Kazanorgsintez reduced revenue by 13% last year

MOSCOW (MRC) - Kazanorgsintez (KOS, part of the TAIF Group), a major Russian polymer producer, has cut revenue by 13% to RUB 62.8 billion in 2020, Business Online reports.

The indicators of the Tatarstan plastic manufacturer cannot be considered in isolation from the general market situation. And the PPI-ST index, reflecting the dynamics of prices for large-tonnage plastics, sank 9% last year, from 99.4 thousand rubles per ton to 90.7 thousand rubles. The minimum indicator over the past two years fell on June 2020 with its 81.1 thousand rubles, however, the quotes, having found the bottom, quickly went up and closed the year at the maximum values ??in 24 months at the level of 107.1 thousand rubles.

The plastics market has moved in line with the general environment in the world since the announcement of the COVID-19 pandemic. Also, prices for plastics correlate with prices for natural gas, which is the main raw material for their production. In the second half of 2019 and exactly until June 2020, quotations on the gas market decreased to USD1.43 per million BTU, and then sharply surged upward, ending the year at USD2.55 per million BTU.

Within the Russian Federation, prices were relatively stable due to the specifics of Russian pricing. At the same time, KOS's foreign colleagues get access to raw materials at spot prices, which means that they could make plastics cheaper in 2019 and in the first half of 2020, which put pressure on KOS's prices.

Unlike Nizhnekamskneftekhim, KOS receives the lion's share of revenue in the domestic market. At the end of last year, the ratio of its sales in Russia and abroad amounted to 51 billion to 12 billion rubles against 61 billion to 12 billion at the end of 2019.

Compared to competitors in the West, Russian large companies show slightly better performance due to the floating and periodically sinking ruble exchange rate, which allows them to generate more revenue (in national currency, of course) and save on expenses within the country - such as electricity, rail transportation, purchases the same ethylene and further down the list. At the same time, over the year, the domestic currency fell in price against the US dollar by an average of 11% to 72.1 rubles per dollar.

In physical terms, it can be noted that the production capacity at the polycarbonate plant has increased from 65 thousand tons by more than half. The modernization was carried out in two stages: in August - September 2019 and in October - November 2020. According to the results of the first stage of renovation, the productivity was about 88 thousand tons of polycarbonates per year, after the second it was increased to 100 thousand. All modernization works were carried out during the periods of preventive scheduled repairs, without additional production interruptions. As a result, the revenue from the sale of polycarbonates in the first 9 months of 2020 increased by 22.6% to 7.8 billion rubles.

Profit of KOS over the past year decreased by 26%, or 3 billion, to 8.6 billion rubles and returned (adjusted for the exchange rate) in 2014. Although the final result could be much weaker, since the company received only 11.1 billion rubles of operating profit from its core activities - 35%, or 5.9 billion rubles, less than in 2019. Fortunately, the balance of other items was dramatically improved. The negative balance of other income and expenses decreased by 2.26 billion to 320 million rubles. The key role was played by exchange rate differences: negative ones decreased from 1.71 billion to 846 million rubles, while positive ones increased from 315 million to 1.47 billion rubles.

Kazanorgsintez's revenue for 2020 under RAS fell by almost 14%, operating profit - by 35%, and net profit decreased by 26%. At the end of 9 months of 2020, the company showed a decrease in revenue by almost 20% compared to the same period in 2019, respectively, the fourth quarter of 2020 turned out to be the most successful for it. In principle, the entire global petrochemical industry has suffered, as both prices and sales have fallen. The coronavirus pandemic and the related restrictions on business, which persisted in European countries until the end of 2020 and are still ongoing in some countries, have reduced the demand for petrochemical products.

Earlier it was reported that Kazanorgsintez began a project to build a production of polyethylene-vinyl acetate (EVA) and high-pressure polyethylene (LDPE). The capacity of the new production will be 100 thousand tons of EVA / LDPE per year. The Japanese company Sumitomo Chemical will act as the licensor. The production complex will be located on a free site, inside the territory of Kazanorgsintez. To implement the project, it is planned to use the company's own funds and attract debt financing.

According to MRC's DataScope, in January of this year, imports of EVA to Russia increased by only 0.07% to 3.084 thousand tons from 3.087 thousand tons in the same month of the previous year, but by the end of January-December 2020, imports of this type of copolymer ethylene in the Russian Federation decreased by 3.41% - to 38.17 thousand tons (39.52 thousand tons in January-December 2019).

Kazanorgsintez PJSC is one of the largest polyethylene producers and the only manufacturer of polyethylene
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1. March oil storage increased in China

MOSCOW (MRC) -- China boosted the flow of crude oil into storage tanks in March as strong imports and domestic output exceeded an increase in the volume of fuel being processed by refiner, said Hydrocarbonprocessing. ,About 1.63 million barrels per day (bpd) of crude was directed into commercial and strategic inventories last month, up from about 920,000 bpd in the first two months of 2021, according to calculations based on official data. The increase in storage was mainly a reflection of rising crude imports in March, which reached 11.69 million bpd, above the 11.08 million bpd reported by customs for the first two months of the year. Domestic crude output was also higher in March at 4.02 million bpd, up 3.3% from the same month last year, and also above the 3.89 million bpd in the first two months of 2021. China doesn't disclose the volumes of crude flowing into strategic and commercial stockpiles. But an estimate can be made by deducting the amount of crude processed from the total amount of crude available from imports and domestic output.


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MOSCOW (MRC) -- Thai Polyethylene, part of Siam Cement Group (SCG), plans to resume operations at its low density polyethylene (LDPE) plant in Thailand in early May, 2021, after a scheduled turnaround, reported S&P Global with reference to a company source.

The company has halted operations at this unit on 9 March, 2021. The unit was initially expected to restart on 22 March, 2021.

Located at Map Tha Phut in Thailand, the plant has a production capacity of 160,000 mt/year of LDPE.

As MRC wrote previously, SCG Chemicals ,took its high density polyethylene (HDPE) plant off-stream for a maintenance turnaround on November 26, 2019. It remained under maintenance until December 14, 2019. Located in Map Ta Phut, Thailand, the plant has a production capacity of 200,000 mt/year.

According to MRC's ScanPlast report, February estimated LDPE consumption in Russia decreased to 36,580 tonnes from 61,210 tonnes a year earlier. Russian producers raised their export LDPE shipments because of more attractive prices in comparison with the domestic market. Russia's estimated LDPE consumption totalled about 97,790 tonnes in the first two months of 2021, up by 19% year on year.

SCG Chemicals is a subsidiary of SCG and is one of SCG’s 3 core businesses consisting of Chemicals, Paper and Cement-Building Materials. SCG embarked upon the chemicals business in 1989. At present, SCG Chemicals manufactures and supplies a full range of petrochemical products ranging from upstream petrochemicals such as Olefins, intermediate petrochemicals such as Styrene Monomer, PTA, and MMA, to downstream petrochemicals such as Polyethylene, Polypropylene, Polyvinyl Chloride, and Polystyrene resins. SCG Chemicals is now one of the largest integrated petrochemical companies in Thailand and a key industry leader in the Asia-Pacific region.
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MOSCOW (MRC) -- Formosa Plastics Company (FPC), part of Formosa Petrochemical, is in plans to take off-stream its No. 1 cracker in Mailiao, Taiwan for a scheduled turnaround on 8 June, 2021, reported Reuters with reference to the company's spokesman.

This cracker with an annual capacity of 700,000 tons of ethylene and 350,000 tons of propylene is expected to remain shut unitl mid-July, 2021.

As MRC wrote before, the company unexpectedly shut its No.1 cracker in Mailiao on 12 April 2021 due to an unspecified technical issue and resumed operations on 19 April 2021. FPC expects to restore 100% capacity utilisation at this facility in a couple of days after the restart.

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

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
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MOSCOW (MRC) -- PT Polytama Propindo is ramping up operating rates at its polypropylene (PP) plant in Balongan, Indonesia and might be able to achieve normal operations by the end of this week, reported CommoPlast with reference to market sources.

They said that the company is now in middle of this process at this facility that can produce 380,000 tons/year of PP.

As MRC informed earlier, on 29 March, 2021, PT Polytama Propindo took its PP plant in Balongan offline after a fire broke out at the Pertamina's refinery at the nearby location that disrupt the propylene supply to the company.

PT Polytama Propindo has reportedly restarted its PP plant in Balongan over the weekend after three weeks of shutdown. Pertamina has successfully resumed the propylene supply last Thursday, 15 April 2021, allowing Polytama to restart the operation at its PP plant.

We remind that in 2017, the company conducted maintenance at this plant from end-January to mid-February.

According to MRC's ScanPlast report, PP shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

PT Polytama Propindo was established in 1993 as a signifcant manufacturer of polypropylene resin (PP resin) in Indonesia. Polytama is taking a leading role in Indonesia's fast growing economy by utilizing the country wealth i.e. the secondary processing yield of oil and natural gas , through industrial manufacturing. The factory located in Balongan, Juntinyuat district, Indramayu-West Java, using one of the best technology in the world, the Spheripol technology of Montell (now LyondellBasell), with an installed capacity of 100,000 metric tons per year.

Two years later the construction of the factory was completed on July 27, 1995 and PT Polytama Propindo started the production (the product trade name: Masplene), the supply of raw material propylene with high purity from PERTAMINA refinery UP-VI (now RU-VI ) Balongan. In 1996, and the plant capacity grown to 180,000 tons per year. Response to the addition of propylene production capacity of PERTAMINA RU-VI in 2004, PT Polytama Propindo increased its capacity to 200,000 tons per year.
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