Lotte Chemical to invest USD211mln to expand its ethylene oxide adduct line in South Korea

MOSCOW (MRC) -- Lotte Chemical Corp., a petrochemical unit of South Korean conglomerate Lotte Group, said Friday it will spend 250 billion won (USD211.4 million) to expand its domestic production line of ethylene oxide adduct (EOA), according to Kemicalinfo.

The expansion of the production line in Daesan, a county in the central South Chungcheong Province, will help boost its EOA production capacity by an annual 150,000 tons to 480,000 tons globally, the company said in a release.

It will also increase the production of high-purity ethylene oxide (HPEO), a main source of EOA, to 250,000 tons, the company said.

EOA is an ethylene-based ingredient used in a chemical agent that reduces water in concrete used for the construction of large structures, such as skyscrapers, piers and dams. The agent reduces the water usage by 30%, which enhances the durability of the concrete.

Lotte Chemical invested 120 billion won in January to expand the EOA production by 100,000 tons at its Yeosu factory on the country’s southern coast.

Currently, the Daesan factory has production capacity of 50,000 tons, with the Yeosu factory touting 230,000 tons and a China-based factory having 50,000 tons.

As MRC informed before, Lotte Chemical shut its naphtha-fed steam cracker in Daesan for an annual maintenance on 15 May, 2021. This cracker with the capacity of 1.1 million mt/year of ethylene and 550,000 mt/year of propylene resumed production on 23 June, 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 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.

Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the southwestern city of Yeosu.
MRC

MOSCOW (MRC) - Former Prime Minister of France, who is also a representative of Russia on the board of directors of Zarubezhneft, Francois Fillon has been nominated and elected to the board of directors of SIBUR Holding, Interfax reports.

The Board of Directors included Fillon in the list of candidates on November 18, but SIBUR announced this simultaneously with the disclosure of the decision of the shareholders' meeting of December 22 on the election of a new board.

In addition, the board of directors includes Anton Ustinov from SOGAZ (head and owner of SG-Invest LLC, which holds 16.54% of the insurer's shares) and Albert Shigabutdinov from TAIF.

Fillon became an independent director. As noted in SIBUR, "Mr. Fillon is not only a top-level manager, but also a consistent supporter of promoting the sustainable development agenda, the importance of recycling and reusing raw materials." SIBUR in its strategy is also guided by the principles of the circular economy. Mr. Fillon's experience, his extensive knowledge of management, economics and business processes will help the company in promoting ESG initiatives, "SIBUR said.

SIBUR's shareholder Kirill Shamalov, independent director Andrei Vernikov (leading researcher in the sector of evolution of socio-economic systems at the Center for Evolutionary Economics of the Institute of Economics of the Russian Academy of Sciences), and the deceased Vladimir Razumov left the board of directors, consisting of 12 people.

Otherwise, the council remained unchanged: Ksenia Sosnina, General Director of JSC Ilim Group, Sergey Vasnetsov (previously he worked as Senior Vice President for Strategy at LyondellBasell), Alexey Komissarov (Vice-Rector and Director of the Higher School of Public Administration RANEPA), Head of Gazprom oil Alexander Dyukov, Chairman of the Board of PJSC SIBUR Holding Dmitry Konov, Chairman of the Board of PJSC NOVATEK Leonid Mikhelson, member of the Board of Directors of NOVATEK Gennady Timchenko, Executive Vice President of the Silk Road Fund Wang Dan, and CEO Chemical Department of Sinopec Corporation Li Chengfeng.

Mikhelson, the main shareholder of SIBUR, was re-elected Chairman of the Board. Fillon joined the Audit, Human Resources and Remuneration Committee and the Sustainable Development Committee. Ustinov and Shigabutdinov - to the Committee on Strategy and Investments, Shigabutdinov also to the Committee on Sustainable Development.

Mikhelson owns 31% in SIBUR, Timchenko - 14.45%, shares of Chinese Sinopec and the Silk Road Fund - 8.5%, SOGAZ - 10.625%, current and former top management - 12.325% (of which Shamalov's share is 3 , 3%), as well as TAIF shareholders - 15%. In early December, a number of personnel changes were announced in the management of SIBUR and TAIF.

In October, SIBUR closed the deal to acquire 100% of TAIF JSC, which includes Nizhnekamskneftekhim, Kazanorgsintez and TGK-16.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.

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.)
MRC

1. Crude oil rise on reduced fears of Omicron-induced demand slump

MOSCOW (MRC) -- Oil prices bounced in a light-volume session on Thursday on signs that the worst effects of the Omicron variant might be more containable than previously feared, even as countries imposed travel restrictions on surging infection levels, reported Reuters. The oil market has wavered in recent days over how seriously to take the threat of another slump in fuel demand. The Omicron variant is more transmissible than previous coronavirus variants, but early data suggests it causes a milder level of illness. Brent crude futures settled up USD1.56, or 2.1%, at USD76.85 a barrel, the highest close since Nov. 26, and a gain of 4.5% on the week.

MRC

MOSCOW (MRC) - General Director of TAIF Management Company Albert Shigabutdinov joined the board of directors of SIBUR holding, the press service of the company reported.

In addition, the board of directors includes Anton Ustinov from SOGAZ (the head and owner of SG-Invest LLC, which holds 16.54% of the insurer's shares) and former French Prime Minister Francois Fillon. In total, the list of members of the board of directors includes 12 people.

At the board of directors on December 20, Leonid Mikhelson was elected chairman of the board of directors of SIBUR Holding, Alexander Dyukov - deputy chairman of the board of directors of SIBUR Holding.

In early December, a number of personnel changes were announced in the management of SIBUR and TAIF.

In October, SIBUR closed the deal to acquire 100% of TAIF JSC, which includes Nizhnekamskneftekhim, Kazanorgsintez and TGK-16.

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.)
MRC

MOSCOW (MRC) -- Oil prices bounced in a light-volume session on Thursday on signs that the worst effects of the Omicron variant might be more containable than previously feared, even as countries imposed travel restrictions on surging infection levels, reported Reuters.

The oil market has wavered in recent days over how seriously to take the threat of another slump in fuel demand. The Omicron variant is more transmissible than previous coronavirus variants, but early data suggests it causes a milder level of illness.

Brent crude futures settled up USD1.56, or 2.1%, at USD76.85 a barrel, the highest close since Nov. 26, and a gain of 4.5% on the week.

US West Texas Intermediate (WTI) crude futures ended up USD1.03, or 1.4%, at USD73.79 a barrel, to rise 4.1% on the week. Volume was light on Thursday, with just 244,000 front-month contracts trading, according to Refinitiv Eikon data, compared with a daily average of 381,000 contracts over the last 200 days.

"The demand destruction everybody thought was going to happen isn’t going to happen," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

However, some governments are imposing tighter travel restrictions to slow the spread of the variant, which could hit demand even if Omicron causes a lower level of hospitalization, particularly among the vaccinated.

The Chinese city of Xian on Wednesday ordered its 13 million residents to stay home, while Scotland imposed gathering limits from Dec. 26 for up to three weeks, and two Australian states reimposed mask mandates.

The United States authorized separate antiviral COVID-19 pills manufactured by both Pfizer and Merck, and officials from the US Food and Drug Administration said the medications are both effective against the Omicron variant.

AstraZeneca said a three-dose course of its COVID-19 vaccine was effective against Omicron, citing data from an Oxford University lab study.

Operating US oil and gas rigs rose to their highest levels since April 2020 in the most recent week, according to energy services firm Baker Hughes. Overall counts are now at 586, portending a boost in output in coming months.

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, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC