Repsol sinks deep into red in Q4 after oil price hit

MOSCOW (MRC) -- Spanish energy company Repsol says it posted a net loss of 2.06 billion euros (USD2.26 billion) in the fourth quarter of 2015 due primarily to a write-down of assets related to the slump in oil prices, said Abcnews.

That's a big change from the same period the year before when Repsol's loss stood at only 34 million euros.

However, Repsol pointed out Thursday that without the cost of the write-down, net income would have been 24 percent higher at 461 million euros.

Over the full-year, Repsol said it made a net loss of 1. 23 billion euros after taking 2.96 billion euros in one-off charges. Without those charges, net profit for the year rose 9 percent at 1.86 billion euros.

Repsol shares rose 0.8 percent at 8.6 euros in early Madrid trading.

As MRC informed earlier, during the first quarter of 2016 (Q1 2016), Repsol will complete the construction work of its new metallocene polyethelene plant at its Tarragona site. Repsol plans to start up the plant and begin production and marketing of this new product during Q2 2016. Throughout the construction phase, the high density polyethylene (HDPE) plant in Tarragona will remain temporarily stopped to allow the safe and efficient execution of all the required activities.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

Europe could lose 1 mln mt of chlorine capacity by 2018 on legislation

MOSCOW (MRC) -- Europe could see losses of 1 million mt of chlorine capacity by the time European legislation forbidding mercury-based production takes effect in December 2017, said Plastemart citing platts.

EU legislation requires all mercury-based chlorine and caustic soda capacity to convert to membrane-based production by 2018 or close. "There are some discussions that close to 1 million mt of capacity could be reduced, but we will not know until the end of the year how much capacity will be shut down in Europe," Albert Chao, Westlake Chemical president and CEO, said on a conference call to discuss 2015 full-year results.

Around 58.8%, or 7.30 mln mt, of chlorine production in the EU, Norway and Switzerland is membrane based and 24.6%, or 3.05 mln mt, is mercury based, according to industry body Eurochlor, while 16.6%, or 2.06 mln mt, is produced by other methods. Investment bank Helvea-Baader estimates only 40% of mercury-based production has changed its process to membrane. The bank does not expect all companies will make the transition, indicating some will exit the market. Caustic soda and chlorine are co-products. They are manufactured by passing an electric current through brine. Chlorine is a feedstock for polyvinyl chloride.

As MRC informed earlier, Evonik and AkzoNobel broke ground in January 15, 2016, to officially start the construction of the new membrane electrolysis plant in Ibbenburen. The new facility is due to come on stream by the fourth quarter of 2017, with an annual nameplate capacity of around 130,000 metric tons of potassium hydroxide solution and approximately 82,000 metric tons of chlorine.


MRC

Air Liquide strengthens its innovation capabilities in China

MOSCOW (MRC) -- French industrial gas company Air Liquide yesterday opened a 25-million-euro (USD27.6 million) research and technology center in Shanghai to address issues including carbon dioxide emission reduction and waste water treatment in China and Asia-Pacific, said the producer on its site.

The center intends to tackle environmental and societal challenges, including transition to cleaner energy, carbon dioxide emission reduction, waste water treatment, urban air quality, food safety, and health care.

Located in Xinzhuang Industrial Park in Minhang District, the 12,000-square-meter center is Air Liquide’s first to focus on innovation and its fifth center globally.

In 2015, Air Liquide Asia Pacific’s gas and services revenue grew 6 percent year on year to 3.85 billion euros, which accounted for 26 percent of its worldwide gas and services revenue.

Air Liquide is confident China’s industrial gas market will grow 6 to 8 percent annually, above the government’s economic growth target of around 6.7 percent.

As it was informed earlier, Air Liquide also signed a contract with Chinese outfit Xinneng Energy last month, which will see it invest more then EUR60m (USD65m) in a new ASU to produce up to 2,700t of oxygen (O2) per day, sticking its proverbial flag further into Chinese soil.

L'Air Liquide S.A., or Air Liquide, is a French multinational company which supplies industrial gases and services to various industries including medical, chemical and electronic manufacturers.
MRC

South Korea 2015 petrochemical exports down 21.60% on year

MOCOW (MRC) -- South Korea’s 2015 petrochemical exports plunged 21.6% to USD37.78 billion on year due to softened demand from China and the sustained low oil prices, according to a report released by the Korea International Trade Association (KITA), said TPS.

The main driver behind the plunge in South Korea’s petrochemical exports in 2015 was the sustained low oil prices which translated into lower unit price of petrochemical products.

For instance, the Dubai crude oil, which accounts for nearly 70% of total oil imports in South Korea, was averaged at USD26.90/b in January 2016. This was a sharp fall of 41.30% compared to the same month in 2015.

Structural factors that weakened South Korea’s petrochemical exports include the slowdown of the Chinese economy and increased self-sufficiency rates for petrochemical products in China.

Given that exports to China account nearly 50% of total petrochemical exports, this was regarded as a huge blow to South Kora’s export-oriented petrochemical industry.

Just as importantly, the sharp yuan depreciation by the People’s Bank of China (PBOC) has also weakened the competitiveness of South Korea’s petrochemical products.

Looking ahead, it is expected that petrochemical prices will continue to decline further due to low oil prices and exports to remain sluggish throughout Q1 2016.

As MRC informed previously, the South Korean government is pushing forward with consolidation of the petrochemical industries, which are mired in a supply glut and the protracted global economic recession. The restructuring on the petrochemical industry is currently led by the Ministry of Trade, Industry, and Energy. Although working-level officials of major petrochemical firms such as LG Chem, Lotte Chemical, and SK Global Chemical held a meeting last month in order to discuss issues like capacity adjustment, they no longer do it out of concern that it might be construed as an act of collusion by the Fair Trade Commission.
MRC

Tigers Polymer to bolster production in USA, Thailand

MOSCOW (MRC) -- Tigers Polymer will launch new plants in the U.S. and Thailand by this autumn to expand the lineup and boost the output of its automobile components, said Asia.nikkei.

The Japanese manufacturer of molded resin and rubber parts for autos, home appliances and construction expects to complete the plants by the end of February. The investment is expected to reach just over 2 billion yen (USD17.9 million).

The new U.S. plant with floor space of about 6,500 sq. meters is being built at the site of the company's existing plant in the state of Ohio at a cost of roughly 1.3 billion yen. This new plant, which will have production lines that can handle both injection and blow molding methods, is to sharply increase the company's capacity for car engine air-cleaner modules.

Tigers Polymer's existing U.S. plants have been operating at full capacity. The company's components are being adopted by an expanding range of vehicles manufactured by Japanese automakers in North America.

"In the U.S., new-car sales have been solid as gasoline prices have been falling," said Harunobu Genda, director of the Japanese parent. "Furthermore, we expect demand for cars there to increase steadily."

In Thailand, a plant with 10,000 sq. meters of floor space is going up in a vacant section of the site occupied by a manufacturing unit in Ayutthaya Province. The new plant, Tigers Polymer's fourth production base in the Southeast Asian country, will make air conditioning ducts. The facility also will absorb the manufacturing operations from the company's first Thai plant, whose productivity has suffered from a series of incremental expansions.

Domestic demand for cars has been weak, but vehicle exports from Thailand remain high. The company sees room for further growth in Thailand as a production base. Tigers Polymer is already the No. 1 supplier of blow-mold products to Japanese companies in Thailand, but it hopes to win more orders by expanding its product line, raising productivity and bolstering cost competitiveness, all with the establishment of the new plant.

The company, whose shares trade on the Tokyo Stock Exchange's first section, counts molded resin autoparts and hoses for home appliances and construction as its main products. It has added foreign production bases over the years to keep up with the business expansion of Honda Motor, its main customer.

As it was informed earlier, Honda Motor Company is planning to increase production of its partially or fully electric vehicles (EVs) to account for two-third of the global sales by 2030.

Tigers Polymer now generates more than 50% of sales outside Japan. Group sales for the current year ending in March are projected to reach 41 billion yen.

MRC