LG Chem shuts aromatics unit following control-room fire

MOSCOW (MRC) -- LG Chem, a South Korean petrochemical major, has shut down its aromatics unit in Yeosu following a fire at the company's cracker at the same site on 5 November, according to Chemweek.

The unit can produce 180,000 mt/year of benzene, 115,000 mt/year of toluene and 80,000 mt/year of xylenes.

The aromatics unit could stay offline for 2–3 weeks.

As MRC reported earlier, a fire broke out at its central control room at the Yosu cracker complex at around midnight local time (15:00 GMT) onn 5 November, the company said. The country's largest chemical company said it was in the process of figuring out the cause of the fire. The facility can process about 1.2 million tonnes of ethylene per year (tpy).

Benzene is the main feedstock for the production of styrene monomer (SM). which, in its turn, is used for the production of polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 362,820 tonnes in the first nine months of 2020, down by 1% year on year. September total estimated PE consumption in Russia was 48,690 tonnes, up by 13% year on year.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) -- Lanxess reports a 68.4% year-on-year (YOY) drop in third-quarter net income from continuing operations to EUR25 million (USD29 million) on sales down 14.3% to EUR1.461 billion, said Chemweek.

The company says that COVID-19 continued to impact its business during the quarter, but that there were “positive signals” from markets compared with the previous quarter. Lanxess has confirmed and narrowed its full-year forecast range. At EUR193 million, third-quarter EBITDA before exceptional items was 28.3% lower YOY. The company’s EBITDA margin pre exceptionals declined to 13.2%, against 15.8% in the prior-year quarter. The company says that, in addition to the pandemic, a planned major maintenance shutdown in Belgium, effects from reduced selling prices, and adverse exchange-rate effects, particularly related to the US dollar, burdened the result. However, the company’s consumer protection segment continued to develop well.

“In many businesses, we are seeing indications that things are taking a turn for the better,” says Lanxess chairman Matthias Zachert. “Demand in key customer industries, including the automotive sector, picked up again in comparison to the second quarter. China and the US, in particular, are providing positive stimuli." Demand in Lanxess’s advanced intermediates segment stabilized compared with the second quarter, so that sales volumes almost reached the previous year’s level. However, given lower selling prices and negative exchange-rate effects, sales and earnings were down YOY. Sales decreased 14.4% YOY to EUR470 million. At EUR65 million, EBITDA pre exceptionals was 28.6% lower than the prior-year figure.

COVID-19 continued to impact the specialty additives business in the third quarter. Sales volumes declined significantly, particularly due to lower demand from the automotive and aviation industries. Lower selling prices and negative exchange-rate effects also had a negative impact. Sales fell 18.5% YOY to EUR410 million and at EUR65 million, EBITDA pre exceptionals was 33.0% lower YOY.

Lanxess says its consumer protection segment remained a “strong pillar” of the group thanks to a robust agricultural chemicals business and good demand for disinfectants. In addition, the positive portfolio effect from the acquisition of biocide manufacturer IPEL offset adverse exchange-rate effects. At EUR278 million, sales were stable YOY and at EUR59 million, EBITDA pre exceptionals was 7.3% higher.

Lanxess, meanwhile, says it will pay a special bonus for the “extraordinary commitment” of its employees during the COVID-19 pandemic. “In particular, our colleagues at the plants played a crucial role in keeping our business running during the crisis,” says Zachert. “With this bonus, we would like to thank them and all the others who have made special contributions over the past months.” The company will distribute a high-single-digit million euro sum. The amount of the payment varies from employee to employee. In Germany, the special bonus will be paid out in December, and different rules apply in other countries, Lanxess says.

As per MRC, Lanxess' net profits in the second quarter of 2020 were almost eight times higher than in the same period of the previous year, to EUR798 million (USD943 million). This is primarily due to the sale of its 40% stake in chemical park curator Currenta to Macquarie Infrastructure and Real Assets in April, which resulted in a disposal gain of EUR740 million. Sales declined 16.7% year on year, to EUR1.44 billion, due to weak demand across many industries and lower raw material prices, the company says. EBITDA and EBIT shrank by 23.8% and 57.3%, to EUR198 million and EUR61 million, respectively.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
MRC

MOSCOW (MRC) -- Solvay reports a 42% decline year on year (YOY) in underlying net profit to EUR176 million (USD208 million) for the third quarter, on sales that fell over 18% YOY to EUR2.1 billion due primarily to lower volumes and foreign exchange losses, said Chemweek.

EBITDA of EUR473 million was down 21% compared to the prior-year quarter due to the lower volumes and currency effects, but up sequentially by 7.7% from the second quarter, it says. Cost reductions and sustained pricing significantly offset volume declines, with Solvay’s EBITDA margin improving to 22.5% from 20.2% quarter on quarter, reflecting “improvement in the quality of earnings,” it says. The net profit figure is also up sequentially from EUR109 million in the previous quarter.

Sales in the third quarter were down slightly on the second quarter, reflecting low demand in July and August, although “September showed some improvement in certain automotive applications, including tires and EV batteries,” Solvay says. Other markets “remained resilient,” including electronics, healthcare, home and personal care, agro, and coatings, while civil aerospace and oil and gas remain challenged, it notes.

Cost savings now total €260 million so far this year, with EUR90 million of savings achieved in the third quarter, of which EUR50 million were structural. Within the structural savings, approximately 50% are related to restructuring actions, 40% from indirect spend, and 10% from productivity and efficiency improvements, it says. Free cash flow of EUR366 million was achieved in the third quarter, it adds.

In a portfolio update, the company says it has reached agreements to sell its interests in several business lines, including: the sodium chlorate business and related assets in Portugal, which are part of its peroxides business; certain fluorine chemicals and its site in Seoul, South Korea that is part of its Special Chem business; and “most recently” the process materials product line part of its composites business. No financial details or third parties were given. “Solvay will continue to explore other opportunities to further simplify its portfolio,” it adds.

“Our relentless focus on cash and cost in this challenging environment resulted in record cash generation of €801 million through the nine-month period,” says CEO Ilham Kadri. Cost reduction actions achieved higher sequential EBITDA compared to the second quarter “despite the continued headwinds in some key end markets,” she says. The company has also selectively resumed investments and is working closely with its customers to commercialize new innovations, she adds. Solvay’s full-year underlying EBITDA forecast is estimated at between EUR1.89-1.97 billion.

As MRC informed earlier, Solvay says it aims to reduce emissions further from its own production plants and related to the energy it purchases, and include in its 2030 sustainability targets emissions in the value chains connected to Solvay’s activities.

As per MRC's ScanPlast, September PE production in Russia was 233,200 tonnes, whereas this figure was 258,700 tonnes a month earlier, in the first month of autumn several producers stopped their capacities for repairs at once. Thus, overall PE output reached 2,204,200 tonnes in January-September 2020, compared to 1,349,000 tonnes a year earlier. Production of all PE grades rose, but LLDPE accounted for the greatest increase, which was provided by ZapSibNeftekhim.
MRC

MOSCOW (MRC) -- INVISTA and Hengli Petrochemical (Huizhou) have reached agreement to license INVISTA’s P8 PTA technology for two PTA lines, said the company.

These two lines will be installed at Xiachong, Daya Bay, Huizhou City, Guangdong province, China. The kick-off meeting was successfully concluded on October 23, 2020, between Hengli, INVISTA and CTCI (the engineering contractor).

@We are very pleased that our industry-leading P8 PTA technology has been selected again by Hengli Group. Our companies have a decade-long cooperation, and we look forward to working together on this new project, leverage the learning on Hengli PTA 4/5 and deliver a successful project."

Hengli is also operating another 5 PTA lines on Changxing Island (Dalian), all of which utilise advantaged INVISTA PTA technology, with a total capacity of 12 million tonnes per annum.

Adam Sackett, IPT vice president PTA, commented, "We are very pleased that our industry-leading P8 PTA technology has been selected again by Hengli Group. Our companies have a decade-long cooperation, and we look forward to working together on this new project, leverage the learning on Hengli PTA 4/5 and deliver a successful project."

INVISTA’s industry-leading PTA technology, including its latest version of P8 technology, is available as a license package from IPT.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

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.

Hengli Group is an international company that owns a diversity of business: petrochemical, advanced polyester materials, textiles, trading, finance and thermal power. In 2019, Hengli’s total revenue was 556.7 billion RMB, ranking No. 181 in the Fortune Global 500 list. Hengli operates the largest PTA site in the world combined with the biggest performance fibre textile production base.
MRC

MOSCOW (MRC) -- Univar has reported third-quarter net income of USD28.5 million, compared with USD2.5 million in the year-ago quarter. Net sales fell 15.8% year-on-year (YOY), to USD2.01 billion, said Chemweek.

Adjusted earnings fell 3.5% YOY, to USD58.7 million, or 34 cents/share, beating analysts’ consensus of 26 cents/share, as reported by Refinitiv (New York, New York). Results improved sequentially through the quarter, an improvement that continued into October, Univar says.

"Our team executed well this quarter, meeting the challenges of variable customer demand and macroeconomic uncertainties, all while managing our costs,” says David Jukes, CEO of Univar. “Our financial results reflect…the strength of our supplier and customer relationships, and the benefit of a growing suite of digital capabilities."

USA segment sales declined 19.7% YOY, to USD1.25 billion, while segment adjusted EBITDA fell 13.6%, to USD110.3 million. EMEA sales were down 6.0%, to USD399.4 million, while segment adjusted EBITDA rose 4.4%, to USD33.3 million.

Canada segment sales fell 17.0% YOY, to USD234.9 million, while segment adjusted EBITDA decreased 25.2%, to USD16.6 million. Latin America segment sales grew 2.8% YOY, to USD120.5 million, while segment adjusted EBITDA increased 28.4%, to USD13.1 million.

As MRC informed earlier, Sibur selected Univation’s licensed process for three 600,000-metric tons/year PE lines at Amur. The lines will be part of the integrated project, located near Svobodny in the Amur region close to Russia’s border with China, which will have a total polyolefin design capacity of 2.7 million metric tons/year.

As per MRC's ScanPlast, September PE production in Russia was 233,200 tonnes, whereas this figure was 258,700 tonnes a month earlier, in the first month of autumn several producers stopped their capacities for repairs at once. Thus, overall PE output reached 2,204,200 tonnes in January-September 2020, compared to 1,349,000 tonnes a year earlier. Production of all PE grades rose, but LLDPE accounted for the greatest increase, which was provided by ZapSibNeftekhim.
MRC