Covestro completes divestment of polycarbonate sheets business

MOSCOW (MRC) -- Covestro has successfully closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy, reported MarketSreener.

The segment generated total sales of EUR 130 million in 2018. Serafin will continue operations with the 250 employees at all locations. Moreover, Covestro will continue to serve as key raw materials supplier in the foreseeable future.

With the sale of its European polycarbonates sheets business, Covestro is pursuing its ongoing portfolio optimization. The divestment follows transactions that were already concluded in North America and India, as well as the conversion of the Guangzhou (China) site into production of speciality films. Thus, Covestro has completely sold its polycarbonates sheets business.

From now on, the former polycarbonate sheets business of Covestro will operate under the new company name Exolon Group. Within Serafin Group, Exolon Group will be established as an independent, mid-sized company. With its own dedicated strategy based on the needs of its customers, the company will be able to fully exploit its growth potential in the future. As an independent company, Exolon Group will continue to focus on the production and distribution of high-quality solid and multiwall sheets, which are used in a variety of industries and applications, such as in the construction- and lightning industries as well as in the fields of mechanical engineering and mobility.

Covestro and Serafin have agreed not to disclose the financial details of the transaction.

As MRC wrote before, in May 2018, Bayer Group sold 28.81 million shares representing a 14.2 percent interest in Covestro at a price of 75.50 euros per share. The proceeds of this sale totaled 2.2 billion euros. Bayer AG now holds just 6.8 percent of Covestro shares to repay the exchangeable bond that matures in 2020. Bayer AG acquired these shares from Bayer Pension Trust, which now no longer holds any Covestro shares.

We also remind that on 1 September, 2015, Bayer MaterialScience became known as Covestro. The plans for the carve-out of Bayer MaterialScience were announced in September 2014.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to\from Belarus) fell in January-November 2019 by 14% year on year to 70,700 tonnes (62,000 tonnes a year earlier).

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2018 sales of EUR 14.6 billion, Covestro has 30 production sites worldwide and employs approximately 16,800 people (calculated as full-time equivalents) at the end of 2018.

Serafin is a diversified industrial group whose philosophy is based on more than 150 years of entrepreneurial tradition of its shareholding family. Serafin invests into companies with the aim to foster their long-term development in accordance with all stakeholders. Following the successful acquisition of Exolon Group, Serafin Group companies will generate total revenues of more than EUR 900 million with 5,000 employees.
MRC

Four-day refinery strike in France should not leave motorists stranded -Total

MOSCOW (MRC) -- French oil major Total said that strikes against the government’s pension reform were having no impact on its fuel supply and distribution ahead of a four-day nationwide strike in French oil refineries, according to Hydrocarbonprocessing.

A day before unions are starting a 96-hour strike and protest actions at refineries in France, oil companies and the government are saying that motorists need not fear fuel shortages, but union leaders say they are determined to squeeze supplies until the government drops its pension reform plans.

"Our gas stations are well stocked on Monday. The protest movement that has been announced will have no impact on the supply of our network from Jan. 7 to 10 and beyond," Total said in a statement.

Total said that only 26 - or just 0.7% - of its 3,500 gas stations had supply problems on Monday morning and that there was no risk of shortages in its retail network.

Hard-line CGT union official Thierry Defresne told Reuters that seven out of eight French refineries will be on strike for 96 hours from Tuesday to Friday.

He said those refineries will close completely and will not distribute a single product, including no kerosene fuel for airplanes.

"There will be disturbances to fuel supply. Our goal is not to make motorists’ lives miserable. We want to show that workers are united against this reform," Defresne said.

About 50% of the fuel sold in France is not produced in local refineries but imported, which reduces the impact of French refinery strikes, an industry source said.

Total said its four oil refineries in Donges, Feyzin, Normandie and Grandpuits as well as its bio-refinery at La Mede were in operation.

It said that in Donges, Feyzin and Normandie products were shipped normally by trucks and pipeline, but that Grandpuits and La Mede could only be supplied by pipeline.

Total also said that with the exception of two fuel storage facilities attached to Grandpuits and La Mede, no depots were blocked. Nationwide, France has some 200 depots from where fuel is distributed to gas stations.

Public transport sector workers at national railway SNCF and Paris metro operator RATP have been on strike for more than a month, and on Thursday unions are organizing a fourth day of nationwide protest marches against President Emmanuel Macron’s pension reform plans.

As MRC informed before, in November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

Sandvik acquires Thermaltek

MOSCOW (MRC) -- Sandvik acquires privately owned Thermaltek Inc., a manufacturer of high temperature furnace systems and metallic heating elements headquartered in North Carolina, USA, said Hydrocarbonprocessing.

“Through this acquisition we add further strength to our leading position in industrial heating, a strategically important growth area for our Kanthal division within Sandvik Materials Technology,” says Goran Bjorkman, President, Sandvik Materials Technology.

"This acquisition is yet another important step for Kanthal to expand its global offering of sustainable industrial heating. I am pleased to welcome all employees at Thermaltek into the Kanthal family,” says Nicklas Nilsson, Vice President, Kanthal.

In the 12-month period ending in September 2019, Thermaltek generated revenues of 13 million USD with its 30 employees and strong sales network in North America. Thermaltek will continue to go to market under its own brand.

The transaction is closed and Thermaltek will be reported as part of the division Kanthal within business area Sandvik Materials Technology. The parties have agreed not to disclose the purchase price. The deal is neutral to earnings per share from the start.
MRC

Total to take part in carbon capture study at US cement plant

MOSCOW (MRC)--Total will take part in a study for commercial-scale carbon capture at the Holcim Portland Cement Plant in Colorado, US, the French major said on Monday.

In conjunction with wholly-owned Occidental subsidiary Oxy Low Carbon Ventures (OLCV) and carbon capture specialists Svante Inc, Total will participate in the study to evaluate the cost of storing up to 725,000 tonnes of carbon dioxide (CO2) a year from the plant.

The project would use Svante’s technology to capture carbon directly from industrial sources at half the capital cost of existing solutions. The CO2 would then be permanently sequestered underground by Occidental.

By pairing the technologies, it could significantly reduce the carbon footprint for the cement industry. Total Group CTO senior vice president Marie-Noelle Semeria said: "Total has slated 10% of its annual R&D budget to make significant advances in Carbon Capture, Utilisation and Storage (CCUS) technology, a key technology to curb worldwide CO2 emissions.

"Our investment in this joint study is directly aligned with our strategy. The learnings from this study will help us pursue our commitment to the commercial development of CCUS."

As it was written earlier, Total is also developing a USD1.4-billion propane dehydrogenation and PP complex at Arzew, Algeria, in partnership with Algeria’s state-owned oil company Sonatrach. The facilities will be designed to produce 600,000 metric tons/year each of propylene and PP. The project is in FEED phase with FID due in 2021.

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

Crude oil prices were generally lower in 2019 than in 2018

MOSCOW (MRC) -- The price of Brent crude oil, the international benchmark, averaged USD64 per barrel (b) in 2019, USD7/b lower than its 2018 average. The price of West Texas Intermediate (WTI) crude oil, the U.S. benchmark, averaged USD57/b in 2019, USD7/b lower than in 2018, said Hydrocarbonprocessing.

Compared with recent years, both crude oil prices traded within relatively narrow price ranges throughout the year. Brent prices reached an annual daily low of USD55/b in early January, rising to a daily high of USD75/b in late April. The resulting range of USD20/b is the narrowest since 2003. WTI prices ranged from USD47/b to USD66/b.

More recently, crude oil prices have increased following the January 3 U.S. military operation in Iraq, likely reflecting an increase in geopolitical risk.

Although the 2019 range of daily prices remained relatively narrow, Brent and WTI front-month futures prices did experience their largest single-day price increases since 2008. On Monday, September 16, 2019, the first full day of trading after an attack on key energy installations in Saudi Arabia, Brent and WTI crude oil prices increased by USD9/b and USD8/b, respectively. The price increases were relatively short lived, and prices returned to pre-attack levels by the end of the month because of Saudi Arabia’s ability to bring production back online within weeks of the attack and global concerns about demand growth.

Throughout 2019, increases in U.S. petroleum production put downward pressure on crude oil prices. In addition, the production increases likely limited the effect on prices from the attack on Saudi Arabia, production cut announcements from the Organization of the Petroleum Exporting Countries (OPEC), and U.S. sanctions on Iran and Venezuela that limited crude oil exports from those countries.

Outside the United States, crude oil production from major producers such as Saudi Arabia, Venezuela, and Iran declined in 2019. EIA expects that total OPEC crude oil production averaged 29.8 million b/d in 2019, a decline from the 2018 average of 32.0 million b/d. U.S. crude oil imports from OPEC countries were at their lowest level in several decades. To continue limiting excess crude oil supply, on December 7, 2019, OPEC+ (OPEC plus 10 other nations such as Russia, Mexico, and Kazakhstan) announced they were deepening the production cuts originally announced in December 2018.

Based on the U.S. Energy Information Administration’s (EIA) monthly data through October and short-term forecasts for November and December, 2019 will likely be a record year for several U.S. crude oil and petroleum metrics. EIA expects that U.S. crude oil and other liquids production will reach an annual average of 19.6 million barrels per day (b/d), the highest level on record. EIA also expects U.S. crude oil production will average 12.3 million b/d in 2019, making the United States the largest crude oil producer in the world.

In its December Short-Term Energy Outlook, EIA expects U.S. crude oil and petroleum product net imports will average 490,000 b/d in 2019, down from 2.3 million b/d in 2018. In September and October, the United States exported more petroleum (crude oil and products) than it imported for the first time on record, based on monthly values since 1973. EIA’s monthly data through December 2019 will be available by the end of February 2020.
MRC