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.
MRC

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.
MRC

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).
MRC

MOL opens polyol R&D centre

MOSCOW (MRC) -- MOL has opened a new polyol research and development center, named after Gyorgy Mosonyi, the late CEO of MOL, in Szazhalombatta, Hungary to develop polyol products that meet the needs of customers. The experimental reactor system, which is the most modern in the world, was supplied and commissioned by thyssenkrupp Industrial Solutions. 90% of the other assets in the project were procured from Hungarian suppliers. In addition, MOL and thyssenkrupp have entered into a joint research and development agreement.

MOL Group's 2030 strategy sets the goal of increasing the share of contribution of the petrochemical business to the results of the entire group. The EUR 1.2 billion investment in the polyol complex in Tiszaujvaros serves to achieve this. To underpin this investment and ensure that the plant meets the needs of the markets it serves, MOL established the research and development center at the Danube Refinery. The EUR 10 million investment center will fund up to 12 engineers and 7 technicians and the most advanced experimental reactor system in the world, supplied and commissioned by thyssenkrupp Industrial Solutions with 90% of equipment procured from Hungarian suppliers.

MOL and thyssenkrupp have also entered into a joint research and development agreement to facilitate the entry of both companies into the polyol market: thyssenkrupp as a technology service provider and engineering-procurement-construction (EPC) contractor, and MOL as a manufacturer and seller of various polyol products.

Gabriel Szabo, EVP of MOL Group Downstream, said: "The research and development center bears the name of Gyorgy Mosonyi, the late CEO of MOL, who was deeply committed to innovation throughout his work, so this a worthy tribute to his memory. It is a state-of-the-art laboratory, equipped with all the necessary tools, instruments and most importantly it has great experts who will ensure that the R&D activities can serve the development of market-ready products, to be later produced by the polyol plant in Tiszaujvaros. Centre is outstanding not only for MOL, but as the most advanced polyol research center in Central and Eastern Europe it has national significance and we hope that the scientific results of it will be of high value internationally as well."

"With our agreement on joint research and development, this R&D center is a big step forward to explore and win the new markets MOL is addressing with the polyols. We are excited for this new chapter in our joint journey and confident that this partnership will be an important success factor on our path to develop advanced and sustainable technology and products for a better future," Sami Pelkonen, CEO of thyssenkrupp's Chemical & Process Technologies business unit added.

The research and development center will conduct tests of the physicochemical properties of polyols, as well as laboratory tests and application experiments of polyurethane foams made from them. By July 2022, at least 10 polyol grades will be developed in the newly built facility. In order to compare and validate the results of the measurements, the company also plans to cooperate with the laboratories of several Hungarian universities and independent research institutions. These collaborations will help to further develop the methodologies used in the polyol R&D center and increase the knowledge base of universities. As well as to the MOL Group, the center will offer outstanding value to the Hungarian and international scientific community for years to come.

MOL's project "Research and Development of Polyether Polyol Grades with Market Potential", which is supported by the National Office for Research, Development and Innovation with HUF 483,269,279, will also take place primarily in the newly opened research center.

As MRC informed before, MOL Petrochemicals Company (formerly known as TVK, part of the MOL Group), the only Hungarian producer of olefins and polyolefins, announced force majeure on the supply of polypropylene (PP) from plant No. 4 at the petrochemical complex in Tiszaujvaros (Tiszaujvaros, Hungary) on 23 September 2019.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 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.

MOL Group is an integrated, international oil and gas company with its headquarters in Budapest, with an international and dynamic workforce of 25,000 in more than 30 countries and an industrial history of more than 100 years. MOL's exploration and production activities are supported by more than 80 years of experience in the hydrocarbon industry. It currently has extraction activities in 9 countries and has research assets in 14 countries. MOL Group operates three refineries and two petrochemical plants under integrated supply chain management in Hungary, Slovakia and Croatia, and its retail network includes 1,940 filling stations in 10 countries in Central and South-Eastern Europe.

thyssenkrupp Industrial Solutions AG is a leading partner for the engineering, construction and service of industrial plants and systems. Based on more than 200 years of experience we supply tailored, turnkey plants and components for customers in the chemical, fertilizer, cement, mining and steel industries. Around 11,500 employees worldwide form a global network with a technology portfolio that guarantees productivity and cost-efficiency to the highest extent possible.
MRC

Evonik invests further in Denmark-based hydrogen peroxide start-up

MOSCOW (MRC) -- Evonik Industries says it has made a second investment in HPNow (Copenhagen, Denmark) through Evonik's venture capital unit. Evonik participated in the first financing round of the start-up in 2017, according to Chemweek.

HPNow has developed a modular generator, HPGen, that produces hydrogen peroxide (H2O2) directly on site based on a patented electrochemical technology, the company says. Further details have not been disclosed.

HPNow has until now addressed mainly the market for agricultural drip irrigation water treatment but is now entering markets for the treatment of industrial wastewater with high oxygen demand, for advanced oxidation in municipal water treatment, and for use in cooling systems, Evonik says.

HPNow’s patented technology breaks down H2O2 into water and oxygen after its application, making it possible to use the environmentally friendly H2O2 even in places to which transport has been uneconomical or even impossible until now, Evonik says. All that the system needs on site is electricity, water, and air, the company adds.

"This patented technology offers the possibility of a demand-oriented and cost-efficient supply of hydrogen peroxide directly to the customer," says Michael Traexler, head/active oxygens at Evonik. "This investment supports our strategy of offering our customers customized system solutions."

As MRC reported before, Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

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

According to MRC's ScanPlast report, 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.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.
MRC