W.R. Grace open to discussing sale to 40 North

MOSCOW (MRC) -- W.R. Grace CEO Hudson LaForce said the company is open to discussing a sale to private investment fund 40 North Management (New York, New York) “in the context of our ongoing review of strategic alternatives” in a letter sent to 40 North that was released in mid-January, 2021, reported Chemweek.

“Any transaction would need to be at a price level that reflects full value for Grace and its shareholders,” the letter adds.

40 North submitted an unsolicited USD4.3-billion, USD65/share, bid to acquire Grace earlier this month, which Grace said its board would review. The bid came after Grace rejected a USD60/share offer, also unsolicited, in November.

“Grace’s opportunities for continued growth and value creation are strong, particularly as our end markets recover from the disproportionate displacement resulting from the COVID-19 pandemic,” LaForce says in the letter. “As we disclosed when we announced our third quarter 2020 results, we have experienced a rapid recovery from the pandemic and expect fourth quarter 2020 sales and gross margin to approach pre-pandemic levels, with adjusted free cash flow nearing 2019 levels as well.”

The company is prepared to share “information that would support the full value of Grace” under confidentiality agreements with 40 North, LaForce adds.

As MRC informed previously, in April 2018, W. R. Grace & Co. completed the USD416 million acquisition of the Polyolefin Catalysts business of Albemarle Corporation.

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

A leader in polyolefin catalysts and licensing, W.R. Grace has the world’s broadest portfolio of polypropylene and polyethylene catalyst technologies used to produce thermoplastic resins for a variety of applications. A leading innovator and strategic partner to its customers, Grace supplies catalyst solutions for all polyolefin processes, as well as polypropylene process technology and process controls. Grace employs approximately 3,700 people in over 30 countries.

Limetree Bay oil refinery begins producing transportation fuel

MOSCOW (MRC) -- Limetree Bay refinery in St. Croix, United States Virgin Islands, recently began producing transportation fuel, reported Reuters with reference to people familiar with the matter, clearing one of the hurdles that had disrupted a facility restart and jeopardized its crude supply contract.

Achieving full operation is required for Limetree Bay owners’ EIG Global Energy Partners and Arclight Capital Partners to retain a crude supply and product offtake contract with BP Plc. Full startup has been delayed a year and the project has run more than USD1 billion over budget.

BP is set to load ultra low sulfur diesel from the 210,000-barrel per day plant this week, according to two sources and vessel tracking data. Plant operations are “stabilizing,” according to one of the people familiar with the matter, after two fires in December.

Limetree Bay did not respond to a request for comment. BP declined to comment on Monday.

Limetree was given an undisclosed period to cure the plant’s problems after BP warned delays past mid-January would allow it to exercise a clause in its contract and exit the agreement to supply crude oil and market the resulting fuels.

The plant has been making semi-processed fuels including light-end distillate fuel oil and naphtha since restarting a crude unit in September. But it struggled to bring units online to make gasoline and diesel. It had been idled since 2012.

The refinery restart suffered repeated setbacks including high levels of corrosion in pipes and weaker-than-expected demand for IMO 2020-compliant transportation fuels, such as ultra low sulfur diesel, that the owners have sought to tap.

As MRC wrote before, in late October 2020, a “technical defect” disrupted production at part of BP's Gelsenkirchen integrated refinery and petrochemicals complex in Germany, early last week. The company operates plants in the Horst and Scholven districts at Gelsenkirchen, with the defect occurring at Horst. BP said then it was working to resume normal operations as soon as possible. It did not specify which unit has been affected, with sources suggesting it was the fluid catalytic cracker, but this was not confirmed by the company.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

ACC CAB rises again in January

MOSCOW (MRC) -- ACC’s chemical activity barometer (CAB), a leading economic indicator and composite index of industry activity, rose 1.5% in January, following a 1.3% increase in December, on a sequential three-month moving average (3MMA), according to Chemweek.

The barometer was up 1.3% on a year-on-year (YOY) basis in January.

“With nine months of gains, the latest CAB reading is consistent with expansion in the US economy,” says Kevin Swift, chief economist at ACC.

Indicators of industry activity were broadly positive, including production-related indicators, trends in construction-related resins and related performance chemistry, and resins and chemistry for durable goods. This reflects, in part, a strong housing market in the US and recovery in automotive demand. Plastic resins for packaging applications also showed strong trends, as did equity prices and product and input prices, ACC says.

As MRC reported previously, US chemical volumes were expected to drop nearly 10% in 2020 as global economic activity contracts due to the impacts of COVID-19, according to the American Chemistry Council's (ACC) Mid-Year 2020 Chemical Industry Situation and Outlook. Volumes should recover in 2021 with a return to pre-COVID-19 output levels in the US by the second half of 2021.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, 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-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

Lotte Chemical Titan nears restart of naphtha unit in Malaysia

MOSCOW (MRC) -- Lotte Chemical Titan has shut its fluidised catalytic cracking unit in Malayisia because of a technical issue, reported Chemweek.

Thus, the unit producing up to 92,000 metric tons/year of ethylene, 160,000 metric tons/year of propylene has been offline since 15 January following unplanned shutdown. The company intends to resume production at this unit in the first half of February.

As MRC informed earlier, Lotte Chemical Titan also shut its No. 2 cracker in Malayisia in mid-January because of a technical glitch. This cracker is located in Pasir Gudang, Malaysia, and produces 522,000 tons/year of ethylene and 360,000 tons/year of propylene.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

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.

Covestro plans maintenance in May at TDI plant in Dormagen, Germany

MOSCOW (MRC) -- Covestro is planning to carry out maintenance work in May 2021 at its 270,000-metric-tons/year toluene diisocyanate (TDI) plant in Dormagen, Germany, according to Chemweek with reference to market sources.

“The TDI turnaround is expected in mid-May,” says a source. The exact dates for the turnaround are not known, and Covestro declined to comment when asked to specify them. “We don’t comment on turnarounds of our plants,” says a company spokesperson. Another source suggested that the TDI unit maintenance program could take two weeks. “Usually it takes two weeks if there are no issues,” the source says.

BASF, meanwhile, is planning to carry out maintenance from early March until the end of May this year at its 300,000-metric-tons/year TDI plant in Ludwigshafen, Germany.

“The month that BASF Ludwigshafen comes back, Covestro will start its turnaround. It will be interesting when they return, as we expect gasoline demand to improve in the second quarter of this year. So, you may see TDI producers compete with gasoline blenders for the toluene, which is a feedstock and a blend component at the same time,” says Eleanor Dann, principal analyst/aromatics and fibers at IHS Markit.

The TDI market in Europe was tight throughout the second half of 2020, but in December supply began to improve as all three European TDI makers were operational, according to James Elliott, associate director/polyurethane feedstocks at IHS Markit. “As we move into the second quarter of this year, two major TDI suppliers will be on maintenance. Whilst stocks will have been built up in advance of the downtimes, there is the potential for short-term tightness to arise should the outages extend, like last year, beyond the initially planned timeframe,” he says.

In October 2020 Covestro declared force majeure on its TDI plant at Dormagen following the sudden failure of a central pump at the facility. The force majeure affected all of Covestro’s TDI products in the EAME region. The plant had been undergoing maintenance and was expected to restart mid-October. Covestro lifted the force majeure on 1 November.

OPIS is an IHS Markit company.

As MRC reported earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to\\from Belarus) rose in January-November 2020 by 18% year on year to 83,600 tonnes (70,600 tonnes a year earlier).

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2019 sales of EUR12.4 billion, Covestro has 30 production sites worldwide and employs approximately 17,200 people (calculated as full-time equivalents) at the end of 2019.