MOSCOW (MRC) -- Cepsa (Madrid, Spain) reports a 30% rise year on year (YOY) to EUR86 million (USD101 million) in clean EBITDA on a current cost of supply (CCS) basis for its chemicals business in the second quarter, due to a rebound in margins and volumes in the phenol/acetone segment and “high demand” in the detergents sector, said Chemweeek.
"The resilient nature and strong performance of this business managed to partially offset lower earnings in other business units,” it says. Overall group clean CCS EBITDA was down 66% YOY to €180 million, while Cepsa reported a clean CCS net loss of EUR93 million, impacted by non-cash asset impairments of certain upstream assets and a negative inventory valuation.
Demand for oil products was severely hit by the pandemic and subsequent lockdowns in Spain, including jet kerosene, which suffered a 92% decline YOY, it says. The decrease was partly offset by higher internal consumption at Cepsa’s chemical plants, with the product used as a raw material to produce linear alkylbenzene (LAB), which the company says has been in high demand as a raw material for detergents as a result of the COVID-19 pandemic.
Chemical product sales declined 3% to 691,000 metric tons compared with the prior-year quarter. Sales in the LAB segment rose by 11% YOY, lifted by the COVID-19-related demand increase, while sales in the phenol/acetone and solvents segments declined by 7% and 8%, respectively, compared with the equivalent period last year. A decrease in demand globally was partly countered by improved margins, particularly in Asia, due to shutdown of several competitors’ plants, it says.
Growth capital expenditure (capex) of EUR6 million in the quarter was spent mainly on the revamp of Cepsa’s LAB plant at Puente Mayorga, Spain, with a further EUR5 million of expenditure mainly on maintenance work at the same site. The company is investing a total of EUR100 million in the chemical plant in an ongoing program to increase its LAB capacity from 200,000 metric tons/year to 250,000 metric tons/year.
Cepsa says a contingency plan launched earlier this year in response to the pandemic to deliver savings of EUR310 million has been revised upward to EUR500 million for 2020, including EUR120 million in operating cost reductions and EUR380 million in capex cuts, it says. A total of EUR275 million in savings had been captured by the end of June, it says.
As per MRC, Cepsa Quimica (Shanghai) stopped the phenol and acetone plant in Shanghai for 5 days from December 10 of last year due to the repair work on the gas pipeline in the Shanghai Caojing Chemical Industry Park, where the plant is located.
Phenol is the main raw material for bisphenol A (BPA) production, which in turn is used to produce polycarbonate (PC).
According to MRC's ScanPlast, in the first half of 2020, the total estimated consumption of PC granulate in the Russian Federation (excluding imports and exports to Belarus) amounted to 47,300 tonnes against 40,700 tonnes in 2019. Total demand increased by 16%.
MRC