PPG completes acquisition of Ennis-Flint

MOSCOW (MRC) -- PPG said 24 December that it has completed the acquisition of specialty transport coatings maker Ennis-Flint, said Chemweek.

PPG previously announced that the acquisition was valued at approximately USD1.15 billion. Ennis-Flint is a global leader in pavement markings and traffic safety solutions with a wide range of products, including traffic paint, hot-applied and preformed thermoplastics, raised pavement markers and intelligent transportation systems. The company has approximately 1,000 employees globally, with production within the United States, Europe, South America, Australia and Asia. Ennis-Flint’s full year of 2020 revenue is expected to be approximately USD600 million, with mid-teen percentage EBITDA margins.

PPG will provide additional details relating to the business acquisition, including acquisition-related financial impacts, during the company's fourth-quarter earnings conference call on 21 January.

PPG last week separately announced plans to acquire Baltic region coatings maker Tikkurila for EUR1.1 billion (USD1.3 billion). That deal is expected to close in first-half 2021.

We remind that Russia's output of chemical products rose in October 2020 by 7.2% year on year. At the same time, production of basic chemicals grew in the first ten months of 2020 by 6.3% year on year, 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-October output. October production of polymers in primary form grew to 857,000 tonnes from 852,000 tonnes in September. Overall output of polymers in primary form totalled 8,340,000 tonnes over the stated period, up by 17% year on year.
MRC

MOSCOW (MRC) -- SK Capital Partners has completed the acquisition of a 39.75% stake, roughly 42.4 million shares, in titanium dioxide maker Venator from Huntsman for roughly USD100 million, according to Chemweek.

The deal includes a 30-month option for the purchase of Huntsman’s remaining approximate 9.5 million shares by SK at US2.15/share. Huntsman spun off Venator in a 2017 initial public offering.

"We are excited to engage with (SK founder) Barry Siadat and the SK Capital team, who have a strong reputation within the chemical industry for supporting long term growth and innovation," said Simon Turner, president and CEO of Venator.

"Our business is poised for increased shareholder value creation as demand for our world class functional and specialty products continues to strengthen." Venator said it remains "well positioned to deliver the full USD55 million in EBITDA improvement from our 2020 business improvement program over the next two years. We look forward to implementing additional steps to strengthen our business and further unlock shareholder value.”

SK said in a regulatory filing 23 December that it intends to "engage in discussions with management or the board of directors of (Venator) about its business, operations, strategy, plans, and prospects, from time to time." Discussions may concern "any extraordinary corporate transaction, a sale or transfer of a material amount of assets, a change in the board of directors or management, a material change in the capitalization, other material changes in the company’s business or corporate structure, or similar actions."

Huntsman said that the sale will provide cash tax savings of approximately USD150 million from the offset of a capital loss on the sale of Venator shares against the capital gain realized on the sale of its chemical intermediates and surfactants businesses in early January. The company said the Venator sale will secure a total related benefit of approximately USD250 million in cash this year.

As MRC reported earlier, Nanjing Jinling Huntsman, a joint venture between Huntsman and Sinopec Jinling, planned to shut its propylene oxide plant in Nanjing (Nanjing, Jiangsu Province, China) on November 1 for scheduled maintenance. This plant with a capacity of 240,000 tonnes/year of propylene oxide will be closed until approximately 25 November.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of approximately USD7 billion. The company's chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operates more than 70 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 9,000 associates within our four distinct business divisions.
MRC

MOSCOW (MRC) -- Gazprom has lost a third of its share of the Finnish gas market after a new pipeline made it possible to import liquefied natural gas (LNG) via the Baltic States, data from Gazprom and Estonian gas grid operator Elering showed, reported Reuters.

The Balticconnector pipeline, which opened early this year, links Finland and Estonia and can also send gas to the Baltics.

In the first nine months of 2020, a total of 5.8 terawatt-hours (TWh) of gas was exported to Finland via the pipeline, data provided by Elering showed.

Meanwhile, direct gas exports from Russia to Finland over same period dropped by 35% to 11.4 TWh, from 17.6 TWh over Jan-Sept in 2019, Gazprom's quarterly data, published on its website, showed.

Natural gas prices between Finland and the Baltic states of Estonia, Latvia and Lithuania vary due to their access to the global LNG market, ability to store gas in Latvia and different Russian gas supply contracts.

Haroldas Nauseda, board member at Lithuanian state-controlled gas trader Ignitis, told Reuters: "In 2019, gas in Finland cost about 7 euros per MWh more than in Lithuania, a difference of 150 million euros for the full year."

"Today, there's little difference left."

Ignitis supplied 2.23 TWh to Finland over Jan-Sept and expects to keep the share in Finland next year, Nauseda said.

Most of the gas came from the only large-scale LNG import terminal in the Baltic states, in Lithuania, with capacity of 39 TWh per year.

Nauseda said that during the cold winter months the Balticconnector pipeline is unable to satisfy demand and prices in Finland go up.

Built to transport about 25 TWh of gas per year, Balticconnector has been limited to about 11 TWh per year due to delays upgrading compressor stations.

Gazprom is also facing competition in other parts of Europe from LNG imports, including from the United States.

The Baltic and Finnish gas markets will be connected to mainland Europe at the end of 2021 by a new pipeline linking Lithuanian and Polish gas grids, potentially bringing in more competition.

"The four countries consume about 60 TWh of gas per year, compared with 200 TWh in Poland, so the region will attract international players," Nauseda said.

As MRC informed before, Gazprom neftekhim Salavat, part of Gazprom, has restarted its low density polyethylene (LDPE) production after a scheduled maintenance. The plant"s customers said Gazprom neftekhim Salavat resumed its LDPE production on 10 August, 2020, after the scheduled turnaround. The outage lasted slightly longer than originally planned. LDPE production capacities were shut for the turnaround on 1 July.

According to MRC's ScanPlast report, October estimated LDPE consumption in Russia grew to 50,030 tonnes from 23,930 tonnes a month earlier. Russian producers increased domestic LDPE shipments after the September shutdowns for maintenance. Russia's estimated LDPE consumption was about 456,490 tonnes in January-October 2020, down by 1% year on year. Lower production was offset by higher imports.
MRC

1. Asia distillates-Jet fuel cracks hover near multi-month peak as aviation demand ticks up

MOSCOW (MRC) - Asia's refining margins for jet fuel dipped on Tuesday but remained within close sight of multi-month highs touched last week, supported by seasonal heating demand for kerosene and a slow but gradual recovery in regional aviation demand, Reuters. However, a fast-spreading new coronavirus strain that has shut down much of Britain has prompted several countries to reimpose travel curbs on UK routes, triggering worries about fuel demand recovery and near-term air travel outlook. Refining margins, or cracks, for jet fuel slipped 24 cents to $4.36 per barrel over Dubai crude during Asian trade on Tuesday. The jet cracks, which also determine the profitability of closely-related kerosene, have gained 37% in the last month, Refinitiv Eikon data showed. Cold season in the northern hemisphere typically brings peak demand for kerosene in Japan and Korea, where the fuel is used as a heating oil to fend off winter chill.


MRC

MOSCOW (MRC) -- The US Environmental Protection Agency is now aiming for Dec. 31 as the point by which it will propose rules on the amount of biofuels refiners must blend into their fuel mix next year, after missing a deadline last month to release the proposal, reported Reuters.

Under the adjusted timeline, the agency will aim to finalize the rule on the so-called Renewable Volume Obligations in June 2021, according to the agency's agenda on the Office of Information and Regulatory Affairs' website.

EPA is in charge of administering the US Renewable Fuel Standard, which requires refiners to blend billions of gallons of biofuels into their fuel mix each year, or buy tradable credits from those that do.

The regulation is a lightning rod of contention between the corn industry, which supports it because it creates demand for ethanol, and the refining industry, which opposes it because it is costly and competes with traditional petroleum fuels.

The EPA missed a Nov. 30 deadline for issuing the obligations this year, after the process was complicated by the coronavirus pandemic and its economic fallout for the fuel industry.

EPA did not immediately respond to a request for comment.

As MRC wrote before, in October, the US Environmental Protection Agency (EPA) released a federal strategy for addressing marine litter that includes broad efforts to incentivize recycling and build infrastructure both domestically and overseas. “Internationally, up to 28 billion pounds of waste makes it into our oceans every year, harming marine life and coastal economies,” says EPA administrator Andrew Wheeler. “Marine litter is a top priority for this Administration, and working together with our global partners, we aim to solve the current growing marine litter problem in our shared oceans.” According to EPA, five countries in Asia - China, Indonesia, the Philippines, Thailand, and Vietnam - account for over half of the plastic waste input into the ocean. The majority of marine litter comes from land-based sources, such as littering and the mismanagement of waste, and the most effective way to combat marine litter is to prevent and reduce land-based sources of waste from entering the oceans in the first place.

We remind that Braskem has formed first partnership for removing household plastic waste from landfill in Greater Sao Paulo. The partnership forged between Braskem and Tecipar, the Brazilian company specializing in environmental engineering, will avoid some 2,000 tons of plastic waste annually from being discarded in the landfill of Santana do Parnaiba, a city in the metropolitan area of Sao Paulo. This volume is equivalent to 36 million units of plastic packaging made from polyethylene (PE) and polypropylene (PP). The partnership reinforces Braskem's commitment to the Circular Economy and is aligned with the business strategy of the company, which is engaged in supporting the development of the recycling chain and its market.

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC