COVID-19 - News digest as of 21.07.2020

1. Perstorp swings to net profit with positive exchange-rate effects on net debt; sales, EBITDA shrink

MOSCOW (MRC) -- Perstorp has recorded a net profit of 294 million Swedish krona (USD32.66 million) in the second quarter, swinging from a net loss of SKr41 million in the same period of the previous year, said Chemweek. This is mainly due to a large difference in exchange-rate effects on net debt between the two periods. Meanwhile, net sales fell 32% year on year (YOY) to SKr2.08 billion, caused by measures to tackle COVID-19 that drove demand down worldwide and due to lower selling prices linked to falling raw material costs, Perstorp says. EBITDA excluding nonrecurring items decreased by 27% YOY in the second quarter, to SKr265 million, the company says. Despite the weaker quarterly performance, the company was able to partially offset the negative impact of COVID-19 through a positive product mix together with lower fixed costs following strict spending controls.

MRC

MOSCOW (MRC) - Imports of polypropylene (PP) into Belarus decreased to about 44,500 tonnes in first five months of this year, down 2.5% year on year, compared to the same period of 2019. The greatest increase in demand accounted for homopolymer PP, according to MRC DataScope.

May PP imports in Belarus was about 8,300 tonnes, while in April it exceeded 9,200 tonnes. Total PP imports into the country reached 44,500 tonnes in January - May, compared with 45,700 tonnes year on year. The demand for homopolymer PP increased, but demand for propylene copolymers decreased.

The structure of PP imports by grades looked the following way over the stated period.

May imports of homopolymer PP reached 6,600 tonnes versus 6,200 tonnes a month earlier, purchasing of homopolymer PP rose in Russia under the pressure of seasonal factors. Overall imports of homopolymer PP reached 32,100 tonnes in the first five months of 2020, up by 5.2% year on year.

May imports of propylene copolymers to Belarus were 1,800 tonnes versus 3,000 tonnes a month earlier, local companies reduced their procurement of injection moulding block-copolymers of propylene (PP block copolymer) from Russian producers. Thus, overall imports of propylene copolymers reached 12,400 tonnes in January-May, down by 18% year on year.


MRC

MOSCOW (MRC) -- Overall imports of unmixed polyvinyl chloride (PVC) into Belarus totalled about 15,600 tonnes in the first five months of 2020, which corresponds to the same figure a year earlier, according to MRC's DataScope report.

According to the Statistical Committee of the Republic of Belarus, local converters increased their purchasing of PVC in May 2020 on a stronger demand for finished products, overall imports totalled 2,800 tonnes versus 2,600 tonnes a month earlier. Thus, imports of unmixed PVC into the country reached 15,600 tonnes in January-May 2020, which corresponds to the last year's figure.

Russian producers with the share of about 83% of the Belarusian market were the key suppliers of resin to Belarus over the stated period.
Producers from Germany and Ukraine were the second and third largest suppliers, respectively.


MRC

MOSCOW (MRC) -- Royal Dutch Shell Plc shut the gasoline-producing fluidic catalytic cracker (FCC) at its 318,000 bpd joint-venture Deer Park, Texas, refinery after a fire, sources familiar with plant operations said Reuters.

How long the 70,000-bpd FCC will be shut was unknown on Sunday, the sources said. Shell spokesman Curtis Smith said on Sunday that all individuals were safe and accounted for at the Shell Deer Park Complex, which includes the refinery and adjoining chemical plant.

"We responded to a small fire and leak at one of the units at our Deer Park Manufacturing Complex,” Smith said. “The fire is extinguished, all individuals are safe and accounted for and our operations team is working to stop the leak and safely repair the unit."

The Deer Park FCC outage will tighten supply when gasoline consumption is close to last year’s levels. U.S. finished gasoline consumption has recovered since April, when it was down by 48% from a year ago, to 6% of the 2019 level of 8.6 million bpd for the second week of July, according to the U.S. Energy Information Administration.

The FCC uses a catalyst under high heat and pressure to convert gas oil into gasoline.

Propylene is the main raw material for the production of polypropylene (PP).

According to MRC's ScanPlast, PP suppliy to the Russian market in January - May 2020 rechaed 457,930 tonnes (calculated using the formula production minus exports plus imports). The supply of only stat-copolymers of propylene (PP-random) increased.

The Deer Park refinery is a 50-50 joint venture between Shell and Pemex, Mexico’s national oil company. Shell is the managing partner.
MRC

MOSCOW (MRC) -- Oil major Chevron Corp said it agreed to buy Noble Energy Inc in an all-stock deal, valuing the Houston-based oil and gas producer at USD5 billion, said Hydrocarbonprocessing.

The offer values Noble at USD10.38 a share or 0.1191 Chevron share, a 7.5% premium to Noble’s Friday close. The deal would value Noble at roughly USD13 billion, including debt.

Noble’s assets will expand Chevron’s presence in the DJ Basin of Colorado and the Permian Basin across West Texas and New Mexico. They would also add to Chevron’s assets in the eastern Mediterranean and West Africa and yield potential annual cost savings of USD300 million.

Chevron’s offer comes more than a year after it was forced to abandon its takeover bid for Anadarko Petroleum Corp, outmaneuvered by Occidental Petroleum Corp’s higher offer.

Shale producers have been hit hard as oil prices collapsed in April due to the pandemic and a brief price war between Saudi Arabia and Russia, leading many companies to seek bankruptcy protection.

While prices have recovered from their lows, they remain depressed as a new surge of COVID-19 cases threaten to stall recovery in fuel demand.

As MRC informed earlier, Chevron Corp restarted the 112,229 barrel-per-day (bpd) Pasadena, Texas, refinery night after completing a multi-unit overhaul that was extended because of the COVID-19 pandemic.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveries of exclusively PP random copolymer increased.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC