Braskem reported first-quarter net income

MOSCOW (MRC) -- Braskem SA (BAK) reported first-quarter net income of USD456.3 mln, after reporting a loss in the same period a year earlier, said the company.

The Butanta, Brazil-based company said it had net income of USD1.15 per share. The petrochemical company posted revenue of USD4.15 billion in the period.

Braskem shares have more than doubled since the beginning of the year. The stock has more than doubled in the last 12 months.

Braskem swung to a first-quarter net profit of reais (R) 2.49bn from a loss of R3.65bn in the same period of last year

Q1 recurring operating result surged, reflecting the 23% depreciation in the Brazilian real against the U.S. dollar.
Resin demand in the Brazilian market increased in the first quarter, led by healthy demand from various sectors of the economy, notably the automotive, infrastructure, agribusiness, construction, home appliance and packaging industries.

Compared to Q1 2020, the capacity utilisation rate of the crackers in Brazil increased, reflecting the non-scheduled shutdown of the cracker in Rio Grande do Sul in the prior year quarter.

Braskem America plans to raise North American polypropylene (PP) prices by 8 cents / lb (USD176/tonne) in addition to any changes in propylene feedstock prices from June 1. PP demand continues to be strong in the region thanks to increased manufacturing activity as well as increased demand for PP packaging and PP for filaments and fibers driven by the pandemic. Earlier it was reported that Braskem America in April raised the price of polypropylene (PP) by 12 cents per pound (USD265 /tonne).

According to the ICIS-MRC Price Report, in the Russian spot market last week the decline in prices for propylene homopolymer (PP-homo) continued for some sellers, and converters expect further price declines in May. In the contract market, on the contrary, the processors noted the rise in prices and quite serious.

Based in Sao Paulo, Braskem is a leading Brazilian petrochemical company and the main producer of polyethylene and polypropylene in the country. The company owns the largest petrochemical facilities in Latin America and is the fifth largest in the world in petrochemical production. Braskem operates 18 chemical plants with a production capacity of over 11 million tonnes of chemical and petrochemical products per year.

COVID-19 - News digest as of 06.05.2021

1. Indian refineries reduced fuel sales in April due to the second wave of coronavirus infections

MOSCOW (MRC) -- Indian state refiners' local fuel sales in April declined due to state-level restrictions aimed at stemming a rampant second wave of coronavirus infections, preliminary data shows, said Hydrocarbonprocessing.The deadly second wave topped 400,000 new daily cases for the first time on Saturday. Authorities reported 401,993 new cases in the previous 24 hours, the highest daily count globally, after 10 consecutive days over 300,000. Deaths from COVID-19 jumped by 3,523, taking the total toll in India to 211,853.


Technip Energies awarded major contract by Indian Oil to upgrade Barauni Refinery

MOSCOW (MRC) -- Technip Energies has been recently awarded a significant Engineering, Procurement, Construction and Commissioning (EPCC) contract by Indian Oil Corporation Limited (IOCL) for its BR9 Expansion Project in Barauni, Bihar, in the Eastern part of India, according to Hydrocarbonprocessing.

This EPCC contract covers the installation of a new Once-through Hydrocracker Unit (OHCU) of 1 million metric tonnes per annum (MMTPA) capacity, a Fuel Gas Treatment Unit (FGTU) and the associated facilities.

The OHCU, in combination with downstream refinery units, will enable production of BS VI Grade fuels - similar to Euro VI Grade fuels - and petrochemicals.

IOCL’s Barauni refinery, built in 1964, is the second refinery to be built in India. The BR9 Expansion project shall enhance refinery capacity from 6 MMTPA to 9 MMTPA and will add petrochemicals such as polypropylene (PP) into Barauni refinery’s product portfolio.

As MRC reported before, in February 2021, TechnipFMC announced the completion of its spin-off transaction to create two industry leading, independent, publicly traded companies, TechnipFMC and Technip Energies.

According to MRC's ScanPlast report, 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.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.

Crude oil futures rangebound on the back of latest EIA data

MOSCOW (MRC) -- Crude oil futures were rangebound during mid-morning Asian trade May 6 following the release of the US Energy Information Administration's latest data, which was mixed, reported S&P Global.

At 11:30 am Singapore time (0330 GMT), the ICE Brent July contract was up 24 cents/b (0.35%) from the May 5 settle at USD69.20/b, while the June NYMEX light sweet crude contract was up 15 cents/b (0.23%) at USD65.78/b.

The EIA data released late May 5 showed US crude inventories experiencing their largest draw since the week ended Jan. 1. According to the data, US crude inventories declined 7.99 million barrels to 485.12 million barrels in the week ended April 30.

The draw in crude inventories not only exceeded analysts' expectations of a 3.9 million-barrel fall, but was also ahead of the American Petroleum Institute's May 4 report of a 7.69 million-barrel decline in inventories.

The EIA's crude draw came on the back a 62% surge in US crude exports to 4.12 million b/d and a 1.5% increase in total refinery net crude input to 15.24 million b/d, according to the data.

The data, however, also had bearish elements, as it showed that total US gasoline stocks had climbed for a fifth-straight week, moving 740,000 barrels higher to 235.81 million barrels in the week ended April 30. US implied gasoline demand also edged 10,000 b/d lower to 8.86 million b/d, a six-week low.

Implied demand for distillates was down by nearly 5% at 4.13 million b/d, even as inventories declined 2.9 million barrels to a one-year low of 136.15 million barrels.

Meanwhile, the market continues to monitor the evolving pandemic situation in Asia, and in particular India, where burgeoning COVID-19 infection and fatality numbers have forced parts of the country to go under lockdown. The mobility restrictions imposed in the country are expected to weigh on oil demand.

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.

Russian PVC to increase by Rb10,000/tonne in May

MOSCOW (MRC) -- Global record high prices for suspension polyvinyl chloride (SPVC) proportionally affected prices of polymer in Russia. Russian producers intend to achieve an increase in prices of Rb10,000/tonne or more, according to the ICIS-MRC Price Report.

PVC prices broke new records in many regions of the world in April due to a shortage; a number of producers also intend to increase prices for shipments in May further. Russian market was also affected by this trend, the situation on foreign markets has been putting serious pressure on PVC prices since the middle of last year. Since January of this year, Russian converters have got an import alternative, but it does not restrain the rise in prices in the market.
Domestic producers announced a price increase of Rb10,000/tonnes and more for May shipments.

The export prices from Russian producers remains at a good level, and prices in the domestic market were far from it in April. At the moment, the export prices from producers varies in the range of Rb132,000-150,000/tonne FCA, including VAT, FCA, depending on the region. And this factor has a huge impact on pricing in the domestic market.

After a long period of tight supply and rising prices for PVC in the domestic market, Russian converters got an import acetylene PVC from China in January. As a result, the volume of imports increased in the first quarter, but still does not allow balancing the Russian market and stopping the rise in prices. Today, taking into account all taxes, the price of Chinese acetylene PVC is about Rb125,000/tonne, including VAT, and delivery.

But complex logistics and limited export quotas from Chinese producers do not allow talking about the possibility of a serious increase in PVC supplies from China. Despite the record level of Russian PVC prices, the demand for PVC from the domestic market in the first four months was at a good level. Although export volumes in the first quarter still grew by 14%.

There was no surplus of PVC supply in the market, and the April quotas were actually sold by producers in the first ten days of the month. At the same time, the converters reported disruptions in shipments from at least two producers. PVC K58/70 accounted for the acutest shortage of export quotas.

Despite the long weekend ahead, discussions on prices for the May supplies of Russian PVC began only in the middle of the week, with some producers postponing the start of negotiations several times. This week, deals for the supply of Russian PVC with K64 / 67 were discussed in a very wide range: Rb135,000-150,000/tonne CPT Moscow, including VAT for volumes up to 500 tonnes, against Rb121,500-130,000/tonne CPT Moscow, including VAT in March.