Asahi Kasei FY2020 net profit falls nearly by a quarter on weak materials business

MOSCOW (MRC) -- Asahi Kasei’s net profit for the fiscal year ending March 2021 slumped by 23.2%, weighed down by weakness in its materials business, and as the company booked a one-off loss for the period, as per the Japanese producer's statement.

The materials segment was hit by global economic deterioration amid the coronavirus pandemic.

Sales for the segment declined by 9.3% year on year to Y991.2bn, with operating profit falling by 28% to Y66.5bn.

“Performance recovered from the second quarter with recovery of automotive-related markets and recovery of petrochemical market prices, but there was a significant impact from the pandemic especially in the first quarter,” Asahi Kasei said.

Meanwhile, the sharp decline in net income was caused by an extraordinary loss of Y22.3bn for the fiscal year 2020 incurred because of a semiconductor plant fire.

For the fiscal year ending March 2022, Asahi Kasei expects higher sales and operating income, backed by “significant recovery of performance in Material”, aided by improving automotive, petrochemicals and apparel-related markets.

As MRC informed before, in July 2019, Asahi Kasei decided to expand its plant for the artificial suede LamousTM in Nobeoka, Miyazaki Prefecture, Japan, by four million m2/year, increasing the total production capacity to 14 million m2/year upon completion in 2021.

Asahi Kasei Corporation is a multinational Japanese chemical company. Its main products are chemicals and materials science. It was founded in May 1931, using the paid in capital of Nobeoka Ammonia Fiber Co., Ltd, a Nobeoka, Miyazaki based producer of ammonia, nitric acid, and other chemicals. Now headquartered in Tokyo, with offices and plants across Japan, as well as China, Singapore, Thailand, USA and Germany.
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MOSCOW (MRC) -- Efforts to get fuel supplies to areas in the United States facing shortages have been slowed because shipowners have mothballed US-flagged oil tankers that can make coastal voyages, reported Reuters with reference to shipping sources.

The shutdown of the Colonial Pipeline network to thwart a cyber attack has disrupted nearly half the East Coast's fuel supply and left parts of the southeast facing a severe shortage of gasoline and diesel. Colonial said it began to restart on Wednesday but warned it would take several days for fuel supply chain to return to normal.

One way to alleviate the shortage would be to transport fuel via ship from the refineries on the Gulf coast that make the fuel that typically goes through the pipeline. The ships could carry the fuel to the cities and states on the East Coast that need it.

Only US-flagged tankers are permitted to make voyages carrying US goods along the coastline of the United States, under legislation known as the Jones Act.

Several of the roughly 60 vessels in the US-flagged tanker fleet, which mostly include tankers and barges, have been taken out of service because of slow demand before the Colonial Pipeline shutdown, according to company executives and market sources. Idled tankers would take a minimum of 10 days to be restarted, said a spokesperson for Jones Act shipping company Overseas Shipholding Group Inc.

The US government is considering waiving the Jones Act restrictions under emergency measures so that more ships can make the journey.

Refiners and wholesalers have provisionally secured at least three foreign flagged vessels in the event a Jones Act waiver is issued by the US government, according to three sources familiar with the matter. "Nothing is moving yet it's all just in case," said one shipbroker.

Even with a Jones Act waiver and finding international ships to charter, only a few ports in the worst affected regions in the US Southeast, such as in Florida and Savannah, Georgia, are able to receive large tankers, experts said.

As MRC wrote previously, Valero Energy chartered an oil products' tanker for storage in the US Gulf Coast on 7 May amid a cyber attack that shut the Colonial pipeline, the biggest US fuel pipeline. The tanker, called the Nave Titan, is currently in the Mississippi River in southern Louisiana, according to Refinitiv Eikon shipping data. Nave Titan can hold up to 330,000 barrels of oil, according to the tanker data.

We remind that Marathon Petroleum, the largest US refiner, can meet its supply commitments for now but is working to find alternative ways to ship motor fuels to the eastern United States if the Colonial Pipeline shutdown is extended.

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.
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MOSCOW (MRC) -- US refiner Citgo was granted the second Jones Act waiver by the US government after a cyberattack shut the Colonial Pipeline, the biggest US fuel pipeline, late in the first week of May, reported Reuters with reference to two sources familiar with the matter.

At the same time, Valero received the first Jones Act waiver, Reuters reported yesterday.

Earlier Friday the US Department of Homeland Security said it approved a second Jones Act waiver request to a company to ease fuel supply constraints between Gulf Coast and East Coast ports, but did not name the company.

Citgo did not immediately respond to a request for comment.

As MRC wrote previously, Valero Energy chartered an oil products' tanker for storage in the US Gulf Coast on 7 May amid a cyber attack that shut the Colonial pipeline. The tanker, called the Nave Titan, was then in the Mississippi River in southern Louisiana, according to Refinitiv Eikon shipping data. Nave Titan can hold up to 330,000 barrels of oil, according to the tanker data.

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.
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MOSCOW (MRC) -- The troubled Limetree Bay oil refinery in St. Croix, United States Virgin Islands, has suspended operations after a malfunction sent oil raining onto a nearby neighborhood, reported Reuters with reference to the company's statement.

The Caribbean refinery has suffered repeated setbacks since its private-equity owners began overhauling the long-idled facility two years ago with a plan to process up to 210,000 barrels of oil per day.

Limetree Bay said it suffered an "upset in the refinery", and urged residents living near the plant not to drink water from collected supplies. Residents living in the island generally collect rainwater in cisterns for consumption.

Residents were alerted of a fire at the plant by the V.I. Territorial Emergency Management Agency on Wednesday.

The company said it plans to distribute water to those affected by the oil release, and added that the plant's processing units will be brought to a "safe, stable condition". Flaring, or emergency burning of feedstocks, caused oil to release onto neighborhood areas. A malfunctioning coker unit caused the flaring, according to two people familiar with the matter. Cokers convert heavy oil for feedstocks to make motor fuels.

As MRC informed earlier, in early May, the EPA said if it determines that Limetree's operations present an "imminent risk" to residents health, it would take appropriate action to safeguard the public. EPA sent air monitors to the island in the first week of May to measure sulfur dioxide and hydrogen sulfide emissions, though they are not functional as yet.

Meanwhile, Limetree Bay said air quality testing near its US Virgin Islands refinery found zero concentrations of sulfur dioxide, hours after the National Guard said it found elevated levels of the chemical during its own testing.

We remind that in late March 2021, EPA said it had revoked an expansion permit for the Limetree Bay oil refinery in the US Virgin Islands, citing concerns that the area around the facility is overburdened with pollution. The decision allowed the plant to keep operating but blocked ongoing expansion work pending an EPA review to assess measures the facility needs to take to protect nearby residents.

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.

MOSCOW (MRC) -- Mitsui Chemicals’ net profit for the fiscal year ending March 2021 posted 70.3% growth despite lower sales, as profitability of its basic materials business benefited from better overseas markets, said the company.

Lower group sales were attributed to declines in product prices, dragged down by falls in values of naphtha and other raw materials and fuel amid the coronavirus pandemic. Its basic materials segment reported a 12.6% year-on-year decline in sales to Y541.4bn, but operating income before special items more than doubled to Y19.6bn from Y9.4bn in the previous fiscal year “due to improved overseas market".

Mitsui Chemicals said that operating rates at its naphtha crackers were lower than the previous fiscal year due to decreased demand for downstream products, caused by the impact of the coronavirus. “Performance of polypropylene was affected by slowing demand for automotive products. For bisphenol A (BPA) and acetone, the overseas market was at a higher level than the previous fiscal year,” the Japanese producer said.

For the current fiscal year ending March 2022, Mitsui Chemicals is projecting higher earnings, in line with the global economic recovery from a pandemic-induced slump in 2020. Basic materials should be able to generate sales of Y635bn and yield an operating profit before special items of Y36bn, based on the company’s forecasts.

“In the chemical industry, although demand is expected to expand due to signs of economic recovery, chemical companies should remain vigilant regarding fluctuations of raw materials and other chemical product markets,” it said.

As per MRC, Kumho Mitsui Chemicals Inc. said it will invest about 400 billion won (USD358.1 million) to expand its chemical manufacturing factory in South Korea's southwestern region. The joint venture between Korean synthetic rubber maker Kumho Petrochemical and Mitsui Chemicals of Japan said its shareholders approved the investment plan to scale up a methylene diphenyl diisocyanate (MDI) factory in Yeosu, 455 kilometers southwest of Seoul.

Phenol is the main feedstock component for the production of bisphenol A (BPA), which, in its turn, is used to produce polycarbonate (PC).

According to MRC ScanPlast report, Russia's overall estimated consumption of PC granules grew in the Russian market by 27% year on year in January-February 2021 (excluding imports and exports to/from Belarus) to 16,000 tonnes, compared to 12,600 tonnes a year earlier.
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