Huntsman agrees to sell its remaining interest in Venator Materials

MOSCOW (MRC) -- Huntsman Corporation has announced that it has entered into a definitive agreement with funds advised by SK Capital Partners, LP to sell approximately 42.5 million of the shares it holds in Venator Materials PLC for a cash purchase price of approximately USD100 million, including a 30-month option for the sale of the remaining approximate 9.5 million shares it holds at USD2.15 per share, as per the company's press release.

The transaction is subject to regulatory approvals and is expected to close near year-end.

Together with estimated cash tax savings of approximately USD150 million anticipated by offsetting the capital loss on the sale of Venator shares against the capital gain realized on the sale of our chemical intermediates and surfactants businesses that closed this year in January, we expect to secure an aggregate total benefit of approximately USD250 million in cash near year end.

Peter Huntsman, Chairman, President and CEO, further commented, "I am pleased to have reached an agreement to sell our remaining interest in Venator to SK Capital. We enjoy an ongoing relationship with SK Capital and their co-founder Barry Siadat. They are a great owner and operator of businesses and we are pleased for them to acquire Huntsman's stake in Venator, a world class functional and specialty TiO2 business. The proceeds to be received will further bolster our balance sheet and only enhance our flexibility for further growth."

As MRC reported previously, in April 2020, to further aid in the fight against the COVID-19 pandemic, LyondellBasell (LBI) donated a key ingredient to Huntsman Corporation to produce hand sanitizer for US first responders.

We remind that, in January 2020, Indorama Ventures Public Company Limited (IVL), a global chemical producer, completed its acquisition of Huntsman’s world-class integrated oxides and derivative businesses, including a large flagship site on the US Gulf Coast (USGC) at Port Neches, as well as Chocolate Bayou and Dayton in Texas, Ankleshwar in India, and Botany in Australia, as per IVL's press release.

The acquisition is a profitable and growing end applications business along with unique products and geographical profile among the crowded olefins space. It has a well-integrated assets base with an extensive infrastructure and future expansion possibilities. The area is adjacent to many USGC feedstock suppliers. The cash value of USD2.0 billion makes it the largest acquisition by Indorama Ventures ever and now our capital employed is nicely spread over plastic, chemicals and fibers. The transaction value translates to an EV/EBITDA of ~5.7x and is expected to add substantial synergies to Indorama’s existing 450kta Ethane/Propane Cracker and our 550kta EO/EG. IVL will now be integrated from Ethane to PET as well as the high-margin EO and PO derivative businesses.

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.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of more than USD7 billion. Its chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operate more than 75 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 10,000 associates within its four distinct business divisions.
MRC

MOSCOW (MRC) -- French energy major Total said its joint USD5 billion petrochemical project with Saudi Aramco in the Saudi city of Jubail will not be hit by planned cuts in investment, although the partners were focused on controlling costs, according to Hydrocarbonprocessing.

Total, like other oil companies, has announced deep cuts in spending, and is expected to shelve some projects after restrictions on movement to contain the coronavirus destroyed fuel demand and led to a collapse in the price of oil.

“The recently announced objective by Total to reduce its capital expenditure for 2020, including USD500 million in the downstream sector, does not include this project,” Total said in a statement to Reuters earlier this year.

It said the partners were focused on controlling the cost and engineering studies for the petrochemical complex located next to the Satorp refinery were underway.

The complex, which would comprise a mixed-feed cracker with the capacity to produce 1.5 million tonnes a year of ethylene, is expected to start in 2024, Total said, adding the partners were pursuing efforts to keep to the announced schedule.

As MRC wrote before, in November 2019, Total disclosed that itis 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.
MRC

1. Sinopec Shanghai Petchem to raise second-half crude throughput

MOSCOW (MRC) -- Sinopec Shanghai Petrochemical, a refining subsidiary of Asia's top refiner Sinopec, plans to raise daily crude oil throughput by 7.8% in the second half of 2020, as per Hydrocarbonprocessing. The Chinese company aims to process 7.68 million tonnes of crude oil in July-December, equivalent to 304,700 barrels per day, a company official said at a briefing on Thursday. That compares to 7.02 million tonnes of crude oil in the first half of 2020, which was down 6.1% from the same period last year due to the coronavirus outbreak and refinery overhaul. The firm has annual crude refining capacity of 16 million tonnes.

MRC

MOSCOW (MRC) -- The Russian market saw a constant rise in low density polyethylene (LDPE) prices throughout August due to good demand and shutdowns for maintenance at some plants. The increase in prices of some grades exceeded 25% for the month, according to ICIS-MRC Price report.

The rise in LDPE prices in Russia began back in late June because of shutdowns for turnarounds at Angarsk Polymers Plant and Gazprom neftekhim Salavat. But in August, the dynamics of price growth increased significantly due to strong demand and the upcoming shutdowns for maintenance simultaneously at three plants in September. Polyethylene (PE) prices of some sellers grew by Rb20,000/tonne and more in the last summer month.

Angarsk Polymers Plant shut down its production capacities for a 30-day turnaround on 22 June, however, the plant had managed to resume its PE production after maintenance only by 3 August, and PE production was again taken-off stream on 10 August due to problems at the ethylene unit. The producer has not resumed its LDPE production so far.

A similar situation occurred with Gazprom neftekhim Salavat, the shutdown started on 1 July and was also planned to be conducted during the month, but the resumption of LDPE production started only 10 days after the scheduled date. At the same time, Salavat PE was virtually completely absent in the spot market in the second half of August.

It is also worth noting that Kazanorgsintez reduced its LDPE output in August due to a shortage of ethylene.

Many sellers limited their sales in the spot market throughout August, and prices were also adjusted on a weekly basis. In the contract market, consumers reported restrictions from producers. As a result, many converters were unable to build up additional LDPE inventories.

But September will be the most difficult month for consumers because of a series of shutdowns for maintenance at three more plants. Ufaorgsintez will be the first to start gradually shutting down its production for a turnaround from 29 August, the maintenance works are scheduled to be fully completed by 6 October.

Tomskneftekhim intends to shut down its production capacities for a two-week turnaround in early September. Kazanorgsintez will shut down its production capacities in several phases from 17 September, the outage will last until 10 October.

In late July, prices for 108 grade PE started from Rb74,500/tonne CPT Moscow, including VAT, and offer prices for 158 grade LDPE were at an average of Rb76,500/tonne CPT Moscow, including VAT. In late August, prices rose to Rb95,000/tonne CPT Moscow, including VAT, and Rb100,000/tonne CPT Moscow, including VAT, respectively.
MRC

MOSCOW (MRC) -- Russia's production of high density polyethylene (HDPE) totalled 1,040,000 tonnes in the first seven months of 2020, up by 84% year on year. ZapSibNeftekhim accounted for the main increase in the output, according to MRC's ScanPlast report.

July total HDPE production in Russia was 147,500 tonnes, whereas this figure was 114,400 tonnes a month earlier, the largest producer - ZapSibNeftekhim - raised its capacity utilisation after the shutdown for a scheduled maintenance in July. Thus, overall HDPE output reached 1,040,000 tonnes in January-July 2020, compared to 564,500 tonnes a year earlier. All producers raised their output, but ZapSibNeftekhim accounted for the greatest increase.

The structure of HDPE production by plants looked the following way over the stated period.

Kazanorgsintez reduced its HDPE production in July in favour of linear low density polyethylene (LLDPE), the total production was 41,500 tonnes, compared to 42,600 tonnes a month earlier. The plant's overall HDPE output reached 312,600 tonnes in the first seven months of 2020, down by 2% year on year.

Stavrolen shut down some of its HDPE production capacities last month due to technical issues, the total production was 22,800 tonnes versus 27,500 tonnes in June. The plant's overall output totalled 186,700 tonnes in January-July 2020, up by 2% year on year.

Gazprom neftekhim Salavat reduced its capacity utilisation in July, the plant's HDPE production dropped to 8,700 tonnes from 11,300 tonnes a month earlier. The Salavat plant's overall output of polyethylene (PE) reached 73,100 tonnes, up by 19% year on year, such an increase in production was caused by the absence of shutdown for maintenance this year.

ZapSibNeftekhim produced 74,600 tonnes last month versus 33,000 tonnes in June, the low figure of the first summer month was due to a two-week shutdown for a turnaround. The plant's overall production totalled about 468,000 tonnes over the stated period.

MRC