Saudi Aramco beats quarterly profit forecast with 30% rise in Q1 2021 earnings

MOSCOW (MRC) -- State-run oil producer Saudi Aramco beat analysts' forecasts with a 30% rise in first-quarter net profit, helped by strong oil prices, reported Reuters.

Earnings by global energy companies such as Exxon Mobil have climbed on the back of rising crude prices, which are up by about a third this year, as fuel demand recovers from the pandemic and as a global surplus of crude shrinks.

"Given the positive signs for energy demand in 2021, there are more reasons to be optimistic that better days are coming," Amin Nasser, chief executive of the world's top oil exporter, said in a statement.

"And while some headwinds still remain, we are well-positioned to meet the world's growing energy needs as economies start to recover," he said.

Net income rose to USD21.7 billion for the quarter to March 31 from USD16.7 billion a year earlier. Aramco was expected to post net profit of USD19.48 billion, according to an average of estimates by five analysts.

Aramco, which listed in 2019 with the sale of a 1.7% stake mainly to the Saudi public and regional institutions, said earnings were boosted by stronger crude prices and higher refining and chemicals margins, helping offset lower production.

Aramco, which reduced its output as part of that pact and as a result of Saudi Arabia's additional voluntary production cuts, said global demand for petroleum products was recovering from its lows in 2020 but remained below pre-pandemic levels.

As MRC informed earlier, in October 2019, McDermott International announced that it had been awarded a contract by Saudi Aramco and Total Raffinage Chimie (Total) for their joint venture (JV) Amiral steam cracker project at Jubail, Saudi Arabia. Amiral is a JV in which Aramco holds 62.5% and Total the rest. The plant, designed to produce 1.5 million metric tons/year (MMt/y) of ethylene, will be one of the world's largest mixed-feed crackers.

Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

COVID-19 - News digest as of 07.05.2021

1. May prices of European PVC rise by three-digit amount for CIS markets

MOSCOW (MRC) -- Negotiations on prices of European polyvinyl chloride (PVC) for May shipments to the CIS markets began this week. An acute shortage continued to weigh heavily on export prices of European producers. As a month earlier, European producers announced a price increase of EUR100/tonne and higher, according to ICIS-MRC Price report. May contract price of ethylene was agreed up by EUR5/tonne from the previous month, which theoretically allowed to talk about the same net cost of PVC production, compared to April. But since last year, a shortage of resin both in the domestic market and in a number of export directions has been the main factor in the pricing of producers in Europe. And the acute shortage of polymer in the market allowed to achieve a three-digit increase in domestic and export PVC prices. European producers announced an increase in their export prices for the CIS countries by EUR100/tonne and higher in May.


MRC

Thirteen refineries in the US exceeded benzene emissions limits in 2020

MOSCOW (MRC) -- Thirteen US oil refineries released the cancer-causing chemical benzene in concentrations that exceeded federal limits last year, reported Reuters with reference to government data published by the green group Environmental Integrity Project (EIP).

The study is based on the second full year of data reported by US refineries since the Environmental Protection Agency (EPA) in 2015 began requiring continuous monitoring of air pollutants around plants to protect nearby communities, many of which are disproportionately poor, Black and Hispanic.

In 2019, eleven refineries made the list, EIP said.

For eight of the 13 refineries, benzene levels exceeded the EPA standard of nine micrograms per cubic meter of air at the fencelines at the end of every quarter in 2020, according to the report.

When refineries monitor results that exceed the action level, the program requires them to undertake root cause analyses and corrective actions to reduce benzene, the EPA said in a statement.

The agency said it was "committed to reducing benzene and other air toxic emissions from refineries and protecting those communities most at risk from air toxics."

Louisiana was home to five of the refineries on the EIP list -the largest share of any U.S. state, according to the report.

The highest emitter of benzene in 2020 was Delek's Krotz Springs, Louisiana refinery, which averaged more than 31 micrograms per cubic meter last year - more than three times the EPA's action level, according to EIP.

A spokesperson for the refinery said the company had implemented a number of measures in September 2020 to reduce benzene emissions, and anticipates the rolling 12-month average will fall below nine micrograms per cubic meter by this summer.

Four other refineries on the list were in Louisiana - PBF Chalmette, Phillips 66 Lake Charles, Phillips 66 Alliance, and Shell Norco.

In neighboring Texas, Total Port Arthur, Marathon Galveston Bay, and Citgo Corpus Christi East exceeded the federal level. Other refineries included Shell Chemical Mobile in Alabama, HollyFrontier Lovington and HollyFrontier Artesia in New Mexico, and Marathon Catlettsburg in Kentucky.

As MRC informed earlier, Marathon Petroleum is at an impasse in negotiations with the local Teamsters union at its 104,000 barrel-per-day St. Paul Park, Minnesota, refinery. Marathon said in a letter dated April 29 the two parties are at an impasse with respect to "non-starter" proposals made by the union and other proposals made in the refiner's last, best and final offer the union in March.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

Trinseo raises May PS, ABS and SAN prices in Europe

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN) in Europe, according to the company's press release as of May 5.

Effective May 1, 2021, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR105 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR105 per metric ton;
- MAGNUM ABS resins - by EUR160 per metric ton;
- TYRIL SAN resins - by EUR170 per metric ton.

As MRC informed before, Trinseo last raised its prices for all PS and ABS on April 1, 2021, as stated below:

- STYRON GPPS -- by EUR330 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech HIPS - by EUR330 per metric ton;
- MAGNUM ABS resins - by EUR300 per metric ton
- TYRIL SAN resins - by EUR350 per metric ton.

According to ICIS-MRC Price report, in Russia, Nizhnekamskneftekhim's PS prices remained unchanged in May. Prices of Nizhnekamskneftekhim's GPPS were in the range of roubles (Rb) 192,000-203,000/tonne, CPT Moscow, including VAT, whereas HIPS prices were at Rb196,000-207,000/tonne CPT Moscow, including VAT. At the same time, May prices of Penoplex's material fell by Rb15,000/tonne to Rb204,000-206,000/tonne CPT Moscow, including VAT.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.
MRC

Epsilyte raises May EPS prices on higher feedstock costs

MOSCOW (MRC) -- Epsilyte (The Woodlands, Texas), a leading North American producer of Expandable Polystyrene (EPS), has announced a rise in its prices for all EPS grades for May shipments, said the company.

The price of the company's EPS grades increased by 8 cents/pound (cts/lb) or USD176/tonne, effective 1 May, 2021 or as contracts permit.

The present adjustment is necessary to keep pace with escalating feedstock costs.

As MRC reported earlier, Epsilyte raised its April EPS prices in the region by 10 cts/lb or USD220/tonne.

EPS is a rigid form of polystyrene (PS) used in insulation foams for the construction industry as well as for packaging.

According to ICIS-MRC Price report, in Russia, at the end of last week, Plastik, Uzlovaya announced a roll-over of its EPS prices at Rb158,000-160,000/tonne CPT Moscow, including VAT. The producer said customers did not accept high prices of material, therefore, the current prices of material might be reduced after the holidays.

At the same time, prices for SIBUR-Khimprom's material were in the range of Rb157,000-165,000/tonne CPT Moscow, including VAT, at the beginning of the month.

Epsilyte is owned by private equity firm Balmoral Funds (Los Angeles, California).
MRC