COVID-19 - News digest as of 01.02.2022

1. LyondellBasell posts Q4 net income down by 15% mainly due to noncash impairment charge related to its Houston refinery

MOSCOW (MRC) -- LyondellBasell's (Houston, Texas) Q4, 2021 net income came to USD726 million, down 15% year over year from USD855 million largely because a USD624-million noncash impairment charge related to the Houston refinery reduced net income by USD481 million, as per the company's press release. Sales totaled USD12.830 billion, up 62% YOY from USD7.937 billion. Adjusted earnings per share came to USD3.63, up 66% YOY from USD2.19 but short of the consensus estimate of USD3.96 compiled by Zacks Investment Research. LBI reports strong polyolefin pricing and volume during the fourth quarter of 2021, but also high feedstock and energy costs as well as depressed demand into applications affected by semiconductor shortages.

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MOSCOW (MRC) -- LyondellBasell's (Houston, Texas) Q4, 2021 net income came to USD726 million, down 15% year over year from USD855 million largely because a USD624-million noncash impairment charge related to the Houston refinery reduced net income by USD481 million, as per the company's press release.

Sales totaled USD12.830 billion, up 62% YOY from USD7.937 billion. Adjusted earnings per share came to USD3.63, up 66% YOY from USD2.19 but short of the consensus estimate of USD3.96 compiled by Zacks Investment Research.

LBI reports strong polyolefin pricing and volume during the fourth quarter of 2021, but also high feedstock and energy costs as well as depressed demand into applications affected by semiconductor shortages.

"With forecasts for above-average GDP growth in 2022, we expect continued strength in demand for our products,” says Ken Lane, LyondellBasell interim CEO. “We are closely monitoring rising feedstock and energy costs, particularly at our European operations. Elevated levels of ethylene industry maintenance activities scheduled for the first half of 2022 are likely to constrain supply. We expect tight markets for acetyls, and propylene oxide will continue to drive strong profitability within our [intermediates and derivatives] segment. In January, our advanced polymers solutions segment benefited from increased order volumes for our products used in automotive production."

The olefins and polyolefins - Americas segment turned in adjusted EBITDA of USD1.262 billion, up 75% YOY from USD722 million on higher margins. Olefin margins widened as ethylene and propylene prices outpaced rising feedstock and energy costs, while ethylene volumes declined as inventories were built in preparation for planned maintenance in the first quarter, says the company. Polyolefins pricing increased faster than monomer pricing.

The olefins and polyolefins - Europe, Asia, international segment turned in adjusted EBITDA of USD155 million, down 38% YOY from USD251 million. Olefins margins declined as higher feedstock and energy costs were only partially offset by increased ethylene and propylene prices. Volumes declined owing to planned maintenance. Polyolefins margins increased as strong demand and tight markets drove spreads higher, offsetting increased energy costs.

The intermediates and derivatives segment reported adjusted EBITDA of USD252 million, up 29% YOY from USD196 million despite USD40 million in unfavorable LIFO inventory valuation charges. Propylene oxide and derivatives margins increased owing to strong Asian demand and market tightness, partially offset by high energy costs and lower volumes. Intermediate chemicals margins increased on higher pricing, partially offset by higher feedstock costs, while volumes decreased owing to planned and unplanned maintenance. Oxyfuels and related products margins declined primarily because of higher feedstock butane prices.

The advanced polymer solutions segment turned in adjusted EBITDA of USD24 million, down 81% YOY from USD126 million, in part because of USD60 million in LIFO inventory valuation charges. The balance reflects lower volumes driven by constrained production in automotive, appliance, and other end markets affected by semiconductor shortages.

Adjusted EBITDA in the refining segment totaled USD150 million, up from a loss of USD74 million in the year-ago period, reflecting LIFO inventory valuation benefits, higher margins, and higher volume. Adjusted EBITDA in the technology segment totaled USD173 million, up 284% YOY from USD45 million on increased licensing revenue and catalyst volume.

As MRC informed before, LyondellBasell Industries said its Houston refinery would be a better fit with a larger oil processing company and that a sales effort continues.

We remind htat in July, 2021, Neste and LyondellBasell announced a long-term commercial agreement under which LyondellBasell will source Neste RE, a feedstock from Neste that has been produced from 100% renewable feedstock from bio-based sources, such as waste and residue oils and fats. This feedstock will be processed through the cracker at LyondellBasell’s Wesseling, Germany, plant into polymers and sold under the CirculenRenew brand name.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Neste (Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. The company refines waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. The company is the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. In 2020, Neste's revenue stood at EUR11.8 billion, with 94% of the company’s comparable operating profit coming from renewable products.
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MOSCOW (MRC) -- Honeywell and Navin Fluorine International Limited, part of the Padmanabh Mafatlal Group, has announced a partnership to manufacture Honeywell’s proprietary Solstice range of hydrofluoroolefins (HFO) in India, according to Kemicalinfo.

Production is scheduled to commence by Q2-2022 at NFIL’s manufacturing facility in Gujarat.

This portfolio of next generation products has no ozone depletion potential and a global warming potential (GWP) of 1, thereby helping customers lower their carbon footprint without sacrificing end-product performance.

These products have various applications, including in blowing agents for foam insulation and refrigeration liquid for chillers.

“Many countries have pledged to be carbon neutral and promote technologies to help them meet their sustainability goals. This partnership enables these countries - including developing countries - to transition to HFOs from the more harmful hydrofluorocarbon (HFC) and hydrochlorofluorocarbon (HCFC) alternatives that are currently prevalent,” said Laura Reinhard, VP-GM, Advanced Materials FIP, Honeywell.

The demand for low-GWP solutions continues to grow. Multiple global regulations stemming from the Kigali Amendment to the Montreal Protocol require the phasedown of HFCs, driving the demand for more sustainable solutions.

Honeywell has already invested more than a billion dollars in research, development and new capacity for its Solstice technology, having anticipated the need for lower-GWP solutions to combat climate change more than a decade ago.

Honeywell’s partnership with Navin Fluorine will enable capacity expansion for its Solstice range to cater to the growing global demand for environmentally friendlier solutions.

Radhesh Welling, Managing Director, Navin Fluorine International Limited, said, “As the country’s leading producer of specialty fluorochemicals, we are pleased to partner with Honeywell for production of Honeywell’s industry-first HFOs at our Dahej facility. This will be a truly Make-in-India product that will serve global customers. We will also work together to develop new applications for Indian market. We strongly believe this project will help us further strengthen our partnership with Honeywell to do bigger and better things together in future.”

As MRC wrote previously, earlier this month, Honeywell announced that it has been selected by Spanish oil and gas company Repsol to supply an integrated control and safety system (ICSS) for the first advanced biofuels production plant to be built in Spain.

We remind that Repsol said in October, 2021, it will invest EUR2.549 billion (USD2.958 billion) in the entire hydrogen value chain by 2030. Renewable hydrogen is one of Repsol’s strategic pillars to achieve zero emissions by 2050. Thus, the company presented its hydrogen strategy for up to 2030.

We also remind that the “Cracker of the Future” consortium has recently announced two new member companies: Repsol and Versalis (Eni) have joined the consortium.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
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MOSCOW (MRC) -- Graham Partners portfolio company VPET USA LLC of Fontana, Calif., is acquiring Canyon Plastics Inc., a Valencia, Calif.-based packaging moulder, said Canplastics.

The financial terms of the deal have not been disclosed. In a Jan. 25 news release, VPET officials described Canyon as a supplier of consumer-packaged goods such as vitamins, protein powders, supplements, and nutraceuticals, as well as a growing portfolio of specialized engineered products for the medical device and aerospace and defense sectors. It uses blow molding, stretch blow molding, and injection molding. Canyon was founded in 1982 and has an employee base of over 100.

We remind, in 2019, Graham Partners invested in VPET USA LLC, a Fontana, Calif.-based company that blow molds custom and stock PET plastic containers for the food packaging and beverage industries and that specializes in wide-mouth PET food packaging.

Also, in 2018, Graham Partners bought Nuconic Packaging LLC of Vernon, Calif., another maker of thermoformed packaging.

VPET is a provider of plastic containers primarily used to package food and beverage products. Graham bought VPET in 2019. Graham Partners is headquartered in Newtown Square, Pa.

Founded in 1988 and headquartered in Newtown Square, Pa., Graham Partners focuses on acquiring and investing in what it calls “higher growth, middle-market consumer and industrial manufacturing-related companies”.
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MOSCOW (MRC) -- Ascend Performance Materials (Houston, Texas) said it has signed an investment agreement to set up a new hexamethylene diamine (HMD) and specialty chemicals plant in Lianyungang, China, to supply its global polyamide production and serve its regional customers, accordingto Apic-online.

The project, to be located in Xuwei New Area Park, will be the company?s first chemical production facility and its largest investment made outside the US Construction is expected to begin later this year with start-up targeted for the second half of 2023.

The capacity of the new plant was not disclosed.

"Our growth is driven by increasing market demand and growing collaboration with our customers globally," noted Ascend President and Chief Executive Phil McDivitt.

As MRC reported earlier, in January 2021, Ascend Performance Materials acquired Eurostar Engineering Plastics (Fosse, France), a compounder with a broad portfolio of flame-retardant (FR) engineered plastics and expertise in halogen-free formulations.

And in June 2020, Ascend acquired the assets of NCM (Changshu) Co. and Tehe Engineering Plastic (Suzhou) Co. located in Changshu Yushan High-tech Industrial Park near Shanghai. Ascend intends to expand the compounding assets at the site and to establish a global research and development center.
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