BASF reports second-quarter net profit beat on increased volumes, prices

BASF reports second-quarter net profit beat on increased volumes, prices

MOSCOW (MRC) -- The world’s largest chemical producer BASF reported a better-than-expected second-quarter net profit as it managed to increase volumes and prices thanks to strong demand, said the company.

Low commodity prices during the coronavirus pandemic weighed on BASF’s earnings last year, but the German group recorded a rapid recovery so far in 2021 as the global economy picked up faster than expected.

“We achieved volumes growth and price increases across all regions and all segments compared with the second quarter of 2020,” BASF’s Chief Executive Martin Brudermueller said in a statement.

The Germany-based giant reported a second-quarter net income of 1.7 billion euros (USD2.01 billion) compared to the 1.4 billion euros expected on average by analysts in a company-provided poll.

The diversified group said price and volumes increased especially in its surface technologies, chemicals, materials and industrial solutions segments.

The company confirmed the preliminary figures for second-quarter adjusted earnings before interest and tax (EBIT) and sales as well as the 2021 guidance it announced on July 9.

As per MRC, BASF, the world leader in the production of chemical products in the world, keeps the capacity utilization at its expandable polystyrene plant (EPS) at its complex in Ludwigshafen (Ludwigshafen, Germany) at a reduced level in July due to technical problems. Thus, a technical malfunction at the reactor of one of the lines of this enterprise with a capacity of 200,000 tonnes per year, discovered on 11 July, led to a reduction in the production of Styropor F95, Peripor and F15 grades.

According to MRC's ScanPlast, EPS consumption in Russia amounted to 40,690 tonnes in the first five months of this year, an 18% increase over the same period last year. In May, the consumption of EPS in the country increased by 35% compared to the same month a year earlier and amounted to 8,790 tonnes.

BASF SE (headquartered in Ludwigshafen) - the world's largest manufacturer of chemical products for the industry, including the extraction and processing of oil and gas; has more than 150 production sites in the world, including a number of production lines in the Russian Federation.

PKN Orlen selects KBR technologies for its Plock refinery

PKN Orlen selects KBR technologies for its Plock refinery

MOSCOW (MRC) -- KBR has been awarded technology licensing contracts by PKN Orlen for KBR's leading Solvent Deasphalting (SDA) and Residue Fluid Catalytic Cracking (RFCC) technologies as part of PKN's Bottom-of-the-Barrel project for its Plock Refinery in Poland, according to Hydrocarbonprocessing.

Under the terms of the contracts, KBR will provide technology licensing and basic engineering design for the SDA and RFCC units. Following a PKN Orlen final investment decision, the SDA unit will be based on KBR's market-leading supercritical solvent recovery ROSE technology and will help PKN Orlen achieve its operating objectives, producing cleaner upgraded feedstock for the new RFCC unit. For the RFCC unit, KBR will provide its innovative, dual-riser MAXOFIN technology, which uses conventional FCC operating conditions, KBR's proprietary catalyst additives and state-of-the-art equipment to help PKN Orlen maximize propylene production from traditional FCC feedstocks and naphtha streams.

The combination of both proprietary technologies would allow PKN Orlen to upgrade crude residue and naphtha streams to petrochemical feedstocks and clean transportation fuels to address market demands.

"Selection of KBR's energy-efficient and sustainable technologies by PKN represents continued trust in our industry-leading refinery technologies," said Doug Kelly, KBR President, Technology. "Our ROSE technology delivers 50% energy saving over conventional solvent deasphalting technologies and MAXOFIN technology helps refiners maximize feedstock flexibility to produce higher value petrochemical products."

As MRC reported before, earlier this month, PKN Orlen signed a final contract with Hyundai Engineering and Tecnicas Reunidas for the engineering and construction of the main units for PKN Orlen's previously announced Olefins Complex III project at Plock, Poland.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

PKN Orlen is a leading player on the fuels and energy markets, and the largest company in Central and Eastern Europe, listed in prestigious global rankings such as Fortune Global 500, Platts TOP250 and Thompson Reuters TOP100. The ORLEN Group operates in 6 home markets – Poland, the Czech Republic, Germany, Lithuania, Slovakia and Canada.

ZapSibNeftekhim launched a project to modernize propane dehydrogenation production

ZapSibNeftekhim launched a project to modernize propane dehydrogenation production

MOSCOW (MRC) -- ZapSibNeftekhim (ZSNKh, part of SIBUR Holding, Tobolsk), launched modernisation of the propane dehydrogenation unit (DPD) required for the production of propylene and further production of polypropylene, the company said.

The unit was commissioned in 2013 as part of the first polymer production facility in Tobolsk. Planned for 2021-2022 modernization of the DGP unit will increase its capacity by more than 8% - up to 561 thousand tons per year and will allow the enterprise to become even more environmentally friendly.

"We are modernizing the propane dehydrogenation plant in order to increase its productivity, reliability and operational efficiency. At present, the polymer capacity of the enterprise exceeds the volume of propylene produced at the DGP unit, therefore, we partially use imported raw materials. This project will allow the complex to increase the share of its own raw materials for the production of final product - polypropylene, - says Maxim Rogov, General Director of ZapSibNeftekhim. - The global olefin market is growing by 3-4% per year, and the expansion of the plant's capacity will help us expand our presence in the growing market for propylene products while reducing production costs. "

"The project for the modernization of the DGP unit includes 12 subprojects. Five of them are associated with the replacement of equipment, another seven - with the installation of additional technological units. The equipment is mainly of Russian production, approved by the licensor," emphasizes Ramil Ryabikov, director of the ZapSibNeftekhim monomer plant.

The project is being developed jointly with the licensed company UOP, Honeywell. Since 2011, most of the new dehydrogenation projects in the world have been based on its UOP C3 Oleflex technology. The specialists of the licensor's company have confirmed the possibility of a safe and effective increase in the capacity of the gas generator.

SIBUR is currently working on detailed design with the licensor. Construction and installation work is scheduled to begin in November this year. Direct connection of new equipment will take place in the spring-summer period of 2022, during scheduled preventive shutdown repairs, this process will not affect the supply of propylene and, accordingly, polypropylene.

In April of this year, ZapSibNeftekhim began the production of a new grade of PE-100 polyethylene. This brand is distinguished by increased resistance to the external environment and an unusual appearance of the granules - they are black. The new brand is used mainly for the production of large diameter pipes (LDP, up to 1000 mm), which are in high demand in the oil and gas industry, housing and communal services and other areas as an alternative to steel pipes.

According to MRC's ScanpPlast, SIBUR Tobolsk / ZapSibNeftekhim had kept the April level of capacity utilisation in May, the total production of polypropylene reached 76,900 tonnes (in late April - early May, the company carried out preventive maintenance works). In general, in the first five months of the year, the total volume of polypropylene production at the Tobolsk complex was 439,300 tonnes, which is 25% more than a year earlier.

ZapSibNeftekhim is SIBUR's largest project, the construction of which was completed in May 2019. After reaching its design capacity, it became the largest modern petrochemical complex in Russia. The project is a plant for the production of various grades of polyethylene (1.5 million tons) and polypropylene (500 thousand tons). The budget of the complex is USD8.8 billion.

SIBUR is the largest vertically integrated gas processing and petrochemical company in Russia, uniting a number of production sites in various regions of the Russian Federation. The company sells products to consumers in the fuel and energy complex, automotive, construction, consumer goods, chemical and other industries in more than 80 countries around the world.

BSK resumed PVC production

BSK resumed  PVC production

MOSCOW (MRC) -- Bashkir Soda Company (BSK, Sterlitamak) has resumed its polyvinyl chloride (PVC) production after the scheduled turnaround, according to the ICIS-MRC's Price Report.

According to a company representative, PVC production was resumed on Monday after stopping for preventive maintenance works. The outage was short and lasted for only two weeks. The plant's annual production capacity is 240,000 tonnes.

It is worth saying that the next shutdown for turnaround is scheduled at Kaustik Volgograd in September.
The annual capacity of the Volgograd producer is 90,000 tonnes.

According to MRC's ScanPlast, Baskhir Soda Company produced 23,300 tonnes of SPVC in June versus 23,800 tonnes a month earlier. The Baskhir plant's overall production of resin reached 140,500 tonnes in January-June 2021, up by 8% year on year.

JSC "Bashkir Soda Company" was founded in April 2013 by the takeover of JSC "Soda" to JSC "Kaustik". BSK is one of the largest chemical complexes in the country. The company ranks first in Russia in the production of soda ash and baking soda, and is also one of the leaders in the production of PVC, caustic soda and cable compounds.


COVID-19 - News digest as of 29.07.2021

1. SK Innovation sees refining margins to gradually improve in Q2 on stronger demand

MOSCOW (MRC) -- SK Innovation Co Ltd, the owner of South Korea's top refiner SK Energy, said refining margins were likely to gradually improve in the second quarter due to recovering demand as the impact of COVID-19 eases, according to Hydrocarbonprocessing. The company posted an operating profit of 503 billion won (USD444.88 million) in the January-March quarter, compared with an operating loss of 1.8 trillion won in the same period a year earlier. Revenue declined 16% to 9.2 trillion won from a year earlier. That compares with the 9.9 trillion won forecast of analysts in the Refinitiv SmartEstimate. "Despite the resurgence of COVID-19 in some regions and countries, as vaccinations in the United States and Europe continue, expectations about demand recovery are growing," Lee Dong-yeol, the head of SK Energy's corporate planning office, said in a earnings conference call.