Borealis eyes early December restart for Porvoo cracker

MOSCOW (MRC) -- The 380,000-metric tons/year steam cracker at Porvoo, Finland, operated by Borealis is expected to restart operations in early December after the company declared force majeure following a technical failure on 11 November, reported Chemweek with reference to a company spokesperson's statement to OPIS on Friday.

"Start-up is currently foreseen for early December 2020," the spokesperson said.

The cracker was shut down to allow necessary repair works, according to Borealis. Cumene and phenol operations at Porvoo have not been disrupted by the cracker outage, as Borealis has been able to source feedstocks to maintain production, according to IHS Markit analysts. Borealis produces

150,000 metric tons/year of benzene, 245,000 metric tons/year of cumene, and 190,000 metric tons/year of phenol at Porvoo, IHS Markit data show.

OPIS is an IHS Markit company.

As MRC informed earlier, Borealis announces that its new naphtha cavern in Porvoo, Finland has now been safely commissioned as of October 2020. Having invested around EUR25 million in the construction of this 80,000 m3 facility, Borealis can now source and store naphtha for its Porvoo operations from the global market in a more flexible, cost-efficient, and secure way. The cavern can also accommodate renewable naphtha, making it possible for Borealis customers in future to draw on certified renewable polypropylene (PP) and polyethylene (PE), as well as renewable base chemicals, ethylene, propylene and phenol.

We remind that the light-feed 625,000-metric tons/year Borealis steam cracker at Stenungsund, Sweden, is expected to restart operations in the fourth quarter this year after a fire broke out at the plant in May, 2020. The cracker has been under force majeure ever since after the blaze at the plant on 10 May, which was subsequently brought under control the following day.

Ethylene and propylene are feedstocks for producing PE and PP.

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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.

TechnipFMC commences work on new hydrocracking complex in Egypt

MOSCOW (MRC) -- TechnipFMC has successfully completed the remaining conditions required to enable work to commence on the EPC contract with Assiut National Oil Processing Company (ANOPC) for the construction of a new hydrocracking complex for the Assiut refinery in Egypt, according to Hydrocarbonprocessing.

As previously announced, this major EPC contract covers new process units such as a vacuum distillation unit, a diesel hydrocracking unit, a delayed coker unit, a distillate hydrotreating unit as well as a hydrogen production facility unit using TechnipFMC’s steam reforming proprietary technology. The project also includes other process units, interconnecting, offsites and utilities.

The project supports the Egyptian government’s Energy Transition strategy and will reinforce the economic growth of rural areas while minimizing environmental emissions as well as reducing the government export bill. The complex will transform lower-value petroleum products from Assiut Oil Refining Company’s (ASORC) nearby refinery into approximately 2.8 million tons per year of cleaner products, such as Euro V diesel.

The contract award will be included in the Company’s fourth quarter 2020 inbound orders.

As MRC reported earlier, Saad Helal, the Chairman of Egyptian Petrochemicals Holding Company (ECHEM), stated in September 2020 that his company is rapidly working on implementing a number of seven new projects to the national plan for the period of 2020-2035. He said that these projects include one by Wood Technology Company for producing medium-density fibreboard (MDF) wood which is being installed and implemented by Petrojet, a methanol derivative production project which produce a capacity of 140 tons per year and is worth USD117 million, and a project by the Egyptian Ethylene and Derivatives Company (Ethydco) for producing rubber polybutadiene at a capacity of 36,000 tons per year with costs USD183 million.

Butadiene is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, Russia's estimated consumption of polystyrene (PS) and styrene plastics totalled 362,820 tonnes in the first nine months of 2020, down by 1% year on year. Consumption of material in the Russian ABS segment decreased in January-September 2020 by 8% year on year, totalling 32,240 tonnes.

Global auto sales improve modestly again in October

MOSCOW (MRC) -- In North America, according to Scotiabank’s latest Global Auto Report, Canadian auto sales similarly continued to stabilize in October with a modest -0.6% month-over-month (m/m) (sa) deceleration, sitting 2.5% down year-over-year, said Canplastics.

"October’s selling rate at 1.85 million saar units is only 5% below 2019 annual sales, mirroring the broader economic recovery where gains are largely moderating following impressive rebounds in the immediate aftermath of lockdowns,” the report said. “Second waves across Canada will likely moderate auto sales heading into the end of the year.” In fact, preliminary figures for Ontario and, to a lesser extent Quebec, already showed slowing auto sales in October as those economies entered second waves earlier than other parts of the country, Scotiabank said. “But these are not expected to destroy demand as much as dampen demand in the near term with some deferral in sales into the new year," the report said.

In the U.S., auto sales continued to normalize in October with a modest pullback of -0.5% m/m (0.9% y/y). October’s selling rate of 16.2 million units is less than 5% below last year’s annual sales, while a broad range of economic indicators similarly continues to hold up against second (or third) waves of the pandemic, the report said. “With some deterioration in auto purchase sentiment noted by the Conference Board, sales may be dampened over the remainder of the year, but reduced election uncertainty and the possibility of some form of fiscal support in the near term will likely put a floor under auto sales activity,” the report said.

Mexican auto sales modestly improved again in October (by 2.9% m/m) but still sit steeply in negative territory relative to last October (-21.3%). “Trend improvements are expected, albeit at a slower pace in line with a softer recovery in private consumption and economic output more generally, along with more limited fiscal capacity to accelerate the recovery,” Scotiabank said.

European auto sales continued to trend in the right direction in October but with considerable volatility and variability across markets, largely a function of outbreaks. “Western European sales, for example, slowed by -6.3% m/m for the month but this masked a 6.5% m/m improvement in Germany against a -4.5% m/m retrenchment in French auto sales, mirroring a difference in the path of the pandemic,” the report said. “Italy and Spain similarly saw October sales pull back modestly, while UK sales picked up modestly (1% m/m) despite escalating cases in October."

With COVID-19 cases decreasing in November (or at least plateauing), auto sales in the region should continue to normalize over the remainder of the year, Scotiabank said. South American auto sales showed signs of further recovery in October with an overall 2% m/m increase in activity. “This is the second month of solid rebounds across most of the region as it emerged from prolonged first waves that extended through the summer for the most part," Scotiabank said.

Brazil continues to underperform, driving headline numbers as the largest auto market, with sales retreating by -4% m/m (-15% y/y). Chile, followed by Peru, showed what Scotiabank called “tremendous rebounds” of 35% m/m (29% y/y) and 9% m/m (7% y/y), respectively. “With political turmoil erupting in November, this could introduce further volatility in the trend recovery for Peruvian auto sales,” Scotiabank said. “Colombian auto sales improved by 9% m/m, but were still down relative to last year (-12% y/y)."

Momentum in global auto sales continues to be driven largely by China, Scotiabank said. “October Chinese purchases retreated only modestly (-0.2% m/m), but posted a hefty 9.4% y/y improvement,” the report said. “Reportedly, 6% of October sales were electric vehicles as the country aggressively strives to meet a 25% EV sales target by 2025. As the pandemic remains at bay, Chinese auto sales are expected to continue to improve over the remainder of the year."

Japanese auto sales, meanwhile, posted a strong sales month in October with a 6.1% m/m improvement as the country was enjoying a brief lull in COVID-19 cases. "Massive year-over-year improvements (29.2% y/y) speak more to the substantial sales declines last October when the sales tax was increased by 2 ppts,” Scotiabank said. “With cases escalating rapidly towards the end of the month, sales will likely be weaker for the remainder of the year, albeit with some offsets from base effects from last fall’s tax."

And while it’s a smaller market, South Korea is on track to be the least-impacted auto sales market amidst the pandemic with year-to-date sales currently only -2% y/y. “October sales pulled back by -15.5% m/m, but are still modestly positive on a year-over-year basis (0.3% y/y),” Scotiabank said.

Rounding out the rest of the region, divergences in auto sales largely continue to track COVID-19 outbreaks, Scotiabank noted. “Australia posted another month of strongly accelerating sales (20.9% m/m; -1.5% y/y) as it has so far avoided major second waves,” the report said. “India experienced a further improvement in sales in October (11.7% m/m; 12.3% y/y) as a persistent first wave is largely under control, while Indonesian sales continue to contract (-10.7% m/m; -47.1% y/y) against rising COVID-19 cases."

As per MRC, Ministry of Industry and Trade of the Russian Federation predicts a 10% drop in car sales in Russia by the end of 2020. Thus, the ministry improved its previous forecast - before the announcement of the September results, the ministry had expected sales to fall by 25-30% per year.

As MRC reported, the Russian car market in 2019 amounted to 1 million 759 thousand cars, which is 2.3% lower than the same indicator a year earlier, according to the Association of European Businesses (AEB). Sales of passenger cars and light commercial vehicles in Russia in December increased by 2.3% to 179 thousand vehicles. As predicted by the AEB, sales of passenger and light commercial vehicles in Russia will continue to fall in 2020, amounting to 1.72 million units, that is, 2.1% less than last year.

PPG to acquire transportation coatings firm Ennis-Flint

MOSCOW (MRC) -- PPG Industries says it has agreed to acquire Ennis-Flint (Greensboro, North Carolina), a maker of specialized transportation coatings, for USD1.15 billion. Ennis-Flint sells and manufactures pavement markings, traffic paint, thermoplastics, and products for intelligent traffic systems, according to Chemweek.

"The company generates about USD600 million/year in revenues and “mid-teens percentage EBITDA margins,” PPG says.

“The addition of Ennis-Flint’s products further enhances our existing mobility technologies in support of increased automotive occupant safety through driver-assisted and autonomous driving systems,” says PPG chairman and CEO Michael McGarry. “We look forward to the Ennis-Flint team joining PPG and working together to further expand the company’s product distribution on a global scale.”

Much of Ennis-Flint’s revenue is derived from “non-discretionary, essential maintenance spending,” PPG says. The company has manufacturing facilities in the US, Europe, South America, and Asia, and employs about 1,000 people.

The deal is part of PPG’s broader strategy to expand in transportation and mobility related business. The company formed a “mobility focus team” in 2017 to develop products and technologies for these markets.

The transaction is expected to close in early 2021.

As MRC wrote previously, in February 2020, PPG said it had completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

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 year on year by 6.1% 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. September production of primary polymers decreased to 852,000 tonnes against 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.

Polish refiner PKN sees investment at USD37B in 2020-2030

MOSCOW (MRC) -- Poland's biggest oil refiner PKN Orlen expects to invest around 140 billion zlotys (USD37.45 billion) over the next ten years as it shifts focus to building clean energy sources rather than oil refining, reported Hydrocarbonprocessing with reference to the company's statement.

The company said in September that it plans to become climate neutral in the next 30 years, although Poland is the only European Union state which has not pledged to cut emissions to zero by 2050.

"We are opening a new chapter in the history of PKN Orlen. We are building a new multi-energy group, capable of competing in the face of significant changes," PKN Orlen chief executive Daniel Obajtek said in a statement.

PKN Orlen wants to have 2.5 gigawatts of installed capacity in clean energy sources by 2030, including 1.7 GW in offshore wind in the Baltic Sea. The group will cut carbon emissions from its refining and petrochemical assets by 20% and in its energy segment by 33% over the period.

"We are preparing for changes, especially that oil refining will be becoming less significant," Obajtek said, adding that renewable energy sources and the petrochemical segment will be key drivers of the group's core profit (EBITDA).

The group plans to more than double EBITDA, or earnings before interest, tax, depreciation and amortization, to around 26 billion zlotys in 2030. It wants to pay out a dividend of at least 3.5 zlotys per share, and sees its capital needs at around 205 billion zlotys over the period.

As MRC reported earlier, in June 2020, Honeywell announced that PKN Orlen plans to use the UOP Q-Max and Phenol 3G technologies to produce 200,000 metric tons per year of phenol at its facility in Plock, Poland.

Phenol is one of the main feedstocks for the production of bisphenol A (BPA), which, in its turn, is used for the production of polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of polycarbonate (PC) granules (excluding imports and exports to/from Belarus) rose in the first three quarters of 2020 by 32% year on year to 75,600 tonnes (57,200 tonnes a year earlier). And although in the injection moulding sector, the market dropped by 5% with consumption of 7,300 tonnes year on year (7,700 tonnes), it increased by 39% in the extrusion sector to 67,400 tonnes (48,600 tonnes a year earlier). The blow moulding sector grew in January-September 2020 by 1% year on year to 880 tonnes (870 tonnes a year earlier).