SIBUR increased profit by 60% in the second quarter

MOSCOW (MRC) - The largest Russian petrochemical holding SIBUR in the second quarter of 2021 increased its net profit by 60% to 76.43 billion rubles from 47.8 bn rubles a year earlier, mainly due to an increase in prices for its products,the Russia-headquartered producer said.

Adjusted net profit of the holding excluding exchange rate differences in the second quarter increased to 62.8 bn rubles from 4.2 bn rubles in the same period in 2020. Thus, in the second quarter, the company's revenue, compared to the first, increased by 15.8% and amounted to 200.9 bn rubles. Increased by 39.9% and net profit - excluding exchange rate differences, amounted to 62.8 bn.

The company's total debt at the end of the second quarter decreased by 4.4% compared to the end of the previous year, to RUB 388.08 bn.

The company's revenue for the first half of the year increased by 59% year-on-year to RUB 374.24 bn.
The company's EBITDA grew 2.3 times year-on-year to RUB 169.98 billion. EBITDA margin in the second quarter was 48.4% versus 42.4% at the end of the first quarter of 2021. The holding's capital investments in the reporting period decreased by 12.1% and reached 22.2 bn rubles.

In the first half of the year, SIBUR's gas processing plants processed 9.85 bn cubic meters of associated petroleum gas (APG), a decrease of 9.6% from a year earlier, the report said.

Fractionation volume of broad fraction of light hydrocarbons increased by 2.9% year on year and amounted to 3.96 m tonnes. Liquefied petroleum gas sales volumes fell 25.2% to 1.37 m tonnes. Sales of naphtha increased by 3.2% compared to the previous year - up to 506.65 thousand tons. At the same time, polypropylene sales increased by 20.3% - up to 612,000 tonnes. Polyethylene sales volume increased by 48.3% to 818,000 tonnes.

Sales volumes of petrochemical products in the second quarter of this year decreased by 4.8% to 1.3 m tonnes in annual terms. Polypropylene sales during this period increased by 9.2% to 291 thousand tons, polyethylene sales decreased by 8.4% to 383,000 tonnes, the company said.

In April, SIBUR announced a merger with TAIF by exchanging 15% of its shares for 50% + 1 share in TAIF. The scope of the transaction includes only TAIF's petrochemical and generating companies. This merger will increase the scale of SIBUR's operations and strengthen its market leadership. SIBUR and TAIF expect to reach final terms and close the deal in the second half of 2021. TAIF together with SIBUR will spend more than 1 trillion rubles. for the implementation of joint projects. In total, the companies plan to implement over 30 projects.

As per MRC's Sacnplast, SIBUR Tobolsk / Zapsibneftekhim increased capacity utilization in June, the total production of polypropylene reached 97,900 tonnes versus 76,900 tonnes a month earlier (in late April - early May, the company carried out preventive maintenance works). Tobolsk complex's PP overall output reached 537,200 tonnes in the first six months of 2021, up by 28% year on year.

SIBUR manufactures and sells petrochemical products on the Russian and international markets in two business segments: olefins and polyolefins (polypropylene, polyethylene, BOPP, etc.), as well as plastics, elastomers and intermediate products (synthetic rubbers, expanded polystyrene, PET, etc.).
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1. Shell raises dividend by almost 40% amid soaring oil prices

MOSCOW (MRC) -- Royal Dutch Shell has raised its dividend almost 40 per cent and launched a USD2bn share buyback scheme, as the energy major takes advantage of stronger energy prices to try to attract back investors, said The Financial Times. Thursday’s moves, which came as the group reported a jump in second-quarter earnings helped by oil’s recovery above USD70 a barrel, were more aggressive than analysts had anticipated and show the pressure on energy majors to resurrect flagging share prices. France’s TotalEnergies also reported strong results on Thursday with its highest half-year earnings in five years, and will use some of its cash flow for share buybacks. Investors remain wary of a sector that has been hard hit by two price slumps since 2015 while facing the long-term challenge of a possible peak in oil demand and increasing government action to tackle climate change.


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MOSCOW (MRC) -- Crude prices extended their rally July 29, settling higher on the back of a weaker US dollar and tightening inventories, reported S&P Global.

NYMEX September WTI settled USD1.23 higher at USD73.62/b and ICE September Brent moved up USD1.31 to USD76.05/b.

Oil futures gleaned support from a weaker US dollar and rising risk appetite supported by a dovish tone taken by US Federal Reserve chairman Jerome Powell, analysts said.

"Oil prices are surging as risk appetite runs wild following disappointing economic data that solidifies the view that the Fed won't be slowing down its ultra-accommodative stance anytime soon," OANDA analysts said in a July 29 note.

"Strong earnings and a cautious US central bank bodes well for crude, which saw the rally slow heading into Fed day," they added. "The biggest downside risk to oil prices now is unsurprisingly the delta variant rapidly spreading and weighing on the economic recovery going into the end of the year."

NYMEX August RBOB settled 4.32 cents higher at USD2.3514/gal and August ULSD climbed 3.34 cents to USD2.1894/gal.

Powell, during a press conference following a July 28 Federal Open Markets Committee meeting, indicated the US economy had farther to go before easing the Fed's current supportive stance. The comments proved bearish for the US dollar, which in turn is supportive for crude prices.

The ICE US Dollar index fell to 91.86 in afternoon trading, on pace for the lowest close since June 25.

Meanwhile, US crude supply outlooks remain bullish following a 4.09 million-barrel inventory draw in the week ended July 23 and a decline in drilling activity.

"Sentiment was buoyed by falling inventories across several markets and an easing of fears that the recent surge in COVID-19 cases would hurt demand," ANZ analysts said in a July 29 note.

"The falls suggest the rise in cases of COVID's delta variant is having little impact on mobility. While health authorities remained concerned about its spread, the high level of vaccination has prevented widespread restrictions," the ANZ analysts said in the note.

As MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.

We remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
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MOSCOW (MRC) -- Lummus Technology and Chevron Lummus Global LLC (CLG) announced multiple technology contracts from North Huajin Refining and Petrochemical Co., Ltd. for a grassroots refinery and petrochemical complex in Liaoning Province, China, according to Hydrocarbonprocessing.

The complex will include one of the largest vacuum residue desulfurization (VRDS) units in China and one of the largest Novolen polypropylene (PP) plants. Lummus will provide the license and basic engineering for its Novolen PP technology, plus the associated catalysts. CLG will provide the license and basic engineering for the VRDS technology, plus proprietary reactor internals and catalysts.

Once complete, the VRDS unit will process 5 MMTPA of vacuum residue, providing hydrotreated feed for the downstream conversion unit while simultaneously producing low sulfur bunker oil that meets International Maritime Organization (IMO) specifications. The Novolen plant, embedded in a compact plot area, will produce 1,000 KTA of polypropylene homopolymers, random copolymers, and impact copolymers - making it one of the largest in China – with high-end products encompassing the complete portfolio.

As MRC informed before, in April, 2021, Lummus Technology was awarded a master licensor contract by PJSC Nizhnekamskneftekhim for its ethylbenzene, styrene monomer (SM), ethylene dimerization and olefins conversion technologies. These four plants will be part of the expansion of an olefins production facility in Nizhnekamsk, Russia. The dimerization and olefins conversion units will be the first in Russia.

According to MRC's ScanPlast report, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
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MOSCOW (MRC) -- Hexion Inc., a major American manufacturer of phenol and bisphenol A (BPA), has recently announced that in order to help address climate change, it has committed to reduce absolute carbon emissions by 20% by 2030, according to BusinessWire.

A leading producer of adhesives, coatings and composite resins, Hexion’s commitment encompasses “Scope 1” and “Scope 2” emissions, which are direct and indirect greenhouse emissions from operations and consumed energy. The reduction target is compared to 2017, the baseline year of operations.

Hexion is also reviewing its “Scope 3” emissions, which are those associated with all other aspects of the company' business, such as raw materials, product use and disposal, waste generation, business travel, and the impact of associate commuting, among others. The establishment of the greenhouse gas reduction commitment follows a 2020 materiality assessment where Hexion engaged with various internal and external stakeholders. From that assessment, the company determined its most important areas of focus, which included formalizing the following goals:

- Minimizing climate change impact - Hexion will strive to protect against climate change throughout its business lifecycle by efficiently using natural resources, optimizing existing processes and enhancing products and technologies through continuous innovation.
- Developing innovative sustainable products - Hexion is committed that by 2030, all new products will incorporate sustainable attributes.
- Enhancing worker safety/well-being - By 2022, Hexion will offer a voluntary well-being program that addresses associate physical, mental, and financial well-being with the goal of 50% associate participation in the program by 2025. Hexion also re-affirmed its commitment to continue to drive toward zero recordable injuries.
- Reducing spills and releases - Hexion has committed to reduce spill mass and releases by 80 percent by 2025.
- Maintaining product stewardship - Hexion remains committed to implementing the Responsible Care Product Safety Code and will continue to be transparent and communicate to key stakeholders regarding its stewardship programs such as risk reviews and reduction of substances of concern.

As further validation of its commitment to more sustainable operations, Hexion also recently received its first ENERGY STAR Partner of the Year award, one of the highest honors bestowed by the United States Environmental Protection Agency’s ENERGY STAR program. Hexion was recognized for numerous successes in waste reduction and energy efficiency throughout the company since 2014. In that time, Hexion has reduced global energy intensity by 28%, executed more than 250 sustainability projects, and produced water and energy savings of approximately USD14 million, including USD2 million in 2020 alone. Each year, the ENERGY STAR program honors a group of businesses and organizations that have made outstanding contributions to protecting the environment through superior energy achievements. ENERGY STAR Award Winners lead their industries in the production, sale, and adoption of energy-efficient products, services, and strategies. These efforts are essential to fighting the climate crisis and protecting public health.

As MRC informed before, Hexion shut down its BPA plant in the Netherlands for scheduled maintenance in early November, 2020. The turnaround at this plant with a capacity of 120,000 mtyear of BPA, located in Pernis, the Netherlands, lasted until the end of November, 2020.

Bisphenol A is used as a hardener in the production of plastics, as well as plastic-based products. It is one of the key monomers in the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in January-May 2021 by 8% year on year to 42,200 tonnes (38,900 tonnes a year earlier).

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
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