Shintech planning USD1.25 billion expansion of new US vinyls facility

MOSCOW (MRC) -- Shintech will invest USD1.3bn to expand its manufacturing and packaging facilities in Iberville and West Baton Rouge in Louisiana, the US-based polyvinyl chloride (PVC) producer said, said Chemweek.

The company will make a USD1.25bn investment to increase PVC manufacturing capacity and expand chlor-alkali and vinyl chloride monomer capacity in its Plaquemine facility. The expansion was announced in 2018 and is expected to be completed this year.

Shintech is also expanding its PVC packaging and warehouse operation in its Addis facility. The company is expanding to keep pace with the rising demand for PVC, which is used in a variety of applications including, building and construction industries, healthcare, electronics, automobile, and other sectors.

“Shintech continues to invest in and increase its manufacturing presence in the North American market,” vice president of Manufacturing Danny Cedotal said. The state of Louisiana has offered Shintech a performance-based grant of up to ГЫВ6.6m for the construction, procurement and installation of infrastructure to support the expansion of the project.

The grant is payable in four instalments, contingent upon the company reaching investment and production benchmarks.

As MRC informed earlier, Shintech, a subsidiary of Japan's Shin-Etsu, raised PVC contract prices in January by 4 cents per pound (USD88 per tonne). The company previously announced a 3 cents / lb increase in January PVC contracts and is seeking an additional 3 cents / lb hike in February.

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.
MRC

US oil output rises above 11 MMbpd in Nov for first time since April

MOSCOW (MRC) -- US oil output rose 692,000 barrels per day (bpd) in November last year to 11.124 million bpd, the first time it has surpassed 11 MMbpd since last April, reported Reuters with reference to a monthly report from the US Energy Information Administration (EIA).

At the same time, demand for distillate fuels such as diesel was down 7.1% from a year earlier and gasoline demand was off by 13.3%.

Monthly gross natural gas production in the U.S. Lower 48 states jumped almost 3.0 billion cubic feet per day (bcfd) to 102.5 bcfd in November, according to the EIA’s 914 production report.

That was the biggest increase in a month since output climbed by a record 5.0 bcfd in October 2008, according to EIA data going back to 2005.

Gross natural gas output peaked at 107.1 bcfd in December 2019.

In top natural gas producing states, output gained 1.6% in Texas to 27.8 bcfd in November and 3.8% in Pennsylvania to a monthly record high of 20.6 bcfd.

As MRC informed before, global oil demand is expected to rise by nearly 7% this year, boosted by quicker vaccine distribution and a better economic outlook, according to consultancy Wood Mackenzie's statement. Total liquids demand is expected to average 96.7 million barrels per day (bpd) in 2021, 6.3 million bpd higher than last year when the Covid-19 pandemic caused an unprecedented oil demand shock. Refineries under the threat of closure could repurpose the facilities to produce liquid renewables instead of converting into a terminal, which could help oil companies’ aim of achieving carbon neutrality.

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

Sasol flags rise in headline earnings per share, sees sequential improvement

MOSCOW (MRC) -- Sasol is expected to deliver a strong set of results for the six months ended 31 December 2020 (2021 financial half year), underpinned by a strong cash cost, working capital and capital expenditure performance despite the effects of the COVID-19 pandemic, a severe decline in crude oil prices and softer chemical product prices, said the company.

In addition, our Lake Charles production was impacted by hurricanes experienced in the US Gulf Coast, resulting in lost production of approximately 300kt for the 2021 financial half year.

Shareholders are advised that, for the 2021 financial half year: The earnings per share is expected to be between R22,76 and R24,07 compared to the prior half year earnings per share of R6,56 (representing an increase of more than 100%);

Headline earnings per share (HEPS) is expected to be between R18,59 and R19,78 compared to the prior half year HEPS of R5,94 (representing an increase of more than 100%); and Core HEPS (CHEPS) is expected to be between R6,94 and R8,79 compared to the prior half year CHEPS of R9,25.

Sasol?s adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA) is expected to decline by between 0% and 10% from R19,8 billion in the prior year, to between R17,9 billion and R19,8 billion. This decline results from a 23% decrease in the rand per barrel price of Brent crude oil coupled with lower sales volumes due to softer demand attributable to COVID-19 lockdowns and the aforementioned hurricanes impacting our gross margins adversely. This was offset by a strong cost performance, supported by delivery towards the US$1 billion integrated crisis response plan commitment.

Notable non-cash adjustments for the 2021 financial half year include: Unrealised gains of R5,4 billion on the translation of monetary assets and liabilities due to the 15% strengthening of the closing rand/US dollar exchange rate compared to June 2020; Unrealised gains of R4,7 billion on the valuation of financial instruments and derivative contracts; and R3,3 billion gain on the realisation of the foreign currency translation reserve (FCTR), mainly on the divestment of 50% interest in the LCCP Base Chemicals Business.

The financial information on which this trading statement is based has not been reviewed and reported on by the Company's external auditors. Sasol will release its 2021 financial half year results on Monday, 22 February 2021. Sasol?s President and Chief Executive Officer, Fleetwood Grobler, and Chief Financial Officer, Paul Victor, will present the results. The pre-recorded presentation will be available on 22 February 2021 on the following link: presentation link.

As per MRC, Sasol completed the USD404-million sale to Ineos of its 50% equity stake in the companies’ Gemini high-density polyethylene (HDPE) manufacturing joint venture (JV) at La Porte, Texas. The planned divestment, first announced by Sasol in November 2020, was successfully closed on 31 December.

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

Stepan buys Invista aromatic polyols business

MOSCOW (MRC) -- Stepan Company (Northfield, Illinois) says it has acquired Invista’s aromatic polyols business, which has annual sales of about USD100 million, according to Chemweek.

The deal includes a manufacturing site in Wilmington, North Carolina, and another in Vlissingen, Netherlands, as well as intellectual property, customer relationships, inventory, and working capital. Terms of the deal, which was financed with cash on hand, were not disclosed.

F. Quinn Stepan, Jr., chairman and CEO, says the acquisition will support the growth of Stepan’s global rigid polyol business. “We expect that Invista's available spare capacity, plus debottlenecking opportunities in both plants, will allow Stepan to support market growth in a capital efficient way," he says. "We believe the long-term prospects for rigid polyol use in insulation remain strong, as energy conservation efforts and more stringent building codes should continue to drive market growth. Additionally, we believe the acquired technology will accelerate our product leadership initiatives, drive manufacturing efficiencies and output, and create increased value for the overall market."

Stepan already has polyester polyols capacity at Nanjing, China; Wesseling, Germany; Brzeg Dolny, Poland; Columbus, Georgia; and Millsdale, Illinois, according to IHS Markit's Directory of Chemical Producers.

As MRC informed before, Stepan conducted planned maintenance at its 90,000 tonnes/year phthalic anhydride (PA) plant Millsdale, Illinois, US, from early October to end-October, 2020.

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 ScanPlast report, Overall production of polyvinyl chloride (PVC) reached 976,500 tonnes in 2020, up by 0.2% year on year. Only two producers managed to increase their PVC output
MRC

BP and Equinor seal deal to supply US with offshore wind

MOSCOW (MRC) -- BP completed the formation of its strategic US offshore wind partnership with Norway's Equinor, said the company.

Under the award, Equinor and incoming strategic partner BP will develop the 1,260 MW Empire Wind 2 and the 1,230 MW Beacon Wind 1 offshore wind projects. The execution of the procurement award is subject to the successful negotiation of a purchase and sale agreement.

Equinor and BP will also partner with the State of New York to transform the South Brooklyn Marine Terminal (SBMT) and the Port of Albany into large-scale offshore wind working industrial facilities.

“The U.S. East Coast is one of the most attractive growth markets for offshore wind in the world. The successful bids for Empire Wind 2 and Beacon Wind 1 represent a game-changer for our offshore wind business in the U.S. and underline Equinor’s commitment to be a leading company in the energy transition,” said Anders Opedal, CEO of Equinor.

The State of New York launched its second offshore wind solicitation in July 2020, seeking up to 2,500 MW of projects. Equinor is already developing the 816 MW Empire Wind Phase 1 wind farm which was selected in New York’s first-ever offshore wind solicitation in 2019 alongside Orsted and Eversource Energy’s Sunrise Wind project.

Empire Wind is located 15-30 miles southeast of Long Island and spans 80,000 ha, with water depths of between 65 and 131 feet. The lease was acquired in 2017 and is being developed in two phases. Beacon Wind is located 60 miles east of Montauk Point and 20 miles south of Nantucket and covers 128,000 ha. The lease was acquired in 2019 and has the potential to be developed with a total capacity of more than 2.4 GW.

The project, which was initially announced in September will be staffed equally from both companies once in in operation. This builds on BP’s strategy to become an integrated energy company, growing net renewable capacity from 2.5GW in 2019 to 20GW by 2025 and around 50GW by 2030.

The investment also contributes towards BP’s aim of increasing annual low-carbon investment ten-fold to around USD5bn a year by 2030.

We also remind that BP and Equinor confirmed they are shutting in production on their platforms, while Chevron, BHP and others said they are evacuating some personnel and considering decisions on production reductions.

Ethylene and propylene are feedstocks for producing 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.



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