Pemex fails to send USD26 million credit note to Braskem Idesa

MOSCOW (MRC) -- Mexico's Braskem Idesa has not received a credit note worth about USD26 million from state-run Pemex for failing to supply an agreed amount of ethane, reported S&P Global with reference to Braskem's statement Thursday.

According to Braskem Idesa, the payment is related to "limited damages" and is provided for in an ethane contract signed by the two companies. The contract integrates the Mexican petrochemical complex's financing structure.
Braskem Idesa was not available for comment immediately Thursday on when the note was due or what its next steps would be.

Braskem Idesa is a joint venture between Brazil's Braskem and Mexico's Idesa and has a nameplate production capacity of 1.05 million mt/year each of ethylene and polyethylene (PE).

On Wednesday, Mexican President Andres Manuel Lopez Obrador said his government was analyzing the possibility of canceling the supply contract between Pemex and Braskem Idesa. The joint venture, on the other hand, said it has been talking to Pemex and will take the appropriate contractual measures if necessary.

The deal was signed in February 2010 and involves Pemex providing Braskem Idesa with 66,000 b/d of ethane for 20 years. However, the state-owned company has been struggling to fulfill its part of the agreement. In 2018, former Braskem president Fernando Musa said Pemex was facing operational challenges and could not deliver all the ethane it needed.

In the first half of February, Braskem Idesa said the company received its first imported ethane cargo so it could produce polyethylene at the complex in Veracruz.

Pemex did not respond to a request for comment Thursday.

As MRC informed before, Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- Italian oil major Eni continues to operate its domestic refineries and power plants in northern Italy normally, reported S&P Global with reference to a company spokesman's statement Thursday, despite sending home staff at its headquarters in Milan as local coronavirus cases mount.

All Eni employees based in the company's San Donato Milanese and central Milan offices were asked on Wednesday to work home until February 28, the spokesman said. He declined to say if any actual or suspected cases of coronavirus has been identified at the sites.

"Given the operational complexity of its industrial activities in the offices, the company will maintain the functional supervision to guarantee the complete safety of its operations," the spokesman said.

San Donato Milanese, on the outskirts of Milan, is a major administrative and operational center for Eni which includes an oil and gas research center and Enipower, which operates six thermoelectric plants in Italy.

Eni operates two refineries in northern Italy, the 190,000 b/d Sannazzaro plant near Milan, and a biorefinery near Venice.

Italy has become Europe's worst-affected country by coronavirus. Italy's coronavirus cases surged by 100 to over 500 Thursday, with 14 total deaths, mostly in the highly-industrialized Lombardia and Veto regions of northern Italy.

On Tuesday, Chevron sent home about 300 workers from its trading office in London's Canary Wharf district after an employee reported flu-like symptoms after having recently returned from a country infected with the coronavirus, according to sources close to the matter.

As MRC informed earlier, Italy’s Versalis (part of Eni) took its cracker in Dunkirk, France offline in early September, 2019, due to a fire which broke out at the company’s petrochemical plant. Local media sources also reported that the fire was brought under control with no reported injuries. The cracker has a production capacity of 380,000 tons/year of ethylene and 95,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia"s estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of 68 billion euros (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.
MRC

MOSCOW (MRC) - The Interdepartmental Commission for International Trade of Ukraine considered the statement of the largest petrochemical plant in Ukraine - Karpatneftekhim about initiating and conducting a special investigation regarding imports to Ukraine regarding imports of polyethylene and polyvinyl chloride, as well as caustic soda to Ukraine, reports Uryadovy Kurjer.

The company also requests a reduction in rail transportation tariffs and asks the government to take measures to protect domestic producers.

The publication notes that in accordance with the Law of Ukraine "On the application of special measures regarding imports to Ukraine", the Commission considered the statement of Karpatneftekhim "On the initiation and conduct of a special investigation regarding the import into Ukraine of polymer products regardless of the country of origin and export."

The Commission examined the evidence provided in the statement on the growth of imports of polymer materials into Ukraine and causing significant harm to national producers as a result of such imports. And also took into account the information of the Ministry of Economic Development, Trade and Agriculture of Ukraine on the results of the consideration of the application.

Based on the results of the review, the Commission found that the statement provided sufficient evidence, based on which it can be considered that the import of polymer materials into Ukraine, regardless of the country of origin and export, grew.

In addition, the statement provides sufficient evidence that the import into Ukraine of polymeric materials, regardless of the country of origin and export, was carried out in such volumes and under such conditions that it could cause significant damage to the national producer.

In connection with the above and in accordance with Article 9 of the Law, the Commission adopted a decision dated 21.02.2020 No. SP-440/2020 / 4411-03, according to which it initiated a special investigation regarding the import of goods into Ukraine regardless of the country of origin and export, has the following description: polymeric materials, in particular polyethylene with a specific gravity of 0.94 or more and polyvinyl chloride, not mixed with other substances that can be classified according to UKT FEA according to codes 3901 20 90 00 and 3904 10 00 00.

A special investigation was entrusted to the Ministry of Economy. If the investigation concerns the interests of individuals or legal entities, such persons have the right to send information to the Ministry of Economy that may be useful for the investigation.

Commission Decision of February 21, 2020 No. SP-440/2020 / 4411-03 shall enter into force on the day of publication of this message.

Earlier it was reported that Karpatneftekhim from January 2 stopped the production of low-pressure polyethylene (HDPE) due to the high cost of raw materials, which are not covered by the current world prices of the polymer.

The city council of the Ukrainian city of Kalush, where Karpatneftekhim is based, reviewed and agreed on the text of an appeal to the President of Ukraine, the head of the Verkhovna Rada and the Prime Minister of Ukraine on the situation that has developed at the enterprise.

According to a DataScope survey by Market Report, last year, the total volume of polyethylene imports to the Ukrainian market grew by 10% compared to the year 2018 and amounted to 268.7 thousand tons. The largest increase in external supplies came from low-pressure polyethylene (HDPE). At the same time, according to the results of the first month of the current year, the total volume of imports of polyethylene (PE) on the Ukrainian market decreased by 8% compared to the indicator of 2018 and amounted to 19.4 thousand tons. The largest decline in external supplies was due to linear polyethylene (LLDPE).

Karpatneftekhim is one of the largest enterprises in the petrochemical complex of Ukraine. Currently, the company is capable of annually producing 300 thousand tons of polyvinyl chloride, 200 thousand tons of caustic soda, about 180 thousand tons of chlorine, as well as 250 thousand tons of ethylene and 100 thousand tons of polyethylene.

MRC

MOSCOW (MRC) -- The city council of the Ukrainian city of Kalush, where the largest petrochemical plant in Ukraine, Karpatneftekhim, is based, has reviewed and agreed on the text of an appeal to the President of Ukraine, the head of the Verkhovna Rada and the Prime Minister of Ukraine on the situation that has developed at the enterprise, Vikna reports.

It was previously noted that Karpatneftekhim from 2 January shut the production of low-pressure polyethylene (HDPE) due to the high cost of raw materials, which are not covered by the current world prices of the polymer.

In its appeal, the city council indicates that Karpatneftekhim is one of the largest taxpayers in the Ivano-Frankivsk region and in Kalush, therefore the shutdown of the enterprise, which employs 2,792 people, will have a negative impact on budgets of all levels, the labor market and lead to a social and economic explosion in the region . According to the optimistic scenario, they can reduce 20% of the workers, while the pessimistic scenario - up to 80%.

"This situation has arisen in connection with a non-competitive environment for domestic producers, caused by a sharp increase in imports to Ukraine and dumping prices for caustic soda, polyethylene and polyvinyl chloride and a high tariff for rail transportation," the statement said.

The City Council supported the statements and petition of Karpatneftekhim to initiate and conduct a special investigation into the import of caustic soda into Ukraine and the import into Ukraine of polyethylene and polyvinyl chloride and a petition to reduce rail tariffs, and asks the government to take measures to protect the domestic producer.

As the deputy general director of Karpatneftekhim LLC Yarema Rudik said at the session, the enterprise will not be able to operate without government intervention.

According to Yarema Rudik, the company has already submitted to the Ministry of Economy and Trade an application for a special investigation into the import of caustic soda, polyethylene and polyvinyl chloride into Ukraine. On February 12, the ministry launched a special investigation into caustic soda, and the application for polymers should have been considered on February 21. The special investigation procedure is lengthy - 200 days. Therefore, Karpatneftekhim LLC appealed to the Ministry with a request to introduce preventive measures (import duties) that can be applied 45 days after the start of the investigation.

As Jarema Rudik noted, meetings have already been held with representatives of ministries and the government has an understanding of the situation. In Ukraine, products, forcing out Karpatneftekhim LLC from the market, are imported from different countries, in particular from the USA and Saudi Arabia.

According to a DataScope survey by Market Report, last year, the total volume of polyethylene imports to the Ukrainian market grew by 10% compared to the year 2018 and amounted to 268.7 thousand tons. The largest increase in external supplies came from low-pressure polyethylene (HDPE). At the same time, according to the results of the first month of the current year, the total volume of imports of polyethylene (PE) on the Ukrainian market decreased by 8% compared to the indicator of 2018 and amounted to 19.4 thousand tons. The largest decline in external supplies was due to linear polyethylene (LLDPE).

Karpatneftekhim is one of the largest enterprises in the petrochemical complex of Ukraine. Currently, the company is capable of annually producing 300 thousand tons of polyvinyl chloride, 200 thousand tons of caustic soda, about 180 thousand tons of chlorine, as well as 250 thousand tons of ethylene and 100 thousand tons of polyethylene.
MRC

MOSCOW (MRC) -- Mitsubishi Chemical Corp (MCC) has agreed to acquire Swiss engineering plastics recycler Minger Group - consisting of Minger Kunststofftechnik AG and Minger Plastic AG, the Japanese chemicals major said.

Based on the Mitsubishi Chemical Holdings (MCHC) Group’s KAITEKI Vision 30, MCC makes the circular economy a key element, and plastics recycling is an important initiative within this basic policy.

The Minger Group has strong proprietary recycling technologies for engineering plastics like polyether ether ketone (PEEK), poly vinylidene difluoride (PVDF), and nylon. It possesses a material collection network that spans a wide area of Europe, a track record of recycled material transactions with over 100 customers, and an established business model for recycling engineering plastics in the region.

The acquisition will allow MCC to establish an integrated business model for engineering plastics, from manufacturing to sales, machining, collection, and reuse. Going forward, the company will continue to strengthen its capability to propose solutions to users in the engineering plastics industry and will contribute to the realisation of a recycling-based society.

Appenzell-based Minger has proprietary recycling technologies for engineering plastics like polyether ether ketone (PEEK), poly vinylidene difluoride (PVDF) and nylon, along with a material collection network that spans a wide area of Europe, MCC said.

As MRC informed earlier, Mitsubishi Chemical has a steam cracker in Kashima with an ethylene production capacity of 564,000 mt/year. It shut one steam cracker there in 2014 - which has an ethylene production capacity of 375,000 mt/year -- following a sluggish petrochemical demand in the country.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
MRC