Hexpol profits grow on cost-reduction efforts

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

MOSCOW (MRC) -- US oil major Exxon Mobil Corp reiterated its support for methane regulations, a day after President Joe Biden’s administration came out with a slew of executive orders to address climate-warming greenhouse gas emissions, reported Reuters.

The orders map out the direction for the Democratic president's climate change and environmental agenda and reverse policies of his Republican predecessor, Donald Trump, who sought to maximize US oil, gas and coal output by removing regulations and easing environmental reviews.

Methane is the main component of natural gas. It is a more potent greenhouse gas than carbon dioxide but does not remain in the atmosphere as long.

Exxon said that it has outlined emission reduction plans to reduce methane intensity by up to half compared to 2016 levels, which is expected to result in a 40 to 50 % decrease in absolute methane emissions globally.

The largest US oil producer, under increasing pressure from investors and climate change activists, reported the emissions that result when customers use its products, for the first time this month.

The American Petroleum Institute, a powerful fossil fuel lobby, also came in support with Biden's Environment Protection Agency earlier this week, after previously supporting the Trump administration rolling back methane regulations.

As MRC informed earlier, last year, Exxon Mobil Corp announced it will lay off about 1,900 employees in the United States as the COVID-19 pandemic batters energy demand and prices.

We remind that ExxonMobil has undertaken a planned shutdown at its cracker in Singapore. The company halted operations at the cracker for maintenance on September 14, 2020. The cracker was expected to remain off-line till end-October, 2020. Located at Jurong Island, Singapore, the cracker has an ethylene production capacity of 1 million mt/year and a propylene production capacity of 450,000 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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.
MRC

MOSCOW (MRC) -- Repsol says it has joined a consortium aiming to develop Europe’s first 100-megawatt (MW) alkaline electrolyzer plant for the production of low-carbon hydrogen, said Chemweek.

The consortium’s H24All project has applied for EU Green Deal funding for further research and development work on the plant, which would be connected to one of Repsol’s industrial sites, it says. The proposed site location was not given. The consortium is aiming to develop, build, operate, and demonstrate the sustainability of the 100-MW high-pressure electrolyzer to meet market requirements for competitive low-carbon hydrogen production, it says.

The project’s objective is to reduce the cost of producing renewable hydrogen to around EUR3/kilogram (USD3.6). “The economic and business-modelling case will provide quantitative evidence that will reduce the risk for other hydrogen infrastructure deployment across Europe,” Repsol says. The project is expected to involve three years of R&D and construction, with two further years for a demonstration and validation phase.

The consortium features partner companies from across the hydrogen value chain in Belgium, Denmark, Germany, Norway, Spain, and Turkey, including research centers, material suppliers, engineering firms, electro-intensive industries, energy and automotive companies, universities, and industry associations.

Repsol has previously stated its aim of achieving 400 MW of renewable hydrogen production by 2025 and being net-zero in terms of carbon emissions by 2050. The company’s refining business is currently the largest consumer and producer of hydrogen in Spain, it says.

As MRC reported earlier, Repsol shut down its cracker in Tarragona (Spain) for maintenance in the fourth quarter of 2019. The turnaround at this steam cracker, which produces 702,000 mt/year of ethylene and 372,000 mt/year of propylene, was pushed back from Q3 2019. The exact dates of maintenance works were not disclosed.

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

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

MOSCOW (MRC) -- Phillips 66 reported a wider-than-expected loss on Friday, as rising oil prices and lower fuel demand hit the US refiner's marketing and specialties business, reported Reuters.

While crude prices rallied more than 20% in the last quarter, driven by optimism over the development of COVID-19 vaccines, refiners struggled with uneven demand for fuel and related products as fresh lockdowns due to a resurgence in COVID-19 infections threatened that recovery.

Consumption of liquid fuels globally is estimated to have fallen by 9 million barrels per day in 2020, according to U.S. Energy Information Administration. Data also shows that travel on U.S. roads also fell 11% in November from the year-ago period, after a 9% drop in October.

Like rival Valero, Phillips 66 also expects COVID-19 vaccination efforts to boost economic recovery.

Phillips 66 said realized marketing fuel margins declined 38.6% in the fourth quarter to USD1.37 per barrel in the United States, and were down 19.3% at USD5.07 per barrel internationally, on a sequential basis.

The Marketing and Specialties segment sells gasoline, diesel and aviation fuel through various outlets.

Refined product exports in the reported quarter also fell to 103,000 barrels per day (bpd) from prior quarter's 139,000 bpd.

The company reported adjusted net loss of USD507 million, or USD1.16 per share, up from USD1 million, or 1 cent per share, in the third quarter.

Analysts were expecting a loss of USD1.06 per share, according to Refinitiv IBES.

As MRC wrote before, in October 2020, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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