Mitsubishi Chemical to acquire European carbon fiber recycling companies

MOSCOW (MRC) -- Mitsubishi Chemical Corporation (MCC) recently decided to acquire two German carbon fiber recycling companies, CFK Valley Stade Recycling GmbH & Co. KG (CFK) and carboNXT GmbH, through its subsidiary Mitsubishi Chemical Advanced Materials AG, as a part of the company's efforts to promote the circular economy, said the company.

The acquisition is slated for completion around early August. Based on the MCHC Group's medium- to long-term basic management strategy KAITEKI Vision 30, MCC views the circular economy as a key element in its realization of KAITEKI 2, and in-house product recycling is an important initiative within this strategy.

CFK has its own network to collect leftover materials generated during the molding of intermediate materials such as carbon fiber prepreg, mainly from customers in mobility-related industries, and also draws on its advanced proprietary technology to recycle these materials into usable forms of carbon fiber. In turn, carboNXT sells these CFK-recycled products.

MCC has also acquired c-m-p GmbH 3, a carbon fiber prepreg manufacturer, as well as the Minger Group 4 of engineering plastics recycling companies. With the latest acquisition, MCC will establish a chain from the manufacture of carbon fibers and carbon fiber composites to collection and recycling of products, in Europe, following Japan, where the chain has already been established. 5 In the future, MCC will offer total solutions including product recycling to customers, by using recycled products as raw materials within the group.

Going forward, the company will continue to strengthen its capability to propose solutions to users as a leader in the carbon fiber composite industry and will contribute to the realization of a recycling-based society.

As MRC informed Mitsubishi Chemical resumed production at the end of June at the monoethylene glycol (MEG) plant in Kashima, Japan after renovations. Maintenance at this enterprise with a capacity of 300,000 tonees/year was started in mid-May of this year.

According to MRC's ScanPlast, in May of this year, the estimated PET consumption in Russia amounted to 70,170 tonnes, which corresponds to the level of consumption last year (70,450 tonnes). In total for the period January - May of this year, the estimated consumption of PET in the Russian Federation amounted to 304,310 tonnes of material. This is 3% less than in 2019.

Mitsubishi Chemical, a Japanese integrated chemical company, was formed on October 1, 1990 through the merger of Mitsubishi Kasei and Mitsubishi Petrochemical Co. Due to its wide range of activities, it is one of the ten leading chemical companies in the world.

U.S. crude stocks post steepest weekly draw this year as imports slide

MOSCOW (MRC) -- U.S. crude oil stockpiles fell by nearly 11 million barrels last week as imports dropped, while refined product inventories rose, the Energy Information Administration said, said Hydrocarbonprocessing.

Crude inventories fell by 10.6 million barrels in the week to July 24 to 526 million barrels, compared with analysts’ expectations in a Reuters poll for a 357,000-barrel rise. It was the largest one-week fall in crude stocks since December.

Net U.S. crude imports fell 1 million barrels per day, the EIA said, dropping to 1.9 million bpd. "If we are seeing a drawdown that is a key indicator in terms of largely a market that’s starting to move more aggressively into balance,” said Tony Headrick, energy markets analyst at CHS Hedging."

U.S. gasoline stocks rose by 654,000 barrels, the EIA said, compared with forecasts for a 733,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, rose by 503,000 barrels, versus expectations for a 267,000-barrel drop, the EIA data showed.

Refinery utilization rates rose 1.6 percentage points to 79.5% of total capacity, their highest since late March. Refinery crude runs rose by 389,000 bpd last week, the EIA said.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

PQ Group earnings fall as COVID-19 dings demand

MOSCOW (MRC) -- PQ Group today reported second-quarter net income down 48.0% year-on-year (YOY), to USD15.9 million, on sales down 16.7%, to USD359.5 million, said Chemweek.

Adjusted earnings totaled 22 cents/share, ahead of analysts’ consensus estimate of 19 cents/share, as reported by Refinitiv (New York, New York). The declines were “largely on lower volume from COVID-19 impacts related to stay-at-home mandates and demand disruption for industrial applications,” PQ says.

Performance chemicals segment sales declined 19.8% YOY, to $142.6 million, while segment adjusted EBITDA was down 17.5%, to USD34.0 million. Demand from industrial applications declined during the quarter, but demand from personal care applications generally held up well.

Performance materials segment sales fell 12.3% YOY, to USD104.3 million, while segment adjusted EBITDA declined 6.5%, to USD27.3 million. Lower industrial demand and lower demand from European highway striping activity was partly offset by solid North American highway striping activity.

Refining services segment sales fell 22.9% YOY, to USD90.4 million, on lower gasoline consumption and weaker demand from the automotive and industrial sectors. Catalysts sales grew on higher demand for polyolefin, chemical, specialty, and hydrocracking catalysts.

As MRC informed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.

Total swings to USD8.4 billion net loss on oil, gas write-down, petchems margins "resilient"

MOSCOW (MRC) -- Total has swung to a net loss for the second quarter of 2020 of USD8.37 billion from a profit of USD2.76 billion in the prior-year period, due largely to a USD8.1-billion impairment after lowering its future oil and gas price assumptions and cutting the value of some of its upstream oil and gas assets, said Chemweek.

On an adjusted earnings basis it reports income of USD126 million, 96% lower year-on-year (YOY) but beating analysts’ consensus expectations for a net loss of about USD520 million, as reported by Refinitiv (New York).

The company says the lower adjusted earnings were due to lower Brent crude oil and natural gas prices, reduced refining margins, and the impact of the COVID-19 pandemic on demand. Net cash flow fell to USD226 million in the second quarter from USD3.3 billion a year earlier, with group sales plunging by over 50% YOY to USD25.7 billion.

Total does not state its chemicals earnings separately, reporting a 20% decline YOY in its adjusted net operating income to USD575 million for its combined refining and chemicals business. The decrease was “notably due to an even more severely degraded refining margin environment in the second quarter and low plant utilization of 59%,” it says. This was partially offset “by resilient petrochemical margins” and a good performance from its trading activities, it says. Refining and chemicals net sales in the quarter plunged over 60% YOY to USD11.92 billion from USD30.04 billion.

Olefins monomer production rose 40% YOY to 1.39 million metric tons, although last year’s equivalent quarter was impacted by planned maintenance of steam crackers in Daesan, South Korea; and Port Arthur, Texas. Polymer production grew by 6% compared to the prior-year period to 1.19 million metric tons, again partly due to the maintenance work last year at Daesan, Total says.

By region, petchems production of both olefins and polymers fell 3% YOY in Europe during the second quarter to 1.27 million metric tons, while petchems output in the Americas rose 34% to 637,000 metric tons. In the Middle East and Asia, petchems production more than doubled to 672,000 metric tons.

Total says oil prices have strengthened since the start of June but that the oil environment “remains volatile, given the uncertainty around the extent and speed of the global economic recovery post-COVID-19.” Net investments in 2020 will be kept below USD14 billion, while the company will achieve savings of USD1 billion in operating costs compared to 2019, it says.

As MRC informed before, Total has recently 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 DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

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.

Indian Oil ees low run rates in 2020-2021

MOSCOW (MRC) -- Indian Oil Corp, the country’s top refiner, will continue to operate its refineries below capacity in 2020/21 as it sees local and overseas fuel demand remaining subdued, reported Reuters with reference to IOC Chairman S. M. Vaidya's statement.

IOC, along with its unit Chennai Petroleum, controls about a third of India’s five million-barrels-per-day (bpd) refining capacity.

Vaidya said refinery runs have declined to about 75% from 93% in early July on low fuel demand.

He said the operations are expected to remain at 70%-75% for the remainder of the fiscal year through March 2021.

“It is very difficult to predict... We don’t expect demand to recover to pre-COVID levels in the near future,” he said, adding the company could raise refinery runs to 90% if demand recovers.

Indian refiners are cutting crude processing and shutting units for maintenance as local fuel demand falls and global refining margins are weak, company officials said.

Vaidya said IOC has shut its 300,000 bpd Pardip refinery on the east coast for maintenance and has plans to shut some units its 274,000-bpd Koyali refinery in the west for repairs this fiscal year.

Indian refiners are also reducing run rates as the export market is not attractive and rising fuel exports from China are likely to increase the pressure on Asian refining margins.

On Friday IOC reported a 47% decline in its June quarter profit as lockdowns hammered fuel demand and squeezed its refining margins to minus $1.98 per barrel.

Vaidya hoped oil prices would stay at around $40 per barrel in the second half of 2020. He also said to boost revenue IOC would look at maximising petrochemicals production at its refineries.

As MRC wrote before, Indian Oil Corporation Ltd (IOCL) was in plans to undertake a planned shutdown at its polypropylene (PP) plant in Paradip last weekend. The plant is expected to remain under maintenance for about two weeks. Located at Paradip in the India state of Odisha, the PP plant comprises of two lines with a production capacity of 340,000 mt/year each.

We remind that Indian Oil Corp restarted operation at its naphtha cracker in India in early-October, 2019, after completing maintenance works. The cracker was shut in early-September, 2019 for a maintenance turnaround. Located in Panipat, in the northern Indian state of Haryana, the cracker has an ethylene production capacity of 857,000 mt/year and propylene capacity of 425,000 mt/year.

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.