LyondellBasell Houston refinery restarting gasoline unit after crude unit restart

MOSCOW (MRC) -- LyondellBasell Industries is restarting the gasoline-producing fluidic catalytic cracker (FCC) after completing the restart of the large crude distillation unit (CDU) at its 263,776 barrel-per-day (bpd) Houston refinery, reported Reuters with reference to sources familiar with plant operations.

The 147,000-bpd Unit 537 CDU is the first to restart since the refinery was shut on Feb. 15 by severe cold weather. The 90,000-bpd FCC could be back in production by early next week, the sources said.

Lyondell spokesman Chevalier Gray declined comment.

Unit 537 along with the Unit 536 CDU breaks down crude oil into hydrocarbon feedstocks for all other production units in the refinery.

The FCC uses a catalyst to convert gas oil into unfinished gasoline.

As MRC wrote previously, LyondellBasell (Houston, Texas), one of the largest plastics, chemicals and refining companies in the world, reports fourth-quarter net income of USD855 million, up 40% year-over-year (YOY) from USD612 million on higher polyolefin volumes and margins. A USD147 million non-cash, lower-of-cost-or-market (LCM) inventory valuation benefit increased net income by USD119 million, or USD0.36 per share. Sales totaled USD7.937 billion, down 3.0% YOY from USD8.179 billion. Adjusted earnings per share of USD2.19 increased 15% YOY from USD1.91 and beat the consensus of USD1.31 as compiled by Zacks Investment Research.

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.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges, like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world"s largest producer of polymer compounds and the largest licensor of polyolefin technologies. In 2020, LyondellBasell was named to Fortune Magazine"s list of the "World"s Most Admired Companies" for the third consecutive year.
MRC

Croda profits decline on COVID-19 impacts, higher M&A costs

MOSCOW (MRC) -- Croda International says its pretax profit decreased 10.9% in 2020, to USD375.5 million, and operating profit was 9.3% lower, said Chemweek.

Pretax profit was 1% below analysts' consensus estimate and operating profit exceeded consensus by 0.4%. Sales edged up by 0.9%, to GDP1.39 billion, driven by a recovery in fourth-quarter sales in personal care and performance technologies, and double-digit growth in life sciences in the second half of 2020. Profits reflected “an adverse mix in both personal care and performance technologies, where demand for higher-value-add products was most impacted by the pandemic,” as well as higher costs related to Croda’s M&A activity in 2020, the company says. Fourth-quarter figures have not been disclosed.

Steve Foots, CEO of Croda, says that the company’s financial performance was resilient, despite the inevitable drop in demand caused by the pandemic. “Our strong financial platform has allowed us to make further progress positioning the business to focus on the fast-growth markets of the future, capitalizing on emerging trends in existing and adjacent markets,” Foots says. “We have made significant investments to accelerate delivery of our strategy, notably the acquisitions of Avanti and Iberchem, so that life science and consumer markets now represent over 80% of Croda’s profit generation."

Life sciences posted higher sales and profit in 2020, driven by a strong performance in the health-care and seed-enhancement segments. Sales in reported currency grew by 14.6%, to GDP401.6 million and adjusted operating profit increased 21%, to GDP129.4 million. The company says that its life sciences business is moving from consumer health to patient health by accelerating innovation and organic investment to strengthen specialty excipients, vaccine adjuvants, and lipid delivery.

Sales of the company’s personal care business declined 1.9%, to GDP475.9 million, and adjusted operating profit decreased 15.8%, to GDP136.5 million. A reduction in consumer demand for products associated with "going out" and an interruption of sales channels by COVID-19 reduced the business’s sales, the company says. Croda expects “sales and profit to improve when lockdowns lift, luxury channels re-open, and with the significant cross-selling opportunities provided by the Iberchem acquisition.” The company says it is strengthening consumer care through investing in personal-care innovation to meet its customers’ sustainability requirements.

Performance technologies’ sales were down 3.2%, to GDP416.4 million due to the impact of COVID-19 especially in the second quarter of 2020, which led to temporary closures of automotive and industrial plants, the company says. In the second half of the year, the business saw steady recovery, with fourth-quarter sales “encouragingly ahead of prior year,” Croda says. Adjusted operating profit declined 22.2%, to GDP54 million. “With a recovery accompanied by growth in renewable technologies and sustainable solutions, the sector should become less cyclical as sales growth and better margin return,” the company says.

Croda says it is cautiously optimistic for 2021, but unable to provide a near-term outlook due to the continued COVID-19 restrictions and the uncertainty they create. The 2020 exit rates for the consumer-care and performance-technologies businesses were encouraging, but it remains difficult to make predictions, Croda says. Life sciences are expected to stay strong, it says. “The benefits of recovery, together with the full-year impact of Avanti, Iberchem, and our Pfizer-BioNTech COVID-19 vaccine contract, are expected to support profitable growth across the business,” Croda says.

As per MRC, Croda International (Goole, UK) says it has entered a partnership with Sentient Science (Buffalo, New York), an asset management and software services company, for the recommended use of Croda’s Rewitec additives for wind turbine gearboxes and main bearings.

We remind, Croda says it has completed the acquisition of the entire issued share capital of flavors and fragrances company Iberchem Group (Murcia, Spain) from investment company Eurazeo.

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

Chinese demand recovery hopes fade for Atlantic Basin crude sellers

MOSCOW (MRC) -- With barrels of crude oil that will arrive in China in May now changing hands, hopes that demand from its refiners for African and European crude would tick higher following spring maintenance may have been premature, reported S&P Global.

After a bumper 2020 for sales to China, 2021 has got off to a slow start with demand for long-haul crude hit by higher flat prices, refinery maintenance season and fresh restrictions on mobility on the back of an uptick in coronavirus levels which coincided with Lunar New Year celebrations.

About 50 million mt/year of refining capacity at six state-owned refineries - five Sinopec and one CNOOC - was expected to be shut over the March-April period, while May could also witness some maintenance, albeit at a relatively lower level, industry data and information collected by S&P Global Platts showed.

Sellers of Atlantic Basin crudes hoped that once the bulk of refinery works were finished in May, crude arriving in that period would see more demand, but a confluence of factors has dashed expectations.

"Many companies positioned themselves to deliver May cargoes into China, betting on a demand recovery after the holidays ... that is not happening," one trader said.

As Brent futures and benchmarks surge, others have struggled to keep pace, pushing Brent to its highest premium to Dubai futures in over a year, in tune complicating arbitrage economics for Atlantic Basin crudes.

The front-month Brent/Dubai exchange of futures for swaps has traded above USD2.50/b through the past week, with the May contract last trading at USD2.61/b.

The EFS, a key indicator of the relative strength of Brent-linked crudes against Dubai-linked grades, was last wider in January 2020 and traded in negative territory through much of last year.

Brent-linked Angolan crude, beloved by Chinese refiners, has seen slow trading of March- and April-loading barrels as a result.

"With the current (Brent/Dubai) EFS, it is difficult to see Angolan barrels heading east," a trader said. "Though, I do not think they have a home in the Med ... so I think sellers will load barrels and send them east waiting for economics to improve."

The situation was similar for another Brent-linked crude, Russia's Urals, which has seen demand from the east fade on the back of strength in Brent, according to traders.

Despite low freight rates, North Sea barrels have also been struggling to find buying interest from Asia, with VLCC fixtures failing and some vessels having withdrawn on the route heading East.

Dubai-priced alternatives such as Russian ESPO or Persian Gulf grades looked increasingly attractive to Chinese refiners, other traders said.

Alongside strength in Brent flat prices, the market has shifted into a steep backwardation – a structure in which the forward price of oil is below the prompt price.

With a relatively long distance for Atlantic Basin arbitrage flows into China, the structure penalizes crude loading earlier, with shorter-haul barrels such as ESPO or Persian Gulf grades losing less money while on the water, traders said.

As well as discouraging long-haul flows, backwardation motivates refiners to draw from storage, and with healthy crude inventories in China, it does not make sense to buy fresh oil, according to traders.

Commodity data company Kpler estimates that inventory levels in China are around 936 million barrels, or 67% of the total capacity, a touch under a peak of 70% in September.

Additionally, product markets were well-supplied in China, sources said, with inventories rising.

"Refinery margins in China are not that good ... gasoil demand is not good and (China) is now exporting more diesel as a result," a trader said.

As MRC informed before, in early December 2020, Sinopec’s board approved plans to build a 1.2-million metric tons per annum ethylene plant and downstream units in the Nangang area of the port of Tianjin, China. Sinopec estimates the cost of the project at 28.8 billion renminbi (USD4.4 billion).

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

Neste’s refinery acquisition in Rotterdam completed

MOSCOW (MRC) -- Neste announced that it would acquire Bunge Loders Croklaan's refinery plant in Rotterdam, the Netherlands, said Hydrocarbonprocessing.

The refinery plant is located next to Neste’s existing biorefinery and it consists of a pretreatment facility, tank farm, jetties and has a pipeline connection to Neste’s site. The acquisition has been approved by regulatory authorities, and the transaction has been completed on 1 March 2021. The transition of operations and employees will be implemented in phases with the refinery plant’s full and modified pretreatment capacity available for processing Neste’s feedstock by the end of 2024.

"The completion of this acquisition is an important step forward in delivering on Neste’s global growth strategy in renewables. It allows us to accelerate the scaling up of our renewable raw material pretreatment capacity, which is an important driver for expanding the use of waste and residue feedstocks and increasing our feedstock flexibility. We are committed to increasing the share of waste and residues to 100% of Neste’s total renewable raw material inputs at the latest by 2025, and growing our production platform to help customers reduce greenhouse gas emissions by 20 million tons annually by 2030,” says Neste’s President and CEO Peter Vanacker.

To meet the growing demand of renewable diesel, sustainable aviation fuel and feedstock for polymers and chemicals, Neste focuses on building a global feedstock and production platform for renewables. The company will expand its renewables annual nameplate production capacity from the current 3.2 to 4.5 million tons in the first quarter of 2023, of which the Singapore facility expansion will provide 1.3 million tons. The now acquired refinery offers further pretreatment capacity and terminal infrastructure to handle the increasingly complex waste and residue feedstocks, and supports further growth in production capacity beyond 2023.

Neste has been active in the Netherlands since 2011 when the Rotterdam facility for renewable products started its operations. The Rotterdam facility, together with the company’s Singapore refinery, are the world’s biggest and most advanced renewable fuels refineries. Neste’s Sluiskil plant is responsible for the storage and pretreatment of renewable raw materials, and Neste Demeter B.V. delivers raw materials to the company's renewable products facility. In 2020, Neste also acquired a terminal in Rotterdam for storing, pretreating and blending renewable waste and residue-based raw materials. In 2019, Neste opened a new office in Hoofddorp, in greater Amsterdam which serves as the global hub for the growing Renewable Aviation business. Neste MY Renewable Diesel™, produced from renewable raw materials is currently available at more than 100 sales points throughout the country.

As MRC informed earlier, Neste, a leading producer of renewable diesel and sustainable aviation fuel and a forerunner as a provider of renewable and circular solutions for the petrochemical industry, and LG Chem, South Korea’s largest diversified petrochemicals company and a leading manufacturer of lithium-ion batteries for energy solutions, have announced their aim to build a strategic long-term partnership to develop and grow the biopolymers and biochemicals market globally, and more specifically, in the LG Chem’s home market Korea.

As MRC reported earlier, LG Chem, a South Korean petrochemical major, has shut down its naphtha cracker in Yeosu following a fire. The company said a fire broke out at its central control room at the Yosu cracker complex at around midnight local time (15:00 GMT) on 5 November. The country's largest chemical company said it was in the process of figuring out the cause of the fire. The facility can process about 1.2 million tonnes of ethylene per year (tpy).The cracker shutdown is expected to last at least three weeks.

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

PPG names acquisition integration head

MOSCOW (MRC) -- PPG Industries has named John Stephenson to the post of director/acquisition integration, according to Chemweek with reference to the company's statement.

In this new role, Stephenson will oversee the integration of PPG acquisitions, including the recently-announced deal for Tikkurila. He will report to PPG chairman and CEO Michael McGarry.

Stephenson was most recently business controller/industrial coatings at PPG. He joined the company in 1985 and has served in a variety of finance functions across its operating segments.

As MRC wrote before, Finnish paints maker Tikkurila said in early February, 2021, that Pittsburgh-based PPG had raised its all-shares offer for the company to 34.00 euros per share, topping a rival bid from Akzo Nobel.

We remind that in February 2020, PPG completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

We also 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