LG Chem to invest in technical centres in the US and Europe by 2023

LG Chem to invest in technical centres in the US and Europe by 2023

MOSCOW (MRC) -- LG Chem Ltd., South Korea’s leading chemical company, said Monday it will establish technical support facilities in the United States and Europe to improve customer care services in its main markets, said Koreabizwire.

LG Chem will invest around 120 billion won (USD103 million) to establish tech centers in Ohio, the United States, and Frankfurt, Germany, with their full-scale operations scheduled to start in 2023. The U.S. and Europe are the main markets that account for more than 20% of global demand for the company’s strategic products, LG Chem said.

The company said each tech center is a “dedicated customer support organization” that will provide comprehensive technical solutions like product development and quality improvement to those who purchase its petrochemical products.

LG Chem added its American and European tech centers will each have various pilot facilities for customer-tailored technical support, particularly centered on automotive materials and packaging films, as well as eco-friendly products.

A total of 70 research and development experts, including application technology teams, such as extrusion processing and injection technology, will be stationed to provide technical support in need, the company said.

With its American and European tech centers, LG Chem said the company will have a “global quadrilateral customer support system,” connecting South Korea, China, the United States and Europe.

LG Chem is currently building a tech center in Huadong, China, with its operation slated for 2022. In addition to tech centers, LG Chem will also build an acrylonitrile butadiene styrene (ABS) compound plant at the site of the U.S. tech center.

It will invest around 60 billion won to construct the facility that will have an annual production capacity of 30,000 tons by 2023. The North American market accounts for 10 percent of global demand for ABS, the company added. LG Chem said it also plans to consider building an ABS polymerization plant to better respond to North American customers.

As MRC informed earlier, LG Chem started up its new second naphtha cracker in Yeosu in mid-June, 2021. The second cracker's production capacity will be 900,000-1,000,000 mt/year.

According to the ICIS-MRC Price Rport, ABS imports to Russia increased by 30% in in January-August 2021 compared to the same period last year and amounted to 27,900 tonnes against 21,400 tonnes. The share of South Korean supplies fell to 57% (15,800 tonnes) against 63% (13,500 tonnes) a year earlier.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
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COVID-19 - News digest as of 11.10.2021

1. Asia distillates-gasoil prices are on the rise

MOSCOW (MRC) -- Asia's middle distillate markets firm on Friday, buoyed by a firming demand outlook and tighter regional supplies, said Hydrocarbonprocessing. Recovering industrial demand due to easing COVID-19 restrictions and increased usage of the fuel for power generation on the back of high coal and gas prices are boosting the markets, trade sources said. Rising natural gas and thermal coal prices are likely to see increased gas-to-oil switching, supporting demand for residual fuel oil and gasoil, ANZ Research said in a note. ANZ analysts raised their fourth-quarter 2021 crude oil demand forecast by 450,000 bpd amid rising gas-to-oil switching in the power generation and industrial sectors and a continued recovery in demand for transportation fuels. The front-month gasoil time spread climbed to 72 cents a barrel, its highest since December 2019, Refinitiv data in Eikon showed.

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Fire at gasoline tank at Lebanon southern Zahrani city put out

MOSCOW (MRC) -- A fire that broke out Oct. 11 at a gasoline tank at the Zahrani oil installations in southern Lebanon has been contained, the prime minister's media office said on Twitter, days after the country plunged into darkness due to a lack of fuel for power plants, reported S&P Global.

The cause of the fire at the gasoline tank, which belongs to the Lebanese army, will be investigated, according to the Twitter post quoting energy minister Walid Fayyad.

The fire comes a few days after Lebanon's main power plants in Zahrani and Deir Ammar in the north ran out of fuel as the cash-strapped government struggles to buy feedstock for its facilities.

Iraq agreed this year to sell Lebanon 1 million mt/year of heavy fuel oil in return for goods and services, which will help OPEC's second-biggest producer reduce a surplus of the commodity. Because Iraq's fuel oil doesn't meet specifications of its power plants, Lebanon will resell the Iraqi fuel and use the proceeds to buy spot cargoes of fuel that is compatible with its facilities, Lebanon's former energy and water minister Raymond Ghajar said July 24.

One million mt/year of fuel would meet around a third of Lebanon's needs, he said at the time.

Lebanon is suffering from severe power outages due to the financial crisis gripping the country, which relies on imported oil products for electricity generation.

We remind that as MRC wrote before, Borealis has declared a force majeure (FM) at its steam cracker in Stenungsund, Sweden after a fire. The FM at the Swedish cracker with the capacity of 625,000 mtyear of ethylene was declared on 14 September, 2021, and the cracker was shut on 11 September due to a malfunction and the fire. A Borealis spokesperson said that the duration of the force majeure was not yet clear.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
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Crude oil futures continue rising in Asia on tightening supply outlook

Crude oil futures continue rising in Asia on tightening supply outlook

MOSCOW (MRC) -- Crude oil futures extended an uptrend into mid-morning trade in Asia Oct. 11 on a tightening supply outlook, and as a weaker-than-expected US jobs report creates a potential headwind to a recent hawkish change in US Federal Reserve monetary policy, reported S&P Global.

At 10:25 am Singapore time (0225 GMT), the ICE December Brent futures contract was up 78 cents/b (0.95%) from the previous close at USD83.17/b, while the NYMEX November light sweet crude contract was USD1.18/b (1.49%) higher at USD80.53/b.

"WTI crude futures topped USD80/b [Oct. 8] for the first time since November 2014 amid a global energy crisis while OPEC+ producers kept to their supply discipline," UOB market research analysts said in a note Oct. 11.

ANZ research analysts said in a note Oct. 11: "Crude oil gained amid a broader rally in the energy sector as fears of strong demand and supply shortage continue to grip the market. Saudi Aramco warned that high natural gas prices are already boosting oil demand for power generation and heating."

US non-farm payrolls rose 194,000 jobs in September, easing from a 366,000 increase in August, US Department of Labor data released Oct. 8 showed, and well below market expectations of a 500,000 increase.

Oil futures paradoxically moved higher following the report, as the weak growth may add headwinds to a recent hawkish pivot in US Federal Reserve monetary policy, analysts said.

"The jobs report came in well below expectations, questioning the timing of a well-telegraphed November taper, as well easing some enthusiasm about Fed hikes in 2022," TD Securities analysts said in a note. "Energy markets are solidifying at the upper end of recent trading ranges as the fear factor and right tail risks become more embedded heading into the winter months that could exacerbate the energy crisis in Europe and Asia," the TD Securities analysts added.

OCBC Treasury Research said in a note that crude oil was undeterred by the seemingly poor US non-farm payrolls numbers, and noted that Brent had closed above $80/b for a week and may remain above that support level for the time being.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
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DDSM Engineering Materials aims to cut emissions by 50% by 2030

DDSM Engineering Materials aims to cut emissions by 50% by 2030

MOSCOW (MRC) -- DSM Engineering Materials has announced that it is further enabling its customers to achieve their sustainability targets by accelerating its carbon footprint and greenhouse gas emission reduction journey, as per the company's press release.

Thus, the company aims to reduce its total greenhouse gas emissions (including Scope 1, 2, 3 upstream) and the carbon footprint of its products by 50% by 2030, from a 2016 baseline.

It also targets to use 100% renewable electricity in all production plants by 2025 (was 70% in 2020) and to achieve Net Zero Scope 1 and 2 greenhouse gas emissions by 2040 on the way to Net Zero across all value chains by 2050.

This announcements align with and reinforce DSM Engineering Material’s wider sustainability roadmap. In June, DSM announced it has successfully halved the carbon footprint of Akulon PA6, and is also developing greenhouse gas reduction roadmaps for Stanyl PA46 and Arnitel TPC. In its drive toward 100% renewable electricity, DSM Engineering Materials plants in Europe and China are already fully powered by renewable electricity. In addition, DSM Engineering Materials has committed to developing and rolling out bio- and/or recycled-based alternatives for its entire portfolio by 2030; specific grades are already available for all major product lines.

Overall, all these initiatives – including the move toward bio- and recycled-based alternatives – will help DSM Engineering Materials to achieve Net Zero greenhouse gas emissions (of direct production and via renewable electricity) by 2040 on the journey to Net Zero across all value chains by 2050.

As MRC reported earlier, in April 2021, DSM said it had completed the sale of the resins & functional materials businesses to Covestro for EUR1.6 billion (USD1.9 billion), including EUR1.4 billion in cash. It included DSM Niaga, DSM additive manufacturing, and the coatings activities of the DSM advanced solar business, which together represented EUR1.01 billion of DSM’s 2019 total annual net sales and EUR133 million of DSM’s 2019 total EBITDA.

We remind that Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market were almost 56,000 tonnes in January-July 2021, down by 3% year on year (58,000 tonnes).

Royal DSM, commonly known as DSM, is a Dutch multinational corporation active in the fields of health, nutrition and materials. The Materials cluster is made up of DSM Engineering Materials, DSM Protective Materials and DSM Resins & Functional Materials. DSM Engineering Materials’ specialty plastics are used in components for the electrical and electronics, automotive, flexible food packaging and consumer goods industries.
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