Repsol chemical business earnings rise on higher utilization, margins, sales

MOSCOW (MRC) -- Repsol has reported a EUR102-million (USD123 million) rise year on year (YOY) in fourth-quarter operating income in its chemicals business, due mainly to higher utilization rates, petrochemical margins, and sales, combined with reduced costs, reported Chemweek.

Specific figures for operating income and chemical sales for the quarter and comparative prior-year period were not provided.

The chemicals business sits within Repsol’s industrial segment, for which adjusted net income in the fourth quarter was EUR68 million, down 72% YOY from EUR242 million, but swinging sequentially from a loss of EUR67 million in the third quarter. The earnings decline was due to primarily to negative market conditions related to COVID-19 in the company’s refining activities, operations in Peru, and to a lesser extent in its trading, and wholesale and gas-trading businesses. “This was partially offset by the strong performance of chemicals and lower taxes due to a lower operating income,” it says. Sales totaled EUR6.69 billion for the quarter, down from EUR9.40 billion a year earlier, but improving from EUR5.89 billion in the third quarter.

Petchem product sales in the fourth quarter rose 11.5% YOY to 727,000 metric tons and were also up sequentially from 704,000 metric tons in the previous quarter.

Repsol reported a group net loss of EUR711 million for the fourth quarter, narrowing from a loss of EUR5.28 billion a year earlier, but widening sequentially from a loss of EUR94 million in the third quarter. The net loss was due mainly to provisions in its upstream business, it says. Adjusted net income was EUR404 million, flat YOY and up from EUR7 million in the third quarter. Fourth-quarter group sales declined to EUR8.97 billion, down 30% from EUR12.91 billion in the prior-year period, but up sequentially from EUR8.48 billion in the third quarter.

Looking forward, Repsol says it is “committed to efficiency in the industrial processes of its chemicals business, oriented towards a circular economy, with the goal of recycling the equivalent of 20% of its polyolefin production by 2030.”

As MRC wrote previously, in January 2020, Berry Global Group, Evansville, Indiana, announced that Madrid-based Repsol, its longtime supplier, will supply it with circular resins. The Spanish multienergy global company will supply Berry with International Sustainability and Carbon Certification (ISCC) Plus-certified circular polyolefins from its Repsol Reciclex range. According to a news release from Berry Global, these polyolefins are obtained by advanced recycling, enabled by the adoption of new chemical recycling technologies, of postconsumer plastic scrap not suitable for traditional recycling.

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). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Hengyi Industries has selected Univation's Unipol polyethylene (PE) process for a new world-scale PE plant that will be built at Hengyi's site in Palau Maura Besar, Brunei, according to Apic-online.

The 600,000-t/y PE unit will be integrated into a larger refinery and petrochemicals project, which includes a 280,000-b/d refinery and downstream production of ethylene, benzene, paraxylene, ethylene glycol, purified terephthalic acid, polypropylene (PP) and polyethylene terephthalate (PET).

The Unipol technology will allow Hengyi to produce a broad range of high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) products. A schedule for the project was not given.

Hengyi also selected Univation's advanced software platforms for both process control capability and virtual process training for the PE facility.

This Hengyi Industry project represents Brunei's first-ever world-class oil refinery and petrochemical complex and also marks and important milestone as the company's second significant capital investment for the Palau Muara Besar site, said Chen Lian Cai, chief executive of Hengyi.

As MRC informed before, in September 2020, China’s Hengyi Petrochemical Co Ltd announced plans to spend USD13.65 billion to build the second phase of a refinery and petrochemical complex in Brunei. Hengyi, one of the few private Chinese firms operating a refinery outside China, plans to add a 14 million tonne per year (280,000 barrel per day) crude oil refinery and a two million tpy paraxylene unit at its complex in Palau Muara Besar, the company said. It will also build a 1.65 million tpy ethylene plant and 2.5 million tpy purified terephthalic acid (PTA) facility. Paraxylene and PTA are key materials for making polyester fibre used in textiles and packaging.

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.
MRC

MOSCOW (MRC) -- Lotte Chemical Titan has resumed production at its fluidised catalytic cracking unit in Malayisia, reported Chemweek.

Thus, the unit producing up to 92,000 metric tons/year of ethylene, 160,000 metric tons/year of propylene was brought on-line on 6-7 February and recieved on-spec production on 6-7 February. It was shut on 15 January because of a technical issue.

As MRC informed earlier, Lotte Chemical Titan also shut its No. 2 cracker in Malayisia in mid-January because of a technical glitch. This cracker is located in Pasir Gudang, Malaysia, and produces 522,000 tons/year of ethylene and 360,000 tons/year of propylene.

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). Supply of exclusively PP random copolymer increased.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.
MRC

MOSCOW (MRC) -- 2020 was a difficult year for the world’s refineries as the coronavirus pandemic reduced refinery utilization and OPEC+ supply restraint narrowed crude price differentials, said Hydrocarbonprocessing.

Despite this, integrated refinery and petrochemical sites significantly outperformed their fuels-only peers, according to Wood Mackenzie. One of the most highly integrated sites in China, Hengli, generated a net income of more than USD1.4 B during 1Q to 3Q 2020, at a time when most of the refining industry was incurring significant losses.

Alan Gelder, Wood Mackenzie VP Refining, Chemicals & Oil Markets, said: “Over the coming years, the energy transition and the associated electrification of the passenger car fleet will slow the pace of global gasoline demand growth and drive it into decline after 2030.

“Meanwhile the versatility and durability of petrochemicals will see sustained demand growth, particularly in the developing economies of Asia, with global petrochemical feedstock demand growing by over 500,000 bpd each year over the next decade. This growth in petrochemical feedstocks will be tempered by an increase in global recycling rates as societies focus on reducing the environmental challenges of plastic waste.

"This switch in demand away from gasoline to petrochemicals promotes the adoption of refinery and petrochemical integration, particularly for new facilities in Asia and the Middle East. Currently, more than 30% of the world’s refineries are now integrated with commodity petrochemicals. These sites benefit from both a diversified product slate, and the potential to unlock greater value through economies of scale and operational cost synergies.

China has already outlined an integrated refinery and petrochemicals path that achieves earnings comparable with the most profitable refining sites in North America, says Wood Mackenzie. Two second-generation integrated sites, Hengli and RhongSheng, were brought online in 2019 and achieved full operations in 2020. Had they been fully operational in 2019, they would have been among the world’s top performing sites for 2020 when measured in earnings per barrel of crude processed, estimated at around USD10/bbl, according to Wood Mackenzie’s REM-Chemicals tool.

"The development of these sites and fast followers is to be closed watched as their deployment has global consequences. The new integrated sites in China are achieving a chemical yield of over 40 wt%. The development of such highly competitive sites makes it increasingly difficult for refineries in the Atlantic Basin to export their surplus gasoline, so the further growth of such sites will accelerate refinery closures in Europe and the U.S.

“Though China is currently a runaway leader in the integrated refinery and petrochemicals space, India’s significance as an investment location is expected to rise over the coming years. The Middle East has invested in expert refining and has recently become more interested in integration as a means of adding value to its crude exports because its supplies of gas-based feedstocks are dwindling,” added Gelder.

As per MRC, a winter storm has brought unusually cold temperatures, snow, and freezing rain to Texas and western Louisiana, forcing a large share of US light olefins production offline. As of the evening of Tuesday, 16 February, IHS Markit had confirmed the shutdown of at least 61% of US ethylene capacity, 59% of US chemical- and polymer-grade propylene (CGP, PGP) capacity, and 22% of US fluid catalytic cracking (FCC) capacity. Many plants that remained online were running at reduced capacity.

As MRC informed earlier, in late August 2020, Chevron Phillips Chemical shut down its Port Arthur, Texas cracker in preparation for Hurricane Laura. The unit's capacity of 855,000 mt/year. Chevron Phillips also shut its Cedar Bayou, Texas, crackers ahead of the storm. The company's Cedar Bayou crackers 1 and 2 have capacities of 837,000 mt/year and 1.7 million mt/year, respectively.

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). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Polynt Composites (Scanzorosciate, Italy) has announced a price rise in Europe for all its unsaturated polyester resins (UPRs), gelcoats, and vinyl esters, effective 1 March 2021 or as contracts allow, reported Chemweek.

Raw and auxiliary materials costs “are relentlessly increasing during the first months of 2021,” it says. Freight and logistic costs, as well as packaging costs, are also rising, it says.

Polynt’s full vinyl ester range will be increased by EUR300/metric ton (USD364/metric ton), while its UPRs, gelcoats, and ancillary products will rise by EUR200/metric ton.

The thermoset composites manufacturer imposed similar price increases in January for the same given reasons, and says it will “make every effort” to limit the impact of rising costs on its product pricing.

As MRC informed previously, in early March, 2020, Polynt announced that all its sites and activities in Italy were running smoothly and according to plan, despite the news about the Italian situation related to the spreading of the coronavirus in the country.

Polynt runs two maleic anhydride (MA) plants in northern Italy, including Bergamo’s 36,000 tonne unit in Lombardy and Ravenna’s 60,000 tonne plant on the east coast. The bigger production line at Ravenna had been operating at a reduced rate since March 2019 due to technical issues, the firm previously said. A new reactor ordered is expected to be operational in 2021. Polynt also produces phthalic anhydride at Bergamo and its San Giovanni Valdarno site, as well as plasticizers at San Giovanni Valdarno.

Maleic anhydride is a feedstock for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids and a number of chemicals for agriculture.

Plasticizers are substances introduced into a polymeric material to give it elasticity and plasticity during processing and operation. In particular, plasticizers are used to produce polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

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). Supply of exclusively PP random copolymer increased.
MRC