Huntsman earnings surge on strong MDI pricing

MOSCOW (MRC) -- Huntsman (The Woodlands, Texas) reports fourth-quarter adjusted net income of USD113 million, up 74% from USD65 million on strong results in the polyurethanes segment, reported Chemweek.

Adjusted earnings per share were USD0.51, beating the average analyst estimate of USD0.44 as compiled by Zacks Investment Research.

Sales totaled USD1.668 billion, up 0.7% YOY from USD1.657 billion. GAAP net income totaled USD360 million, up 17% year-over-year (YOY) from USD308 million.

Revenue in the polyurethanes segment totaled USD1.03 billion, up 5% YOY on higher average pricing for methylene di-para-phenylene diisocyanate (MDI), mainly in China and Europe, partially offset by lower sales volume, which stemmed from unplanned supplier outages. Adjusted EBITDA increased 65% YOY to USD201 million on higher MDI margins driven by higher pricing, partially offset by lower sales volumes. Volumes in building solutions and automotive increased YOY, a trend the company expects will continue in the first quarter, doubling adjusted EBITDA YOY.

Performance products revenue totaled USD265 million, down 5% YOY as sales volume and average selling prices declined owing to to weaker market conditions for several amines businesses. The slight decrease in Adjusted EBITDA declined 5% to USD41 million for the same reason. Huntsman expects first-quarter adjusted EBITDA to increase 10-15% YOY on improved volumes in Asia and the Americas.

Advanced materials revenue dropped 14% YOY to USD207 million as weakness, mainly in the aerospace and commodity markets, reduced sales volume. Adjusted EBITDA decreased due to lower sales volume, partially offset by lower fixed cost. Adjusted EBITDA dropped 36% YOY to USD27 million as the contribution of recently acquired CVC Thermoset Specialties was offset by the divestiture of the India-based DIY consumer adhesives business. The company expects a roughly 40% sequential increase in adjusted EBITDA on improvements in all markets.

Textile effects revenue declined 4% YOY to USD173 million on lower average selling price, the result of lower raw material cost, partially offset by higher sales volume, mainly in the Asia region. Adjusted EBITDA was flat at USD18 million as lower raw material and fixed costs offset the decline in revenue.

As MRC informed earlier, in late December, 2020, SK Capital Partners completed the acquisition of a 39.75% stake, roughly 42.4 million shares, in titanium dioxide maker Venator from Huntsman for roughly USD100 million. The deal includes a 30-month option for the purchase of Huntsman’s remaining approximate 9.5 million shares by SK at US2.15/share. Huntsman spun off Venator in a 2017 initial public offering.

We remind that Nanjing Jinling Huntsman, a joint venture between Huntsman and Sinopec Jinling, shut its propylene oxide plant in Nanjing (Nanjing, Jiangsu Province, China) on November 1, 2020, for scheduled maintenance. This plant with a capacity of 240,000 tonnes/year of propylene oxide was closed until approximately 25 November.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of approximately USD7 billion. The company's chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operates more than 70 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 9,000 associates within our four distinct business divisions.
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Elementis signs sales agreement with UK chemtech firm

MOSCOW (MRC) -- Elementis says it has entered into an exclusive agreement with Aqdot (Cambridge, UK), a supramolecular chemtech company, to sell Aqdot’s odor capture and smart fragrance release solution for use in anti-perspirant and deodorant product formulations, reported Chemweek.

Further details have not been disclosed.

Aqdot’s solution is “complementing our market-leading portfolio of actives and ingredients for anti-perspirant and deodorant applications,” says Stijn Dejonckheere, senior vice president/personal care at Elementis.

As MRC informed before, in December 2020, Brenntag said it signed a deal with Elementis under which Brenntag will distribute the company’s products in coatings, adhesives, sealants, inks and construction materials in Canada. Exact terms of the deal were not disclosed. The product range includes rheology modifiers, defoamers, and various types of additives.

We remind that in April 2020, Brenntag sai it had acquired the operating assets of Suffolk Solutions’ (Suffolk, Virginia) caustic soda distribution business. Financial terms of the deal have not been disclosed.

We also remind that November production of sodium hydroxide (caustic soda) in Russia was 111,000 tonnes (100% of the basic substance) versus 108,000 tonnes a month earlier. Russia's overall output of caustic soda totalled 1,165,600 tonnes in the first eleven months of 2020, down by 1.3% year on year.

Elementis plc is one of the UK's largest speciality chemicals business. The Company comprises three businesses: Specialty Products, Surfactants and Chromium. Both Specialty Products and Chromium hold leading market positions in their chosen sectors. Elementis employs over 1,200 people at more than 30 locations worldwide.
MRC

Venezuela receives more airlifts of refinery materials from Iran

MOSCOW (MRC) -- Venezuela has begun to receive a second round of airlifts of materials from ally Iran to help its troubled oil refineries to produce fuel, reported Reuters with reference to three people familiar with the matter and publicly-available flight-tracking data.

The shipment of catalysts to the 955,000 barrel-per-day (bpd) Paraguana Refining Complex (CRP) in western Venezuela comes after Iran sent more than a dozen flights to the area last year to help restart the 310,000 bpd Cardon refinery and alleviate acute gasoline shortages in the OPEC nation.

Iran has also sent three flotillas of vessels carrying fuel to Venezuela, whose oil industry has collapsed after years of underinvestment and mismanagement, as the two US adversaries boosted economic ties in an effort to stay afloat despite escalating sanctions from Washington.

The United States in January 2019 sanctioned state oil company Petroleos de Venezuela as part of a push to oust President Nicolas Maduro, accused of rights violations and rigging his 2018 re-election. Washington has heavy sanctions on Iran to try to get Tehran to abandon its nuclear program.

On Feb. 11, an Airbus plane belonging to Venezuelan state-run airline Conviasa arrived at the Las Piedras airport on the Paraguana peninsula after taking off from Tehran on Feb. 10, with a stopover in Belgrade, according to air traffic monitoring website flightradar24.com.

The plane was carrying catalysts intended for PDVSA, said the three people, who spoke on the condition of anonymity. More than a dozen further similar flights are expected, the people said.

Neither PDVSA nor Venezuela’s information ministry immediately responded to requests for comment.

Currently, Cardon is the only one of Venezuela’s refineries producing gasoline, with its naphtha reformer and catalytic cracking units producing around 60,000 bpd, one of the people said. The nearby 645,000 bpd Amuay refinery is producing naphtha to serve as a feedstock for Cardon’s gasoline units.

The catalysts are expected to help restart gasoline production at Amuay, whose catalytic cracker has been offline since late 2019, in anticipation of planned maintenance at Cardon, the person said.

As MRC informed earlier, pressured by strict US sanctions, Venezuela's oil exports plunged by 376,500 barrels per day (bpd) in 2020, according to Refinitiv Eikon data and internal documents from state-run PDVSA, financially squeezing President Nicolas Maduro.

We remind that in December 2020, a tanker chartered by the National Iranian Oil Company (NIOC) was loading Venezuelan crude for export, documents from state-run PDVSA show, providing evidence of the two countries' latest tactics to expand their trade in defiance of US sanctions. Venezuela and Iran had deepened their cooperation last year as Venezuela had exchanged gold and other commodities for Iranian food, condensate and fuel.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
MRC

U.S. expected to return to being a net petroleum importer in 2021 and 2022

MOSCOW (MRC) -- More petroleum (including crude oil and refined products) was exported from the United States in 2020 than was imported. U.S. net imports (gross imports minus gross exports) of petroleum declined from 670,000 barrels per day (bpd) in 2019 to an estimated -700,000 bpd in 2020, said Hydrocarbonprocessing.

The U.S. Energy Information Administration’s (EIA) February 2021 Short-Term Energy Outlook (STEO) estimates that 2020 marked the first year that the United States was a net petroleum exporter on an annual basis. Declining net imports of crude oil primarily drove this change from being a net importer to a net exporter. In 2021 and 2022, EIA expects the United States to return to being a net petroleum importer, averaging 230,000 bpd in 2021 and 550,000 bpd in 2022.

The STEO model forecasts petroleum trade in terms of net imports rather than gross imports and gross exports. In 2020, 81% of the decline in net imports of petroleum was crude oil. EIA expects that increasing crude oil imports will drive the growth in net petroleum imports in 2021 and 2022 and more than offset declines in refined product net imports. In 2020, net imports of crude oil fell to a low of 2.3 MMbpd in the third quarter, down from 3.9 MMbpd in the third quarter of 2019. EIA forecasts that net imports of crude oil will increase, averaging 3.7 MMbpd in 2021 and 4.4 MMbpd in 2022. EIA expects that more imports of crude oil will be needed because crude oil inputs to U.S. refineries will increase more than domestic crude oil production.

Total U.S. demand of petroleum products—as measured by product supplied— declined by an estimated 2.5 MMbpd (12%) in 2020. U.S. petroleum demand dropped significantly in the first half of 2020 because of responses to the COVID-19 pandemic, but it increased in the second half of the year. EIA expects petroleum consumption to continue to recover from the effects of the pandemic as the vaccines for COVID-19 become more widely distributed and travel and economic activity increase. EIA forecasts total U.S. petroleum demand will grow by 1.4 MMbpd (7%) in 2021 and 1.0 MMbpd (5%) in 2022.

In the second quarter of 2020, U.S. refiners responded to the pandemic-driven drop in petroleum product consumption, high inventories, and reduced profitability by implementing steep cuts in refinery runs (Figure 2), which dropped 2.6 MMbpd to an average of 13.2 MMbpd. In the third and fourth quarters of 2020, product consumption increased, and refiners increased runs to average 14.0 MMbpd in the second half of 2020, which was still less than the second half of 2019 average of 16.6 MMbpd. Annual refinery inputs of crude oil declined 2.3 MMbpd (14%) in 2020. EIA expects refinery runs to increase by 0.9 MMbpd (6%) in 2021 and by 1.1 MMbpd (7%) in 2022 as domestic and foreign petroleum demand increase.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
MRC

Chlorine output in Europe rises for third consecutive month

MOSCOW (MRC) -- Europe’s chlorine industry has recorded a third consecutive month of year-on-year (YOY) growth in output in 2020, according to the latest figures from Euro Chlor, the European chlor-alkali industry association, said Chemweek.

Total chlorine production in December rose to 807,437 tonnes, up 6.1% on the prior-year period’s monthly total of 760,958 metric tons. The daily average of 26,046 metric tons in December was however down slightly, by 0.03%, on November 2020’s total of 26,054 metric tons.

Chlorine production capacity utilization in Europe during December rose 3.9% compared with the prior-year period to 82.1% and was flat with November 2020, which was itself the highest utilization rate achieved since March last year.

Caustic soda stocks in Europe declined 6.2% to 207,739 metric tons in December from the prior month, and were 17,893 metric tons lower YOY.

For the full year 2020, chlorine output in Europe fell 2.3% compared to 2019 to 9.19 million metric tons, while capacity utilization dropped 3.1% YOY to 79.1%.

Euro Chlor’s figures are drawn from the EU-27 countries plus Norway, Switzerland, and the UK. The association represents 38 companies producing chlorine in 19 countries.

As per MRC, Industria Quimica del Istmo (Iquisa; Mexico City, Mexico) hired Bluestar Chemical Machinery Co. (BCMC) to build a membrane-cell chlor-alkali plant in Coatzacoalcos, Mexico, with capacity to produce 150,000 metric tons/year of chlorine. BCMC, which announced the news Monday, says it will supply its proprietary electrolysis technology for the project, which is to begin construction this month and to be completed within two years.

We remind that November production of sodium hydroxide (caustic soda) in Russia were 111,000 tonnes (100% of the basic substance) versus 108,000 tonnes a month earlier. Russia's overall output of caustic soda totalled 1,165,600 tonnes in the first eleven months of 2020, down by 1.3% year on year.
MRC