Chemours earnings up on gains in TiO2 and fluorochemicals

MOSCOW (MRC) -- Chemours (Wilmington, Delaware) reports fourth-quarter net income of USD19 million, up from a loss of USD317 million in the year-ago quarter, on sales of USD1.337 billion, down 1% year-over-year (YOY), according to Chemweek.

Adjusted net income totaled USD103 million, up 12% YOY from USD92 million owing to higher volume, lower cost, and favorable currency impact, partially offset by lower average pricing, says the company. Adjusted earnings per share came to USD0.61, well above the average analyst estimate of USD0.36 as compiled by Zacks Investment Research.

“We ended 2020 with solid momentum as the global recovery boosted demand in our key end-markets,” says president and CEO Mark Vergnano. “Our outlook strikes a balance between the recovery and the natural uncertainty in the progression of the global COVID-19 pandemic."

Chemours expects full-year 2021 adjusted EBITDA of USD1-1.15 billion, up from USD879 million in 2020, and adjusted EPS of between USD2.40-3.12, up from USD1.98 in 2020.

The company also announced that it has split its fluoroproducts segment into two new reporting segments, thermal & specialized solutions (TSS), formerly fluorochemicals, and advanced performance materials (APM), formerly fluoropolymers. Chemours says the move “enables an enhanced customer-centered approach, management focus and decision-making, strong resource allocation, and increased transparency and accountability.”

Titanium technologies segment sales totaled USD691 million, up 13% YOY. Volume increased 17% YOY on demand recovery in the architectural coatings, laminates and plastics markets. Global average selling prices were down 6% YOY. Adjusted EBITDA increased 30% YOY to USD149 million.

Sales in the thermal & specialized solutions (TSS) segment totaled USD272 million, down 6% YOY. Volume was flat, while price declined 7%, primarily the result of contractual price adjustments for refrigerants as well as product and customer mix. Adjusted EBITDA increased 28% YOY to USD105 million, driven by improved cost performance from the ramp up of Opteon production at Corpus Christi, Texas, which more than offset the impact of reduced price, says Chemours.

APM segment sales dropped 14% YOY to USD279 million. Volume and price declined 10% and 6% YOY, respectively. The COVID-19 pandemic continued to weigh on demand, but the impact moderated global recovery gained momentum in key end markets. Adjusted EBITDA decreased 29% YOY to USD25 million, mainly on lower net sales, partially offset by improved operational performance and cost reduction actions.

Chemical solutions segment sales dropped 26% YOY to USD95 million, mainly on the divestiture of Chemours’s methylamines business in the fourth quarter of 2019. Prices and volume were both lower YOY. Adjusted EBITDA increased 12% YOY to USD28 million on higher licensing income.

As MRC informed before, in December 2019, Chemours announced plans to sell its methylamines and methylamides unit to Belle Chemical, an affiliate of Cornerstone Chemical. The sales price was not disclosed. Thus, Chemours had signed a letter of commitment with Belle Chemical Co. to sell Chemours' methylamines and methylamides business and production facilities at the Belle location. Earlier in 2019, Chemours announced it would stop making methylamines and methylamides at the plant. In 2020, it planned to start dismantling the methylamines operations. Once Belle takes possession of the plant, most of the employees at Belle and others assigned in supporting roles at other locations will become part of Belle, Chemours said. Cornerstone makes acrylonitrile (ACN) and melamine at Fortier, Louisiana.

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

According to ICIS-MRC Price report, last year's ABS imports to Russia grew by 4% year on year to 35,000 tonnes from 33,700 tonnes. The share of South Korean supplies amounted to 62% (21,600 tonnes) versus 58% (19,700 tonnes) in January-December 2019.

Global oil inventories to become tight by mid-2021

MOSCOW (MRC) -- Global refineries will increase crude processing sharply over the next six months to stabilise stocks of fuels such as gasoline and diesel – even if substantial coronavirus controls remain on travel and service sector businesses, said Hydrocarbonprocessing.

The prospective rise in processing and consequent draw down in crude inventories in the second and especially third quarters is what has been boosting futures prices and causing calendar spreads to tighten. The oil market’s rapid evolution from a massive production surplus last year to deficit has been most evident in the United States, where reliable data on stocks is published weekly by the Energy Information Administration (EIA).

U.S. inventories of crude and products outside the strategic petroleum reserve amounted to 1,283 million barrels on March 5, which was just 12 million barrels or 1% above the previous five-year average. Crude stocks were 29 million barrels or 6% above the five-year average, mostly as result of the disruption to refineries caused by cold weather and power failures in Texas last month.

But inventories of finished fuels and intermediate refinery products had already fallen to 15 million barrels or 2% below the average for 2016-2020. The gasoline shortfall has become particularly severe, with inventories 15 million barrels or 6% below the five-year average.

Total stocks of crude and products have fallen by 168 million barrels since July, largely reversing the 198 million build between March and June associated with the epidemic and volume war between Saudi Arabia and Russia. In the next few months, U.S. refineries will have to accelerate crude processing and fuel production to prevent stocks from depleting further.

If coronavirus controls on travel, services and international passenger aviation are relaxed, that would provide an even bigger boost to consumption. But it is important to stress that crude processing will have to accelerate even if controls are maintained to prevent fuel stocks from eroding to undesirably low levels.

The depletion of petroleum inventories is most obvious in the United States because of its high-frequency real-time data, but the phenomenon is worldwide.

Commercial petroleum inventories in the OECD countries have fallen by around 284 million barrels since July, reversing most of the 335 million barrel build between last February and June, according to the EIA. In March, OECD inventories are likely to fall slightly below the average for the previous five years, for the first time since the epidemic started to spread outside China in February last year.

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 polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

European chlorine output hits highest total for two years

MOSCOW (MRC) -- Chlorine production in Europe increased 3.3% year on year (YOY) in January to 855,883 metric tons, with the average daily rate of 27,609 metric tons also rising 6% month on month from December’s daily rate of 26,045 metric tons, or 807,438 metric tons in total, according to Chemweek.

It is the fourth consecutive monthly rise YOY in output, and the highest monthly total for two years, according to data from Euro Chlor, the European chlor-alkali industry association.

Caustic soda stocks rose YOY by 6,617 metric tons to 233,430 metric tons in January and increased 12.3% compared to December 2020’s total of 207,855 metric tons, it says.

Europe’s average chlorine production capacity utilization rate in January rose YOY by 2.5% to 86.7%, the highest rate achieved since February 2020.

Euro Chlor’s figures are drawn from the EU-27 countries plus Norway, Switzerland, and the UK. The association represents 38 companies producing chlorine in 19 countries.

As MRC reported earlier, in January 2021, Industria Quimica del Istmo (Iquisa; Mexico City, Mexico) hired Bluestar Chemical Machinery Co. (BCMC) to build a membrane-cell chlor-alkali plant in Coatzacoalcos, Mexico, with capacity to produce 150,000 metric tons/year of chlorine. BCMC said then it will supply its proprietary electrolysis technology for the project, which is to begin construction this month and to be completed within two years.

We remind that November production of sodium hydroxide (caustic soda) in Russia were 111,000 tonnes (100% of the basic substance) versus 108,000 tonnes a month earlier. Russia's overall output of caustic soda totalled 1,165,600 tonnes in the first eleven months of 2020, down by 1.3% year on year.

Sipchem 2020 net profit falls on lower prices

MOSCOW (MRC) -- Sipchem's net profit fell by 41.3% year on year to Saudi riyal (SR) 175.9m last year, partly weighed by lower selling prices for most of its products, the Saudi Arabia-based producer said in a stock exchange filing, said Argaam.

Sahara International Petrochemical Co. (Sipchem) reported a net profit after Zakat and tax of SAR 175.9 million in 2020, down 41% compared to a net profit of SAR 299.5 million a year earlier.

The profit drop was attributed to lower sales revenue and selling prices for most of Sipchem’s products, along with lower production in the polypropylene plant, due to unplanned shutdown and turnaround maintenance.

Sipchem also recorded an impairment loss of SAR 280 million in 2020 from cash generating units, namely International Diol Company (IDC) (SAR 100 million) and EVA Film Plant, owned by Saudi Specialized Products Company (SAR 180 million).

As per MRC, Sahara International Petrochemical Co. (Sipchem) is planning to mothball the Polybutylene Terephthalate (PBT) plant, owned by its affiliate, Sipchem Chemical Co., and Ethylene Vinyl Acetate (EVA) Film plant that is owned by affiliate firm, Saudi Specialized Products Co. Steps to implement the decision are underway, Sipchem said in a statement to Tadawul, adding that the suspension of both plants will start on Jan. 1, 2021, until further notice. The company expects a positive financial impact starting from Q1 2021 results.

According to ICIS-MRC Price report, on Wednesday, 10 March, 1,500 tonnes of Turkmenbashi refinery's PP raffia grade were put up for export sale at the State Commodity and Raw Materials Exchange of Turkmenistan. The starting price was set at USD1,515/tonne FOB/FCA. PP prices were growing dynamically during the trades and finally reached another record - USD1,775/tonne FOB/FCA, the total volume of PP was sold in one day.

Clariant will increase prices for Pigments & Pigment Preparations

MOSCOW (MRC) -- Clariant, a focused and innovative specialty chemical company, has announced global price increases across its product portfolio, as per the company's press release.

The increase, which is effective March 19th, 2021 or as soon as contracts allow, is necessary to recover significant on-going cost inflation for basic raw materials, energy and transportation.

Prices for the pigment portfolio will increase by 1.2 USD/KG and for pigment preparations by 0.5 USD/KG or its equivalent in local currency.

Selected individual products will experience higher price increases due to the severe impact of their specific raw material costs.

As MRC reported earlier, in October 2020, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.