Styrene, polycarbonate margins drag down Trinseo earnings

MOSCOW (MRC) -- Trinseo (Berwyn, Pennsylvania) reports fourth-quarter net income of USD6 million, swinging from a USD1-million loss in the year-ago period, reported Chemweek.

Adjusted EBITDA totaled USD27 million, down 47% year over year (YOY) from USD51 million, reflecting lower styrene and polycarbonate (PC) margins. Sales totaled USD889 million, down 17% YOY from USD1.065 billion, the result mainly of the pass-through of lower raw material costs, but also lower volume in the feedstocks, polystyrene, and synthetic rubber segments. Adjusted earnings per share came to 35 cents, up 52% YOY, but short of the average analyst estimate of 48 cents as compiled by Refinitiv (New York).

Frank Bozich, CEO, expects market conditions in the year ahead similar to those of the second half of 2019. "We are confident that our business excellence program, our improved cost structure from the recent restructuring, and our focus on the growth areas of our portfolio will largely offset incremental headwinds, including lower year-over-year styrene margins."

Trinseo expects 2020 net income of USD95-112 million, up from USD92 million, and adjusted earnings per share of USD2.40-2.84, down from USD3.13. The outlook assumes the 2019 novel coronavirus (2019-nCoV) outbreak will have a pretax impact of USD5-10 million. "While our operations haven’t been affected, we are seeing lower demand from our customers in China due to delayed plant start-ups following Chinese New Year," says Bozich.

Sales in the latex binders segment declined 14% YOY to USD219 million, mainly on the pass-through of lower raw material costs. Adjusted EBITDA was flat at USD22 million as unfavorable net timing was offset by higher volume to coatings, adhesives, sealants, and elastomers (CASE) applications and the contribution of the Rheinmuenster, Germany, latex binder facilities acquired from Dow in October.

Synthetic rubber segment sales declined 23% YOY to USD100 million. Trinseo cites cost pass-through and lower emulsion styrene-butadiene rubber (E-SBR) volume, partially offset by higher solution styrene-butadiene rubber (S-SBR) volume. Adjusted EBITDA doubled to USD12 million on favorable timing, higher S-SBR volume, and higher fixed-cost absorption.

Performance plastics sales dropped 10% YOY to USD325 million on cost pass-through and the weaker polycarbonate market, partially offset by higher volume, mainly into the consumer electronics market in Asia. Adjusted EBITDA came to USD29 million, down USD2 million YOY on higher fixed costs, partially offset by timing and increased volume.

Polystyrene (PS) sales dropped 26% YOY to USD176 million, mainly on styrene cost pass-through; lower volume in Europe was mostly offset by higher volume in Asia. Adjusted EBITDA dropped slightly to USD5 million.

Sales in the feedstocks segment dropped 13% YOY to USD69 million on lower styrene market prices. Adjusted EBITDA of negative USD10 million was USD3 million lower YOY on lower margins in Europe and Asia.

Americas Styrenics, the company’s joint venture with CPChem, reported adjusted EBITDA of USD21 million, down USD10 million YOY on lower styrene margin.

As MRC informed before, Trinseo have announced a price increase for all PS grades, acrylonitrile-butadiene-styrene (ABS) and acrylonitrile styrene copolymer (SAN) grades in Europe. Effective February 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

-- STYRON general purpose polystyrene grades (GPPS) -- by EUR100 per metric ton;
-- STYRON and STYRON A-Tech and STYRON X- Tech high impact polystyrene grades (HIPS) - by EUR100 per metric ton;
- MAGNUM ABS resins - by EUR55 per metric ton;
- TYRIL SAN resins - by EUR55 per metric ton.

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics was 46,260 tonnes in December 2019, up by 8% year on year. The estimated consumption of PS and styrene plastics totalled 500,660 tonnes in 2019, down by 1% year on year. Russian producers of PS and styrene plastics produced 44,960 tonnes of material in December 2019, up by 1% year on year.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
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Hengli Petrochemical cuts PTA production at No. 4 line in Dalian

MOSCOW (MRC) -- Hengli Petrochemical (Dalian) Co., Ltd (Hengli) had reduced capacity utilisation at its No. 4 purified terephthalic acid (PTA) line in Dalian to 50% as coronavirus impacts demand, reported Chemweek.

As MRC informed earlier, Hengli Petrochemical announced the successful start-up of its new fourth PTA line in January, 2020.

This 2.5 million tons per annum capacity plant, located in Changxing Island, Dalian City, Liaoning Province, utilizes INVISTA’s P8 PTA technology with industry leading variable cost, capital productivity, energy usage, water usage, effluent generation and footprint, came online on January 8th, 2020. As the result of joint effort of all parties involved, the schedule of this project is significantly shorter than other PTA projects, with start-up only 22 months after the project kicked off in early March, 2018.

A fifth PTA line, identical to the fourth PTA line is currently under construction and is expected to start-up around the middle of 2020. Hengli also operates another 3 PTA lines on the same site, each with a capacity of 2.2 million tons per annum, using INVISTA’s P7 PTA technology. This makes the Hengli site the largest PTA site in the world.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia decreased by 16% year on year in December 2019. Russia's overall estimated PET consumption totalled 696,810 tonnes in 2019, up by 1% year on year (690,130 tonnes in 2018).

Hengli Petrochemical Co., Ltd. manufactures chemical fibers. The Company researches, produces, and sells polyester filament and chips for consumer and industry products. Hengli Petrochemical markets it products worldwide.
MRC

Trinseo introduces new portfolio of polycarbonate resins for medical devices

MOSCOW (MRC) -- Trinseo, a global materials solutions provider and manufacturer of plastics, latex binders and synthetic rubber, continues to support medical industry trends with the launch of a new wear resistant, high lubricity polycarbonate (PC), as per the company's press release.

The global medical industry is constantly evolving to address megatrends such as a rapidly growing and aging population. This is creating a need for home healthcare and self-administered treatments as well as medical wearables and patient-friendly devices.

Trinseo’s wear resistant, high lubricity PC has been designed for drug delivery devices and surgical tools, which are growing in importance for their convenience and cost saving potential. Part of Trinseo’s CALIBRE Polycarbonate Resins series, the new material platform provides a solution for the low friction movement of one material over another, extending product life and minimizing noise without external lubricants.

Beside this latest innovation, Trinseo is also recognized globally for its leadership position in advanced chemical resistant materials and will showcase its EMERGE 9000 product portfolio as well. This product range is used extensively in diagnostic equipment housings to resist the aggressive cleansers and disinfectants used by healthcare professionals to fight healthcare associated infections (HAIs), which remain a growing concern.

"Trinseo plastics satisfy the demand for aesthetically-pleasing devices designed for human interaction," said Aldo Zanetti, Global Market Leader Medical, Personal Care & Household, Trinseo. "At both Pharmapack and MD&M West, we look forward to sharing how Trinseo supports medical device manufacturers and also pharmaceutical companies, particularly with our latest grades for drug delivery device applications."

As MRC informed earlier, Trinseo raised its prices for all PC grades in Europe on 1 February, 2020, by EUR150 per metric ton.

According to MRC's ScanPlast report, Russia's estimated PC consumption (excluding imports and exports to/from Belarus) totalled 78,500 tonnes in 2019, up by 15% year on year (68,100 tonnes a year earlier).

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
MRC

PVC production in Russia rises by 4% in January

MOSCOW (MRC) -- Contrary to seasonal factors, Russian producers of unmixed polyvinyl chloride (PVC) have maintained a high level of capacity utilisation. Overal PVC output totalled 91,700 tonnes in January 2020, up by 4% year on year, according to MRC's ScanPlast report.

January production of unmixed PVC was 91,700 tonnes versus 87,760 tonnes in January 2019 and 81,400 tonnes in December 2019. Thus, despite relatively weak demand for resin from the domestic market, the average capacity utilisation exceeded 95% last month. Russia's overall PVC production reached 975,000 tonnes in 2019, compared to 958,600 tonnes a year earlier.

The structure of PVC production by plants looked the following way over the stated period.


RusVinyl (joint venture of SIBUR and SolVin) produced 32,400 tonnes of PVC in January, with emulsion polyvinyl chloride (EPVC) accounting for 2,900 tonnes of the whole amount, compared to 29,500 tonnes of PVC in January 2019 and 23,100 tonnes in December 2019. RusViny's overall PVC output reached 339,800 tonnes last year.

SayanskKhimPlast produced 28,200 tonnes of suspension PVC (SPVC) last month, whereas this figure was at 27,700 tonnes in January 2019 and 27,900 tonnes in December 2019. Overall, the Sayansk plant managed to produce 294,500 tonnes of PVC in 2019.

Bashkir Soda Company produced 23,600 tonnes of SPVC in January 2020, compared to 23,000 tonnes a year earlier and 24,100 tonnes in December 2019. Bashkir Soda Company's overall output of resin reached 263,200 tonnes last year.

Kaustik Volgograd produced 7,500 tonnes of SPVC last month, whereas this figure was at 7,600 tonnes in January 2019 and 6,400 tonnes in December 2019. The plant's overall output of resin reached 77,500 tonnes in 2019.

MRC

Ineos, UPM Biofuels announce renewable polymer raw materials production

MOSCOW (MRC) -- INEOS and UPM Biofuels have reached a deal to supply renewable raw materials to produce bio-based polymers in Europe, the companies said in a statement Tuesday.

The renewable raw materials will be supplied to Ineos' Cologne plant in Germany in order to produce polymers suitable for plastic food packaging, medical applications and piping.

The raw material will be UPM Biofuel's BioVerno, which is produced from the residue from wood pulp production. This raw material will be used by Ineos to create material's such as BIOVYNTM, which is used to make bio-based polyvinyl chloride (PVC), called Biovyn.

Announced at the K-Fair in Dusseldorf in October, Biovyn will be manufactured at Inovyn's 320,000 mt/year Rheinberg site, and will receive the bio-feedstock from Ineos' Cologne steam cracker via pipeline.

Biovyn is said to be the first commercially available PVC made without using fossil fuels and will follow strict technical, social and environmental standards set out by the Roundtable on Sustainable Biomaterials.

Inovyn is an Ineos company.

The RSB has now certified the entire production process, from converting the wood-based residue through to creating the final polymer, according to the statement.

"UPM BioVerno products now help to reduce climate and environmental impacts in an even broader range of applications. INEOS's and UPM Biofuels' commitment to RSB certification creates a strong common ground to build on," according to Maiju Helin, head of Sustainability and Market Development at UPM Biofuels.

As MRC reported before, in June 2019, petrochemicals company INEOS announced Antwerp as the location for its new petrochemical investment.

And earlier, in July 2018, INEOS announced that it will invest EUR2.7 billion (USD3.15 billion) to build a new chemical cracker and PHD unit in northwest Europe. This is the first cracker to be built in Europe in 20 years and both facilities will benefit from US shale gas economics, adding that the project will be completed in four years.

According to MRC's DataScope report, exports of suspension polyvinyl chloride (SPVC) from Russia totalled 193,700 tonnes in 2019, up by 11% year on year. Imports increased more significantly - by 217% year on year - to 50,900 tonnes.
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