COVID-19 - News digest as of 28.12.2020

1. Lotte Group implements generation change at executive level

South Korea’s fifth-largest Lotte Group has turned younger, with executive positions filled with 50s at latest reshuffle to become more agile to fast-changing environment from the pandemic, according to PulseNews. Lotte Group on Thursday conducted the year-end executive team reshuffle at 53 affiliates, spanning from retail to food, chemical and hotel. Lee Young-goo, 58 years old, chief executive officer of Lotte Chilsung Beverage, has been named the head of the group’s food and beverage business unit, replacing Lee Young-ho, 62. Park Yoon-ki, 50, senior vice president of the strategy & planning division at Lotte Chilsung Beverage, was made the new CEO of the company. Kang Sung-hyun, 50, CEO of Lotte-Nestle Korea, was named the head of Lotte Mart business unit head. Lee Jin-sung, 51, director of Lotte Institute of Economy & Business Strategy was named CEO of Lotte Food. Hwang Jin-goo, 52, CEO of Lotte Chemical USA, was named CEO of Lotte Chemical. Cha Woo-chul, 52, audit team director at Lotte Corporation, was named CEO of Lotte GRS, while Noh Joon-hyung, 52, DT business director at Lotte Data Communication Company, was promoted to CEO of the company. Koh Soo-chan, 58, executive vice president of Lotte Engineering & Construction, has been promoted as the head of communications at Lotte Corp. Park Eun-jae, an ex-prosecutor was recruited as the head of the legal & compliance division at Lotte Corp. Lotte Corp. is Lotte Group’s holding entity. It has replaced the heads of all six teams in two years. Lotte Group retained Kim Kyo-hyun, CEO of Lotte Chemical, as the head of its chemical business unit despite the company’s poor business performance this year, which was largely affected by the pandemic. Sohn Tae-woon, executive vice president of Lotte Chemical USA was promoted to CEO of the company.

MRC

MOSCOW (MRC) -- Crude oil futures ticked lower during midmorning trade in Asia Dec. 28 as concerns intensified about the new coronavirus strain and countries across the world reported new infections while the market awaited further news on the US fiscal relief package, reporte S&P Global.

At 10:53 am Singapore time (0253 GMT), the ICE February Brent crude contract was down 17 cents/b (0.33%) from the Dec. 24 settle at USD51.12/b while the NYMEX February light sweet crude contract was down 12 cents/b (0.25%) at USD48.11/b. Both markers had fallen 1.86% and 2.05% in the week to Dec. 24 to settle at USD51.29/b and USD48.23/b, respectively.

News about the strain continued to weigh on the oil complex morning Dec. 28 after several countries, including Canada, France, Japan, Spain and Norway, reported cases of the strain - first detected in the UK. There are now fears that this variant may have transmitted undetected to many other countries, many of whom do not conduct genomic sequencing as actively as in the UK, according to analysts.

Following the confirmation of new COVID-19 infections, Beijing entered into an emergency mode over the weekend and tightened measures to control the spread. South Korea has extended social distancing measures in a bid to suppress infection numbers, which remain near record levels.

The market awaited clarity on the status of the US stimulus package, after the US President Donald Trump tweeted Dec. 28 that there is "good news" on the stimulus front but gave no further details. Trump in the week ended Dec. 26 refused to sign a Congress-approved USD900 billion package and said the amount allocated for direct payments be increased.

"With a shortened working week, investors would be looking forward to President Donald Trump signing the combined pandemic relief and funding bill to avoid the start of a partial government shutdown," said Avtar Sandu, senior commodities manager at Phillips Futures, in a Dec. 28 note.

"Most analysts believe that the President would eventually sign the bill," he 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 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

MOSCOW (MRC) -- Ultrapar (Sao Paulo, Brazil) says it is “evaluating strategic alternatives,” including divestment, for its specialty chemicals business, Oxiteno, reported Chemweek.

The company made the statement on 14 October in an announcement prompted by recent press reports.

“The priority in capital allocation for the next years is centered in the existing opportunities in the oil & gas value chain in Brazil, where the company operates with three businesses and has structural competitive advantages,” the company says. Ultrapar is reportedly interested in acquiring refining assets currently being divested by Petrobras.

Iparango is Ultrapar’s fuel business, Ultragaz its liquefied petroleum gas (LPG) business, and Ultracargo its liquid bulk storage business.

“Oxiteno was built and has been developed by Ultrapar for more than 40 years and has an outstanding position in Brazil and Latin America, with modern industrial facilities and world-class technology in the chemical industry, a sector that has been going through a restructuring and consolidation process worldwide,” the company notes.

As MRC informed previously, Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July, 2020. She said during the company's recent webinar that Petrobras plans to give more time for potential investors to make offers for the company"s assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company's stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem"s back burner for several years.

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

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

MOSCOW (MRC) -- Russia's overall polypropylene (PP) production increased in the eleven months of 2020 by 31% year on year to about 1,698,000 tonnes. ZapSibNeftekhim accounted for the main increase in the output, according to MRC's ScanPlast report.

November PP production in the country exceeded 169,100 tonnes, compared with 152,000 tonnes in October; several producers increased their capacity utilisation. Russia's overall PP production reached 1 698,000 tonnes in January-November 2020, compared to 1 298,000 tonnes a year earlier. Six out of eight producers increased their capacity utilisation, two producers decreased production volumes.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk reduced its capacity utilisation in November, the plant's PP production dropped to 49,200 tonnes that month versus 51,800 tonnes a month earlier. The Tobolsk plant's total PP production reached 453,800 tonnes in the eleven months of 2020, up by 7% year on year.

ZapSibNeftekhim produced about 40,100 tonnes of polypropylene in November compared with 32,000 tonnes in October. The plant's overall output totalled 396,900 tonnes in the eleven months of 2020.

Omsk Poliom increased the capacity utilisation to almost 100% in November, and, as a result, produced about 15,000 tonnes of PP. Whereas in October the plant was shut for scheduled maintenance and the volume of production decreased to 5,800 tonnes. The Omsk plant's PP production totalled about 165,500 tonnes over the stated period, down by 15% year on year.

Nizhnekamskneftekhim produced a little more then 18,000 tonnes of propylene polymers in November versus 17,700 tonnes a month earlier.
The Nizhnekamsk plant's overall output of polymer reached 200,600 tonnes in the eleven months of 2020, compared to 193,300 tonnes a year earlier.

Tomskneftekhim produced about 12,400 tonnes of polypropylene in November against 13,500 tonnes in October. Total PP production by the producer reached 135,600 tonnes in January-November 2020, up 1% year on year.

Ufaorgsintez's November PP production was about 11,300 tonnes versus 7,600 tonnes in October; in September-October the producer carried out scheduled maintenance works. The Ufa plant's overall output of polymer reached 108,900 tonnes in January-November 2020, down by 7% year on year.

Neftekhimiya (Kapotnya) last month produced about 12,500 tonnes of PP, compared with 11,900 tonnes in October. The plant's overall PP output reached 136,800 tonnes in the eleven months of 2020, up by 9% year on year.

Stavrolen (LUKOIL) increased its capacity utilisation in November, and, as a result, it produced about 10,800 tonnes of propylene polymers versus 11,700 tonnes in October. The Budenovsk plant's overall production of propylene polymers exceeded 100,300 tonnes in the eleven months of 2020 versus 96,000 tonnes a year earlier.

MRC

MOSCOW (MRC) -- South Korea’s fifth-largest Lotte Group has turned younger, with executive positions filled with 50s at latest reshuffle to become more agile to fast-changing environment from the pandemic, according to PulseNews.

Lotte Group on Thursday conducted the year-end executive team reshuffle at 53 affiliates, spanning from retail to food, chemical and hotel.

Lee Young-goo, 58 years old, chief executive officer of Lotte Chilsung Beverage, has been named the head of the group’s food and beverage business unit, replacing Lee Young-ho, 62. Park Yoon-ki, 50, senior vice president of the strategy & planning division at Lotte Chilsung Beverage, was made the new CEO of the company.

Kang Sung-hyun, 50, CEO of Lotte-Nestle Korea, was named the head of Lotte Mart business unit head. Lee Jin-sung, 51, director of Lotte Institute of Economy & Business Strategy was named CEO of Lotte Food. Hwang Jin-goo, 52, CEO of Lotte Chemical USA, was named CEO of Lotte Chemical. Cha Woo-chul, 52, audit team director at Lotte Corporation, was named CEO of Lotte GRS, while Noh Joon-hyung, 52, DT business director at Lotte Data Communication Company, was promoted to CEO of the company.

Koh Soo-chan, 58, executive vice president of Lotte Engineering & Construction, has been promoted as the head of communications at Lotte Corp. Park Eun-jae, an ex-prosecutor was recruited as the head of the legal & compliance division at Lotte Corp.

Lotte Corp. is Lotte Group’s holding entity. It has replaced the heads of all six teams in two years.

Lotte Group retained Kim Kyo-hyun, CEO of Lotte Chemical, as the head of its chemical business unit despite the company’s poor business performance this year, which was largely affected by the pandemic. Sohn Tae-woon, executive vice president of Lotte Chemical USA was promoted to CEO of the company.

This year’s reshuffle at Lotte Group had 80 percent fewer promotions compared with past years. A total of 50 new appointments have been made to the senior management positions, compared with 64 last year. Nearly 20 percent of Lotte Group’s about 600 senior executives are projected to be leaving the company after the reshuffle.

The group reduced the number of senior executive ranks to allow those with more achievements to climb up the ladder faster.

As MRC reported earlier, South Korea’s Lotte Chemical has restarted its fire-hit naphtha-fed steam cracker in Daesan. Thus, the facility begins trial runs of naphtha on 7 December, 2020. Lotte Chemical had initially planned to restart the cracker in September, then - in mid-November and finally - to early December. The cracker was shut on March 4 following an explosion, which injured more than 30 people. Lotte Chemical has two steam crackers. The steam cracker in Daesan has a production capacity of 1.1 million mt/year of ethylene, 550,000 mt/year of propylene and 150,000 mt/year of butadiene, while the Yeosu steam cracker is able to produce 1.18 million mt/year of ethylene, 550,000 mt/year of propylene and 130,000 mt/year of butadiene.

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

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