Arkema Q3 net income falls

MOSCOW (MRC) -- Arkema's net income fell in the third quarter as earnings dropped amid lower volumes and prices at its intermediates unit, the French company said.

The company reported a strong improvement in the Group's volumes compared to the second quarter and excellent cash generation in an environment that remains uncertain.

Arkema noted sales of EUR1.9 billion (EUR2.2 billion in Q3'19): 9% decline at constant scope and currency (-18% in Q2'20), in line with the guidance of around -10% issued end July. There was a negative volume effect of 4.4%. The company reported EBITDA of EUR307 million (EUR385 million in Q3'19) and EBITDA margin of 16.1%.

Net debt was down €265 million on June 30, 2020, at EUR1,869 million including hybrid bonds (EUR2,470 million on Sept. 30, 2019). Arkema reported the successful issuance of the Group's first-ever green bond for a total amount of EUR300 million dedicated to financing the growth project in bio-based polyamides in Singapore.

"After a second quarter marked by the development of the COVID-19 health crisis, global demand recovered in the third quarter and was supported in particular by the strong improvement of market segments linked to construction. Group volumes reflect a clear rebound compared to the previous quarter," chairman and CEO Thierry Le Henaff said. "In a context that remains volatile and uncertain, Arkema continues to demonstrate its solidity thanks to the responsiveness and daily commitment of its teams.

"Specialty Materials, which now account for 83% of Group sales, showed a good level of resilience given the current environment. The Group continued to roll out its cost reduction initiatives and to strictly adapt its working capital. The high level of cash generation in the third quarter enabled us to further strengthen our balance sheet structure."

Demand in the third quarter was supported in particular by the rebound in the construction and decorative paints markets, which started in June, growth in batteries, and a sequential improvement in the automotive sector toward the end of the quarter.

The 4.5% negative price effect was due mainly to the impact of lower propylene prices in Coating Solutions and continued challenging market conditions in Intermediates.

As MRC reported earlier, Arkema said in June, 2020, that it had finalized the divestment of its functional polyolefins business to SK Global Chemical. The divestment was announced last year. Arkema says the sale forms part of its strategy to refocus the group’s activities on specialty materials.

As per MRC, Arkema wins the 2020 Pierre Potier Prize for its Elium® liquid thermoplastic resin for wind turbines Elium,liquid thermoplastic resin, a breakthrough innovation in the composites market that enables the manufacture of 100% recyclable wind turbine blades.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Arkema is a global manufacturer in specialty chemicals and advanced materials, with 3 business segments - High Performance Materials, Industrial Specialties, and Coating Solutions - and globally recognized brands. The Group reports annual sales of EUR8.8 billion. Buoyed by the collective energy of its 20,000 employees, Arkema operates in close to 55 countries.
MRC

MOSCOW (MRC) -- PT Lotte Chemical Titan Nusantara has reportedly shut its No. 3 linear low density polyethylene (LLDPE) line in Indonesia last week for a 20-30 day maintenance, while the high density polyethylene (HDPE) unit is unaffected by the overhaul, reported CommoPlast with reference to market sources.

According to market sources, the line was facing issues in producing higher Melt Index (MI) cargoes such as LLDPE roto-molding grade.

This line has an annual capacity of 200,000/year.

As MRC informed earlier, Lotte Chemical Titan last shut down its No. 3 LLDPE unit in Indonesia from December, 2019, 2020 to 20-22 January, 2020, owing to economic fundamentals. Located at Cilegon, Indonesia, the No. 3 unit has a production capacity of 200,000 mt/year.

We remind that PT Lotte Titan Nusantara, Indonesia shut its LLDPE units at Cilegon from 4 to 12 August, 2019, owing to power failure. Located in Cilegon, Indonesia, the No. 1, 2 and 3 units have a production capacity of 125,000 mt/year, 125,000 mt/year and 200,000 mt/year, respectively.

Besides, PT Lotte Titan Nusantara Indonesia restarted its No. 1 LLDPE unit at Cilegon in early December, 2019. The unit was shut owing to shortage of feedstock in early-November, 2019.

According to MRC's ScanPlast report, September LLDPE shipments to Russia increased to 19,110 tonnes from 17,330 tonnes a month earlier. Russia's overall LLDPE shipments totalled 276,330 tonnes in the first nine months of 2020, down by 9% year on year.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.
MRC

MOSCOW (MRC) -- Overall polypropylene (PP) imports into the Ukrainian market totalled slightly over 113,000 tonnes in the first ten months of 2020, up by only 1% year on year. At the same time, only demand for homopolymer of propylene (homopolymer PP) increased, as per MRC's DataScope report.

October PP imports to Ukraine dropped to 11,800 tonnes from 12,500 tonnes a month earlier, demand for propylene copolymers subsided. Overall imports of propylene polymers reached 113,000 tonnes in January-October 2020, compared to 112,300 tonnes a year earlier. Demand for all grades of propylene polymers decreased, whereas demand for homopolymer PP increased.

The supply structure by PP grades looked the following way over the stated period.

October imports of homopolymer PP to the Ukrainian market were 9,500 tonnes versus 9,000 tonnes a month earlier, local companies increased their purchasing of PP in Saudi Arabia. Overall imports of homopolymer PP imports reached 86,800 tonnes in January-October 2020, compared to 85,600 tonnes a year earlier.

Last month's imports of block copolymers of propylene (PP block copolymers) were about 1,000 tonnes, compared to 1,700 tonnes in September, demand for injection moulding PP block copolymer subside. About 11,400 tonnes of PP block copolymers were imported in the first ten months of 2020, compared to 12,100 tonnes a year earlier.

October imports of stat-copolymers of propylene (PP random copolymer) fell to 1,100 tonnes from 1,600 tonnes a month earlier, local companies reduced their purchasing of pipe grade PP random copolymers. Overall imports of PP random copolymer reached 12,900 tonnes in January-October 2020, compared to 13,100 tonnes a year earlier.

Overall imports of other propylene copolymers totalled about 1,900 tonnes over the stated period.

MRC

MOSCOW (MRC) -- The November contract price of ethylene was agreed in Europe at the previous month's level. On the back of that, many European producers rolled over their October export polyethylene (PE) prices for November shipments to CIS countries, according to ICIS-MRC Price report.

Negotiations over November prices of European PE began in the middle of last week. All market participants said European producers maintained their October export prices of ethylene polymers the same for this month's shipments, and only in rare cases, prices rose by EUR10/tonne.

Deals for November shipments of low density polyethylene (LDPE) were discussed in the range of EUR840-920/tonne FCA, whereas last month's deals were done in the range of EUR830-920/tonne FCA.

Deals for high density polyethylene (HDPE) were negotiated in the range of EUR820-900 per tonne FCA, which virtually corresponds to the October deals.

Many buyers reported a sufficient supply of PE from virtually all European producers with a few exceptions.
MRC

MOSCOW (MRC) -- MEGlobal has nominated its December monoethylene glycol (MEG) Asian Contract Price (ACP) at USD660/tonne, up by USD10/tonne from November ACP, said the company.

Before that MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) was USD650/MT CFR Asian main ports for arrival November 2020. The November 2020 ACP reflects the short term supply/demand situation in the Asian market.

The price is on a CFR (cost and freight) Asia basis. Spot MEG supply remained limited as most producers were running their units at reduced rates to cope with poor margins.

As it was written earlier, MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) was USD640/MT CFR Asian main ports for arrival October 2020.

MEG is mainly used in the production of polyester fibres, resins and films (around 80% of global consumption), followed by use in polyethylene terephthalate (PET) resin. It is also used as automotive antifreeze.

As per MRC' ScanPlast, calculated consumption of polyethylene terephthalate (PET) reached 52,71o tonnes in September 2020, down 27% compared to the same time a year before. Total consumption of PET in Russia in the nine months of 2020 reached 530,750 tonnes, down 22% than the same indicator last year.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).
MRC