Celanese globally raises February prices for engineered materials

MOSCOW (MRC) -- Celanese (Irving, Texas) says it will raise prices globally for its portfolio of engineered materials due to strengthening product demand and increased transportation, energy, and raw material costs, as per the company's press release.

The price hike will be effective for orders shipped on or after 1 February 2021 or as contracts otherwise allow.

Nylon-6,6, polyphenylene, long-fiber thermoplastics, and amorphous products will be increased in price by USD0.30/kilogram (kg), while GUR - the trade name for its ultra-high-molecular-weight polyethylene (UHMWPE) product - will rise by USD0.25/kg. Nylon-6, polybutylene terephthalate, and polyoxymethylene products will each be increased by USD0.20/kg, with its technical thermoplastic elastomer product to rise by USD0.15/kg.

Individual grades may be subject to higher increases than the rises specified, the company said.

As MRC informed previously, in October, 2020, Celanese (Dallas, Texas) announced plans to add a 15,000-metric tons/year line for the production of GUR ultra-high molecular weight polyethylene (UHMWPE) at its facility in Bishop, Texas. Startup is expected by the beginning of 2022.

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.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
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Linde to build ASU in Hungary as part of new industrial gases deal with BorsodChem

MOSCOW (MRC) -- Linde has signed an agreement with BorsodChem (Kazincbarcika, Hungary) for the long-term supply of nitrogen, oxygen, and compressed air to BorsodChem’s chemical complex in Kazincbarcika, including the construction of a new air separation unit (ASU), said Chemweek.

The company will build one of the largest ASUs in Hungary as part of the supply deal, with the unit expected to be completed by the end of 2021, Linde says. “In addition to supporting BorsodChem’s expansion, the plant will provide additional nitrogen, oxygen, and compressed air to meet the increasing demand for industrial gases in Hungary and surrounding countries,” it says.

The building of new capacity in Hungary will give Linde the opportunity to broaden its supply of industrial gases to other regional customers “in response to increasing demand from resilient end markets,” says Linde’s Andreas Muller, head of its Hungary and Austria business.

As per MRC, BorsodChem (Kazincbarcika, Hungary) is planning to start production at its new 200,000-metric ton/year aniline plant in Kazincbarcika during the third quarter of 2021. The facility in northern Hungary has received around EUR45 million (USD53 million) in state subsidies from the Hungarian government, which were approved by the European Commission in 2018. Production was initially scheduled to start in the second quarter of next year, but progress has been delayed due to COVID-19 and other “unforeseen issues,” according to market sources.

According to MRC's DataScope report, last month's SPVC imports to Russia dropped to 0,600 tonnes from 1,600 tonnes in November. High PVC prices in foreign markets and a seasonal decline in demand in the last two months have put serious pressure on import purchases of PVC from Russian companies. Thus, overall imports were 40,800 tonnes in January-December 2020, compared to 50,900 tonnes a year earlier, with PVC from China and the United States accounting for the main reduction in imports. PVC shipments from these countries decreased by almost a third over the stated period.

Wanhua-BorsodChem is a Hungarian chemical raw material manufacturing company headquartered in Kazincbarcika, Northern Hungary. It is the European member of the Wanhua Chemical Group. The company specializes in isocyanates (MDI, TDI), PVC and chlor-alkali (vinyl) businesses.[1] The main production site is located in Kazincbarcika, Hungary but the production is also supported by other European production capacities located in Ostrava, the Czech Republic and Kedzierzyn-Kozle, Poland. Several branch offices are available in Hungary, Belgium, the Czech Republic, Croatia, Italy and Poland.
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COVID-19 - News digest as of 21.01.2021

1. Repsol upstream production slips 8% at 648,000 boe/d in 2020

MOSCOW (MRC) -- Spanish integrated energy group Repsol reported Jan. 19 that its estimated upstream oil and gas production in 2020 decreased 8% year on year at 648,000 b/d of oil equivalent - its lowest annual total since the 2015 purchase of Talisman - with Libyan interruptions and the oil price impact from the pandemic weighing on volume, according to S&P Global. The full-year total was nonetheless in line with the company's postpandemic revised target of 650,000 boe/d, which it sees through to 2030. By region, Europe and Africa showed the largest production decline in 2020, falling 29% year on year to 86,000 boe/d. Repsol's share in the Libyan El Sharara field can supply up to 39,000 boe/d net to Repsol, but output suffered interruptions throughout the year following a shutdown at the field in January 2020 and a blockade of oil terminals.



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Ashland to acquire Schulke & Mayr personal care business

MOSCOW (MRC) -- Ashland says it has agreed to acquire the personal care business of Schulke & Mayr GmbH for EUR262.5 million (USD317 million) in an all-cash deal, reported Chemweek.

Schulke & Mayr is owned by private equity firm EQT (Stockholm, Sweden). The deal will be financed with available cash and bank financing, and is expected to be immediately accretive to Ashland’s earnings.

The acquired business makes additives for personal care products, with a particular focus on preservatives. The deal bolsters Ashland’s efforts in its specialty additives business, and “is an excellent example of the type of bolt-on acquisition opportunities that will help advance our strategy and support the profitable growth of our core businesses,” says Ashland chairman and CEO Guillermo Novo.

The deal also improves Ashland’s environment, social, and governance (ESG) positioning in the personal and household care markets, the company says. “This acquisition further aligns our portfolio with the ‘clean beauty’ trend in the personal care industry and helps us solve for a new generation of consumers who are shifting to products with milder and safer ingredients,” Novo says. “Our combined biotechnology competencies further strengthen our ability to create new sustainable solutions in broader fields of application.”

One analyst estimates that Ashland paid an EBITDA multiple of about 11.3 times for the business. “We estimate an additional EUR83-96m in sales and EUR20–23m in EBITDA absent any synergies,” says Laurence Alexander, an analyst with Jefferies (New York, New York). The deal boosts personal care to about 26% of Ashland’s 2020 sales, Alexander adds.

Ashland appears likely to continue to pursue bolt-on acquisitions, according to Alexander. “The company has previously indicated that M&A activity will likely continue in the personal care, life sciences, and architectural coatings markets,” he notes.

Citi is Ashland’s financial advisor on the deal, with Squire Patton Boggs acting as legal advisor. The transaction is expected to close by 30 June 2021.

EQT acquired Schulke & Mayr from Air Liquide last year in a deal valued at up to EUR1 billion, subject to the results of an earn-out provision.

As MRC informed previously, on 3 September 2019, INEOS Enterprises announced the completion of the acquisition of the entire composites business from Ashland Global Holdings Inc. The acquisition also included a BDO facility in Germany. The businesses included in the transaction have combined sales of more than USD1.1 billion per year. They employ 1,250 employees across 19 sites in Europe, North and South America, Asia and Middle East.

We remind that in mid-January 2019, INEOS announced Antwerp as the location for its new petrochemical investment. The EUR3 billion investment will be the biggest ever made by INEOS and is first cracker to be built in Europe in 20 years. The investment is a game changer for the chemical sectors and will bring huge benefits to the Belgium and wider European economies.

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

Ashland Global Holdings Inc. is global specialty chemicals company serving customers in a wide range of consumer and industrial markets, including adhesives, architectural coatings, automotive, construction, energy, food and beverage, nutraceuticals, personal care and pharmaceutical.
MRC

Ultrapar leads negotiation for Petrobras refinery Refap

MOSCOW (MRC) -- Brazilian group Ultrapar Participacoes SA offered the highest price for Petrobras’ refinery Refap and is leading talks to acquire the facility in the southern state of Rio Grande do Sul, reported Reuters with reference to three people close to the matter.

Brazil has been trying sell eight refineries, which would end Petrobras’s virtual monopoly in the country’s refining sector and open one of the world’s largest fuel markets to private investors. Petrobras is currently negotiating five of them with the highest bidders.

Petroleo Brasileiro SA, as the state-controlled producer is known, is trying to get Ultrapar to boost its offer before agreeing to exclusive talks, three of the people said. Offers below Petrobras’s initial price range have made the company miss its internal deadline to sign a deal by the end of 2020.

Petrobras and Ultra declined to comment.

Raizen, a joint venture between Royal Dutch Shell PLC and Brazilian ethanol producer Cosan SA, has also bid for Refap, two of the people said. A second round of offers hasn’t been ruled out, the people said.

Raizen declined to comment.

Indian conglomerate Essar Group, which had pre-qualified for the binding phase, dropped out of the competition, the people said.

Ultrapar and Raizen have also bid for refinery Repar, which supplies the relatively affluent states of Parana, Santa Catarina, Sao Paulo and Mato Grosso. Petrobras has hesitated to designate a winning bidder because it considers the prices too low, three of the people said.

Refap and Repar are located in Brazil’s southern region and have a production capacity of 200,000 barrels per day each, or about 18% of the country’s capacity.

Antitrust rules would bar Petrobras from selling the units to the same firm.

Elsewhere, Petrobras is in exclusive talks with Abu Dhabi investor Mubadala Investment Co to sell its Bahia unit RLAM. Those talks, at a more advanced stage, could bring a deal as soon as this month, two of the people said.

The producer is also negotiating the sale of its REMAN, LUBNOR and SIX refining units, one of the people said. No exclusivity was set, which allows rebids, the person said.

Petrobras has been trying to sell refineries for almost a decade with no success, facing resistance from politicians, union workers and local contractors. A history of government fuel price intervention has also scared away investors in the past.

Chief Executive Roberto Castello Branco, who took office in January 2019 appointed by president Jair Bolsonaro, relaunched the process as part of a plan to focus on deep-water exploration and cut debt.

On December 2019, Petrobras signed an agreement with antitrust watchdog Cade to privatize eight refineries, or about half of Brazil’s fuel production capacity, by Dec. 2021. Petrobras has told potential buyers it is not obliged to sell the plants if offers fall below its internal price range.

A decrease in fuel demand accelerated by the Covid-19 pandemic is a key reason behind the price gap between Petrobras and potential buyers, three of the people said.

The sales will also allow Petrobras to raise fresh money and reduce debt.

As MRC informed before, Brazil’s state-run oil company Petrobras is seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem.

We remind that 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 also 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.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras" activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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