Lotte Chemical to merge its specialty chemicals unit

MOSCOW (MRC) -- Lotte Chemical Corp., a major South Korean chemical company, said its merger with Lotte Advanced Materials Co. will be completed by 2 January 2020, reported GV.

The company announced the merger plans on 22 August 2019, when it unveiled its decision to merge with its wholly owned subsidiary as part of efforts to streamline its chemical business.

Lotte Chemical formerly owned a 90 percent stake in Lotte Advanced Materials after it acquired the company from Samsung Group in April 2016. It bought the remaining 10 percent stake from Samsung SDI Co. for KRW 279.5 billion (USD 231 million) on 30 July 2019.

Lotte Chemical said the move is intended to help boost the company's competitiveness by bringing specialty chemicals businesses under the same wing and maximizing efficiency in management. The merger will also boost its annual polycarbonate (PC) production capacity to 460,000 tons.

Lotte Advanced Materials currently produces 240,000 tons of PC a year.

We remind that, as MRC informed before, Lotte Chemical Titan Holding (Kuala Lumpur, Malaysia), an affiliate of Lotte Chemical (Seoul, South Korea), announced that the group's ethane cracker and ethylene glycol (EG) plant at Lake Charles, Louisiana, commenced commercial operations in August, 2019. Lotte Chemical USA, a 40/60 joint venture (JV) between Lotte Chemical Titan and Lotte Chemical, holds the Lotte group's stakes in the plants. The USD3.1-billion ethane cracker is an 88/12 JV between Lotte Chemical USA and Axiall, a subsidiary of Westlake Chemical. Lotte has invested about USD1.9 billion in the JV. Lotte Chemical USA owns 100% of the EG plant.

Lotte is the first South Korean petrochemical company to enter the ethane-cracking business in North America using shale gas. Lotte Chemical operates naphtha crackers at Yeosu and Daesan, South Korea, and Lotte Chemical Titan operates a cracker at Pasir Gudang, Malaysia. Lotte says that the US cracker increases the group's overall ethylene capacity to 4.5 MMt/y, making it the seventh-biggest producer of ethylene worldwide.

According to ICIS-MRC Price report, Russia's estimated consumption of polycarbonate (PC) rose in in the first three quarters of 2019 by 11% year on year to 61,000 tonnes (54,800 tonnes a year earlier). Consumption in the injection moulding sector grew in the first nine months of 2019 by 10% year on year to 7,900 tonnes from 7,200 tonnes a year earlier.
MRC

MOSCOW (MRC) -- A shortage of high impact polystyrene (HIPS) remained in the Ukrainian polystyrene (PS) market in December, according to ICIS-MRC Price report.

Meanwhile, the general purpose polystyrene (GPPS) market is balanced.

The market is expected to stabilize in the second half of the month after the arrival of Iranian and Nizhnekamskneftekhim's HIPS. Traders did not have Nizhnekamskneftekhim's PS in early December.

Nizhnekamskneftekhim will ship limited quantities of material to traders this month. The Russian producer's GPPS prices were reduced to USD1,100/tonne FCA Nizhnekamsk, including VAT, whereas HIPS prices dropped to USD1,160/tonne FCA Nizhnekamsk, including VAT.
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MOSCOW (MRC) -- Earlier this month, China’s Zhejiang Petroleum & Chemical Co Ltd launched a 3.8-million-ton-per-year reformer unit, a key processing facility at its new mega refinery and petrochemical complex in east China, the company said on its social media platform, reported Reuters.

The reformer unit, which processes naphtha into aromatics, is the world’s single-largest facility of its kind, the company claimed.

Zhejiang Petrochemical,based in Zhoushan of Zhejiang province, started test runs at a 200,000-barrels-per-day crude oil refinery in May, the company said.

The complex includes a second 200,000-bpd crude unit, a 1.4 million-tpy ethylene and a 4 million-tpy paraxylene plant. All facilites are expected to start operating next year, industry sources said.

As MRC informed earlier, in H1 November 2019, Zhejiang Petrochemical Co Ltd (ZPC) started up its No. 1 cracker in Zhoushan, China, though it is reported that the company is still working to stabilize the operation rate. The cracker has an annual capacity of 1.4 million tons/year of ethylene and 900,000 tons/year of propylene. As reported earlier, the company is also aiming to bring its Phase I downstream PP and PE plants online within 2019. However, the startup schedule is very much depending on the operation of the No. 1 cracker.

The Phase I facility houses a 300,000 tons/year HDPE unit, 450,000 tons/year LLDPE line and a 900,000 tons/year PP plant. Market players are speculating that these units might only come online in Q1-2020 given the large scale of both upstream and downstream production the company is managing.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
MRC

MOSCOW (MRC) -- Buxton Natural Mineral Water, headquartered in the United Kingdom, has announced that its whole range of water bottles will be made from 100 percent recycled polyethylene terephthalate (rPET) by 2021, said Recyclingtoday.

Buxton is a part of the Nestle Waters group. Buxton’s bottles are already 100 percent recyclable and will remain 100 percent recyclable when the company makes this transition, Nestle Waters reports in a news release.

The company’s 75-centiliter and 1-liter bottles made from 100 percent rPET were launched in November as well and the rest of the range, currently made with a minimum of 20 percent recycled plastic, will follow by the end of 2021. According to a news release from Nestle Waters, this change is the result of Nestle Waters’ longstanding commitment to sustainability, to reduce its impact on the environment and to promote a circular economy.

“We are incredibly excited to be able to put our commitments to sustainability into practice,” says Michel Beneventi, business executive officer for Nestle Waters U.K. “The high-quality recycled material retains the same all-important properties as PET, resulting in a product that is lightweight, durable, resilient and still 100 percent recyclable. We would have liked to have made all our Buxton bottles from recycled material much sooner, but there are many challenges to achieving this. The material we use needs to be high-quality food grade.

“The availability of a domestic U.K. supply of this material is still relatively limited,” Beneventi continues. “Today, the rPET used for our Buxton bottles has to be sourced outside of the U.K., as we don’t currently have the infrastructure available at scale in this country to create volumes needed. We would love to be able to produce the bottles for our British water in the U.K. Therefore, we’re working with industry partners, nongovernmental organizations and government to improve the national recycling rate, supporting the U.K.-wide deposit return scheme and engaging with consumers about their recycling to help make a circular economy for plastics a reality.”

This year, Nestle released its vision that none of its product packaging, including plastics, should end up in a landfill or as litter and that all 100 percent of its packaging will be recyclable or reusable by 2025. Buxton is ahead of this target with this announcement, Nestle Waters reports in a news release.

“As a packaged goods company, we have a hugely important role to play in helping to address the amount of plastic produced in our industry and a collective responsibility to help shape a more sustainable future,” says Anna Turrell, head of sustainability for Nestle Waters UK. “We will continue to push the boundaries to address this challenge.”

According to MRC's ScanPlast report, Russia's estimated PET consumption dropped in September 2019 by 10% year on year, totalling 58,210 tonnes. Overall, 551,320 tonnes of PET was processed in Russia in the first nine months of 2019, up 9% year on year.

MRC

MOSCOW (MRC) -- Saudi Aramco's shares traded at Riyals 35.2 (USD9.39) at its debut on the local stock exchange, 10% higher than its initial public offer of Riyals 32, valuing the company at USD1.88 trillion following an IPO for a 1.5% stake in the world's biggest oil producer and most profitable company, reported S&P Global.

Aramco shares are trading under the symbol 2222, according to the local stock exchange known as Tadawul. The IPO valued the company at USD1.7 trillion.

The shares will be capped at a 10% plus or minus daily price fluctuation limit.

Aramco's USD25.6 billion IPO, which is the biggest after Chinese e-commerce giant Alibaba's USD25 billion sale in 2014, is a cornerstone of Saudi Arabia's Vision 2030 aimed at weaning the kingdom off its oil income.

Crown Prince Mohamed bin Salman had initially said the company could be valued at USD2 trillion, with a stake sale of up to 5%.

However, lukewarm international investor interest in the IPO prompted the Saudi government to postpone the IPO that was slated to take place in 2018 and make it a local listing rather than an international and domestic flotation as was first touted by the crown prince.

As MRC informed before, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
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