LyondellBasell reportedly faces production issues at Aubette LDPE plant

MOSCOW (MRC) -- LyondellBasell has been having some technical issues at its low density polyethylene (LDPE) plant in Aubette, France since September, reported NCT with reference to sources close with the matter.

Meanwhile, this information was not directly confirmed by the company at the time of publication.

Sources reported, “Ongoing issues interrupted production at the Aubette plant. Yet, the company is currently supplying its customers from its other site at Wesseling in Germany.”

The Aubette plant has a production capacity of 350,000 tons/year.

As MRC informed before, in early September 2020, LyondellBasell and Liaoning Bora Enterprise Group commenced operations at their 1.1-million metric tons/year ethylene plant and associated polyolefins complex at Panjin in Liaoning Province, northeastern China. The cost of the project is approximately USD2.6 billion. The two companies in September 2019 established a 50/50 joint venture (JV), Bora LyondellBasell Petrochemical Co., for the project.

According to MRC's ScanPlast report, August estimated LDPE consumption in Russia rose to 48,460 tonnes from 43,380 tonnes a month earlier. Russian producers reduced their export LDPE shipments. Russia's estimated LDPE consumption rose to 383,500 tonnes in January-August 2020, up by 6% year on year. Despite the long outages, LDPE production increased, and imports also rose.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 24% in the first nine months of this year, compared to the same period in 2019 and reached about 26,800 tonnes. Sales of Ukrainian PVC to foreign markets increased by 4% year on year, according to a MRC's DataScope report.

Last month's suspension polyvinyl chloride (SPVC) imports into the Ukrainian market decreased to 1,700 tonnes from 2,000 tonnes in August, with North American resin accounting for the decrease in shipments. Overall SPVC imports reached 26,800 tonnes in January-September 2020, compared to 35,500 tonnes a year earlier.

At the same time, the high level of capacity utilisation allowed the Ukrainian producers to increase export volumes. European producers with the share of about 78% of the total imports over the stated period were the key suppliers of PVC to the Ukrainian market. Producers from the USA with the share of about 18% were the second largest suppliers.

Last month, Karpatneftekhim increased the volume of external sales, the export sales of Ukrainian PVC amounted to 13,400 tonnes against 6,000 tonnes in August. Overall, about 124,300 tonnes of PVC were shipped for export in January-September 2020, compared to 119,400 tonnes a year earlier.

MRC

MOSCOW (MRC) -- BASF has released preliminary figures for the third quarter and says it expects to post a net loss of EUR2.12 billion (USD2.50 billion) compared with a net profit of EUR911 million in the year-earlier period due to non-cash impairments and restructuring provisions, below current analyst estimates, said Chemweek.

However, the company says its operating performance was “better than expected” during the third quarter and expects to record a 5% sales decline to EUR13.81 billion from EUR14.56 billion in the third quarter of 2019. This was mainly driven by negative currency effects, the company says.

BASF also expects to record a third-quarter EBIT loss of EUR2.64 billion compared with a positive EUR1.34 billion in the prior-year quarter due to the impairments and restructuring provisions, below analysts’ consensus. The company says it identified fixed-asset impairments of EUR2.8 billion due to “considerably weaker macroeconomic developments as a consequence of COVID-19.” The impairments were largely the result of weaker demand from the automotive and aviation industries, which impacted the surface technologies segment in particular, and a continued oversupply of basic chemicals, which put pressure on margins in the chemicals and materials segments. In addition, impairments were recognized in the agricultural solutions segment as part of measures to streamline the production network. In BASF’s Other segment, provisions were recognized for the realignment of the global business services unit.

The sale of the assets and liabilities of the construction chemicals business and the related disposal gain will not be reflected until BASF reports its fourth-quarter results, the company says. Payments received until 30 September in connection with the construction chemicals divestment are, however, included in BASF’s statement of cash flows for the third quarter under cash flows from investing activities.

BASF says its third-quarter EBIT before special items is expected to be EUR581 million, above analysts’ consensus but well below the figure for the prior-year quarter, EUR1.06 billion. EBIT before special items rose by EUR355 million in the third quarter from EUR226 million in the previous quarter.

The year-on-year decrease in EBIT before special items was primarily due to the continued weak earnings contributions from the chemicals and materials segments due to ongoing high pressure on margins, BASF says. The nutrition and care, agricultural solutions, and industrial solutions segments and Other segment also recorded lower earnings compared with the prior-year quarter. EBIT before special items in the surface technologies segment was almost on a level with the prior-year period.

BASF’s surface technologies, materials, industrial solutions, and chemicals segments exceeded average analyst estimates for EBIT before special items in the third quarter, the company says. EBIT before special items was on a level with analyst estimates in the agricultural solutions segment but fell short of analyst estimates in the nutrition and care segment, BASF says. EBIT before special items of the Other segment “was more negative than analysts expected,” BASF says.

BASF has provided an outlook for the fourth quarter and full year. It expects a further improvement in EBIT before special items compared with the third quarter of 2020. The expected result would exceed current average analyst estimates for the fourth quarter, BASF says. The company expects full-year sales of EUR57–58 billion, down from EUR59.32 billion in 2019, mainly due to weaker demand as a consequence of the pandemic. BASF anticipates EBIT before special items of EUR3.0–3.3 billion for 2020, down from EUR4.6 billion in 2019. “As well as weaker demand, the company expects pressure on margins to continue, especially for basic chemicals, which will be partially offset by fixed-cost savings,” BASF says.

The outlook is based on various assumptions about the global economic environment in 2020, BASF says. The company assumes a decline in worldwide GDP and industrial production of 5.0%. It anticipates a worldwide decline in chemical production of 2.5% in 2020. It also bases its assumptions on an average euro/dollar exchange rate of $1.15 per euro in 2020 and an average annual Brent crude price of $40/bbl. “BASF’s forecast assumes that severe restrictions on economic activity to contain the coronavirus pandemic, such as lockdowns, are not re-introduced,” the company says.

BASF is due to release third-quarter results on 28 October 2020 and full-year results on 26 February 2021.

As MRC reported earlier, COVID-19 occurred at an already challenging time for the petrochemical industry and has required it to take some drastic actions, said the leaders of the worldпїЅs two biggest chemical companies, BASF and Dow, on Monday at the 54th European Petrochemical Association (EPCA) annual meeting, which is taking place in a virtual format. The pandemic has also accelerated key industry trends, particularly those around sustainability and the environment, they said.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

MOSCOW (MRC) -- US oil refineries are moving aggressively to produce renewable diesel, partly to cash in on Canada’s greener fuel standard before Canadian refiners modify their own plants, reported Reuters.

Canadian Prime Minister Justin Trudeau’s government intends to present its Clean Fuel Standard this year, aiming to cut 30 million tons of emissions by 2030.

Renewable diesel, made by processing spent cooking oil, canola oil or animal fats, can be used in high concentrations or without blending in conventional diesel engines.

So far, Canadian companies have been slow in preparing to make the fuel, with only three projects publicly announced, said Ian Thomson, president of the Advanced Biofuels Canada industry group.

At least five US refiners have announced plans to produce renewable diesel or said they are considering it, including Phillips and HollyFrontier Corp.

“This is Canada’s to lose,” Thomson said. “If Canada’s refiners want to get left out of the game, they will dig their heels in and oppose the standard. Meanwhile, the Americans will build.”

Renewable diesel is a niche market, making up just 0.5% of the 430-billion gallon per year global diesel market, according to investment bank Morgan Stanley.

Greenhouse gas emissions from renewable diesel and traditional biodiesel are typically 50% to 80% lower than conventional diesel.

US states such as Colorado and Washington are moving toward such standards and along with Canada’s fuel standard, a sufficient market is developing, said HollyFrontier executive Tom Creery, on the company’s second-quarter earnings call.

Suncor Energy Inc., Canada's second-biggest oil producer, has been considering a renewable diesel plant in Montreal, but the pandemic slowed its progress, said Chief Sustainability Officer Martha Hall Findlay.

Canadian refiners face longer regulatory delays than competitors in the United States, setting them at a disadvantage, she said.

“The timelines would force investment in facilities outside Canada because of the sheer fact that we can’t build them that fast,” Hall Findlay said. “That seems a little backward.”

New supply could far overshoot demand if all announced projects are built, Morgan Stanley said.

Parkland Fuel Corp. is producing renewable diesel and renewable gasoline in its Burnaby, British Columbia refinery, and is considering expanding capacity, said senior vice-president Ryan Krogmeier.

“There’s a tremendous opportunity for Canada to harness its natural resources,” he said. “The market for renewable fuels is really taking off.”

However, Canada’s criteria for crops to be made into biofuels are too strict to be practical, said farmer Markus Haerle, a corn and soybean grower and chair of Grain Farmers of Ontario.

Federal officials have told the group that farms must meet strict requirements to qualify their crops, such as growing them at least 30 meters (98 ft) from waterways and on land that has not been significantly cleared of trees.

“We know farmers won’t be able to be certified under those criteria,” Haerle said.

The same standards will apply to imported fuels, said Samantha Bayard, spokeswoman for Canada’s environment ministry.

As MRC informed before, Canada's Inter Pipeline Ltd said in September 2020 that it would sell a major portion of its European bulk liquid storage business to Spain-based CLH Group for 420 million pounds (USD537.73 million). Proceeds from the sale will be used to cut debt, improve the balance sheet and help with Inter's spending plans, including on its Heartland Petrochemical Complex in Alberta, the company said.

We remind that in 2017, Inter Pipeline's board of directors authorized the construction of a world-scale integrated propane dehydrogenation (PDH) and polypropylene (PP) plant. The facilities, collectively referred to as the Heartland Petrochemical Complex, are estimated to cost USD3.5 B in aggregate and will be located in Strathcona County, Alberta near Inter Pipeline’s Redwater Olefinic Fractionator.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

MOSCOW (MRC) -- SunVic Chemical Holdings' Jiangsu Jurong Chemical (JJC) subsidiary, SunVic Asia Pacific Investments Holdings (SVAP) and Shenzhen Qianhai Gatsway Petrochemical have terminated a framework agreement, in which Shenzhen Qianhai would acquire a 100% equity interest in Jiangsu Jurong Petrochemicals (JJP) from JJC and SVAP, as per Apic-online.

The agreement was terminated due to financial con-straints of Shenzhen Qianhai, and because of an explosion last year in the chemical zone where JJP's plants are located in Yancheng City, China, which led to a government shutdown of the chemical zone.

The transaction, which had an aggregate cash consideration value of RMB 388-million, was to include a methyl tertiary butyl ether facility and a jetty at JJC's site in Xiangshui, China.

JJC holds a 69% interest in JJP, while SVAP, an associated company of SunVic Chemical Holdings, holds a 31% stake.

With the continued shutdown of the chemical zone, the management team of JJC doesn't expect to be able to dispose of JJP in the foreseeable future.

As MRC reported earlier, China's Sinopec has started operation of a 800,000 tons-per-year ethylene facility at its Zhanjiang refinery. The refinery, located in the southern Chinese coastal city of Zhanjiang, commenced operation of its 200,000 barrel per day crude oil refining units in June.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC