Kumho Petrochemical to acquire 50% stake of Kumho Polychem

MOSCOW (MRC) -- Kumho Petrochemical has recently agreed to purchase the 50% stake of Kumho Polychem held by its joint venture partner, JSR, making Kumho Petrochemical the sole owner from July 2021 onward, according to Apic-online.

Kumho Polychem, established in 1985, has a production capacity of 220,000 t/y of ethylene propylene diene monomer (EPDM). It also produces thermoplastic vulcanizate, and other materials used in automotive and other industries.

Value of the transaction was not disclosed.

"This decision was made to enhance the group's compet-itiveness as a whole, based on the competence that Kumho Petrochemical has built in the synthetic rubber industry over the years," Kumho Petrochemical noted.

As MRC wrote before, in April 2021, Kumho Mitsui Chemicals Inc. said it will invest about 400 billion won (USD358.1 million) to expand its chemical manufacturing factory in South Korea's southwestern region. The joint venture between Korean synthetic rubber maker Kumho Petrochemical and Mitsui Chemicals of Japan said its shareholders approved the investment plan to scale up a methylene diphenyl diisocyanate (MDI) factory in Yeosu, 455 kilometers southwest of Seoul. MDI is a core material of polyurethane, which is used in various products, including refrigerators, building materials, car interior and exterior materials, and LNG vessels.

EPDM is used in the production of block comopymer of propylene (PP-block), rubber products, spongy products, for insulating wires and cables; EPDM in combination with other rubbers is also used for the manufacture of tires and a number of polypropylene (PP) parts; in housing construction - as a sealant, waterproofing and roofing (roll) material.

According to MRC's ScanPlast report, Russia's PP production increased to about 851,100 tonnes in first five months of 2021, up by 13% year on year. Three producers increased their output.
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MOSCOW (MRC) -- Olin Corporation has announced it has entered into an agreement with ASHTA Chemicals, Inc. to purchase and sell the chlorine produced at ASHTA's Ashtabula, OH facility, according to Stockhouse.

Existing contracts will be honored for chlorine customers of both companies.

"This agreement provides the opportunity to optimize logistics across the Olin and ASHTA portfolio, reducing the number of miles chlorine travels to get to customers and overall transportation costs while increasing the security and flexibility of supply within the growing Olin network. Olin has unmatched expertise in the safe and efficient delivery of chlorine," said Damian Gumpel, Vice President and President, Chlor Alkali Products & Vinyls.

"We are excited to work with Olin as this agreement allows each company to focus on its strengths, which for ASHTA is the production of potassium hydroxide (KOH) for our growing customer base," said Brad Westfall, President and CEO of ASHTA.

As MRC reported before, earlier this year, Olin announced plans to shut a portion of its diaphragm-grade chlor-alkali capacity in the USA. Thus, the company had permanently shut down about 200,000 metric tons/year of diaphragm-grade chlor-alkali capacity at its McIntosh, Alabama, facility by 31 March. Olin will take a USD5 million of restructuring charge for the move, which the company expects to be cash flow accretive.

We remind that Russia's output of chemical products rose in March 2021 by 5.4% year on year. Thus, production of basic chemicals increased year on year by 6.7% in the first moths months of 2021, according to Rosstat's data. March production of sodium hydroxide (caustic soda) in Russia was 118,000 tonnes (100% of the basic substance) versus 98,400 tonnes a month earlier. Overall output of caustic soda totalled 329,400 tonnes in the first three months of 2021, down by 0.7% year on year.

ASHTA Chemicals, Inc. is a leading manufacturer of potassium hydroxide (KOH) with headquarters and production facilities in Ashtabula, Ohio.

Olin Corporation is a leading vertically-integrated global manufacturer and distributor of chemical products and a leading US manufacturer of ammunition. The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, and hydrochloric acid. Winchester's principal manufacturing facilities produce and distribute sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
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MOSCOW (MRC) -- South Korea's GS Caltex shut its new mixed-feed cracker at Yeosu on June 27 owing to a technical issue, reported S&P Global.

A company source on June 28 could not provide a restart date, but said it likely take several days to resume operations.

The new steam cracker, which came online around June 18, has the capacity to produce 750,000 mt/year of ethylene and 430,000 mt of propylene. This schedule is earlier than the initial plan of 2022.

As MRC informed before, this June, the company also started up its new high density polyethylene (HDPE) in Yeosu with an annual capacity of 500,000 tons/year that would concentrate on producing the film (TR-144, TRB-115), blow molding (5520BN or BM593), and injection (6060 or 6060UV) grades.

The company also operates 180,000 tons/year polypropylene (PP) plant at the same complex.

The project is a 50-50 joint venture between GS Energy Corp. and Chevron Corp., costing 2 trillion won (USD1.84 billion) that started construction work in 2019.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
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1. OPEC discussing deal to increase crude oil production by 2 mln b/d by December

MOSCOW (MRC) -- OPEC and its allies appear in striking distance of a deal on production quotas, discussing proposals that call for an output increase of about 2 million b/d from August to December to meet recovering global oil demand, three sources told S&P Global. If agreed, the OPEC+ alliance's collective production cuts would shrink by about one-third by the end of the year to about 3.76 million b/d, from July's 5.76 million b/d. The sources, who spoke on condition of anonymity, said the deal was not yet finalized and that Saudi Arabia was seeking some flexibility to rescind all, or part of the output increases, if Washington and Tehran revive the nuclear deal that relieves sanctions on Iran's oil exports.


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MOSCOW (MRC) -- Crude oil futures were steady during mid-morning trade in Asia July 2 as the market awaited clarity on OPEC+'s production plans for August onwards, after the producer group failed to reach consensus at a fractious July 1 Joint Ministerial Monitoring Committee meeting, reported S&P Global.

At 10:26 am Singapore time (0226 GMT), the ICE September Brent futures contract was up 10 cents/b (0.13%) from the previous close at USD75.94/b, while the NYMEX August light sweet crude contract was up 8 cents/b (0.11%) at USD75.31/b.

The market remains in limbo after objections from the UAE soured proceedings at the JMMC meeting, forcing the committee to adjourn without reaching a consensus on a production recommendation for August onwards.

During the course of the JMMC, members had reached a tentative agreement to boost production by 400,000 b/d a month from August to December, shrinking the OPEC+'s collective output cut to about 3.76 million b/d from the 5.76 million b/d cut expected in July.

However, according to sources, tensions escalated after the UAE requested that its baseline production level, from which its quota is determined, be hiked significantly due to the capacity additions it has made over the last three years.

The UAE's baseline under the current pact, determined by its October 2018 production level, is 3.168 million b/d, but the UAE claims it is now closer to 4 million b/d. Increasing the UAE's baseline would allow it to pump more crude into the market.

The UAE's request was dismissed by the other members and the monitoring committee failed to reach a compromise, deciding to continue discussion on July 2. The full OPEC+ ministerial meeting that was scheduled to have started after the JMMC was also postponed to July 2.

"Talks are set to resume today in order to try to reach a deal. Failure to come to an agreement could mean that the group continues with current levels of production, which would mean that the market tightens even quicker," ING's head of commodities strategy Warren Patterson and senior commodities analyst Wenyu Yao said in a July 2 note.

We remind that as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
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