COVID-19 - News digest as of 13.01.2021

1. OPEC crude output cuts should help US shale profits in 2021

MOSCOW (MRC) -- A decision by OPEC and allied countries to cut crude production through March delivered a late Christmas present for US shale firms that have slashed costs, but any rise in prices spurred by the unexpected move may be just a modest stocking stuffer, reported Reuters. US crude oil production has fallen 2 million barrels per day in the last year as low prices and demand forced shale producers to cut their losses. Investors had already been pressuring the industry to curb spending and boost returns before the pandemic hit. Shale output was quickly cut, but might return quickly if prices keep rising. Last Tuesday, Saudi Arabia, the world’s biggest oil exporter, said it would voluntarily reduce its production by 1 million barrels per day (bpd) in February and March, after Russia pushed to increase output, worried about US shale capitalizing on the group’s cuts. Russia and Kazakhstan will increase their output, reluctant to cede market share to the United States. Overall, OPEC+ had been due to restore 500,000 bpd in each of the two months. Saudi officials were concerned new increases would outpace demand during new coronavirus lockdowns.




MRC

MOSCOW (MRC) -- Map Ta Phut Olefins Co Ltd (MOC), a subsidiary of Thailand’s SCG Chemical, has completed the maintenance work at its cracker in Map Ta Phut, reported CommoPlast.

Thus, the cracker with the capacity of 900,000 mt/year of ethylene and 450,000 mt/year of propylene was shut for a scheduled turnaround on 2 November, 2020, and fully resumed operations in the fourth week of December, 2020.

Meanwhile, the company’s downstream plants including the 720,000 tons/year polypropylene (PP) unit and 980,000 tons/year high density polyethylene (HDPE) lines have also resumed operating.

MOC took these units offline in November 2020 for 45-days maintenance.

As MRC informed before, Siam Cement Group’s (SCG) proposed flexible-feed cracker project in Vietnam is being configured to take as much as 80% propane as feedstock for production. The USD5.4bn Long Son Petrochemical (LSP) Complex in Vietnam’s Ba Ria-Vung Tao province “is designed to use up to 20% - 80% propane”, SCG stated in a July 2020 presentation to investors, citing low cost of this feedstock during the summer and winter seasons.

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

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
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MOSCOW (MRC) -- Solvay says it has launched a hydrogen platform that will “bring together all the innovative material and chemical solutions the group has to offer to advance the emerging hydrogen economy, said Chemweek.

" At the heart of the platform is the company’s membrane technology, “which constitutes a necessary component in the process of hydrogen production," the company says. By creating the platform, Solvay says it is increasing its resources dedicated to the emerging hydrogen market, including efforts in research and innovation. Starting this year, Solvay is dedicating teams involving research, engineering, sales, and marketing working together to craft the company's added value to the future hydrogen market.

Solvay’s membrane technology, under the brand Aquivion, will be a key contributor to the electrolyzer and fuel-cells markets, the company says. Solvay intends to bring other hydrogen applications and components to the market, such as hydrogen tanks.

"The hydrogen economy has taken off, and with our new hydrogen platform, we are partnering with our customers in the electrolyzer and fuel-cells space to make it happen,” says Solvay CEO Ilham Kadri. “Green hydrogen will be one of the most competitive low-carbon solutions for transportation applications in the near future."

Solvay, meanwhile, has joined the Hydrogen Council, a worldwide CEO-led initiative that brings together leading companies with a united vision and long-term ambition for hydrogen to foster the clean-energy transition. Solvay also says that its hydrogen platform is integral to the group’s One Planet initiative, which includes 10 measurable commitments to achieve sustainable-development goals across three focus areas: climate, resources, and better life.

Solvay notes that the production of green hydrogen via water electrolysis is expected to reach more than 100 gigawatts of worldwide capacity by 2030, and that the global fleet of fuel-cell electric vehicles is forecast to reach “several million vehicles" by 2030.

Meanwhile, public support for hydrogen is increasing exponentially, with USD10 billion of post-COVID-19 stimulus being dedicated, mostly in Europe and APAC, to green hydrogen R&D and infrastructure deployment, Solvay says.

As MRC reported earlier, in August, 2020, through the acquisition of the Solvay polyamide (PA) business, BASF enhanced its R&D capabilities in Asia Pacific with new technologies, technical expertise, and upgraded material and part testing services. BASF is planning to integrate the R&D centers from Solvay into its R&D existing facilities in Shanghai, China, and Seoul, Korea. The enhanced capabilities will boost BASF’s position as a solution provider to develop advanced material solutions for key industries.

We remind that BASF-YPC, a 50-50 joint venture of BASF and Sinopec, undertook a planned shutdown at its naphtha cracker on 30 April 2020. The company initially planned to start turnaround at the cracker on April 5, 2020. The plant remained under maintenance unitl 18 June, 2020. Located in Jiangsu, China, the cracker has an ethylene capacity of 750,000 mt/year and propylene capacity of 400,000 mt/year.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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MOSCOW (MRC) -- Croda International says it has entered a global sales and marketing agreement with Genesis Biosciences (Cardiff, UK) to expand its portfolio of safe and sustainable cleaning raw materials, said Chemweek.

The first phase of the partnership will see the launch of two probiotic ingredients, one for use in hard-surface cleaning products and one for use in odor-neutralizing products. The two ingredients will be available from the end of January, the company says.

Genesis Biosciences specializes in the fermentation of bacteria strains to develop safe and natural microbial and antimicrobial products, Croda says. This technology is “the result of years of [R&D] to characterize natural beneficial bacteria and optimize high-performing consortia for specific applications,” says Peter Wallbank, business development manager at Genesis Biosciences.

As MRC informed earlier, Croda International (Goole, UK) says it has entered a partnership with Sentient Science (Buffalo, New York), an asset management and software services company, for the recommended use of Croda’s Rewitec additives for wind turbine gearboxes and main bearings.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

Croda acquired Rewitec in 2019 and began to offer to energy technology customers nano- and micro-particle-based additives to increase the durability of machinery by lowering friction and reducing wear, the company says. Prior to the acquisition in 2017, Sentient Science validated Rewitec’s DuraGear gearbox oil additives for use in wind turbine gearboxes, it says.
MRC

MOSCOW (MRC) -- Sika has provided a financial update and says that its sales decreased 2.9% in 2020 to 7.88 billion Swiss francs (USD8.85 billion), mainly due to strong negative currency effects, said Chemweek.

Sales in local currencies increased 3.4% with a strong acquisition effect of 7.2% offsetting a 3.8% organic decline in sales. Meanwhile, sales in local currencies in the fourth quarter went up 5.5% year on year, of which 4.1% was organic growth, the company says.

"The 2020 fiscal year was overshadowed by the global coronavirus pandemic, which had a number of serious repercussions for the construction and automotive sectors. Thanks to the strong motivation of our employees and their pronounced customer focus, Sika managed to perform successfully in this highly challenging market environment and achieve above-average results,” says Paul Schuler, CEO of Sika.

Despite the “significant restrictions on construction activity” caused by COVID-19 in most of the countries where the company operates, Sika says it grew more strongly than the market in all regions. Sika posted 12.6% growth in sales in local currencies in the APAC region in 2020, 4.4% growth in EMEA, and an 1% increase in the Americas. The company’s global business recorded an 11.2% decrease in sales in local currencies in 2020.

Sika anticipates an over-proportional increase in EBIT and an EBIT margin of about 14% for 2020. The company has also confirmed its 2023 targets, including annual growth of 6%-8% in local currencies through 2023. The company is aiming for a higher EBIT margin of 15%–18% from 2021. It also estimates that projects in the areas of operations, logistics, procurement, and product formulation should result in an annual improvement in operating costs equivalent to 0.5% of sales.

Sika is scheduled to release its full results on 19 February.

As MRC informed earlier, Sika commissioned a manufacturing facility in Dubai, United Arab Emirates (UAE), which produces epoxy resins aimed at flooring solutions. Sika has decided to invest in the expansion of its manufacturing facilities at the Dubai site in order to increase flexibility in production, shorten delivery times, optimize cost structures, and reduce inventories.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

Sika is a specialty chemicals company with a leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing, and protecting in the building sector and motor vehicle industry. Sika has subsidiaries in 101 countries around the world and manufactures in over 200 factories. Its more than 20,000 employees generated annual sales of CHF 7.09 billion in 2018.
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