MOL sees downstream earnings slide, petchems performance robust

MOSCOW (MRC) -- MOL (Budapest, Hungary) has reported a 58% decline year on year (YOY) in its downstream EBITDA earnings to USD110 million for the second quarter on a current cost of supply (CCS) basis, due largely to negative refinery margins, despite a “resilient” contribution from its petrochemical activities, reported Chemweek.

The company, which does not break out its petchem earnings separately, says the quarter featured major operational challenges “with unprecedented price and margin movements.” The contribution from its petchems activities “remained resilient, as both margins and volumes held up reasonably well during the pandemic,” it says.

MOL’s integrated petchem margin averaged EUR431/metric ton (USD507/metric ton) in the quarter, up 2% YOY, with robust sales, especially in May when it recorded its highest ever sold volume, it says. The integrated petchem margin declined gradually during the quarter from a very high level in March and April as oil prices rose, “but the margin overall remained at a supportive level in both the second quarter and July,” it notes.

The company’s polyols project is now 65% complete, with all major prefabricated equipment on site and the transportation of all oversize equipment via river or sea completed, MOL says. “While some small delays are likely due to the pandemic, MOL remains fully committed to complete this flagship investment according to plans,” it says. Capital expenditure on the polyols project totaled USD101 million in the second quarter.

MOL’s total olefins production in the quarter was down 5% YOY at 504,000 metric tons, while total butadiene production plunged 62% to 23,000 metric tons. Total polymers production was virtually flat YOY at 301,000 metric tons. External total petchem sales output totaled 372,000 metric tons, up 6% on the prior-year quarter, with the company’s polymer products making up the majority of the total with 307,000 metric tons of sales, up 12% YOY.

MOL swung to a net loss for the group in the second quarter of USD142 million, from earnings of USD270 million a year earlier, on sales that declined 45% YOY to USD2.59 billion due to the pandemic and the worldwide economic crisis, it says. It has reconfirmed its 2020 capex guidance of up to USD1.5 billion.

As MRC informed before, in late March, 2020, Hungarian MOL Group started production of hand and surface sanitizers to offer protection against the coronavirus.

We remind that MOL Petrochemicals Company (formerly known as TVK, part of the MOL Group), the only Hungarian producer of olefins and polyolefins, announced force majeure on the supply of polypropylene (PP) from plant No. 4 at the petrochemical complex in Tiszaujvaros (Tiszaujvaros, Hungary) on 23 September 2019.

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.

MOL Hungarian Oil and Gas PLC is an integrated oil and gas company. The Company produces crude oil, petroleum products, bitumens, lubricants and natural gas. MOL owns and operates refineries, oil and gas pipelines, service stations, and natural gas storage facilities.

Cabot swings to loss on collapse of automotive

MOSCOW (MRC) -- Cabot Corporation (Boston, Massachusetts) reports a fiscal third-quarter net loss of USD6 million, down from income of USD32 million in the year-ago quarter, said Chemweek.

Net sales totaled USD518 million, down 39% year-over-year (YOY) from USD845 million. The company attributes the results to the sharp decline in the automotive and tire sectors. Adjusted earnings per share came to a 7-cent loss, down from profit of USD1.00 in the year-ago period, and short of the average analyst estimate of a 2-cent loss as compiled by Refinitiv (New York).

"Volumes and product mix across our businesses declined by over USD100 million in the third quarter as compared to the prior-year quarter, driven primarily by lower demand in the tire and automotive sectors as manufacturers temporarily halted production in response to the COVID-19 pandemic," says president and CEO Sean Keohane. “As the quarter progressed, our customers slowly restarted operations during May and June. The sequential improvement in monthly reinforcement materials volumes through the quarter is a positive indicator that we are exiting the quarter in a stronger position than where we started."

Keohane expects the improving economic outlook and a recovery in the underlying automotive and replacement tire markets to drive a substantial improvement in volume and EBIT during the current quarter.

The reinforcement materials segment turned an EBIT loss of USD5 million, down from profit of USD72 million in the year-ago quarter, on sales of USD197 million, down 57% YOY from USD461 million. Globally, volumes decreased 42% year-over-year as the COVID-19 pandemic significantly impacted demand, says Cabot. The COVID-19 impact was most pronounced in both the Americas and EMEA as temporary customer shutdowns impacted volumes in both regions.

The performance chemicals segment turned in EBIT of USD21 million, down YOY from USD37 million, on sales of USD220 million, down 12% YOY from USD251 million. Cabot cites volume declines tied to COVID-19, a less favorable product mix in specialty carbons, and a more competitive pricing environment in fumed metal oxides.

The purification solutions turned in EBIT of USD2 million, up YOY from USD1 million, on sales of USD63 million, down 14% YOY from USD73 million. Cabot attributes the EBIT gain to higher margins from improved pricing and lower fixed costs.

As MRC informed earlier, Cabot (Boston, Massachusetts) apparently has to put restrictions in place, at least to a certain extent. The company says its coronavirus emergency plans have taken effect to ensure that only personnel critical to production are still working at its European and North American facilities.

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.

Cabot Corporation is an American specialty chemicals and performance materials company headquartered in Boston, Massachusetts. The company operates in over 20 countries with 36 manufacturing plants, eight research and development facilities and 28 sales offices.


PTTGC, Dynachem to collaborate on PP compounding in Thailand

MOSCOW (MRC) -- Dr. Kongkrapan Intarajang, Chief Executive Officer of PTT Global Chemical Public Company Limited, or GC, announced the signing of a shareholders agreement with Dynachem (Hong Kong) Limited, or Dynachem, a compound engineering plastic resin distributor and compound manufacturer, to hold a 41.5% share in Dynachisso Thai Co., Ltd. (DYCT), as per PTTGC's press release.

This is aligned with GC’s ‘Step Change’ strategy to improve the company’s competitiveness in the Southeast Asian region by focusing on providing value-added products to meet the various requirements of its customers, and also supports GC’s policy on growing sustainably through valuable collaborations with strategic partners.

Mr. Patiparn Sukorndhaman, President of GC, said, “The collaboration with Dynachisso Thai to produce polypropylene (PP) compounds serving various industry platforms will rapidly enhance GC Group’s market expansion in the automotive and E&E industries. Furthermore, this collaboration will result in having high value products (HVPs) for PP resins and fully meet the needs of customers in both regional and global markets, especially in Thailand, China, and SEA.

Mr. Michael Tang, Managing Director of Dynachisso Thai Co., Ltd. said, “It is a great opportunity for us to collaborate with GC in the PP compound business, which is mainly used in producing parts in the automotive, transportation, logistics, and E&E sectors. This material can be also used as a part of electronic devices in digital technology (5G), providing an important foundation to further drive the economy.”

Both parties expect to finalize the deal in the third quarter of 2020.

PP compounds possess improved properties due to the addition of additives such as short glass fiber, long glass fiber, mineral filler, synthetic rubber or impact modifiers to the PP resin. PP compounds are used in automobile and motorcycle parts manufacturing such as consoles and bumpers as well as electrical appliance covers.

Dynachisso Thai, located in the Amata Industrial Estate in Chonburi Province, has an installed capacity of 30,000 tons per year.

As MRC reported earlier, in July, 2020, state-owned Thai oil and gas company PTT Pcl said its US unit took a step forward on its proposed chemical plant in Ohio that will turn ethane into plastics with an agreement to develop a natural gas liquids storage facility. PTT Global Chemical America (PTTGCA) signed an agreement with Energy Storage Ventures LLC to build a facility to store and transport natural gas liquids (NGL) for PTTGCA's proposed complex.
And in June, PTTGCA said it delayed making a final investment decision to build the ethane cracker, which analysts estimate will cost USD5.7 billion, from the first half of 2020 to the first half of 2021 due to the coronavirus.

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.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.

Orbit export terminal to start shipping ethane by November to cracker in China

MOSCOW (MRC) -- Energy Transfer Partners (ETP; Philadelphia, Pennsylvania) says the company’s Orbit ethane export terminal at Nederland, Texas, should be commissioning its first ships in November, reported Chemweek.

ETP is developing the terminal in a joint venture with China’s Satellite Petrochemical.

A first steam cracker nearing completion by Satellite Petrochemical in Jiangsu Province, China, will be online in the fourth quarter of this year, with a second cracker facility also using ethane feedstock scheduled to start up in the first half of 2021, according to ETP’s CFO Tom Long on a recent quarterly earnings call. “For the first time at Nederland we’ll be bringing on 180,000 b/d of ethane capacity, primarily for (Satellite),” Long says. “However, we are chasing other markets. We do anticipate selling ethane to other third parties as early as the first quarter of next year. And we’ll do everything we can to fully utilize that facility on a daily basis, depending on what Satellite actually pulls on a daily basis.”

ETP produced record volumes of natural gas liquids (NGLs) in the second quarter, despite the COVID-19 pandemic wreaking havoc on energy demand. As a result, the company has focused its growth capital expenditures on key expansions, including the Mariner East NGL pipeline expansion, Lone Star Express NGL pipeline expansion, LPG export expansion, and the Orbit export terminal. The Mariner East pipeline expansion is on track for an early 2021 completion. “Both domestic and international demand for all natural gas liquids have remained strong even while motor fuel demand has waned because of COVID-19,” Long says. The Lonestar Express pipeline expansion should be complete in late 2020, bringing an additional 400,000 b/d of NGLs from the Permian Basin. The company reached record high fractionation volumes in the second quarter as a result of the start-up of its seventh fractionator in Mont Belvieu in February. An eighth fractionator is under construction and expected to start up in the second quarter of 2021. All the company’s fractionators are at full capacity, says Long.

“LPG demand has remained strong and our LPG expansion projects in Nederland will bring our total export capacity to approximately 500,000 b/d by the end of 2020, further integrating our Mont Belvieu assets with our Nederland assets,” he says.

ETP reported net income of USD353 million in the second quarter, down year on year from USD878 million but up from a net loss of USD855 million in the first quarter.

As MRC informed before, in September 2019, Zhejiang Satellite Petrochemical Co. received regulatory approval from the Jiangsu provincial government to ethane from the US in a new polyethylene (PE) plant to be built in Lianyungang, China. The 1.25-million-t/y ethylene facility, on which construction was expected to begin in September 2019, is estimated to cost USD4.2-billion. Completion is anticipated in about one year. Zhejiang will receive the ethane from Energy Transfer Partners, starting in the fourth quarter of 2020, under a 10-year supply agreement.

Ethylene is the main feedstock for the production of PE.

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.

PetroChina Ningxia refinery to resume operations

MOSCOW (MRC) -- PetroChina’s Ningxia refinery is scheduled to resume operation of its 100,000 barrels per day oil refining units in mid-August after an overhaul, reported Reuters.

The plant in northwestern China began 45 days of maintenance on July 1.

As of Thursday, 84% of the work had been completed, the Ningxia refinery said on Friday.

In 2019, the refinery processed 4.53 million tonnes of crude oil and produced 3.82 million tonnes of refined oil products.

As MRC wrote previously, PetroChina Ningxia PC, part of PetroChina, is in plans to bring on-stream its polypropylene (PP) plant following a turnaround. The company is likely to resume operations at the plant on August 18, 2020. The plant was shut for maintenance on July 1, 2020. Located at Yinchuan, China, the PP plant has a production capacity of 110,000 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.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.