Braskem expands LLDPE production at Bahia plant in Brazil

MOSCOW (MRC) -- Brazilian petrochemical firm Braskem has completed its BRL50m (USD19m) Bahia facility expansion to increase its linear low-density polyethylene (LLDPE) production capacity, reported The Petrochemical Standard.

The investment forms part of the company's aim to meet the growing demand for metallocene-based resins.

Through this initiative, the company intends to increase its polyethylene production capacity of LLDPE by 120,000mt per year to 470,000 mt/yr.

As part of the investment an existing line has been upgraded to produce 100,000 mt/yr of Braskem’s Flexus metallocene based LLDPE. Metallocene based LLDPE currently represents around 20% of local LLDPE demand, the company said.

Braskem polyolefins vice-president Luciano Guidolin earlier noted: "We are expanding our offering of products in the Braskem Flexus line to support our clients' growth in market segments that demand high-tech resins."

The Braskem Flexus product line is used in packaging that requires specific features, such as increased resistance, gloss, transparency and sealing properties, and targets manufacturers of specialty films, technical reels and industrial films.

As MRC wrote previously,Braskem plans to build a new polyethylene (PE) plant at its existing complex in La Porte, Texas. The new plant will manufacture ultra-high molecular weight polyethylene (UHMWPE), making it the first time for Braskem to produce UHMWPE outside of its home base in Brazil.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
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MOSCOW (MRC) -- PPG Industries reported fourth quarter 2014 net sales from continuing operations of USD3.71 billion, up USD207 million, or 6 percent, versus the prior-year figure of USD3.5 billion, said the company in its press release.

Net sales in local currencies grew 10 percent year-over-year, with acquisition-related sales contributing about 6 percent and volume growth adding 4 percent. Unfavorable currency translation impacted net sales by 4 percent, or about USD130 million.

Fourth quarter 2014 reported net income from continuing operations was USD86 million, or 62 cents per diluted share. Fourth quarter 2014 adjusted net income from continuing operations was USD293 million, or USD2.11 per diluted share. The adjusted figures exclude debt refinancing charges of USD200 million after-tax, or USD1.44 per diluted share, USD36 million after-tax, or 26 cents per diluted share, for transaction-related costs primarily from the Comex acquisition, and the benefit of lower taxes of USD29 million, or 21 cents per diluted share, relating to a favorable ruling on a prior-year foreign tax matter. The ongoing tax rate on the adjusted earnings excluding these adjustments was 23.5 percent for the fourth quarter and 23.9 percent for the full year, consistent with the company’s prior guidance.

Fourth quarter 2013 reported net income and earnings per diluted share were USD237 million and USD1.66, respectively. Adjusted fourth quarter 2013 net income from continuing operations was USD240 million with earnings from continuing operations of USD1.68 per diluted share, excluding transaction-related costs of USD3 million, or 2 cents per diluted share.

PPG reported cash and short-term investments totaling USD1.2 billion at year-end. The company repurchased USD300 million, or about 1.4 million shares, of PPG stock during the quarter. PPG also reported approximate full-year 2014 cash uses as follows: USD585 million for capital spending, USD360 million for dividends paid, USD2.5 billion on acquisitions (including repayment of debt acquired), and USD750 million on share repurchases totaling approximately 3.8 million shares.

PPG’s 2014 full-year net sales from continuing operations were USD15.4 billion, an increase of 8 percent versus USD14.3 billion the prior year. Acquisition-related sales contributed 4 percent year-over-year, supplemented by sales volumes and pricing, which added 4 percent and 1 percent, respectively, and partly offset by unfavorable currency translation of 1 percent. The company’s 2014 full-year reported net income from continuing operations was USD1.13 billion, or USD8.10 per diluted share, versus USD950 million, or USD6.55 per diluted share, in 2013. Full-year 2014 adjusted net income from continuing operations was USD1.36 billion, or USD9.75 per diluted share, versus USD1.11 billion, or USD7.67 per diluted share, in 2013.

As MRC wrote before, U.S. chemicals maker PPG Industries Inc had formally finalized its acquisition of Mexican paints maker Consorcio Comex for USD2.3 billion. The Pittsburgh-based PPG Industries said it had received a favorable ruling from Mexico's competition watchdog to complete the purchase, which came after the Mexican company's deal to sell to U.S. rival Sherwin-Williams Co fell through.

PPG Industries, Inc. (PPG) is a global supplier of protective and decorative coatings. Performance Coatings, Industrial Coatings and Architectural Coatings- EMEA segments supply protective and decorative finishes for customers in a range of end use markets, including industrial equipment, appliances and packaging; factory-finished aluminum extrusions and steel and aluminum.MRC

MOSCOW (MRC) -- Russia’s credit rating was cut to the lowest investment grade by Moody’s Investors Service as plunging oil prices and the worst currency crisis since 1998 drag on growth, reported Bloomberg.

Moody’s lowered the country to Baa3, one step above junk, from Baa2. The credit grade matches those of Standard & Poor’s and Fitch Ratings. The rating, on par with India and Turkey, is on review for a further reduction, Moody’s said in a statement.

ЄJunk status would have a very significant impact on Russian corporate debt,Є Ian Hague, a founding partner at New York-based Firebird Management LLC, which oversees about USD1.1 billion, including Russian stocks, said by phone from New York on Jan. 16. "The ironic part is that many of the state-owned companies are under sanctions and are already cut out of the foreign markets, so they couldn’t refinance their debt anyway."

Russia is on the brink of a recession after oil, the country’s largest export, slumped more than 50% since June. The ruble has tumbled 47% over the past six months as financing restrictions and export bans imposed by the US and its allies after President Vladimir Putin annexed Crimea prompted investors to flee the currency. The Bank of Russia has raised its key rate six times since March and spent USD88 billion in interventions last year to support the currency.

"The severe - and likely to be sustained - oil price shock, alongside Russian borrowers’ highly restricted international market access due to ongoing sanctions, is undermining economic fundamentals and increasing financial stresses on both the public and private sectors," Moody’s said in a Jan. 16 statement. "The substantial oil price and exchange rate shock will further undermine the country’s already subdued growth prospects over the medium term."

A cut to below investment grade could force ratings-sensitive investors to sell their remaining debt holdings. Fitch has a negative outlook on the country while S&P said Jan. 16 that it plans to decide whether to lower Russia’s credit grade to junk by the end of the month.

As MRC wrote before, in late December 2014, Moody's Investors Service placed the ratings of 45 Russian non-financial corporates on review for downgrade. The decision to place 45 Russian non-financial corporates and their supported subsidiaries on review for downgrade reflects the ongoing severe and rapid deterioration in the operating environment in Russia and the heightened risk of a more prolonged and more acute economic downturn than originally anticipated. Among the companies, which ratings were placed on review for downgrade are Bashneft, Gazprom Neft, Lukoil, Sibur Holding, Novatek, Rosneft International Holdings Limited and Severstal.
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MOSCOW (MRC) -- Spot prices of bottle grade polyethylene terephthalate (PET) in Kazakhstan have fallen by 14,5-16,6% since early 2015. Traders reduced prices because of weaker demand and cheaper imports that arrived into the market in January, according to ICIS-MRC Price report.

This week's prices of bottle grade PET were heard at Tenge 250,000-265,000/tonne CPT Almaty, including VAT. Back in late December, spot prices were at Tenge 300,000-310,000/tonne CPT Almaty, including VAT. Converters' activity remained seasonally low in January. In addition, spot prices were affected by the overall downward price trend in the world. Importers reported reduced costs for purchasing of material because the national currency (tenge) remained stable against the US dollar.

Traders said domestic prices might go down further by mid-February.

As reported before, PET imports to Kazakhstan remained stable from January to November 2014 compared to the same period of 2013. The Kazakh market imported 48,600 tonnes of PET chips from January to November.
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MOSCOW (MRC) -- China boosted crude processing to an all-time high in December as refineries resumed operations after seasonal maintenance and a plant in the country’s east started a new distillation unit, said Bloomberg.

Refiners processed 44.58 million metric tons of crude last month, or about 10.54 million barrels a day, both record levels, data from the National Bureau of Statistics in Beijing show. The world’s second-largest oil consumer refined a total of 502.77 million tons in 2014, up 5.3 percent from a year ago.

"Sinopec and CNOOC contributed most to the increase in crude throughput as they brought refineries back online from maintenance in the last two months," Amy Sun, an analyst at ICIS-C1 Energy, a Shanghai-based consultant, said by phone from Guangzhou. "Also, Sinopec started a new crude distillation unit at its Yangzi refinery."

China is processing more crude amid the slump in global oil prices, bolstering speculation that its consumption may help eliminate a global supply glut. The nation’s refiners will raise operating rates in the coming months amid low diesel stockpiles and "healthy" margins, the Paris-based International Energy Agency predicted last week.

China National Offshore Oil Corp. restarted its Huizhou refinery, which has a crude-processing capacity of 241,000 barrels a day, at the end of November, according to SCI International, a Shandong-based industry website. China Petroleum & Chemical Corp., known as Sinopec, also resumed operations at its 131,000 barrel-a-day Jiujiang plant on Dec. 15, it said.

Domestic crude production rose by 2.1 percent from a year earlier to 18.32 million tons in December, the statistics bureau’s data show. Natural gas output climbed 8.9 percent to 12.2 billion cubic meters, while power generation gained 1.3 percent to 490.2 billion kilowatt-hours.

As MRC wrote before, Sinopec is at the forefront of a China government push to restructure state-controlled companies and allow markets a bigger role in the allocation of resources. The company is seeking to raise 100 billion yuan selling about a third of its retail unit.
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