Formosa Chemicals profits to decrease in Q2 2014

МОSCOW (MRC) -- Formosa Chemicals & Fibre Corp, which produces aromatics and styrenics, is expected to report a decline in revenue for this quarter from last quarter’s TWD110.82 billion (USD3.69 billion), as raw material supply is expected to diminish, said Taipeitimes.

The firm’s raw material supplier, Formosa Petrochemical Corp, plans to conduct annual maintenance on one of its ethylene plants. Formosa Petrochemical, the nation’s only listed oil refiner and a major unit of the Formosa Plastics Group, shut down its third olefin plant, beginning yesterday, for a 45-day maintenance cycle. The closure was announced by Formosa Petrochemical president Tsao Mihn.

Tsao said the ethylene shipments from the plant would decline by 20 percent this month from a month ago and be down by one-third next month from last month. However, having completed annual maintenance for its oil refinery facilities in June, Formosa Petrochemical will still strive to post a revenue increase this quarter from TWD219.56 billion last quarter, it said.

"We will try to hold our profit this quarter steady compared with TWD6.41 billion a quarter earlier," Tsao said.
The company’s utilization rate for its oil refinery facilities is expected to be 100 percent this quarter, which would increase its oil production to close to 540,000 barrels a day this quarter, up from 377,000 barrels a day last quarter, it said.

Formosa Chemicals & Fibre, another major unit of the group, said it also is to conduct maintenance for its factory for making paraxylene and oxylene for 45 days beginning next month to cope with the reduced supply for ethylene, and for another factory for making styrene monomer for 45 days, company general manager Hong Fu-yuan said.

As a result, between next month and October, the company’s shipments for paraxylene and oxylene are likely to drop by 200,000 tonnes, while shipments for styrene monomer is expected to decline by 90,000 tonnes, Hong said.
Formosa Chemicals & Fibre expects revenue to drop 10 percent, to TWD25 billion, compared with last month and that the decline would extend into next month and October.

Also affected by the scarcity of ethylene, Formosa Plastics Corp, the flagship company of the group, expects its factory utilization to drop to 80 percent this quarter, from 85.3 percent last quarter, company president Jason Lin said. However, it still hopes that this quarter’s revenue would be flat, echoing TWD59.03 billion last quarter, on the back of higher product prices.

As MRC wrote before, The US Environmental Protection Agency (EPA) has recently issued three final GHG Prevention of Significant Deterioration construction permits for the Formosa Plastics facility in Point Comfort, Texas.
Formosa is expanding its chemical complex, located near Victoria, and taking three actions with its turbines unit, olefins unit and low-density polyethylene (LDPE) unit.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Pemex blast at Ciudad Madero refinery kills three workers, injures more

MOSCOW (MRC) -- A burst of flame at the Petroleos Mexicanos (Pemex) refinery in Ciudad Madero has killed three workers and injured several more, as per Hydrocarbonprocessing with reference to the state-owned oil company's report on its official Twitter account.

The company initially said that one worker was killed and 11 injured. On Sunday, Pemex said the death toll had risen to three, and eight workers remained in the hospital with injuries.

The fire occurred at one of the refinery’s coking plants which wasn’t operating at the time of the accident because of maintenance, according to Pemex. There was no damage to the refinery, which is located in the northern Tamaulipas state, according to Pemex.

At least four accidents have occurred at the Ciudad Madero refinery this year, including a fire at a storage tank on July 22 that injured nine Pemex workers. The Ciudad Madero refinery, the smallest of Pemex’s six national refineries, processed 129,763 bpd last year, below the daily production capacity of 190,000 bbl.

Mexico’s Senate approved additional legislation to a law passed last year to open the national energy industry to private investment for the first time since 1938.

The private investment that will be generated by the new law, estimated by Grupo Financiero Banorte to reach USD50 billion by 2020, will be used to improve aging infrastructure and reduce refining inefficiencies, according to Pemex CEO Emilio Lozoya.

We remind that, as MRC wrote previously, in February 2013, the blast that tore through the headquarters of Mexican state oil company Petroleos Mexicanos killed 37 people.

Later last year, in early October 2013, Pemex also said one person was killed while five others suffered injuries after an explosion rocked its crude oil refinery in the state of Hidalgo. The incident took place at the Miguel Hidalgo refinery which is situated in the town of Tula.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

Russia suspended PC exports in July

MOSCOW (MRC) - Russia's exports of polycarbonate (PC) were 4,700 tonnes in the last seven months of 2014, down 49% compared with the same time a year earlier, as per MRC DataScope report.

As it was previously reported, the only PC maker in Russia, Kazanorgsintez had refrained from export deliveries and focused on on domestic consumers. The company aimed at the gradual import substitution and support of Russian converters, which in the seasonal peaks feel shortage of material because of the high prices for imported PC.

The producer's PC exports were 2.0 tonnes in July. Traditionally, almost all export volumes from the producer occurred for injection moulding grades of PC.

Kazanorgsintez in line with its current policy intends to produce PC within the needs of the Russian market. Monthly consumption of PC in Russia makes about 1,000 tonnes (imported and domestic production).

The bulk of the material produced by the company will be PC granules for sheet extrusion. Extrusion sector occupies about 80% of the PC market in Russia.

Kazanorgsintez shut PC production for maintenances on 17, July. The producer plans to resume PC production on 20, August.
MRC

Petrobras net profit falls 20%

MOSCOW (MRC) -- Brazilian state-controlled oil company, Petroleo Brasileiro said its profit fell for a fourth consecutive quarter as it continues to grapple with the high cost of subsidizing fuel imports for the domestic market, as per The Wall Street Journal.

Second-quarter net profit declined 20% from a year earlier to 4.96 billion Brazilian reais (USD2.17 billion), the company known as Petrobras said. Weighing on the company's bottom line was its refining division, which imports gasoline and diesel fuels and then sells them at below cost to help the Brazilian government battle inflation, a program the government started in 2011 and which has cost Petrobras billions of dollars.

Petrobras' imports of oil and derivatives surged 33% in the second quarter from a year earlier to 941,000 barrels a day. The refining division's quarterly loss ballooned to 3.88 billion reais, up 54% from the second quarter of 2013. The fuel subsidy, combined with a massive investment budget, has turned Petrobras into the world's most indebted oil major. Net debt as of June 30 stood at USD109.58 billion, up 16% from the end of 2013.

Petrobras said higher interest expenses and a weaker Brazilian real further ate away at its profits in the second quarter. Earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 10% on the year to 16.26 billion reais.

Revenues, on the other hand, rose 12% to 82.3 billion reais, Petrobras said, bolstered by rising production of crude oil. Second-quarter oil output reached 2.05 million barrels a day in July, up 6.4% from March. Brazil aims to be among the world's top five global oil producers by 2020, when it expects to be producing four million barrels of oil a day. Petrobras reiterated its target of increasing oil production by 7.5%, plus or minus one percentage point, in 2014.

Petrobras Chief Executive Maria das Gracas Foster said that the company's own output of gasoline and diesel will rise in the second half of the year as production at existing refineries improves and the Abreu e Lima refinery, the cost of which has risen past USD18 billion, comes online.

As per MRC, Petrobras plans to begin production of polyethylene terephthalate (PET) resin and polyester fibers at its Petroquimica Suape complex in northeastern Brazil.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

Tobolsk-Polymer is in the final stages of PP production start-up

MOSCOW (MRC) -- Tobolsk-Polymer (par of SIBUR), Russia's largest polypropylene (PP) producer, has moved on to the final stage of the resumption of its PP production after a scheduled outage for maintenance, according to ICIS-MRC Price report.

Tobolsk-Polymer already resumed its PP production after a scheduled 30-day turnaround on 31 July, but the plant's PP production was shut down soon again because of technical issues at its propylene production. The plant had resumed its propylene production by Friday, 8 August, and, consequently, it started to produce PP again.

LLC "Tobolsk-Polymer" is a subsidiary of SIBUR and Russia's largest construction project of a modern PP complex with the production capacity of 500,000 tonnes per year. It is located in the industrial zone of Tobolsk, at the production site of Tobolsk-Neftekhim.
MRC