Koppers stock up on Q3 earnings and revenue beat

MOSCOW (MRC) -- Koppers Holdings Inc.’s KOP shares rose after the company came up with its third-quarter 2020 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate and also grew on a year-over-year basis, reported YahooFinance.

The Pennsylvania-based company also raised its earnings outlook for 2020. Its shares popped 5.8% last Thursday on forecast-topping results and upbeat earnings outlook.

Koppers logged profits (attributable to the company) of USD75.6 million or USD3.53 per share for the third quarter, up from a profit of US19.9 million or 94 cents a year ago.

Barring one-time items, earnings were USD1.64 per share for the quarter, up from USD1.16 per share a year ago. Earnings topped the Zacks Consensus Estimate of USD1.29.

Koppers recorded revenues of USD437.5 million for the quarter, up 0.8% year over year. It also surpassed the Zacks Consensus Estimate of USD425.8 million. Sales were driven by favorable impacts of currency swings.

Sales from the Railroad and Utility Products and Services segment went down around 4% year over year to USD191 million in the reported quarter. The decline was due to decreased volumes in the commercial crosstie market, offset by improved demand for utility poles in Australia and crosstie disposal services in the United States.

The Performance Chemicals unit recorded sales of US147.9 million in the quarter, up around 19% year over year. Sales were driven by sustained demand for copper-based preservatives in the United States and pent-up demand in international markets.

Sales from the Carbon Materials and Chemicals division fell around 12% year over year to USD98.6 million. Sales were impacted by reduced prices for carbon pitch and phthalic anhydride and lower demand for carbon black feedstock globally.

Koppers ended the quarter with cash and cash equivalents of USD39.5 million, down around 3% year over year. Long-term debt was USD796.1 million, down around 16% year over year.

Koppers envisions sales for 2020 to be roughly USD1.6 billion. The company also expects adjusted EBITDA to be in the band of USD204-USD210 million for the year, higher than its earlier view of USD196-USD204 million. Moreover, Koppers sees adjusted earnings per share for 2020 in the band of USD3.65-USD3.90, also up from its prior expectation of USD3.25-USD3.50.

The company also expects investments of $55-$60 million in capital expenditures this year, mainly associated with improving safety and reliability of its existing infrastructure. It also plans to cut debt by around USD125 million in 2020.

As MRC reported earlier, Koppers has restarted its phthalic anhydride (PA) unit following a maintenance turnaround. The company resumed operations at the unit on October 10, 2019. The unit remained under maintenance for about 40 days. Located in Stickney, Illinois, USA, the unit has a production capacity of 100,000 mt/year.

Phthalic anhydride is widely used in for the production of paints and varnishes and plasticizers for PVC products. In a small amount it is used in the manufacture of rubber products, tires. In addition, it is used in the light, pharmaceutical and electrical industries.

According to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 38,500 tonnes in the first ten months of 2020, down by 16% year on year. At the same time, exports decrease by 1%.
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Sasol lifts force majeure declaration on LLDPE, HDPE at Lake Charles facility: company

MOSCOW (MRC) -- Petrochemical producer Sasol has lifted its force majeure declaration on linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) at its Lake Charles, Louisiana, complex, Sasol spokeswoman Kim Cusimano said Nov. 25, reported S&P Global.

Sasol previously declared force majeure on Aug. 31 on all North American polyethylene, including all LLDPE and HDPE grades.

The force majeure was in response to the landfall of Hurricane Laura, which struck the Lake Charles, Louisiana, area on Aug. 27, resulting in widespread power outages.

Sasol's LLDPE capacity is 471,000 mt/year, according to S&P Global Platts Analytics data.

In recent months, HDPE has been tight for blowmolding and injection but readily available for film. Meanwhile, LLDPE has been somehow tight as sources note limited availability for exports.

As MRC informed before, Sasol's low density polyethylene (LDPE) plant reached beneficial operation on 15 November 2020. The LDPE unit is the seventh and final Lake Charles Chemicals Complex unit to come online. The LCCP is now 100% complete with total capital expenditure forecast to be within the previously communicated guidance of USD12,8 billion.

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.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
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Crude oil futures extend uptrend on vaccine reports, US political developments

MOSCOW (MRC) -- Crude oil futures rose during the mid-morning trade in Asia Nov. 24, extending overnight gains, as the market remained supported by the progress of a third potential COVID-19 vaccine and co-operation from US President Donald Trump in moving President-elect Joe Biden's transition forward, reported S&P Global.

At 10:51 am Singapore time (0251 GMT), ICE Brent January crude futures were up 35 cents/b (0.76%) from the Nov. 23 settle at USD46.41/b, while the NYMEX January light sweet crude contract was 37 cent/b (0.86%) higher at USD43.43/b.

The contracts had risen 2.45% and 1.51% respectively on Nov. 23 on reports that a Oxford-AstraZeneca vaccine had an average efficacy of 70%, with analysts noting it was cheaper to produce and distribute than two other vaccines that have also released promising results in recent days.

"With the earlier Pfizer and BioNtech and the Moderna vaccine announcements, and the recent AstraZeneca and Oxford vaccine announcement, we can see the end (of the pandemic) in sight," OANDA senior market analyst Jeffrey Halley told S&P Global Platts Nov. 24.

Stephen Innes, chief global market strategist at Axi, echoed the same sentiment, saying in a Nov. 24 note: "Oil markets are rightly jumping for joy as the AstraZeneca delivery is a big deal, as most of the developed world will be able to immunize its most at-risk population to COVID by the spring and likely the entire community by mid-year."

Meanwhile, uncertainty in the US political arena eased after Government Services Administration chief Emily Murphy gave the approval to begin the formal transition process to a Biden presidency, with Trump also expressing his amenability to following "the initial protocols" in a tweet.

Halley noted that this portended well for the oil market as "it looks like Trump has conceded the election unofficially, paving the way for the Biden administration, which is perceived to be much more trade friendly. Biden also plans to nominate Janet Yellen as Treasury secretary, and this news has been positive for oil and the broader risk assets.

"Greater international trade equals greater growth and greater growth equals more oil consumption, which means higher prices. That is the simple equation that we are going to see in Asia today," Halley 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% 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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Q8Oils and INNIO engage in long-term partnership for lubricating Jenbacher gas engines

Q8Oils and INNIO engage in long-term partnership for lubricating Jenbacher gas engines

MOSCOW (MRC) -- Q8Oils has signed a long-term global partnership agreement with INNIO Jenbacher to supply lubricants for all Jenbacher gas engines that operate on non-natural gas, including biogas, sewage gas and landfill gas, said Hydrocarbonprocessing.

Combining the technical expertise and knowledge of INNIO Jenbacher and Q8Oils will further enhance the durability and efficiency of Jenbacher type 2, 3, 4 and 6 engines. Both companies strongly believe that this partnership will bring strong new benefits to gas engine owners and operators.

Effective 1st October, this new agreement strengthens the close and successful cooperation between INNIO Jenbacher and Q8Oils in recent years. Both companies are intensely cooperating already, and the launch of their new co-branded oil worldwide is planned for Q1 2021.

Frank Rouwens, General Manager Q8Oils, commented: "Today, we are delighted to announce the partnership between Q8Oils and INNIO Jenbacher, which brings together Q8Oils’ leading technology in gas engine lubrication and Jenbacher’s world class expertise in designing and building gas engines. Our companies will focus on developments related to biogas and other non-natural gases. We are very happy with this partnership which fits well with our mutual drive to focus research and new developments on sustainable solutions that support the environment and help make our planet a healthier place."

Andreas Kunz, CTO, INNIO commented: “We are pleased to build on our co-engineering working relationship with Q8Oils. We have been working closely with Q8Oils in recent years to combine INNIO’s product and combustion knowledge with Q8Oils’ competence in lubricant and additive development. This has resulted in the development of a new lubricant that is designed to meet the demanding requirements of non-natural gas combustion. This lubricant is developed specifically for our reliable and highly efficient Jenbacher Type 2, 3, 4 and 6 engines that operate on non-natural gases. Furthermore, it is specified to give greater protection to engine components and to maximize customer value. The partnership agreement will be a key driver in continuing to improve the performance of our non-natural gases engines in an environmentally friendly way."

Q8Oils has been developing solutions related to the challenges that arise from lubricating gas engines in its in-house research laboratories for 35 years. Through continuous innovation, it provides gas engine owners with lubricants which deliver the cleanest engines and longer oil drain intervals, helping to reduce operational costs.

As MRC informed earlier, 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.

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 density 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.
MRC

Thailand crude imports jump in Oct as refiners replenish light-end product stocks

MOSCOW (MRC) -- Thailand imported 792,600 b/d of crude and condensate in October, a 50.8% jump from a year earlier, with demand for light sweet crude from the US and Nigeria picking up sharply after the restart of the country's 215,000 b/d Rayong refinery, reported S&P Gllobal.

The country's crude oil imports in October rose by 46.8% year on year to 725,673 b/d, while condensate imports more than doubled to 66,927 b/d from 31,263 b/d in the same month a year earlier, according to data released Nov. 23 by the customs department.

A sharp monthly increase in Thailand's refinery feedstock imports from its major light sweet crude suppliers including the US and Nigeria stood out, with state-run refiner and upstream company PTT indicating that the country is in need of replenishing some light and middle distillates stocks after refinery runs fell sharply late in the third quarter.

Thailand received 35,357 b/d of crude oil from the US in October, up 90.2% from 18,586 b/d imported in September, the data showed. Imports from Nigeria also more than doubled to 62,251 b/d from 24,655 b/d in September.

In the first 10 months, Thailand imported 92,951 b/d from the US, up 33% from the same period a year earlier, placing the North American producer in the top three supplier list for the year.

"Looking at the WTI-Dubai and WTI-Brent spreads, light sweet US crude may not be as competitive as it was in the previous 2-3 years, but we believe [crude import] diversification should be maintained over the longer run," a trading manager at PTT told S&P Global Platts.

In mid-October, PTT's subsidiary IRPC Public Co. Ltd. competed repairs to its 215,000 b/d Rayong refinery and restarted units that were shut in early September due to a fire, a company official told Platts previously.

The operating rate of the Rayong refinery averaged 88% over the first half of 2020, down from the 94% in H1 2019, IRPC said in an operations update on Oct. 14.

With the units back online, however, market participants expect operating rates at the facility to be steadily increased to at least 80% of capacity, matching levels prior to the fire.

"Light crude and condensate are essential these days for petrochemical feedstock naphtha output ... demand for petrochemicals for plastic, as well as hygiene-related chemical production is rising rapidly during the [coronavirus] pandemic," a plant operation manager at IRPC said.

In addition, PTT Global Chemical plans to raise run rates at its 280,000 b/d refinery in Map Ta Phut to over 90% in December, from 80%-90% in November, due to some improvement in margins, a source close to the matter said Nov. 24.

However, it remain uncertain how far the country's refinery run rates would need to be increased as domestic transportation fuel demand remains fragile, industry and refinery sources said.

The ongoing political protests and fresh coronavirus outbreaks could emerge as challenges to Thailand's gasoline demand in the near term, sources added.

Reflecting the headwinds, driving activity in Thailand has been on a downtrend since the end of August and was seen at 7% below baseline levels Nov. 22, mobility data from Apple showed.

Thailand produced 120,677 b/d of crude oil in the first nine months of this year, down 3.1% year on year, with major output coming from Sirikit (29,553 b/d, 0.4% higher year on year), Erawan (24,656 b/d, down 0.1% year on year) and Tantawan (17,984 b/d, down 15.5% year on year).

Its condensate output between January and September declined 16.6% year on year to 85,529 b/d, with the main production coming from Erawan (40,758 b/d, down 21% year on year) and Pailin (12,544 b/d, dropping 28.2% from a year ago), according to data released Nov. 12 by the Energy Policy and Planning Office.

Domestic crude production data for January-October is scheduled to be released next month.

As MRC informed before, PTTGC might start up the newly constructed cracker in Map Ta Phut, Thailand this December, 2020. The company kickstarted the project in early 2018 as part of PTTGC’s USD4.5 billion projects to “retrofit” its Map Ta Phut site. The new cracker operates on flexible feeds, primarily to utilize the surplus naphtha from its refinery. The unit has an annual capacity of 500,000 tons/year of ethylene and 261,000 tons/year of propylene.

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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