Chemtrade reports loss on lower volumes, pricing

MOSCOW (MRC) -- Chemtrade Logistics Income Fund (Toronto, Ontario, Canada) says volumes during the third quarter were down year-over-year (YOY) in all segments except water products, and pricing dropped in electrochemicals, according to Chemweek.

Net income came to a loss of CD48.3 million, down YOY from a loss of CD0.2 million in the year-ago quarter. Revenue totaled D346 million, down 13% from CD396 million. Earnings per share came to CD0.52, down YOY from breakeven and short of the average analyst estimate of a CD0.06 loss as compiled by Refinitiv (New York).

“The COVID-19 pandemic continued to adversely affect the demand for some, but not all of our products,” says Mark Davis, president and CEO. “Demand for our water business was unaffected, resulting in another strong quarterly performance. Once the economic effect of the pandemic eases we expect to see demand for the adversely affected products increase.”

Sulphur products and performance chemicals revenue totaled CD105 million, down 18% YOY on lower sales volumes for regen and merchant sulfuric acid and other products owing to the COVID-19 pandemic, says Chemtrade. Adjusted EBITDA was CD31 million, down YOY from CD44 million.

The water products and specialty chemicals segment turned in revenue of CD120 million, down 2% YOY on lower sales volumes of water solutions products and specialty chemical products, partially offset by higher selling prices of water solutions products. Adjusted EBITDA was CD29 million, up YOY from CD24 million owing to higher selling prices and lower raw material costs for water products, says Chemtrade.

The electrochemical segment reported revenue of CD121 million, down 17% YOY on lower sales volumes for hydrochloric acid (HCl) and caustic soda, a 30% decline in selling prices for HCl, and an 11% decline in selling prices for caustic soda, partially offset by a 4% increase in selling prices for chlorine. Adjusted EBITDA came to CD25 million, down YOY from CD43 million on lower selling prices and low operating rates at the North Vancouver facility.

As MRC reported earlier, in November 2017, Chemtrade Logistics announced force majeure circumstances for the supply of caustic soda, chlorine and hydrochloric acid from its plant in North Vancouver (North Vancouver, British Columbia, Canada). In a statement, the company said that the force majeure was caused by a technical failure of the equipment.

We remind that September production of sodium hydroxide (caustic soda) in Russia were 108,000 tonnes (100% of the basic substance) versus 99,200 tonnes a month earlier. Russia's overall output of caustic soda totalled 945,600 tonnes in the first nine months of 2020, down by 1.6% year on year.

Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, liquid sulphur dioxide, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, sodium chlorate, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
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1. BP files notices of possible worker layoffs in Chicago area

MOSCOW (MRC) -- BP Plc notified officials in Chicago and the state of Illinois of possible layoffs affecting more than 250 salaried employees at the company’s offices, reported Reuters with reference to BP's statement. BP is also reviewing the organizational structure at its Whiting, Indiana, oil refinery 28 miles (45 km) southeast of Chicago. BP’s US Pipelines and Logistics office is located in Chicago and the company has a technology campus in the nearby suburb of Naperville, Illinois.


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MOSCOW (MRC) -- A post-pandemic world will look very different, and the oil industry will be as much a testament to that as all the others that COVID-19 has run rampage over, reported S&P Global.

Just when we may have thought that the worst is behind us, a re-emergence of the virus in several parts of Europe and the US, and the ensuing lockdowns, have sent oil demand forecasters scrambling back to adjust numbers. S&P Global Platts Analytics has further downgraded its demand outlook by 200,000 b/d and now expects global oil demand to contract by 8.5 million b/d in 2020.

China is the only country in the world expected to see year-on-year growth in oil demand in 2020 – a marginal 0.3% to 14.8 million b/d, according to Platts Analytics. Overall, Asian refined product demand is expected to decline 1.7 million b/d this year.

The price of physically traded Brent crude has fallen below USD40/b several times in recent months, and Platts Analytics does not expect it to stray too much on either side of that level for the rest of the year.

As we reflect on what pieces we will be left picking up once the demand carnage has slowed down, some trends are emerging. Two that stand out in Asia are an altered refining and trade flow landscape, and changing crude oil buying patterns.

Oil refineries in the Philippines and the Oceania region have either already announced closures or are seriously considering it, leaving them dependent on imports to meet most of their oil demand needs. If all closures go through, a little under 700,000 b/d of capacity will be removed, opening up export opportunities for other refiners in the region, particularly the Chinese and South Korean refineries.

Chinese refiners are likely to be best placed to supply to these emerging outlets given the flexibility of their plants – being able to produce varying grades of fuel and, so far, to weather periods of prolonged weak regional margins, with a strong post-lockdown domestic demand helping to sustain refinery economics.

Asia's top crude oil importers, who had embarked on a diversification drive, are finding themselves returning to the tried and tested Middle Eastern crudes, not least due to attractive pricing and some slowdown in non-OPEC supply availability amid the pandemic.

This trend is likely to get stronger as we head into 2021 and non-OPEC supply is further curtailed. For instance, production in the US, the largest non-OPEC supplier, is expected to drop by 1 million b/d in 2020 and another 1 million b/d in 2021 due to cuts in capital expenditures, a slowdown in drilling activity and rising bankruptcies - 41 exploration & production companies have filed for bankruptcy so far, according to Platts Analytics.

South Korea, which had made diversification core to its energy security strategy, is making a U-turn.

The country was importing barrels from as far as away as North and South America, but is increasingly favoring Saudi crudes these days as they are the most viable and economical feedstock option in times of volatile refining margins and tepid consumer fuel demand.

South Korea made rigorous efforts to diversify its crude import sources over the past several years, with the share of Middle Eastern crude in its yearly procurement basket falling below 71% in 2019, compared with more than 85% in 2015. But this crept back up to around 74% recently.

Japan's share of crude oil imports from the Middle East rose to 95.2% over June and July, the highest on record, with reduced imports from Russia and the Americas among others, according to official data.

China, a key market for suppliers, boosted crude imports from the Middle East, with shipments jumping 18.9% year on year at 5.16 million b/d in the first three quarters, official data showed. The Middle East accounted for 46.3% of the market share compared with 43.8% in the same period last year. In contrast, imports from Africa and South America fell over the same period.

This may bring some cheer to Middle East suppliers, who are currently grappling with a seemingly unending delay to demand recovery amid rising crude oil supplies from Libya.

OPEC, Russia, and other key partners in a supply accord are scheduled to taper their collective 7.8 million b/d production cuts by more than one quarter to 5.8 million b/d from January, having banked on a robust rebound in oil demand from the coronavirus pandemic in the second half of the year.

OPEC delegates have told S&P Global Platts the bloc may now consider extending the cuts. Any new deal would, however, require delicate political negotiations and potentially some concessions to countries weary of reining in production.

Ministers are set to meet Nov. 30-Dec. 1 to negotiate and announce a decision.

"All signs point to OPEC+ keeping their current quotas in place for Q1 2021," Platts Analytics said in a recent note.

As MRC informed previously, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

ccording to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
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MOSCOW (MRC) -- Stepan Company is ranked 45 in The Wall Street Journal’s most sustainably managed companies in the world - third among chemical manufacturers in the rankings, reported GV.

The assessment includes more than 5,500 publicly traded businesses that were evaluated on an array of sustainability criteria including business model and innovation, external social and product issues, employee and workplace issues, and the environment. The ranking methodology also considered Stepan’s leadership and governance practices, and how those create long-term shareholder value.

“The Wall Street Journal ranking is truly a recognition of the hard work, integrity and leadership of Stepan’s management and employees,” said Jason Keiper, Ph.D., Stepan’s Chief Technology and Sustainability Officer. “We are proud to provide essential and sustainable products that support our customers and society, including those for cleaning and disinfection, energy-saving insulation, and agriculture and safe food supply. Stepan Company is strengthening its commitment to sustainability and creating long-term stakeholder value, and we are excited to develop new products and partnerships that will reflect the positive impact of what we do and how we do it.”

Stepan said it strives to provide greater transparency and communication of sustainability efforts while continuing to form strategic partnerships. The company said it also works to meet sustainability targets based on material issues identified for the chemical manufacturing industry by the Sustainability Accounting Standards Board (SASB). Stepan said its focus on four sustainability priorities — Investing in People, Efficiency for the Planet, Advantageous Products, and Responsible Practices — guides its efforts to deliver products that support customers' needs and align with global goals for a more sustainable planet.

As MRC informed before, Stepan conducted planned maintenance at its 90,000 tonnes/year phthalic anhydride (PA) plant Millsdale, Illinois, US, from early October to end-October, 2020.

Phthalic anhydride is widely used in for the production of paints and varnishes and plasticizers for PVC products. In a small amount it is used in the manufacture of rubber products, tires. In addition, it is used in the light, pharmaceutical and electrical industries.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.
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MOSCOW (MRC) -- Eastman Chemical announced it is seeking a price increase on US ethyl acetate (etac) effective 1 December, said the company.

Eastman Optifilm™ Enhancer 300: Offlist Price increase of USD 0.09/LB (USD 0.20/KG) in North America and Latin America.

Eastman Texanol™ Ester Alcohol: Offlist Price increase of USD 0.09/LB (USD 0.20/KG) in North America and Latin America.

Etac is used in coatings, pharmaceutical and solvents.

Major US producers of etac include Celanese, Eastman Chemical, Sasol and Solvay.

As MRC reported earlier, Air Liquide plans to invest over USD160 million in new capacity and upgrades to support a long-term agreement under which the company will supply additional gaseous oxygen, nitrogen, and syngas to Eastman Chemical’s Longview, Texas, facility.

We remind that in 2016, Eastman Chemical's chief executive Mark Costa announced that the company wanted to reduce its surplus ethylene and commodity intermediates, but did not intend to sell its cracker in Longview, Texas.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia"s estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

As per MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in the first three quarters of 2020 by 32% year on year to 75,600 tonnes (57,200 tonnes a year earlier).

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in more than 100 countries. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 14,500 people around the world.
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