COVID-19 - News digest as of 05.05.2021

1. Indian Reliance becomes largest domestic medical-grade liquid oxygen producer

MOSCOW (MRC) -- Amid a surging second wave of COVID-19 in the country, Reliance Industries (RIL) has increased output of medical oxygen to 1,000 mt/day, making it India's largest producer of medical-grade liquid oxygen from a single location, according to IndiaTV. Reliance ramped up production from near-zero to 1,000 tonnes per day and now produces over 11% of the country's oxygen demand. It has rallied its resources to meet the daily need of over 1 lakh people every day. "RIL ramps up production of medical-grade liquid oxygen from near zero to 1000 mt per day free of charge. (It is producing) 1000 mt of oxygen to meet the needs of over 1 lakh people every day on an average," the company said in a statement.


Oil prices grow on eased lockdowns in the US and Europe desire to attract travellers

MOSCOW (MRC) -- Oil prices rose on Tuesday after more US states eased lockdowns and the European Union sought to attract travellers, while soaring COVID-19 cases in India capped gains, reported Reuters.

Brent crude futures were 86 cents, or 1.27%, higher at $68.42 a barrel at 1224 GMT, after climbing 1.2% on Monday.

US West Texas Intermediate (WTI) crude futures also rose 77 cents, or 1.19%, to USD65.26 a barrel, after gaining 1.4% on Monday. Both contracts were up over USD1, or about 2%, in earlier trade.

Prices are being supported by the prospect of a pick-up in fuel demand as New York state, New Jersey and Connecticut were set to ease pandemic curbs and the EU planned to open up to more foreign visitors who have been vaccinated, analysts said.

For further signs of rising US oil demand, traders will be watching for reports on crude and product stockpiles from the American Petroleum Institute on Tuesday and the US Energy Information Administration on Wednesday.

Five analysts polled by Reuters estimated on average that US crude inventories fell 2.2 million barrels in the week to April 30. Oil inventories rose in the previous two weeks.

The rate of refinery utilisation was expected to have increased by 0.5 percentage points last week, from 85.4% of total capacity in the week ended April 23, according to the poll.

A weaker dollar, hit by an unexpected slowdown in US manufacturing growth, also helped shore up oil prices on Tuesday. The lower dollar makes oil more attractive to buyers holding other currencies.

In India, the total number of infections so far rose to just short of 20 million after the country saw more than 300,000 new cases for a 12th straight day, which is expected to hit fuel demand in the world's most populous country after China.

As MRC informed earlier, 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 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 the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

NOVA Chemicals declares FM on PE supplies from its plants in Canada

MOSCOW (MRC) -- NOVA Chemicals declared force majeure (FM) on all its polyethylene (PE) resins produced in the Sarnia region of Ontario, Canada, because of mechanical failures, reported S&P Global with reference to the company's letter to its customers as of April 27.

"NOVA Chemicals has experienced a mechanical failure beyond our control at our Corunna ethylene cracker in the Sarnia, ON, region, which supplies ethylene to our polyethylene facilities in that region," it said in the letter.

"As a result of the estimated repair timing and current inventory levels, we must declare a force majeure/excuse for nonperformance event for all polyethylene resins produced in the Sarnia region ... effective April 27, 2021," the letter said.

The FM does not affect any of its other PE products, it said. In addition, the letter stated there is no firm indication as to what extent they would be able to supply for customers during the force majeure.

The PE plants affected include Mooretown high density polyethylene (HDPE) at 210,000 mt/year, Mooretown low density polyethylene (LDPE) capacity at 170,000 mt/year, and St. Clair HDPE capacity at 209,000 mt/year.

As MRC informed before, in late 2013, NOVA Chemicals announced plans to expand ethylene production capacity by 20% at its cracker in Corunna, Ontario, from the capacity of about 839,000 tpy. The expansion was to occur between 2014 and 2018, as part of a wave of expansions and upgrades to NOVA's existing facilities near Sarnia, Ontario.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. LDPE and HDPE shipments increased.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates.

BASF breaks ground on 3rd phase innovation campus in Shanghai

MOSCOW (MRC) -- BASF, the world's largest petrochemical company, has broken ground for the third phase of its Innovation Campus Shanghai in a move to strengthen its innovation capabilities in Asia and established an academic sounding board as part of the Network for Asian Open Research (NAO), as per the company's press release.

The expansion includes an additional research and development (R&D) building and one R&D workshop building. Construction is expected to be completed by the end of 2022; by then, the total investment of BASF into its Innovation Campus Shanghai will sum up to around EUR280 million.

This further expansion demonstrates BASF’s continued commitment to further build up innovation capacities in China and the whole Asia Pacific region.

With this expansion, BASF will strengthen its R&D capabilities for advanced materials and systems as well as for chemical engineering in order to serve the needs of growing industries, such as automotive, construction, and coatings.

Accompanying this expansion at the Innovation Campus Shanghai, BASF is establishing a sounding board made up of experts from top universities in Asia as part of the Network for Asian Open Research (NAO). The sounding board will strengthen BASF’s innovation pipelines and accelerate market introduction by providing professional consultancy for R&D projects, anticipating industry trends, and enhancing the collaborations between BASF and universities.

Launched in 2014, NAO is a joint platform of BASF and meanwhile 12 prestigious universities and institutes in Asia Pacific. To date, more than 70 joint projects have been completed, covering a wide range of research areas including monomers, polymers, surfaces and interfaces, coatings, catalysis, battery materials, chemical and process engineering, insecticides, as well as digitalization and smart manufacturing in R&D.

The Innovation Campus Shanghai has become an innovation powerhouse for BASF and its partners. Over the past five years, the Innovation Campus Shanghai has applied for more than 220 patents. The site plays an increasing role in the development of innovations for the automotive, construction and consumer goods industries.

As MRC reported earlier, in April 2021, Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and BASF announced the intention to expand their businesses with the production of styrene monomer (SM) based on circular feedstock. The enhanced collaboration between Trinseo and BASF aims to increase efforts by both companies in the development and management of SM featuring an improved environmental profile.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.

Chemours reported decline in Q1 net income

MOSCOW (MRC) -- US-based producer Chemours reported on Monday a year-on-year decline in Q1 net income but still raised its outlook for 2021, said the company.

First-quarter income fell because costs rose faster than revenue. Also, Chemours reported a tax charge of USD5m versus a benefit of USD23m from the same time in Q1 2021. The following shows the company's Q1 financial performance. Figures are in millions of dollars.

"We are off to a great start in 2021 as the broad economic recovery drove strong year-over-year and sequential volume growth across the majority of our portfolio, leading to the highest quarterly sales total in more than 2-years," said Chemours President and CEO Mark Vergnano. "This outcome was achieved despite managing through supply chain challenges and operational headwinds, most notably from Winter Storm Uri. Looking ahead, our strong 1Q results and growing confidence in the outlook allows us to raise our 2021 full-year Adjusted EBITDA range by USD100 million with Free Cash Flow now expected to be greater than USD450 million."

First quarter 2021 Net Sales were USD1.4 billion, 10% higher than the prior-year quarter, which included a negative 1% portfolio impact from the exit of the aniline business. 11% volume growth was the primary driver of the better year-over-year sales performance with positive contributions from every segment, led by robust growth in Titanium Technologies and Advanced Performance Materials. The 7% sequential sales improvement was supported by a global macro recovery that drove sales higher in Titanium Technologies, Thermal & Specialized Solutions, Advanced Performance Materials, and Chemical Solutions after accounting for portfolio changes.

First quarter Net Income was USD96 million, resulting in EPS of USD0.57. Adjusted Net Income was USD120 million, resulting in Adjusted EPS of USD0.71, flat vs. the prior-year quarter. Adjusted EBITDA for the first quarter 2021 was USD268 million in comparison to USD257 million in the prior-year first quarter, a result of higher volume and favorable currency impact, partially offset by lower average pricing, under absorption of fixed costs stemming from Winter Storm Uri related plant shutdowns, and higher performance-related compensation. The cost impact of Winter Storm Uri, excluding the impact of lost sales, on Adjusted EBITDA is USD9 million, mostly in Thermal & Specialized Solutions. Free Cash Flow improved USD41 million vs. the prior-year quarter primarily driven by lower capital expenditures.

Chemours reported USD268m in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) up from USD257m from Q1 2021. Winter storm Uri represented a USD9m hit in adjusted EBITDA, excluding its effect on sales. The costs from the storm were mostly in Chemours's Thermal & Specialized Solutions segment.

As per MRC, Chemours says it is looking to achieve a 60% absolute reduction of operations-related greenhouse gas emissions by 2030, and net zero greenhouse gas emissions by 2050. In addition to refrigerants, Chemours is a major producer of titanium dioxide, industrial fluoropolymer resins and derivatives and other chemical solutions.

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.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to the ICIS-MRC Price Report, Plastik (Uzlovaya) increased the price of ABS for Russian converters for the second half of March. So, unpainted material is offered by the plant at a price of Rb282,000-290,000/tonne FCA Nodal, including VAT.

Chemours is a global leader in titanium technologies, fluoroproducts and chemical solutions, providing its customers in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Chemours has approximately 9,000 employees across 37 manufacturing sites serving more than 5,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Del.