Honeywell performance materials business reports fourth-quarter profits down 25.7% YOY

MOSCOW (MRC) -- Honeywell’s performance materials and technologies segment reports fourth-quarter profits down 25.7% YOY, to USD478 million, on sales down 10.5%, to USD2.5 billion, according to Chemweek.

Sales declined to on continued delays in Process Solutions automation projects as well as volume declines in smart energy and thermal solutions, and lower gas processing projects, catalyst shipments, licensing, and engineering due to softness in the oil and gas sector in UOP, partially offset by return to growth in Advanced Materials driven by demand for fluorine products. Segment margin contracted 380 basis points to 18.7% driven by the impact of lower sales volumes and mix, partially offset by productivity actions.

Honeywell’s net income declined 13.3% YOY, to USD1.4 billion. Adjusted earnings per share of USD2.07 was a penny higher YOY and beat the analysts’ consensus estimate of USD2.00, as reported by Refinitiv (New York). Net sales were down 6.3% YOY, to USD8.9 billion.

As MRC reported earlier, in May, 2020, Honeywell announced that Enterprise Products Partners L.P. will use Honeywell UOP’s C3 Oleflex technology in its second propane dehydrogenation plant, called "PDH 2". Located near Mont Belvieu, Texas, PDH 2 will produce 750,000 metric tons per year of polymer-grade propylene as part of Enterprise’s expansion of propylene manufacturing capacity.

We remind that in November, 2020, Honeywell announced Zhenhua Petrochemical Co. Ltd will use Honeywell UOP’s C3 Oleflex technology for propane dehydrogenation to process 1 million metric tons per year of polymer-grade propylene for a proposed plant in Dongying City, Shandong Province, China.

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

According to MRC's DataScope report, PP imports into Russia increased by 23% year on year to about 224,000 tonnes in 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Japanese refiner Idemitsu Kosan Co said on Friday it had extended its public tender offer for a smaller rival, Toa Oil Co, in which a US investment fund has been building up a stake, reported Reuters.

In a statement to the Tokyo Stock Exchange, Idemitsu said the tender would run until Feb. 15, as Toa Oil had revised its earnings forecast.

Idemitsu launched the tender in December to buy all the shares of Toa Oil at 2,450 yen each in a deal worth 15 billion yen (USD143 million).

Toa shares have since surged to trade above Idemitsu’s offer. By Thursday, asset manager Cornwall Capital Management had boosted its stake to 22.98%, a public filing showed, amassing a stake sufficient to block a bid.

Idemitsu, which already owns 50.12% of Toa, aims to acquire a further stake of at least 16.55% to succeed in its bid.

Shares of Toa Oil closed at 2,805 yen on Friday. (USD1=104.5500 yen)

As MRC informed earlier, Japan's Idemitsu Kosan took off-stream its naphtha cracker in Japan for a turnaround on September 7, 2020. The cracker remained under maintenance by end-October, 2020. Located at Tokuyama, Japan, the cracker has an ethylene production capacity of 690,000 mt/year and propylene production capacity of 110,000 mt/year. Idemitsu Kosan also operates another cracker in Chiba, Japan, with an ethylene production capacity of 410,000 mt/year.

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.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC

MOSCOW (MRC) -- Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, and Clariter, an international clean-tech company, today announced a strategic partnership to pursue a next-generation chemical recycling solution for products based on DSM’s Dyneema, an ultra-high-molecular-weight polyethylene (UHMWPE) fiber, said the company.

As a first step, sample products - including ropes, nets and ballistic materials made with Dyneema® - were successfully converted at Clariter’s pilot plant in Poland, demonstrating the recyclability potential of Dyneema® and underlining the active commitment of DSM Protective Materials to shape a more sustainable world.

In line with its ambitious sustainability targets, and following the successful launch of bio-based Dyneema® (mass balance), DSM Protective Materials is actively pursuing reuse and recycling solutions for end-of-life Dyneema®-based products. To drive technical recycling solutions, DSM Protective Materials and Clariter partnered to test the feasibility of using Dyneema® as a feedstock in Clariter’s chemical recycling process. Sample products made with Dyneema® were used in Clariter’s tests at its pilot plant in Poland. The positive results confirm the technical viability of transforming Dyneema®-based end-products into high-value, industrial grade, product families: oils, waxes, and solvents via Clariter’s patented 3-step chemical recycling process. These can be further used as ingredients to manufacture new end- and consumer products.

Moving forward, DSM Protective Materials and Clariter will continue to drive this initiative to shape a more sustainable world. Specifically, building on the success of the lab-scale trial, Clariter has scheduled commercial-scale trials at its facility in South Africa for 2021, with the aim to use Dyneema®-derived feedstock in its full-scale European plants that will be built in the coming years. In addition, DSM will continue to actively explore the possibilities of reducing the environmental impact of Dyneema® across all product life stages.

As per MRC, SABIC, a global leader in the chemical industry, has recently collaborated with DSM and Viscofan in the development of an innovative multi-barrier film for meat casings. The film combines layers of a SABIC’s certified circular polyethylene (PE) from its TRUCIRCLE portfolio and a circular polyamide (PA) from DSM Engineering Materials in a more sustainable packaging solution without compromising the high functional and aesthetic performance required in the fresh food packaging market.

According to MRC's ScanPlast report, December PE production in Russia decreased to 265,100 tonnes, whereas this figure was at 272,800 tonnes a month earlier, as ZapSibNeftekhim decreased its capacity utilisation in the first month of calender winter. Thus, overall PE production reached 2,987,000 tonnes in 2020, compared to 1, 857,600 tonnes a year earlier. Production of all PE grades increased, with low density polyethylene (LDPE) being the exception.
MRC

MOSCOW (MRC) -- Hexpol (Malmo, Sweden), a polymer compounder, says its net profit for the fourth quarter increased 36% year on year (YOY), to 456.0 million Swedish krona (US54.7 million), despite sales declining 9.8% YOY, to SKr3.40 billion, reported Chemweek.

Hexpol says that sales were impeded by negative currency effects, but volumes continued to increase during the fourth quarter compared with previous quarters of 2020, as well as compared with the corresponding quarter of 2019. EBIT increased 47% YOY, to SKr622 million supported by the company’s efforts to reduce direct and indirect costs during the quarter, Hexpol says.

The compounding business of Hexpol, which accounted for 93% of the company’s total sales in 2020, posted fourth-quarter revenue down 10% YOY, to SKr3.16 billion, due to negative currency effects and the impact that COVID-19 had on the business’s customers, the company says. However, Hexpol says that “during the fourth quarter we saw a clear improvement compared to the previous quarter in demand and increased volumes from especially the automotive industry but also from the building and construction industry.” Compounding EBIT increased 47% YOY, to SKr580 million.

The company’s engineered products sales amounted to Skr243 million, level with the corresponding quarter of 2019. The business’s sales were reduced by COVID-19, but to a lesser extent than for compounding. Its EBIT increased 45% YOY, to SKr42 million.

“The uncertainty going forward remains high, with restrictions and shutdowns, due to the COVID-19 pandemic. However, we believe that our strong customer focus in combination with our geographical closeness to our customer gives us opportunities to further build our market position. We also generate a very good cash flow, which strengthens our already strong financial position and gives us good conditions for continued growth and intensified acquisition agenda,” says Georg Brunstam, president and CEO of Hexpol.

As MRC informed before, in December 2019, polymer compounder Hexpol TPE, which has UK operations in Manchester, launched a new range of materials intended for cable sheathing applications in such sectors are telecommunications and electricity delivery.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% 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-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

Hexpol is a world-leading polymers group with strong global market positions in advanced polymer compounds (Compounding), gaskets for plate heat exchangers (Gaskets) and wheels made of plastic and rubber materials for forklifts and castor wheel applications (Wheels).
MRC

MOSCOW (MRC) -- Chinese lithium producer Sichuan Yahua Industrial has signed an agreement to supply battery-grade lithium hydroxide to US electric vehicle manufacturer Tesla, said Chemweeek.

The contract will run from 2021-25, with a total value of USD630-880mn. More details including the purchase volumes and prices were undisclosed. Lithium hydroxide is used to manufacture nickel-cobalt-manganese/nickel-cobalt-aluminium batteries, particularly those with high nickel content.

Sichuan Yahua in May launched a 20,000 t/yr lithium hydroxide production facility in Ya'an city in southwest China's Sichuan province. The firm in the same month said it would issue 1.5bn yuan (USD229.9mn) of non-public bonds to finance a lithium salts production project, with a designed capacity of 20,000 t/yr for battery-grade lithium hydroxide and 11,000 t/yr for lithium chloride.

Yahua produced 6,662t of lithium salts in 2019, up by 30pc from a year earlier, with sales rising by 66pc to 11,726t over the same period. Buoyant demand from the country's battery sector has prompted lithium producers to ramp up production over the past few years in China's fast-growing new energy vehicle market.

Tesla expanded the capacity of its Shanghai factory to 250,000 Model 3 cars/yr in the third quarter of 2020, up by 50,000 cars/yr from the second quarter. Production capacity at the Shanghai factory has risen by 67pc since the third quarter of 2019. The firm also plans to build a plant in Shanghai to produce charging piles to meet increasing demand from Chinese consumers for convenient and fast-charging services.

As per MRC, Piedmont is under way with initial development plans for a 160,000-metric tons/year spodumene mine and 22,700-metric tons/year lithium hydroxide project in North Carolina, with an integrated definitive feasibility study due to start in the first quarter of this year. In September it signed a five-year deal with Tesla to supply spodumene concentrate for high-nickel batteries.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% 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-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC