Ineos declares force majeure on propylene supplies from its cracker in Germany

MOSCOW (MRC) -- Ineos Oxide, an Ineos subsidiary, has declared force majeure on propylene output from one of the two steam crackers at Dormagen, according to Chemweek with reference to sources' statement to OPIS Thursday.

This declaration was not confirmed by Ineos. There are two steam crackers at Dormagen, one with a capacity of 670,000 metric tons/year and another with a capacity of 530,000 metric tons/year, according to IHS Markit data.

"We don't comment on the day-to-day running of our plant," said an Ineos spokesperson in response to an OPIS email seeking confirmation of force majeure declarations, type of production affected, and delivery volumes.

As MRC reported earlier, Ineos has also decrared force majeure on ethylene oxide (EO) deliveries from its 280,000-metric tons/year plant in Cologne, Germany. "We heard about the Ineos ethylene oxide force majeure earlier in the week," a market source said.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

Arkema announces divestment of Its PMMA business to Trinseo

MOSCOW (MRC) -- Arkema announces the proposed divestment of its PMMA business to Trinseo for an enterprise value of EUR1,137 million, as per the company's press release.

This project is a new step in the group’s transformation, and is fully in line with Arkema’s ambition to become a pure Specialty Materials player by 2024.

The offer values this activity at EUR1,137 million, i.e. 9.3 times estimated 2020 EBITDA.

The project offers great development opportunities for the PMMA business over the long term.

Arkema’s PMMA activity is an integrated business, from production of methyl methacrylate to polymethyl methacrylate, marketed under the well-known brands Plexiglas on the American continent and Altuglas in the rest of the world. This activity benefits from leading commercial positions with products primarily dedicated to the automotive, construction, signs & displays, and sanitary ware markets.

The business under divestment is very competitive, employs some 860 people and operates 7 production sites (4 in Europe and 3 in North America). Sales in 2020 are estimated at around EUR510 million for an EBITDA around EUR122 million, a solid performance in the context of Covid-19. In 2019, EBITDA was close to its historic high, at EUR160 million.

Trinseo, a global materials solutions provider and manufacturer of plastics, latex binders, and synthetic rubber, generated sales of US3.8 billion in 2019, and operates 17 production sites worldwide, with a workforce of 2,700 people. Arkema’s PMMA activity will complement Trinseo’s range of performance plastics (ABS, PC, etc.), and strengthen its positions in the automotive, construction and lighting markets. Hence, these highly complementary activity portfolios will offer new growth and development opportunities.

The offer received is based on an enterprise value of EUR1,137 million, and the capital gains tax is expected at around 15% of this amount.

With this proposed divestment, which comes after the sale of the functional polyolefins business to Korean group SK last June, the share of Specialty Materials sales within Arkema increases from 79% to 87% based on the 2019 proforma figures. The Group thus takes another major step in its transformation, with the ambition of becoming a pure Specialty Materials player by 2024, centered only around Adhesive Solutions, Advanced Materials, and Coating Solutions.

"This proposed divestment is fully in line with the Group's strategy presented at our Capital Markets Day last April. It will allow Arkema to continue to significantly reduce the share of its Intermediates segment and to consolidate its foothold in specialty materials with high technological content. Trinseo is a high-quality company which will be able to welcome in the best possible way PMMA’s management and highly professional teams, support its customers and partners over the long term, and capture the many growth opportunities for this sustainable and high performance material" stated Thierry Le Henaff, the Group’s Chairman and CEO.

The proposed disposal is subject to the approval of the relevant antitrust authorities and to an information and consultation process involving Arkema’s employee representative bodies. The deal is expected to be finalized mid-2021.

As MRC wrote before, earlier this month, Arkema completed the acquisition of Colorado Photopolymer Solutions (CPS), a US-based provider of photopolymer formulation services.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

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

Sealed Air launches food-grade film made using recycled plastic

MOSCOW (MRC) -- Sealed Air has developed what it says is the world’s first food-grade soft plastic film containing Certified Circular Resins (CCR). The new CRYOVAC Brand rBDF S10 film is made using up to 30% food-grade CCR, which is certified by the International Sustainability & Carbon Certification (ISCC), said Packagingnews.

Sealed Air has developed what it says is the world’s first food-grade soft plastic film containing Certified Circular Resins (CCR). The new CRYOVAC Brand rBDF S10 film is made using up to 30% food-grade CCR, which is certified by the International Sustainability & Carbon Certification (ISCC).

According to Seald Air the 21 microns ‘ultra-thin’ barrier is a third lighter than widely used HFFS packs and three times thinner than other thermoformable films. The high gloss finish and transparent clarity of CRYOVAC Brand rBDF S10 is designed to help enhance the appearance of food to drive sales and reduce waste.

Leak-proof closures, hermetic sealing and a protective barrier further minimise waste by safeguarding food integrity and extending shelf-life.

The film packaging can be used to wrap foods with or without trays. The overwrap film with modified atmosphere is ideal for fresh red meat, poultry, fish, smoked and processed meat, cheese, convenience food and ready meals.

Arnaud Brunet, fluids and adjacent markets platform director at Sealed Air, said: “The innovative use of CCR in CRYOVAC Brand rBDF S10 film perfectly complements the shrink packaging’s ultra-thin, high abuse, mechanical resistance and anti-fog performance. Together, these form a packaging system well-aligned with a circular economy that’s aiming to lower waste and increase resourcefulness."

The company has set a target for creating 100% recyclable or reusable packaging solutions by 2025.

According to MRC's ScanPlast report, Russia's estimated PET consumption reached 52,71o tonnes in September 2020, down by 27% year on year. Overall PET consumption in Russia reached 530,750 tonnes in the first nine months of 2020, down by 22% year on year.

Headquartered in Charlotte, N.C., Sealed Air makes the Cryovac food packaging and Bubble Wrap protective packaging brands. The company reported USD4.7 billion in sales in 2018 and has approximately 15,500 employees.
MRC

Asia Distillates-Gasoil refining margins climb to highest in over 4 months

MOSCOW (MRC) -- Asian refining margins for 10 ppm gasoil rose last Tuesday to their strongest in more than four months, partly buoyed by optimism that economies would rebound with accelerated approvals for COVID-19 vaccines, reporte Reuters.

Refining margins, or cracks, for 10 ppm gasoil climbed 63 cents to USD6.20 a barrel over Dubai crude during Asian trading hours, their highest since Aug. 6.

Regional gasoil demand is expected to pick up through the remainder of this year and in the first quarter of 2021, primarily led by India, but a resurgence in COVID-19 cases and related restrictions in several other Asian markets might put a dampener on, analysts said. "The economic recovery globally should be sharp and robust due to the extreme low base set in 2020, and the oil price rebound forecast should help to pull diesel prices higher over the next 12 months," said Peter Lee, senior oil and gas analyst at Fitch Solutions. "Although the bulk of the recoveries are expected to occur late in H121 and H221, as key markets continue to struggle with elevated infection rates," Lee added. Cash differentials for gasoil with 10 ppm sulphur content were at a discount of 13 cents a barrel over Singapore quotes on Tuesday, compared with a discount of 22 cents per barrel a day earlier. Meanwhile, cash differentials for jet fuel flipped into a discount of 2 cents a barrel to Singapore quotes on Tuesday, compared with a premium of 3 cents on Monday.

Global air cargo demand was 6.2% lower than previous year's levels in October, the International Air Transport Association (IATA) said on Monday. - Asia-Pacific airlines saw demand for international air cargo drop 11.6% in October year-on-year, but this was a second consecutive month of improvement, the IATA said.

Airlines battered by COVID-19 are prepping for key roles in the mass vaccine rollout that promises to unlock an immediate boost for the sector - and beyond that, its own recovery and survival. Oil prices fell on Tuesday, adding to losses from the previous session that came as California tightened its pandemic lockdown through Christmas and coronavirus cases continued to surge in the United States and Europe.

As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

Tesco removes plastic across own label Christmas range

MOSCOW (MRC) -- Supermarket giant Tesco has revealed it has removed over 20 million pieces of plastic from its Christmas range, said Packagingnews.

Tesco, which won two awards at this year’s UK Packaging Awards, has made changes to its packaging. Its own label crackers will be sold in cardboard packaging while 312,000 Christmas light will be packaged in recyclable cardboard packs.

It has also removed a layer of plastic in Christmas puddings and sponges, which is said to cut 1.78 million pieces of plastic. Tesco has also stopped using glitter for its single-use products and packaging.

Tesco quality director Sarah Bradbury said: "It is an absolute priority of ours to remove and reduce the amount of plastic in our stores to the minimum and ensure everything we use is recycled and kept out of the environment – Christmas time is no exception and we want to do our bit to help customers have more sustainable celebrations."

As per MRC, plastic packaging use in the UK fell by 6% in 2019 year-on-year, according to WRAP’s annual report on the progress of the UK Plastic Pack. Data from WRAP has shown that “unnecessary” plastic has been reduced by 40% during 2019, with an uplift in the amount of plastic packaging being recycled. The organisation said that 400 million items classified as “problematic or unnecessary” were sold by members of its UK Plastics Pact initiative. Plastic items deemed unnecessary include straws, stirrers and cotton buds.

According to MRC's ScanPlast report, October estimated EPS consumption in Russia was 10,310 tonnes versus 10,740 tonnes a month earlier. Russia's estimated EPS consumption was about 80,000 tonnes in January-October 2020, down by 4% year on year. In November, demand was moderate in the Russian EPS market, whereas in the second half of the month, there was a decrease in activity in the EPS market as compared to October. Domestic prices of Russian material were in the range of Rb98,000-111,000/tonne CPT Moscow, including VAT.
MRC