EU chemical production shows signs of recovery, COVID-19 second wave threatens another slowdown

MOSCOW (MRC) -- Production of chemicals in the EU showed signs of recovery in the third quarter of 2020 with a significant sequential increase of 6.1% compared with an 8.7% sequential decline in the second quarter, according to Chemweek with reference to Cefic’s latest quarterly report.

In the first nine months of the year, EU chemical production dropped 4.4% year on year (YOY), due mainly to the COVID-19 outbreak in Europe, the report says. Overall EU manufacturing output fell sharply, by 10.6% YOY, with automotive output losing more than 28%, Cefic says.

EU chemical producer prices were down 5.0% YOY with total industry sales of EUR318.2 billion (USD379.2 billion) in the first eight months of 2020, 9.0% down YOY, attributed to “the weak domestic demand in Europe and the deterioration of trade business environment,” Cefic says. EU chemical exports outside the EU reached EUR111.7 billion in the first eight months of the year, down 5.5% YOY, and chemical imports from outside the EU were down 3.9% YOY in the same period, to EUR86.4 billion.

Cefic notes that the recovery that started in May is showing signs of slowing as a result of the second wave of COVID-19 in European countries. It adds that the length and severity of the second wave will impact chemical production levels in the EU.

“This underpins the need for rapid approval and implementation of the EU Economic Recovery Plan, (which) needs to be firmly embedded in the EU Industrial Strategy and the Green Deal agenda. Only this will ensure that the recovery funding achieves an industrial transformation that will be sustainable and contributes to a resilient economy over time,” says Marco Mensink, director general at Cefic.

France and Italy were the EU countries with the biggest decreases in chemical output in the first three quarters of 2020, each down at least 10% YOY, followed by Spain, Belgium, and Portugal, according to Cefic. Poland was the least affected country, registering unchanged YOY output, and Germany and the UK saw production decline 3.6% and 1.7%, respectively, Cefic says. Capacity utilization in the EU is still 7.7 percentage points below the previous year’s level, it says.

Worldwide production of chemicals in the same period declined 1.8% YOY, with China the only big producer of chemicals posting an increase in output in the first nine months, 0.7% YOY. Cefic notes that China’s “output has already experienced the V-shape and the production level in September was the highest one ever.” Low demand from key customer sectors worldwide slowed down the growth of chemical production in all other countries, with India and Japan posting the steepest declines in output, 10.4% and 9.4%, respectively, according to Cefic data.

Cefic adds that the latest business survey data in the EU Chemicals Confidence Indicator show improvement for the sixth consecutive month in October, following a historic slump in March and April. Chemical production expectations for the months ahead registered a small decrease in October, the survey shows.

The Economic Sentiment Indicator in the EU remained unchanged sequentially, and consumer confidence slipped 1.6% with households reporting growing concerns about the expected general economic situation, Cefic says.

As MRC reported earlier, in mid-July, 2020, Cefic called on EU member states to agree urgently on a recovery plan to restart Europe’s economy and kick off investments toward a green and digital transition. The EU chemical industry is seeking investments in building renovation, clean mobility, the development of all forms of clean hydrogen, chemical recycling, and carbon capture and storage as well as carbon capture and utilization, Cefic said then.

We remind that in 2017, SIBUR joined the European Chemical Industry Council (CEFIC). SIBUR has also become a member of the European Committee of Ethylene Producers and Technology Suppliers (EEPC, part of CEFIC). Membership in the Council allowed SIBUR to take part in the work of 93 sectoral groups on more than 120 petrochemical products, in 90 strategic groups working on issues of sustainable development, innovation, trade, energy and law in the field of petrochemicals.

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.
MRC

MOSCOW (MRC) -- Canada-based automotive parts supplier Magna International Inc. has brought its EyeQ5-based driver assistance system to market through an automaker in Europe, said Canplastics.

The Magna Gen5 “one-box” solution is a Mobileye EyeQ5-based system – one of the industry’s first where the forward-facing camera and related software are contained in a single assembly. Benefits include lower cost, simplified installation on the assembly line, and the ability for the technology to be applied to a wider range of an automaker’s lineup. The system will provide drivers with safety and convenience features such as adaptive cruise control, automatic emergency braking, and pedestrian detection.

As with previous generations, the system combines Magna’s electronics and camera technology with Mobileye’s system-on-chip (SoC) image-processing technology. The camera features a 120-degree, 8-megapixel optical path.

"We have been working with Magna on camera-based ADAS since 2007, and our collaboration continues to provide leading-edge driver-assistance features,” said Erez Dagan, executive vice president for products and strategy at Mobileye. “This latest system represents a new level of performance and functionality, and we’re already looking for ways to make subsequent generations even better."

Aurora, Ont.-based Magna provides global automakers with ADAS technologies – including the PACE Award-winning Trailer Angle Detection, Automatic Emergency Braking, and rearview object and pedestrian detection – to more than 250 vehicle models on the road.

As MRC informed earlier, Magna International Inc. will build a second paint shop 75 kilometers away in Maribor/Hoce, Slovenia. Aurora, Ont.-based Magna will spend approximately USD100 million on the new facility.

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.
MRC

MOSCOW (MRC) -- Rohm (Darmstadt, Germany) says it will shut down its hydroxyester plant in Worms, Germany, from 11-20 December for planned maintenance, reported Chemweek.

The company produces hydroxyethyl methacrylate (HEMA) and hydroxypropyl methacrylate (HPMA) monomer at the facility. Hydroxyesters are used mainly in coatings and reactive resins applications.

Rohm also says it is preparing “for a strong start of the methacrylates business in 2021,” and will use its integrated production and supply chain network to ensure high levels of service and reliability for its customers.

The methyl methacrylate (MMA) market has seen a shift in global dynamics since the summer, with prices firming and the market tightening in all major regions, it says. End-user demand for applications such as coatings and polymethyl methacrylate (PMMA) for plastic sheeting has continued to perform “stronger than anticipated for this time of the year,” it adds. The supply side, meanwhile, has been characterized by maintenance shutdowns and several supply issues in Asia and the US, it notes.

Disruptions in the global phenol-acetone chain have also continued to plague overall acetone availability, leading to price surges and a rise in raw material costs, according to Rohm. Physical product availability could remain an ongoing challenge “as the supply chain is stretched to its limits,” it says. The pandemic continues to pose a big challenge on shipping and logistics, while uncertainties remain regarding the impact of a hard Brexit, it adds.

Rohm lifted sales control mid-October in Europe for MMA after imposing it mid-September. The decision to lift sales control was lifted by the resumption of production in its plant in Worms following an annual maintenance turnaround. The facility at Worms has a production capacity of 225,000 metric tons/year of MMA.

As MRC wrote previously, the company raised its price for MMA in Europe on 16 November by EUR50 (USD59) per metric ton, following a previous rise in Europe on 1 November for MMA and other methacrylate monomer products.

The main application, consuming approximately 75% MMA, is in the production of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used to produce methyl methacrylate-butadiene-styrene copolymer (MBS), used as a modifier for polyvinyl chloride (PVC).

According to MRC's ScanPlast report, October total production of unmixed PVC grew to 86,600 tonnes from 86,000 tonnes a month earlier, SayanskKhimPlast and Bashkir Soda Company increased their capacity utilisation. Overall output of polymer was 805,100 tonnes in the first ten months of 2020, which virtually corresponds to the last year"s figure. Two producers increased their production, whereas two other manufacturers reduced their output.
MRC

MOSCOW (MRC) -- Citing in part the effects of the COVID-19 pandemic on the marketplace, Quebec-based packaging supplier Cascades Inc. has announced that its Laval plant, which specializes in the manufacture of napkins for the away-from-home market, will be closing on June 30, 2021, said Canplastics.

In a Nov. 25 statement, officials with Cascade said the Laval plant, which has an annual converting capacity of 1.4 million cases, will move its production volume to other Cascades plants and filled by additional capacity. The plant currently employs 54 workers, and Cascades plans to offer to relocate as many employees as possible to its many other business units in Quebec.

"COVID-19 has severely impacted the number of visitors to restaurants, hotels and public buildings, markets served by the Laval plant,” said Jean-David Tardif, president and chief operating officer of Cascades Tissue Group. “This situation, combined with high logistics costs, prompted us to move production to other sites in order to optimize our operations, reduce our costs and create synergies. It is important to note that this decision will in no way affect product quality or the level of service we provide to our customers, or Cascades’ ability to meet demand for our products."

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.

Founded in 1964, Cascades, which is headquartered in Kingsey Falls, Que., also operates a flexible plastic packaging division.
MRC

MOSCOW (MRC) -- Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, has announced that it will start a strategic partnership with Neste, the world’s leading producer of renewable diesel and sustainable aviation fuel and a forerunner as provider of renewable and circular solutions for the chemical industry, to enable the production of high performance polymers, as per the company's press release.

This enables DSM and its customers to reduce the carbon footprint of their own products whilst supporting the industry to transition to a circular economy.

In the new strategic collaboration, DSM Engineering Materials will start replacing a significant portion of the fossil feedstock used to date in the manufacture of its high performance polymers portfolio with feedstock produced from recycled waste plastics and/or 100% bio-based hydrocarbons. These polymers are used, for example, in the automotive, electronics and packaging industries.

Over the short term, the collaboration aims to replace several thousand tons of fossil feedstock in the production of polymers with alternative, sustainable feedstock: bio-based and waste plastic based hydrocarbons.

Neste produces its bio-based hydrocarbons entirely from renewable raw materials, such as waste and residue oils and fats. For the production of waste plastic derived feedstock, Neste focuses on plastics that cannot be mechanically recycled and have previously been directed to incineration and landfilling.

Thanks to being a drop-in replacement to commonly-used fossil feedstock in the polymers production, Neste’s products are suitable for existing production infrastructures and enables DSM to produce more sustainable products with consistently high quality using its existing processes.

All of the chemically recycled and bio-based materials within the value chain will have the globally recognized ISCC Plus certification and will not require re-qualification.

The new strategic cooperation underlines a strong commitment from both partners to contribute to a circular economy by collaborating throughout the value chain, and addressing the increasing consumer, societal and regulatory demand for more sustainable circular solutions.

Shruti Singhal, President DSM Engineering Materials said: “We have a long history of delivering tangible proof points of our commitment to sustainability. As a next step we are going to even further reduce our footprint and will offer a full alternative range of our existing portfolio based on bio- and/or recycled-based materials by 2030. Together with our upstream partner Neste and other value chain partners we’re ready to drive our industry forward, seize the sustainable opportunities ahead, and deliver on our purpose of creating brighter lives for all.”

Mercedes Alonso, Executive Vice President, Renewable Polymers and Chemicals from Neste said: “Neste and DSM are frontrunners in providing sustainable solutions to the market. Both companies have a similar sense of urgency towards creating a healthier future for our children. Neste is very pleased to announce this partnership with DSM through which we can further accelerate the industry transformation towards a more sustainable, circular economy. It is exciting to see how our 100% bio-based and waste plastic based products enable DSM to produce its high performance polymers portfolio with a reduced environmental footprint.”

As MRC informed earlier, in September, 2020, DSM formed a 50/50 joint venture (JV) with VDL Groep (Eindhoven, Netherlands), called Dutch PPE Solutions, to produce medical facemasks and establish the first permanent production of critical facemask components in the Netherlands. The companies are investing several million euros to purchase manufacturing equipment and build manufacturing facilities to produce meltblown polypropylene (PP), the critical material layer in medical facemasks that filters viruses, and make medical masks.

According to MRC's ScanPlast report, 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