Investments in PET preforms processing in Russia: Results of 2015

MOSCOW (MRC) - Investment in imported equipment by Russian PET converters (preforms processing) fell to USD8.86 mln, down 68% year on year (USD27.6 mln), according to MRC Annual Report "PET in Russia - 2016".

Investment activity in the Russian PET market in 2015 has subsided. However, despite a significant devaluation and a general decline in the consumption of PET chips in Russia there were companies, which import new lines and invest in the expansion of their production. Among the importers of equipment in 2015 marked were such processing companies as Alpla, APG Eastern Europe, Ada-Uralplast, UMA-PET and others.

The main supplier of equipment to Russia remains the world leader in the production of injection moulding machines - Husky. However, in 2015 the import of equipment from this producer has fallen by almost 10 times. The total investment in Husky machines in 2015 reached USD1.26 mln.

Also the Russian market enetered the lines by the production of Netstal Maschinen, Sipa, Demark Machinery, Negri Bossi and others.

For more information about the companies, expanded capacities in the past year, as well as the PET market dynamics and forecast of the industry can be found in MRC Annual Report "PET in Russia - 2016".

According to the MRC, total investment in the processing of PET preforms in Russia were USD253.67 mln over the past 10 years since 2005.

The peak of investment activity in the injection moulding lines occurred for 2006, when in the foreign equipment was invested USD46.61 mln.

MRC

Chevron posts first loss since 2002 on cheap oil prices

MOSCOW (MRC) -- Chevron Corp reported its first quarterly loss in more than 13 years as the oil producer struggled to cope with plunging crude prices that are eroding profitability across all its divisions, as per Reuters.

It was the latest sign that the more than 70 percent drop in oil prices CLc1 since 2014 has humbled a once-strong energy sector and forced it to curtail new projects, lay off staff and shrink spending.

Chevron last month had already signaled its pain by cutting its 2016 budget by 24 percent to USD26.6 billion, part of a strategy to contend with lower oil prices and hunker down for a hoped-for price rebound.

Smaller rivals Hess Corp, Continental Resources and Noble Energy cut their own budgets early this week, ranging from 40 percent to 66 percent.

"We're taking significant action to improve earnings and cash flow in this low price environment," John Watson, Chevron's chief executive, said in a press release.

The company posted a fourth-quarter net loss of USD588 million, or 31 cents per share, compared with a net profit of USD3.47 billion, or $1.85 per share, in the year-ago period.

The last time Chevron posted a quarterly loss was the third quarter of 2002. Production rose 4 percent to 2.67 million barrels of oil equivalent per day in the quarter ended Dec. 31.

The bulk of Chevron's losses came from its divisions that explore for and produce oil and natural gas, with its U.S. division alone posting a loss of USD1.95 billion.

Surprisingly, Chevron's refining divisions also saw profit plunge. Refiners typically see profitability increase when the price of their main feedstock - oil - falls. Chevron said the drop was due to a boost in the prior year from asset sales, and also smaller margins on specialty refined products.

As MRC informed earlier, Chevron announced steep cuts in its spending on production and exploration, as it set out a plan to cut capital expenditure in 2016 by 24%. In 2017-18 the company expects capital expenditure of USD20bn-USD24bn per year, meaning that it could commit just a little more than half the USD39.8bn it spent in 2014.

Chevron is the second-largest US oil group by production and market capitalisation, after ExxonMobil. Chevron Phillips Chemical (part of Chevron), headquartered in The Woodlands, Texas (north of Houston), US,l is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, piping, and proprietary plastics. Chevron and Phillips 66 each own 50% of Chevron Phillips Chemical.
MRC

PetroChina says 60%-70% profits decline in 2015

MOSCOW (MRC) -- Chinese oil giant PetroChina Co. says it expects little rebound in global oil prices this year as jockeying for position among top oil producers intensifies, said The Wall Street Journal.

China’s biggest oil and gas producer by volume has been perhaps the hardest hit among China’s three main state-owned oil and gas companies. PetroChina said Friday that it expected net profit to have fallen 60%-70% in 2015 compared with a year earlier.

"In 2016, the market of international oil and gas is expected to continue to slump," PetroChina said late Friday in a statement to the Hong Kong stock exchange. "The market competition will be further intensified."

The preliminary results, if confirmed, are in line with the company’s 68% drop in profit in the first three quarters of 2015, and underscore how PetroChina is struggling to protect margins as oil prices sag. Investors have punished the company’s stock, whose value in Hong Kong fell by nearly 50% over the past year.

PetroChina reiterated its pledge to cut costs this year as well as diversify its income sources. It hasn’t provided details on projected capital expenditure cuts or production levels for 2016. PetroChina’s state-controlled oil rival Cnooc Ltd. said this month it would slash capital spending by 44% this year.

As MRC reported earlier, on 9 April 2015, PetroChina Co. passed Exxon Mobil Corp. as the biggest energy company by market value for the first time since 2010. Exxon’s capitalization was USD352.6 billion compared with PetroChina’s USD352.8 billion as of 1:36 p.m. on Thursday, 9 April, in Shanghai. The Chinese company’s A shares surged about 61 percent the past year, versus Exxon’s 14 percent drop. PetroChina was larger by value most recently at the close of trading on June 25, 2010.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

PC production in Russia rose by 9% in 2015

MOSCOW (MRC) -- Russia's production of polycarbonate (PC) totalled 67,300 tonnes last year, up by 9% year on year, according to MRC ScanPlast report.

Thus, production was the only figure in the PC market that showed a positive trend last year, whereas imports, exports and consumption continued to decline. The fact that PC is produced domestically makes it possible for the Russian market to develop. However, in 2015, weaker demand in the market of finished products (sheets, bottles, car parts, electrical engineering) became an obsticle. The state program of the agriculture modernization, as well as the introduction of a new state standard on PC sheets for the construction market, might be a major drive for the market recovery in 2016.


Kazanorgsintez, the only PC producer in the CIS markets, shipped over 64,000 tonnes of its material to the domestic market in 2015, up by 17% year on year. Currently, the plant continues to adhere to the policy of imports substitution in the market.

This year will be significant for the players of the Russian PC granules market. Due to unfavorable economic conditions, "natural selection" will take place and only the most efficient converters will remain. At the same time, there is a considerable risk of a growth of the market share of low-quality products in an attempt to lower its cost.

MRC

HDPE imports to Kazakhstan down 11% in 2015

MOSCOW (MRC) -- Imports of high density polyethylene (HDPE) into Kazakhstan decreased in 2015 by 11% year on year, totalling 76,200 tonnes, reported MRC analysts.


December HDPE imports to Kazakhstan rose to 7,400 tonnes from 3,500 tonnes a month earlier. Russian polyethylene (PE) accounted for the increase in supply, particularly, local pipes producers were actively replenishing their inventories. Overall HDPE imports totalled 76,200 tonnes from January to December 2015 versus 86,000 tonnes in the same period a year earlier. Demand for PE subsided in all consumption sectors.

The HDPE consumption structure by processing sectors looked the following way over the stated period: pipe grade PE accounted for over 85% of the total consumption. According to the Statistics Committee of the Republic of Kazakhstan, production of plastic pipes and fittings rose by 7% during the whole year of 2015 to 127,600 tonnes.


The films sector is the second largest consumption sector, its share was about 10%. According to the official statistics, 37,600 tonnes of polymer films were produced in the twelve months of 2015, up by 12% year on year.

Russian HDPE producers still occupied the key role among the suppliers in the local market. Their share was about 68% in the total deliveries over the stated period. Producers from South Korea and Uzbekistan shared the second and third places in PE shipments to the local market.

MRC