Clariant re-launches pigments unit sale, with multiple bidders

MOSCOW (MRC) -- Clariant is relaunching the sale of its pigments unit, after putting the auction on hold as the coronavirus pandemic engulfed the world and disrupted talks with prospective buyers, reported Reuters with reference to the Swiss specialty chemicals company's statement.

The Muttenz-based company is expected to send out information packages to prospective buyers of the unit this month, and people familiar with the preparations added that buyout groups including PAI, Lone Star, Triton and SK Capital are expected to express interest.

The potential bidders declined to comment or were not immediately available for comment.

"We are continuing our transformation program which has so far seen the successful divestment of the Healthcare Packaging and Masterbatches businesses, by resuming the process for this planned divestment," a Clariant spokesman said.

Before the company said in April the sale process was delayed, the unit which makes dyes including for the car and building industries was expected to fetch up to 900 million Swiss francs (USD984 million), or around 8 times core earnings.

The impact of the pandemic has weighed on the business and it may now fetch less, one of the people said. Clariant said the business has successfully mitigated the pandemic's impact as well as boosted efficiency.

"As a result, Clariant Pigments remains a leading global player in the industry and as such, any convincing offer will have to reflect this leading position," the spokesman said.

Clariant's failed merger with Huntsman, in the face of activist investor resistance, and the joint venture it abandoned in August with Saudi Basic Industries (SABIC) have led to asset sales beyond what the Swiss company originally envisioned.

Clariant is concentrating on its faster-growing segments including catalysts, ingredients for shampoos, and chemicals for the oil and gas industries, while divesting commoditized operations.

As MRC reported before, in early September, 2020, the Competition Commission of India (CCI) cleared SABIC BV's incremental acquisition of a 6.51% shareholding in Clariant AG. The transaction, which will raise SABIC's stake in Clariant to 31.5%, is part of SABIC's growth strategy in specialties.

We remind that in May 2020, Clariant’s CATOFIN catalysts was selected by Advanced Global Investment Co. (AGIC), a joint venture between Advanced Petrochemical Company (APC) and SK Group, to build a PDH facility in the Middle East.

Propylene is the main feedstocks for the production of polypropylene (PP).

According to MRC's ScanPlast report, 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.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

MOSCOW (MRC) -- Braskem has formed first partnership for removing household plastic waste from landfill in Greater Sao Paulo, as per the company's press release.

The partnership forged between Braskem and Tecipar, the Brazilian company specializing in environmental engineering, will avoid some 2,000 tons of plastic waste annually from being discarded in the landfill of Santana do Parnaiba, a city in the metropolitan area of Sao Paulo. This volume is equivalent to 36 million units of plastic packaging made from polyethylene (PE) and polypropylene (PP). The partnership reinforces Braskem's commitment to the Circular Economy and is aligned with the business strategy of the company, which is engaged in supporting the development of the recycling chain and its market.

The partnership supported the creation of a picking plant to separate solid and organic waste from materials collected by the public collection system in the cities of Barueri and Santana de Parnaiba. The plastic sorted by Tecipar is then taken to Braskem's partner recycling company. The recycled PE and PP resins will be used as raw materials for developing more sustainable solutions for the plastic industry.

This is the first agreement entered into by Braskem for the removal of plastic waste from landfills. To Fabiana Quiroga, Braskem's Circular Economy Director for South America, the initiative is an important step for the partnership network Braskem has been building with suppliers, clients, players in the plastics chain and society in general to minimize the environmental impacts and create value for products made from recycled plastic. "Brazil already has a very promising recycling market that creates jobs and income for many people and can help the country overcome one of its main challenges: waste management," she said.

Lucas Faveri, the environmental engineer responsible for the Tecipar waste picking plant, explains that the technology used in the partnership with Braskem is a semi-mechanized model that never has been used before in the state of Sao Paulo state and is scalable, while also helping municipalities to reduce their recycling costs and to increase their recycling rates. A recent survey conducted by the Sao Paulo State Court of Audit (TCESP) found that one-third of municipalities in Sao Paulo do not yet have recycling systems.

"Various initiatives focusing on increasing recyclability come up against the high operational cost of waste triage and collection systems. Information and economic feasibility are two very important factors in this process, and partnerships between companies, such as the one we are forging with Braskem, as well as the move towards more sustainable habits that we are seeing in society, drive us to innovate and to come up with much more efficient solutions," noted Faveri.

The support for technologies and systems that could facilitate recycling in Brazil is among the eight pillars of Braskem's commitment to the Circular Economy. In addition to the partnership with Tecipar, Braskem has been working with companies specializing in mechanical recycling. The company also has been investing in research and technology to leverage chemical recycling in the country. "It is a team effort in which the public's engagement in conscientious consumerism and proper disposal of plastic waste are paramount," said Fabiana.

The recycled PE and PP resins help to expand Braskem's portfolio of sustainable solutions, which are marketed under the I'm greenTM brand and used by major companies for producing plastic items with better environmental footprints. Examples are the recycled plastic chairs recently launched by Tramontina and the line of semiautomatic and automatic washing machines from Colormaq, which include components made from with post-consumer plastic resin.

As MRC reported previously, Brazilian petrochemical producer Braskem's 450,000 mt/year polypropylene (PP) plant in LaPorte, Texas, along the Houston Ship Channel completed its initial commercial production, as per the company's statement as of Sept. 10. "The launch of commercial production at our new world-class PP production line in La Porte clearly affirms Braskem's position as the North American polypropylene market leader," Braskem America CEO Mark Nikolich said in a statement. With a USD750 million investment, the new PP plant's construction started in October 2017 and was completed in June, 2020.

Braskem operates five other US PP plants in Texas, Pennsylvania, and West Virginia, with a cumulative capacity of 1.57 million mt/year that the company acquired. The new plant in La Porte, Texas, is Braskem America's first PP new build.

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.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- Belarus plans to ship at least one cargo of gasoline via Russia's Baltic port of Ust-Luga in October, four industry sources said, turning to a route it last used almost three years ago and avoiding ports in European Union states, said Hydrocarbonprocessing.

The move follows a mounting dispute with the EU. European foreign ministers agreed this week to impose sanctions on Belarusian President Alexander Lukashenko and other officials over an Aug. 9 election the West says was rigged. Belarusian Oil Company will ship 37,000 tons of gasoline from its Mozyr refinery via Ust-Luga port in October, the sources said, adding that trading firm Vitol was the buyer.

"This shipment is a test one," one trader said, adding it was not clear if more Belarusian cargoes would follow. It will be first shipment sent via the Russian port since January 2018. Vitol declined to comment. Belarusian Oil Company and Ust-Luga terminal operator JSC Portenergo did not immediately respond to requests for comment.

Belarus usually exports gasoline from its Mozyr and Novopolotsk refineries via the Lithuanian port of Klaipeda and Ventspils in Latvia, both in EU states on the Baltic. Some motor fuel is also supplied to Ukraine, which borders EU nations. The Belarus president, who has faced weeks of unrest and protests, threatened in August to divert oil products to Russian ports if EU sanctions were imposed and to stop EU states using his country as a transit route to Russia.

Russian Energy Minister Alexander Novak said last month that Belarus might redirect 4 MM to 6 MM tons of oil products through Russian ports. Belarus and Russia have in past years talked of diverting Belarusian oil products through Russian ports, although this has not previously translated into any long-term shift.

Russian President Vladimir Putin said in 2017 Belarusian products produced from Russian oil should be exported through Russian ports. Belarusia's Belneftekhim said in December 2017 it had signed a contract to export 72,000 tons of products via Russian ports but only one 37,000-ton cargo took that route, traders said.

According to MRC DataScope, July imports of polypropylene in Belarus decreased to 7,300 tonnes, while a month earlier this figure was about 11,000 tonnes, local companies reduced the volume of purchases of all types of propylene polymers in Russia. Total PP imports into the country reached 62,800 tonnes in January - July, compared with 64,600 tonnes year on year. The demand for homopolymer PP increased, but demand for propylene copolymers decreased.

MRC

MOSCOW (MRC) -- US crude stocks moved lower last week as Hurricane Delta shut in Gulf of Mexico output and exports hit a 14-month low, reported S&P Global with reference to US Energy Information Administration data showed Oct. 15.

US commercial crude stocks declined 3.82 million barrels in the week ended Oct. 9 to 489.11 million barrels, EIA data showed. The draw left inventories just 10% above the five-year average, the weakest supply overhang since mid-May.
The draw was concentrated on the US Gulf Coast, where stocks fell 5.12 million barrels to 256.33 million barrels, and on the US West Coast, which saw a 1.59 million-barrel draw put inventories at 52.37 million barrels.

Notably, stocks at the NYMEX delivery point of Cushing, Oklahoma, climbed 2.91 million barrels to 59.44 million barrels, the highest since the week ended May 8.

US crude production fell to 10.5 million b/d, down 500,000 b/d from the week prior and the lowest since the week ended September 4, as Hurricane Delta churned through the Gulf of Mexico, causing significant disruptions to oil and gas operations.

At peak on Oct. 10, the storm shut in 1.697 million b/d of crude and 1.692 MMcf/d of gas production, respectively representing 91.72% and 62.43% of total Gulf output, according to US Bureau of Safety and Environmental Enforcement data.

As of midday Oct. 15, approximately 440,000 b/d of crude production, or 24% of total Gulf output remained offline. S&P Global Platts Analytics projected it could take nearly two weeks to fully restore production.

US crude exports plunged 520,000 b/d to 2.14 million b/d, the lowest since mid-August 2019, EIA data showed.

While Hurricane Delta - which temporarily closed both LOOP and the Houston Ship Channel - delayed some exports, weak global spot crude demand and tight arbitrage economics continued to challenge US producers.

US light sweet barrels delivered in Northeast Asia have faced stiff competition from Nigerian and Middle Eastern crudes, with cracks projected to yield between 62 cents/b and 86 cents/b in refined value over WTI from the Magellan East Houston terminal to-date in October, according to Platts Analytics data.

US refinery net crude inputs pulled back 280,000 b/c to 13.58 million b/d as total utilization fell 2 percentage points to 75.1% of capacity.

Delta had only minor impact on regional refineries as close to 1 million b/d of crude refining capacity in Louisiana was already offline ahead of the storm. Citgo Petroleum's and Phillips 66's Lake Charles refineries, representing a combined 678,000 b/d of capacity, both sustained damage from Laura and Phillips 66's 255,600 b/d Belle Chasse refinery is undergoing maintenance work.

Total gasoline inventories fell 1.63 million barrels to 225.12 million barrels. The draw was in line with seasonal norms, holding the deficit to the five-year average steady at around 0.3%.

US Atlantic Coast gasoline stocks plunged 1.91 million barrels to 59.55 million barrels, putting inventories 4.7% behind the five-year average and just off 11-month lows.

Total distillate stocks plunged 7.25 million barrels to 164.55 million barrels, EIA data showed -- the largest weekly draw since the week ended January 31, 2003. Still, distillate stocks remain more than ample, sitting 18% above the five-year average.

The draws come as refined product supplied, EIA's proxy for demand, surged 1.13 million b/d higher to 19.48 million b/d, the strongest since the week ended Aug. 21.

The surge was skewed toward industrial consumption, however, with distillate demand climbing 8% on the week to 4.18 million b/d and petrochemical feedstocks appetite up 26% at 4.16 million b./d, a 14-week high. In contrast, gasoline demand fell back nearly 4% to 8.58 million b/d.

As MRC informed before, in August, 2020, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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) -- Trinseo (Berwyn, Pennsylvania) today issued preliminary third-quarter financial results, estimating net income of USD102-109 million, versus a net loss of USD128 million in the second quarter and net income of USD22 million in the third quarter of 2019, said Chemweek.

The company puts adjusted earnings per share of USD2.76-2.94, well ahead of the average analyst estimate of 69 cents, as compiled by Refinitiv (New York). Trinseo expects adjusted EBITDA of USD100-104 million, up sequentially from a loss of USD8 million up year-over-year (YOY) from USD88 million. Volumes were comparable, YOY, and margins improved YOY in most segments.

Frank Bozich, president and CEO, says strong market conditions have continued into the fourth quarter. "We observed a strong recovery in demand in the third quarter, most notably in automotive, construction, and appliance applications,” says Bozich. “This demand recovery supplemented continued strength in packaging, protective sheeting, and consumer electronics, which had been more resilient through the COVID-19 pandemic. The momentum in demand recovery has thus far extended into October and we are hopeful that it will continue throughout the quarter."

According to ICIS-MRC Price report, October prices of Russian PS continued their upward trend. A shortage of material remained in the domestic market. Traders said Nizhnekamskneftekhim reduced its offer prices for this month's PS purchases to 40%. October prices of Nizhnekamskneftekhim's GPPS grew for the agreed with buyers quantities to Rb89,000-95,000/tonne CPT Moscow, including VAT, whereas HIPS - to Rb93,000-99,000/tonne CPT Moscow, including VAT.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.
MRC