine appears 95% effective at preventing mild to severe COVID-19 disease in a large, ongoing study. The move starts the clock for the approval process at the US Food and Drug Administration.

Moderna's similar vaccine is progressing with claims of nearly 95% effectiveness as well.

However, the daily COVID-19 death count in the US has risen near 2,000 people again for the first time since May, daily caseloads are at all-time highs, and unemployment claims are back on the rise. Some European countries are making more progress in slowing the rising cases, but only after implementing stricter economic lockdowns that hurt oil demand.

And, in both the US and the EU, stimulus package talks remain on hold, including opposition from Poland and Hungary in the EU.

As for products, NYMEX December RBOB increased 1.27 cents to settle at USD1.1752/gal while December ULSD was up 1.56 cents at USD1.2863/gal.

In the meantime, there is ongoing optimism that the OPEC+ group will opt to extend its current production cuts into 2021. However, OPEC is still seeing production volumes rise as Libya ramps up output following a recent peace deal among warring factions.

But there is some fear that OPEC+ could instead decide to reduce its cuts if crude prices keep rising ahead of its December meeting, said Craig Erlam, also of OANDA.

"The vaccine news has been a gamechanger for the outlook. No longer is OPEC+ the only major upside risk," Erlam added.

A combination of OPEC+ and vaccine optimism has helped crude prices move higher, although they've yet to break out more meaningfully, said Bjornar Tonhaugen, Rystad Energy's head of oil markets.

But that stronger pricing jump could come in 2021, he said, when demand finally begins to rebound.

"Until the end of this year, global oil demand will stay suppressed owing to the growing extent of global curfews and lockdowns, with Europe still the epicenter for restrictions," Tonhaugen added.

As MRC informed previously, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
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