Indorama expects lengthy repairs to lightning-damaged Louisiana cracker

MOSCOW (MRC) -- Indorama Ventures expects repairs to its 440,000 mt/year Louisiana cracker could take several months, reported S&P Global with reference to the company's statement August 13 in its second-quarter 2020 earnings release.

"Unfortunately we recently had a lightning strike in recently started Lake Charles, which might take a few months to recover," the company said. "Damage assessment is being done" and is covered by insurance, including profit losses.
Indorama said it does not anticipate any impact on downstream production as spot ethylene "is covered to ensure uninterrupted feedstock supply."

Lightning struck the cracker Aug. 2, prompting its shutdown. Indorama initially started up the revamped cracker in May 2019, but shut it down several months later for repairs and technical improvements after repeated flaring. The company restarted it in December, and it reached commercial production in February.

As MRC wrote earlier, the world's largest polyethylene terephthalate (PET) producer also reported a a net profit of Baht 154 million (USD4.9 million) for the quarter, a 93% decline from Baht 2.267 billion (USD72.78 million) in the year-ago period.

Indorama saw strong demand in the quarter for PET resin used to make plastic bottles as well as hygiene fibers, such as those used to make diapers. However, the company's oxides and derivatives segment was hurt by low oil prices squeezing margins for ethylene glycol, a precursor to PET, and gasoline octane booster methyl tert-butyl ether (MTBE).

In addition, fibers used in non-hygiene industries, such as apparel and automotive, also were "severely impacted" because of widespread coronavirus outbreak-related shutdowns, less spending on durable goods and travel restrictions.

"Our portfolio serving end markets of food, beverages, personal care and hygiene were positively influenced during the pandemic," the company said. "We are also pleasantly surprised that our material which goes into electronics and screens was steady. The automotive- and oil-related segments saw severe drops in offtake and for the first time we saw the shutdown of the retail segment, which impacted our apparel demand."

Indorama also said that as shutdowns eased and crude prices rose later in the quarter and into the third quarter, "we expect to see improved performance of the laggards" in Q2.

Indorama owns a third of a major PET and upstream purified terephthalic acid (PTA) complex under construction near Corpus Christi, Texas. In March, Indorama and its partners, Mexico's Alpek and Taiwan's Far Eastern New Century, suspended spending on the project through the rest of 2020 because labor costs on the US Gulf Coast had exceeded previous budget estimates.

The three partners collectively bought the project out of M&G Chemicals' bankruptcy for USD1.25 billion in cash and capital contributions in 2018. M&G had stopped work on the complex in October 2017, and the new owners did not resume that work until early 2019, after receiving approval for the acquisition from the US Federal Trade Commission in late 2018.

The 1.1 million mt/year PET plant was originally slated to come online in mid to late 2020, followed by the 1.3 million mt/year PTA plant a year later. In November 2019, the companies decided to delay those startups by a year, and in March pushed that delay back further to 2023.

The units will be the world's largest PET facilities when they come online.

Indorama on Aug. 12 also noted that the company remains committed to increasing its recycled PET capacity of 750,000 mt/year by 2025 to meet customer demand. The company announced Aug. 4 it had agreed to buy IMP Polowat, a PET recycling facility in Poland, with capacity to produce 23,000 mt/year of PET flakes and 4,000 mt/year of recycled PET pellets. The deal, for which terms were not disclosed, is slated to close in the third quarter.

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.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 24,000 employees worldwide and consolidated revenue of USD 11.4 billion in 2019.
MRC

IVL recycles its 50-Billionth PET bottle, commits USD1.5-Bn to expand recycling

MOSCOW (MRC) -- Indorama Ventures (IVL) has announced it has recently recycled 50-billion polyethylene terephthalate (PET) bottles since 2011, and has committed up to USD1.5-billion to expand its recycling business with the aim of recycling 50-billion PET bottles a year by 2025, according to Apic-online.

IVL recently entered into an agreement with Coca-Cola to form a new joint venture that will build a greenfield integrated recycling plant near Manila in the Philippines.

The facility will be able to process approximately 30,000 t/y of PET bottles and have an output of 16,000 t/y of recycled PET resin. The plant is expected to be completed by the end of 2021.

The new joint venture company, PETValue Philippines Corp., will be owned 70% by Indorama Ventures Packaging (Philippines) Corp., an indirect subsidiary of IVL, and 30% by Coca-Cola Philippines.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes of material in June.
MRC

Hexion in resins collaboration with Poland D&R

MOSCOW (MRC) -- Hexion (Columbus, Ohio) says it will collaborate with D&R Dispersions and Resins (Wloclawek, Poland) on commercial production of isocyanates-free resins for paint and coatings producers using Hexion’s patented vinyl silane monomer coating technology, said Chemweek.

The collaboration through Hexion’s versatic acids and derivatives group “offers strategic manufacturing capabilities in Eastern Europe to meet the resin production needs for specialty applications,” it says. Hexion will supply the monomer for the venture with D&R.

"We are continuously exploring alternative monomeric raw materials and technologies; this collaboration allows us to create truly innovative and sustainable binder solutions for the coatings industry,” says Arkadiusz Kowalczyk, vice president at D&R, which specializes in the production of alkyd and acrylic resins used to make wood and metal paint.

As MRC informed earlier, Hexion, a major American manufacturer of phenol and bisphenol A (BPA), plans to close its BPA plant in Pernis (Pernis, The Netherlands) in early October for scheduled maintenance. This 120 ktpa BPA production facility will be closed in the second week of October and is expected to resume production in three weeks.

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 Russia, following the results of the first two quarters, the total estimated consumption of PC granulate in the Russian Federation (excluding imports and exports to Belarus) amounted to 47.3 thousand tonnes against 40.7 thousand tonnes in 2019. Total demand increased by 16%.

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
MRC

Saudi Arabia may cut September crude oil prices to Asia

MOSCOW (MRC) -- Top oil exporter Saudi Arabia may cut its September official selling price (OSP) for crude sold in Asia, tracking falling Middle East benchmarks and weak refining margins, according to industry sources, said Hydrocarbonprocessing.

Five sources from Asian refineries on average expect the September OSP for flagship Arab Light crude to fall by 61 cents a barrel, though forecasts range from a cut of USD1 to 20-30 cents, a Reuters survey showed. Slow demand recovery amid the second wave of COVID-19 infections has depressed spot prices for Middle Eastern crude this month, while Asia’s refining margins remained weak, they said.

Although the monthly average of cash Dubai’s premium to swaps dipped by only 6 cents so far this month, DME Oman and cash Dubai this week turned to discounts to swaps for the first time since May, data compiled by Reuters showed.

Prompt Dubai has flipped from backwardation into contango in late July. The contango structure, where prompt prices are lower than future prices, usually indicates an immediate oil surplus. Asia’s margins for gasoline, jet fuel and high sulfur fuel oil weakened in July, while cracks for naphtha, gas oil and low sulfur fuel oil showed improvement.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia. State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

We remind that data collected and tabulated by the American Chemistry Council (ACC) show that due to growth in China, global chemicals production rose by 0.6 percent in June, an improvement from the 0.5 percent decline in May, Production has been declining throughout this year, with the last monthly gain occurring in December 2019. During June, chemical production fell in major regions except Asia-Pacific. Headline global production was off 7.2 percent year-over-year (Y/Y) on a three-month moving average (3MMA) basis and was off 7.4 percent from the peak December level. Global output stood at 109.8 percent of its average 2012 levels.

At the same time, 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. June production of polymers in primary form fell to 791,000 tonnes from 820,000 tonnes in May partially because of a scheduled shutdown for maintenance at ZapSibNeftekhim. Output of polymers in primary form totalled 4,900,000 tonnes over the stated period, up by 14.8% year on year.

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.

MRC

Asahi Kasei Apr-Jun net income falls

MOSCOW (MRC) -- Asahi Kasei Corp’s net income fell in April-June this year compared with the same period in 2019 on lower earnings at its material segment due to the economic effects of the coronavirus pandemic, said the company.

Basic materials operating income decreased with reduced shipment volumes, effects of lower market prices for petrochemical feedstocks on inventories, and deteriorated terms of trade for acrylonitrile (ACN).

Performance products operating income decreased as an effect of broad declines in demand among automobile-related markets and apparel-related markets.

Specialty solutions operating income increased with favorable demand related to communications infrastructure and tablet PCs, while lithium-ion battery separator shipments increased firmly.

Operating income in the Homes and Health Care segments increased.

"Year-on-year, Q2 operating income is expected to decrease overall with a decrease in the material and homes segments and an increase in the health care segment," the company said in a statement.

Japanese petrochemical firm Asahi Kasei expects demand for petrochemical products, including acrylonitrile (AN) and functional polymers for automobiles, to recover in the second half of the April 2020-March 2021 fiscal year.

The company thinks demand for petrochemical products hit a bottom in April-June, although a second wave of Covid-19 infections has created further uncertainty in the market.

It forecasts that the use of polymers for automobiles will start to pick up in July-September following a rebound in Japan's domestic car production.

Asahi Chemical plans to close its polymethyl methacrylate (PMMA) plant in Kawasaki, Kawasaki, Japan in mid-October for scheduled maintenance. This enterprise with a capacity of 20 thousand tons of PMMA per year will be closed until mid-November for about 25 days.

Earlier it was reported that Asahi Chemical plans to close the production of methyl methacrylate (MMA) in Kawasaki (Kawasaki, Japan) in September for scheduled maintenance. This enterprise with a capacity of 100 thousand tons of MMA per year will be closed for about 50 days.

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