Chemours Q2 earnings fall on lower sales

MOSCOW (MRC) -- US-based pigment producer Chemours reported a decline in net income because sales fell faster than costs, said the company.

The following shows the company's Q2 performance. Figures are in millions of dollars. Revenue fell because of lower volumes across the company's segments. Earnings fell because of lower volumes and prices, idle production charges, lower fixed cost absorption and limited F-gas quota sales.

F-gas quotas refer to regulations adopted by the EU to control emissions of fluorinated gases used as refrigerants. The regulations led to the rise in black-market sales of refrigerants, which compete with legitimate refrigerants sold by Chemours. Offsetting the declines in earnings were stronger operational performance and lower costs.

The following breaks down the company's performance by segment. Figures are in millions of dollars.

Second-quarter volumes fell 9% year on year because of lower demand in Europe, Latin America and Asia. Volumes in North America were flat because of a rise in do-it-yourself (DIY) consumers taking on paint projects. Globally, average sales prices were flat quarter on quarter and down by 5% year on year.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell because of higher costs caused by idled production. Earnings were also dragged down by illegal refrigerant sales in the EU.

As MRC informed earlier, Chemours will close its aniline and nitrobenzene site in Pascagoula, Mississippi state, by the end of the year. The First Chemical site produces aniline, nitrobenzene and nonylated diphenylamine (NDPA) lubricant antioxidant.

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.

Chemours is a global leader in titanium technologies, fluoroproducts and chemical solutions, providing its customers in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Chemours has approximately 9,000 employees across 37 manufacturing sites serving more than 5,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Del.
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Vietnamese Dung Quat refinery processes first batch of Russian Sokol crude

MOSCOW (MRC) -- Vietnam’s Dung Quat oil refinery has processed its first batch of Russian Sokol crude oil on a trial basis, as it seeks a replacement for shrinking domestic Bach Ho output, reported Reuters with reference to the refinery's operator Binh Son Refining and Petrochemical.

The 130,000-barrel-per-day refinery imported more than 710,000 barrels of Sokol crude oil last month to mix with other types of crude oil for the test run, Binh Son said in a statement, adding that Sokol accounted for 20% of the mix and Bach Ho crude 29%.

The processing of Sokol crude oil “is an important milestone in Dung Quat refinery’s efforts to diversify its crude oil sources,” Binh Son said.

“The processing result has shown that Bach Ho crude oil can be replaced in the future.”

The refinery in the central province of Quang Ngai, which became operational in 2009, was designed to use crude oil from the Bach Ho field offshore Vietnam.

Output from that field has been shrinking in recent years, however, prompting the owner of the refinery, state-run PetroVietnam, to look for imports and plan to upgrade the facility.

Last year, Dung Quat processed its first batch of West Texas Intermediate (WTI) and Bonny Light crude oil.

PetroVietnam said Dung Quat would import 8 million to 10 million barrels of these two types of crude this year.

The refinery will shut down later this week for maintenance until early October.

As MRC informed earlier, Nghi Son Refinery & Petrochemical (NSRP) shut its polypropylene (PP) unit on 21 June, 2019, owing to technical issues. The exact duration of the shutdown could not be ascertained. Besides, the company conducted a scheduled maitenance at this unit from 22 October, 2019, to end-November, 2019.

We also remind that Vietnam’s Nghi Son oil refinery officially began commercial production from 14 November 2018, following months of tests. The USD9 billion refinery is 35.1 percent owned by Japan’s Idemitsu Kosan Co, 35.1 percent by Kuwait Petroleum, 25.1 percent by PetroVietnam and 4.7 percent by Mitsui Chemicals Inc.

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.
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Synthomer posts H1 2020 loss

MOSCOW (MRC) -- Synthomer plc. has reported that its loss attributable to equity holders of the parent for the six months ended 30 June 2020 was 13.1 million pounds or 3.1 pence per share, compared to net income of 47.4 million pounds or 12.9 pence per share in the prior year, according to Chemweek.

IFRS loss before tax was 4.7 million pounds compared to a profit before tax of 56.6 million pounds in the previous year.

Underlying earnings per share was 10.8 pence per share, down 34.5% from last year, reflecting the lower profits before tax, the higher effective tax rate, and the impact of the pre-emptive acquisition financing 85 million shares rights issue in July 2019 ahead of the acquisition which completed on 1 April 2020.

Group revenue for the period declined to 733.7 million pounds from 762.7 million pounds in the previous year. The decrease reflected the very significant fall in raw material prices in the second-quarter 2020 as a result of the impact of COVID-19, more than offsetting the overall increase in volumes of approximately 2%.

The company now expects full year EBITDA to be broadly in line with current market consensus and accordingly the Board expects to pay a full year 2020 final dividend.

As MRC reported earlier, in January 2020, EU antitrust regulators said they had cleared polymer maker Synthomer Plc’s planned acquisition of US rival Omnova Solutions Inc, subject to conditions. The approval is conditional on Synthomer’s offer to divest its global VP Latex business to address concerns of the European Commission that competition of vinyl pyridine latex would be reduced. The product is used by tyre manufacturers to make safer and more solid tyres. Synthomer announced its plans to buy Omnova for an enterprise value of USD824 million in July, 2019, to strengthen its global position.

Omnova is a US based specialty chemical company which develops, manufactures and markets emulsion polymers, speciality chemicals and decorative products and provides engineered surfaces for various commercial, industrial and residential end uses. On completion of the acquisition of Omnova, Synthomer will strengthen further its position as a major global player in water-based polymer solutions, with best-in-class process technology and a strong R&D platform with global geographic coverage and increased customer proximity.

As MRC wrote before, after the May fall in June, Russia's output of products from polymers rose by 16.9% due to the easing of quarantine restrictions and seasonally stronger demand. However, this figure increased by 1.3% year on year in the first six months of 2020.
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ACC releases June 2020 resin production and sales statistics

MOSCOW (MRC) -- U.S. production of major plastic resins totaled 7.5 billion pounds during June 2020, an increase of 0.7 percent compared to the same month in 2019, according to statistics released by the American Chemistry Council (ACC).

Year-to-date production was 44.9 billion pounds, a 2.8 percent increase as compared to the same period in 2019.

Sales and captive (internal) use of major plastic resins totaled 8.0 billion pounds during June 2020, an increase of 11.5 percent from the same month one year earlier. Year-to-date sales and captive use was 45.7 billion pounds, a 3.9 percent increase as compared to the same period in 2019.

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.
MRC

Green Plains to supply ethanol to Lysol manufacturer

MOSCOW (MRC) -- Green Plains (Omaha, Nebraska) has signed a deal to supply high-grade ethanol through 2021 to consumer products manufacturer Reckitt Benckiser, which makes disinfectants under the Lysol brand, as per Chemweek.

"We are pleased to partner with Lysol to help fulfill their supply chain needs with our high-quality alcohol for products which are EPA approved for use against COVID-19," president and CEO Todd Becker says. "This transaction continues to validate the quality of our alcohol and our growing focus to provide a premium product at scale that can be used in sanitizers and disinfectants."

Ethanol supplied under the deal will come from Green Plains' York, Nebraska, plant, which was originally a beverage-grade facility.

"Our partnership with Green Plains continues to allow uninterrupted supply of our products to consumers," says Hal Ambuter, Reckitt Benckiser vice president/regulatory and government affairs.

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.

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