Lanxess completes acquisition of biocide manufacturer Intace

MOSCOW (MRC) -- Specialty chemicals company Lanxess completed the acquisition of the French company INTACE SAS on March 1, 2021, said the company.

The Paris-based biocide company is a manufacturer of specialty fungicides for the packaging industry. The parties have agreed not to disclose the purchase price.

The biocides businesses now acquired account for annual sales in the mid single-digit million euro range. LANXESS will integrate them into the Biocides business line within its Material Protection Products business unit. The products are used in particular in paper, paperboard, soap packaging, labels and banknotes.

As per MRC, Lanxess announced force majeure at its maleic anhydride plant in Baytown, Texac due to raw material shortages and equipment outages for necessary safety.

Maleic anhydride is a raw material for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids and a number of agricultural chemicals.

Plasticizers are substances introduced into a polymer material to make it elastic and plastic during processing and operation. In particular, plasticizers are used for the production of polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

According to the ICIS-MRC Price Report, price discussions for March supplies of Russian PVC began on Wednesday, supplies of Russian PVC with K64 / 67 were discussed in the range of Rb116,000-120,000/tonne CPT Moscow, including VAT for volumes up to 500 tonnes, against Rb112,000-115,000/tonne CPT Moscow, including VAT in February.

Lanxess is a leading specialty chemicals concern with a turnover of EUR7.2 billion in 2018. The group employs approximately 15,400 people in 33 countries. Currently, the concern includes 60 manufacturing enterprises. Lanxess core business is the development, production and marketing of chemical intermediates, additives, specialty chemicals and plastics. The concern is included in the lists of the world's leading sustainability indices: the Dow Jones Sustainability Index (DJSI World and Europe) and FTSE4Good.
MRC

MOSCOW (MRC) -- Braskem Idesa says it is reopening its Etileno XXI ethylene-polyethylene (PE) petrochemical complex at Coatzacoalcos, Mexico, after signing agreements with Mexico’s state-owned companies Petroleos Mexicanos (Pemex) and National Natural Gas Control Center (Cenagas), reported Chemweek.

The complex was forced to shut down in December 2020 after Cenagas halted gas supplies to the plant. This followed unsuccessful talks between Braskem Idesa and Pemex over the renegotiation of an existing supply contract for feedstock ethane.

Braskem Idesa says it has now signed documents with both Pemex and Cenagas that will enable the facility’s “continued operation.” An agreement with Cenagas covers natural gas transport services for a term of 15 years. This is, however, conditional upon the outcome of further discussions between Braskem Idesa and Pemex over “potential amendments to the ethane supply contract and for the development of an ethane import terminal,” it says.

A memorandum of understanding (MOU) signed by Braskem Idesa and Pemex has set out “respective understandings” for the ethane supply discussion, as well as a forward process to enter into definitive documentation, approval by Braskem Idesa’s shareholders and creditors, and with reservations of rights, it says.

With the signing of these agreements, Braskem Idesa “immediately commenced to receive the service of natural gas transportation, which had been unilaterally terminated,” it says. The existing ethane supply contract between the two companies “has not been modified and remains in full force and effect,” it adds, noting that it “cannot predict the outcome of such discussions with Pemex, its shareholders, and creditors.”

Braskem Idesa announced in December it was taking steps to shut the Etileno XXI petrochemical complex after Cenagas halted gas supplies. Cenagas had said at the end of November it would not renew a contract for supply of natural gas and blocked supplies the following day, according to Braskem Idesa in a statement at the time. There were indications that the decision was driven by Mexican President Andres Manuel Lopez Obrador, who had announced that Pemex would no longer supply natural gas to Braskem Idesa as the contract terms were deemed to be unfair, according to Adrian Calcaneo, senior consultant with IHS Markit, at the time of the petchem plant’s announced shutdown.

Pemex has struggled to meet ethane supply commitments to the plant, the largest petchems investment in Latin America, as Mexico’s oil and gas production has declined significantly in recent years. Earlier in 2020, Braskem Idesa began importing ethane from the US to the plant. The company has spent $4 million on logistics infrastructure to be able to import up to 12,800 barrels/day of ethane, 19% of the volume required by the facility.

The Etileno XXI complex, which comprises a 1.05-million metric tons/year ethylene plant and three polyethylene (PE) units, had a utilization rate of 84% in the third quarter of 2020, according to a Braskem presentation later in the year. The main grades of PE produced are high-density polyethylene (HDPE) for blow molding and film, and low-density polyethylene (LDPE) for film.

As MRC informed earlier, in June 2020, Braskem announced the selection of Charleston, South Carolina for its new global export hub facility to serve international customers. The hub will provide packaging, warehousing and export shipping services to support Braskem's polypropylene (PP) production facilities in the United States. With the design and development phase well underway, the new global export hub was expected to be completed by the third quarter of 2020 and will have a capacity to support export shipments of up to 204,000 metric tons/year of PP and specialty polymers.

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.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- Negotiations on prices of European polyvinyl chloride (PVC) for March shipments to the CIS markets began this week. The rise in export prices from European producers continued, in some cases the price increase was EUR100/tonne by February, according to the ICIS-MRC Price Report.

March contract price of ethylene was agreed up by EUR75/tonne from the previous month, which theoretically allows to talk about an increase of PVC production by EUR33 per tonne compared to February. But a serious deficit has been persisting for several months in the region, which was due to unplanned shutdowns of several production facilities in Europe, and has recently been intensified by shutdowns of capacities in the United States.

European producers announced an increase in export prices for the markets of the CIS countries in March by EUR75-100/tonne. The demand for PVC from the consumers from the CIS countries is starting to gradually increase, despite the record level of prices. The bulk of price offers accounted for K58/70 PVC.

The supply of PVC for export from European producers was decreasing every month. Some producers limited their export sales in favour of the domestic market. Some buyers managed to agree on deliveries for 50% of the submitted order.

But there were companies that did not manage to get confirmation of their March shipments at all. Overall, deals for March shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of EUR1,085 - 1,145/tonne FCA, whereas the previous month's deals were discussed in the range of EUR985-1,045/tonne FCA.
MRC

1. ExxonMobil to cut 7% of Singapore workforce amid unprecedented market conditions

MOSCOW (MRC) -- ExxonMobil Corp plans to cut its workforce in Singapore, home to its largest oil refining and petrochemical complex, by about 7% amid the “unprecedented market conditions” resulting from the COVID-19 pandemic, reported Reuters with reference to the company's statement. About 300 positions out of 4,000 current jobs will be impacted by the end of 2021, the company said in a statement. The Singapore layoffs come weeks after Exxon announced its plan to close its 72-year-old Altona refinery in Australia and convert it to an import terminal. The top US oil producer, once America’s most valuable company, posted a historic annual loss for 2020 after the coronavirus pandemic slashed energy demand.

MRC

MOSCOW (MRC) -- Crude oil futures ticked higher during the mid-morning trade in Asia, with optimism over large draws in US product inventories trickling down into markets otherwise cautious ahead of the OPEC+ meeting, reported S&P Global.

At 10:32 am Singapore time (0232 GMT), the ICE Brent May contract was up by 19 cents/b (0.30%) from the March 3 settle to USD64.26/b, while the April NYMEX light sweet crude contract was up by 10 cents/b (0.16%) to USD61.38/b.

Data released from the Energy Information Administration spurred some optimism in the market as it showed massive declines in US product inventories.

According to the data, US gasoline inventories registered the largest-ever one-week draw reported by EIA in records dating back to January 1992, plummeting 13.62 million barrels to 243.47 million barrel during the week ended Feb. 26. Distillate inventories also recorded their largest draw since January 2003, plunging 9.72 million barrels to 143 million barrels last week.

The bullish data for downstream products took away some attention from the largest-ever one-week build in US commercial inventories, which rose 21.56 million barrels to 484.61 million barrels last week.

"Gasoline demand was the star of the show with a very welcome and colossal draw as the weather improved and road traffic picked up significantly," Stephen Innes, chief global market strategist at Axi, said in a March 4 note.

Meanwhile, the market eagerly awaited the March 4 OPEC+ meeting, after the March 3 OPEC+ Joint Ministerial Monitoring Committee meeting concluded with no recommendation on April crude output levels. Delegates to the meeting said that Saudi Arabia, citing the tenuous nature of oil's recovery, wants to limit any rise in production quotas, while other coalition members want to pump more crude in order to take advantage of oil's bull run.

While there has been speculation in the market that Saudi Arabia would choose not to continue with its unilateral 1 million b/d output cut, S&P Global Platts Analytics said in a recent note that strong OPEC+ quota compliance may convince Saudi Arabia to ease this extra cut in a more phased manner, thereby ensuring that the market remains supported by constrained supply.

"A more gradual rollback of Saudi Arabia's 1 million b/d cut remains a distinct possibility, which could result in tighter markets and signal higher prices as (April loadings) will be needed for increased summer refinery runs," Platts Analytics said.

ANZ research, in a March 3 report, said that while the crude oil futures market has rallied due to progress on the pandemic and US stimulus fronts, the sentiment in the physical markets remains lackluster, and that a full recovery for oil still looks some way off.

"We expect OPEC+ to increase output by 750kb/d in April. This assumes a 500kb/d increase across the group, coupled with a 250kb/d increase from Saudi Arabia," they said.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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