Sluggish demand hurts PTTGC full-year earnings

MOSCOW (MRC) -- PTT Global Chemical's (PTTGC) fourth-quarter net profit surged to Thai baht (Bt) 6.41bn from the same period last year on the back of higher product prices, with sales up 3% year on year, said Chemweek.

Its full-year 2020 results, however, reflected a general weakness in demand caused by the coronavirus pandemic, with a 20% decline in sales nearly wiping out its profit. The company's EBITDA margin rose to 12% in the fourth quarter of 2020 from 5% in the same period of 2019, supported by strong margins at the olefins and derivatives business.

Its olefins and derivatives business for the period posted an adjusted EBITDA margin of 23%, more than double 10% registered in the same period a year earlier. PTTGC's average polyethylene (PE) prices in the last three months of 2020 were up 22% year on year at USD1,074/tonne.

For the full year of 2020, PTTGC's net profit shrank to Bt200m as average product prices slumped due to poor demand amid the coronavirus pandemic. The PX market was under pressure from weaker demand from downstream purified terephthalic acid (PTA) and polyester markets, it said. Some demand support was provided by downstream polyethylene terephthalate (PET), mainly for food packaging and single-use bottles.

As per MRC, PTT Global Chemical has put plans for the construction of a massive petrochemical plant in eastern Ohio on hold while it conducts another feasibility study. The proposed project, which was announced in 2015, has faced a series of delays.

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.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- CVR Energy Inc plans to pursue a renewable diesel project at its 132,000 bpd Coffeyville, Kansas, refinery if it succeeds in producing the fuel at its Wynnewood, Oklahoma, plant, reported Reuters with reference to the refiner's statement.

CVR said it has excess hydrogen capacity and a high-pressure hydrotreater at Coffeyville that could be repurposed for renewable diesel production, pending approvals.

CVR is converting a hydrocracker at Wynnewood to allow for the production of renewable diesel, which could receive feedstock as early as May 2021, and begin processing by the following July, the company said.

Crude processing at the plant will decrease from 75,000 bpd to between 55,000 and 59,000 bpd.

“If market conditions change materially, then we would have the option to return the unit to hydrocarbon service fairly easily at minimum cost,” CVR Chief Executive David Lamp said on an earnings call with investors.

If refining margins remain weak, the refiner plans to install a pretreatment unit at Wynnewood to process lower carbon-intensity feedstocks like inedible corn oil, animal fats and used cooking oil.

As MRC informed previously, earlier this month, KBR, Inc. announced that a subsidiary of CVR Energy, Inc. ("CVR Energy") is proceeding with the next phase of the KBR Solid Acid Alkylation Technology (K-SAATTM) project for its refinery in Wynnewood, Oklahoma. CVR Energy previously awarded a contract to KBR to provide the basic engineering design based on K-SAAT technology to revamp its existing HF alkylation unit at its Wynnewood refinery. CVR Energy now plans to take the project to the next phase, which would entail KBR providing detailed engineering of the process equipment, proprietary equipment supply and module fabrication. The expected mechanical completion of the project would be late 2024, subject to regulatory and internal approvals.

We remind that in September 2020, Ningxia Baofeng Energy Group Co. (Baofeng Energy) selected KBR's proprietary cracker technology for its new methanol-to-olefins (MTO) project to be built in Ningxia, China. Under the contracts, KBR will provide process technology licensing and process design packages for Baofeng Energy's 500,000-t/y coal-to-olefins facility and its 500,000-t/y C2-C5 comprehensive utilization project. Once complete, the complex will be the "largest" single-train MTO plant in the world, KBR noted.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 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.
MRC

MOSCOW (MRC) -- OQ Chemicals (Monheim am Rhein, Germany) has announced a price hike for oxo intermediates in the Americas for the second time in a week, citing continuing strong demand and increasing raw material costs, said Chemweek.

The latest rise in prices will come into effect on 1 March 2021 or as contracts allow, it says. The company announced price increases for several of its oxo alcohol and oxo acetate ester products on 8 February, with immediate effect.

OQ says it will raise prices for 2-ethylhexanol (2-EH), n-butanol, isobutanol, and trimethylolpropane (TMP) by USD0.10/lb each in North America and Mexico, and by USD220/metric ton each in South America. N-propyl acetate will each increase by USD0.07/lb in North America and Mexico, and by USD154/metric ton in South America. N-butyl acetate, isobutyl acetate, and n-propanol will each rise by USD0.05/lb each in North America and Mexico, and by USD110/metric ton in South America.

OQ announced oxo intermediates price rises in the Americas earlier in January, as well as implementing sales control on 26 January due to increased demand and shortage of supply for its US oxo intermediate products produced at its Bay City, Texas, site.

As per MRC, OQ Chemicals declares global sales control for carboxylic acids, aldehydes. Global sales control has been announced by OQ Chemicals (Monheim am Rhein, Germany) on all grades of its carboxylic acids and aldehydes. N-heptanoic acid, n-pelargonic acid, n-heptanal, n-nonanal, and n-undecanal have all been placed under sales control, effective immediately.

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.
MRC

MOSCOW (MRC) -- OQ Chemicals (Monheim am Rhein, Germany) says it has been forced to temporarily shut down its manufacturing plant at Bay City, Texas, and declare force majeure “due to severe weather” after the Texas Gulf Coast area was hit by an extreme cold front, reported Chemweek.

The cold weather conditions have affected the area’s terminals, barging, and shipping facilities, as well as OQ’s plant operations, it says. “As a consequence of the plant shutdown, OQ Chemicals provides notice of force majeure and suspension of performance of its supply obligations for oxo alcohols, aldehydes, acids, and esters,” it says.

The company is continuing to monitor the situation and “working diligently to resume production as soon as possible,” says Fred Gaytan, vice president at OQ Chemicals.

The cold weather conditions and high power demand have impacted operations at several oil refineries in Texas, with nearly 2.0 million barrels/day of refining capacity either off-line or in the process of coming down, according to OPIS, an IHS Markit company.

Earlier this week, OQ announced global sales control on all grades of its carboxylic acids and aldehydes due primarily to strong demand and recent short-term raw material disruptions, as well as in preparation for a planned maintenance turnaround at the Bay City plant.

As MRC wrote before, in September 2020, OQ Chemicals entered into an agreement to license its advanced proprietary technology for the production of ethylene and propylene derivatives to Duqm Refinery and Petrochemicals Industries Company (DRPIC) in Oman. DRPIC, a joint venture between Oman Oil Company and Kuwait International Oil Company, is a planned grassroots petrochemical complex at Duqm, Oman. In all, DRPIC awarded twelve license packages to international licensors.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

OQ Chemicals, formerly Oxea, is a global manufacturer of oxo intermediates and oxo derivatives, such as alcohols, polyols, carboxylic acids, specialty esters, and amines. These products are used for the production of high-quality coatings, lubricants, cosmetics and pharmaceutical products, flavours and fragrances, printing inks and plastics. OQ Chemicals is part of OQ, an integrated energy company that delivers sustainability and business excellence. OQ operates in 16 countries and covers the entire value chain from exploration and production to the marketing and distribution of its products.
MRC

MOSCOW (MRC) -- TechnipFMC has announced the completion of its spin-off transaction to create two industry leading, independent, publicly traded companies, TechnipFMC and Technip Energies, according to Hydrocarbonprocessing.

In connection with the separation, the Technip Energies technical reference price was set at EUR9.00 ahead of its direct listing on the Euronext Paris Exchange where it will trade under the symbol “TE”.

Doug Pferdehirt, Chairman and CEO of TechnipFMC, stated: “I am delighted to announce the successful completion of the separation transaction. As the market leader and industry’s only fully integrated pure-play, we are uniquely positioned to transform our clients’ project economics, helping them to unlock traditional and new energy resources while reducing carbon intensity and supporting their energy transition ambitions.”

New board of directors appointment for Technip Energies. Technip Energies today announced the appointment of a new member of its Board of Directors, Simon Eyers, effective February 16, 2021. Mr. Eyers previously served as Managing Director of Warburg Pincus International from 2012 to 2018 focusing on energy investments, and as a Senior Advisor until the end of 2020 after retiring from his full-time role. In addition to being a founding partner of 4D Global Energy Advisors, a private equity firm based in Paris specializing in the energy sector, Mr. Eyers also held executive leadership roles in various technology ventures and worked 13 years in energy investment banking at SG Warburg & Co, Goldman Sachs and Credit Suisse First Boston Europe.

"We are pleased to welcome Simon Eyers to the Technip Energies Board," said Arnaud Pieton, CEO of Technip Energies. "Simon’s deep understanding of global energy markets and strong experience with the development of new technologies will be invaluable as we grow our business in the future."

As MRC reported earlier, in November 2020, TechnipFMC 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.

We remind that 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 ICIS-MRC Price report, last year's ABS imports to Russia increased by 4% year on year to 35,000 tonnes from 33,700 tonnes a year earlier. South Korean shipments accounted for 62% (21,600 tonnes) in January-December 2020 versus the share of 58% (19,700 tonnes) a year earlier.
MRC