Azelis targets to raise EUR880m in Brussels IPO

Azelis targets to raise EUR880m in Brussels IPO

MOSCOW (MRC) -- Azelis, an innovation service provider in the specialty chemicals and food ingredients distribution industry, is seeking to raise EUR880m in an initial public offering in Brussels in what will be one of the sector’s largest listings this year, reported Financial Times.

The Antwerp-based company, which is owned by Swedish buyout firm EQT, is targeting a valuation of more than EUR5bn, according to people familiar with the matter.

The IPO would make Azelis the world’s fourth-largest listed chemicals distributor in a highly fragmented EUR117bn market. As well as using the IPO’s proceeds to cut some of its EUR1.6bn of debt, the company also plans to make further acquisitions.

“As a public company, we believe we will be able to fully capitalise on growth opportunities, continuing to complement our strong organic growth with accretive acquisitions,” said chief executive Hans Joachim Muller.

Muller said he hoped to expand operations in Asia and gain a foothold in Latin America, where Azelis does not have a presence.

Demand for chemicals has rebounded rapidly from the pandemic’s initial hit, sending valuations for the sector soaring and handing EQT a chance to capitalise.

Nouryon, the former chemicals arm of Akzo Nobel that was acquired by US buyout firm Carlyle in 2018 in a EUR10bn deal, is also set to go public.

Although Azelis has only a 2% market share, it is enough to make it one of the sector’s largest players alongside Germany’s Brenntag, IMCD from the Netherlands and Illinois-based Univar Solutions. In a sign of investor appetite for the sector, Brenntag’s share price is at an all-time high.

As MRC informed earlier, in June 2021, Azelis announced the extension of its distribution scope with CP Kelco in India, Indonesia, Malaysia and Thailand. CP Kelco’s product range is a significant addition to Azelis’ portfolio and the new agreement marks an important milestone in the strong and continuously developing collaboration between both companies globally.

Besides, Azelis made two acquisitions in July, 2021, both in South Korea. The most recent agreement, announced on Jul. 14, is the proposed takeover of Seoul-headquartered Coseal, which specializes in the distribution, repackaging and blending of agricultural/horticultural surfactants. This transaction is expected to close in the third quarter of 2021, when all of Coseal’s 45 employees, along with its owner and CEO Sang Jin Kang, will transfer to the Belgium-based distributor.

Nearly two weeks earlier, on Jul. 1, Azelis revealed it had purchased MH, a local distributor in the food ingredients market, providing the multinational specialty chemicals distribution group with a foothold in the food and health segment. Also headquartered in Seoul, MH is a family-owned business, supplying products such as gluten, starches, sweeteners and functional food ingredients.

Azelis is a leading distributor of speciality chemicals and food ingredients present in over 50 countries across the globe with around 2,200 employees. Our knowledgeable teams of industry, market and technical experts are each dedicated to a specific market within Life Sciences and Industrial Chemicals.
MRC

Phillips 66 shut down refinery for repairs following flooding from Hurricane Ida

Phillips 66 shut down refinery for repairs following flooding from Hurricane Ida

MOSCOW (MRC) -- Phillips 66's 255,600-barrel-per-day (bpd) Alliance, Louisiana, refinery faces a monthslong shutdown for repairs following flooding from Hurricane Ida, sources familiar with plant operations said, said Reuters.

Phillips 66 said it was still assessing the refinery and a timeline for operational restarts was not available. The sources said the company plans to complete its damage assessment next week when floodwaters fully recede. So far, the company still plans to restart the refinery, which in August it announced was up for sale.

"Preliminary assessments at Alliance indicate the refinery’s south flood wall was breached by offsite debris during or after landfall of Hurricane Ida," said company spokesman Bernardo Fallas. "The breach has been secured."

The sources said early damage assessments point to an outage possibly as long as the seven months the refinery was shut following 2005's Hurricane Katrina.

As MRC informed earlier, Phillips 66's decision to market a Louisiana oil processing plant offers a key test of investors' views on the pace of the transition to electric vehicles. Phillips 66, the fourth largest US refiner, on Tuesday said it has put its 255,600 barrel per day (bpd) Alliance plant on the market, citing "the evolving energy landscape." The 50-year-old plant makes gasoline, diesel and jet fuel for US and Latin American markets.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company’s master limited partnership, is integral to the portfolio. Headquartered in Houston, the company has 14,300 employees committed to safety and operating excellence. Phillips 66 had USD55 billion of assets as of Dec. 31, 2020.




MRC

COVID-19 resurgence delays full oil demand recovery

COVID-19 resurgence delays full oil demand recovery

MOSCOW (MRC) -- US petroleum consumption has recovered to pre-pandemic levels, but there has been a marked shift from consumer-facing sectors towards industry and freight transportation, mirroring the uneven economic recovery, reported Reuters.

The total volume of petroleum products supplied to domestic customers climbed to 20.1 million barrels per day (bpd) in May, according to the Energy Information Administration.

Volumes were down by less than 300,000 bpd (1.4%) from the same month in 2019, before the COVID-19 pandemic, and were actually 200,000 bpd (1.1%) above the pre-pandemic five-year average for 2015-2019.

But continued strong growth in consumption of hydrocarbon gas liquids (HGLs), mostly used in petrochemicals and other industries, has masked an incomplete recovery in fuels supplied to end-users.

HGL consumption reached 3.4 million bpd in May, up from 2.7 million bpd in May 2019, and an average of 2.5 million bpd in the five years before the coronavirus hit. By contrast, consumption of finished petroleum products was 16.5 million bpd, down from 17.5 million bpd two years earlier and a five-year average of 17.3 million bpd.

Of 1 million bpd of finished consumption lost compared with the final year before the epidemic, half was jet fuel (-0.5 million bpd) with smaller amounts of gasoline (-0.4 million bpd) and diesel (-0.2 million bpd).

Gasoline consumption was down by only 4% from 2019, and diesel down by 6%, but jet fuel was still down by 26%, mostly owing to the sharp reduction in international flights. Since then, gasoline consumption has continued to rise and is now down less than 2% from the pre-epidemic average, according to high-frequency weekly surveys.

The resumption of aviation, especially long-haul passenger flights, has therefore become critical to the full recovery in petroleum consumption. The same pattern is apparent in other major oil-consuming areas, including Europe and China, where data is published with longer delays.

This is why the resurgence of the coronavirus in North America, Europe and China, as well as the continuing epidemics across the rest of the world, has had such a strong impact on oil prices.

As MRC informed earlier, recyclers in Southeast Asia were heard operating with low capacity utilisation in the film grade high density polyethylene (HDPE) market due to COVID-19-led lockdown measures. Market sources also said persistent bottlenecks at ports in Asia and some maintenance-related plant closures are likely to hurt the supply of petrochemicals during the week of Aug. 30-Sept. 3.

We remind that Southeast Asian polyethylene terephthalate (PET) recycling companies will continue facing challenges with the availability of raw materials, due to the low collecting and processing rate, as a result of the COVID-19 pandemic.

According to MRC's ScanPlast report, June estimated HDPE consumption in Russia decreased to 125,900 tonnes from 128,300 tonnes a month earlier. Domestic producers raised their exports, while some producers' output decreased. Russia's overall HDPE shipments to the Russian market totalled 675,670 tonnes in the first six months of 2021, down by 6% year on year. Production increased by 12%, whereas imports fell by 33%.
MRC

Dow Chemical restarting its petrochemical complex in Louisiana after Hurricane Ida

Dow Chemical restarting its petrochemical complex in Louisiana after Hurricane Ida

MOSCOW (MRC) -- Dow Chemical, one of the largest US petrochemical companies, has begun bringing operations back online "as third-party utility balances and raw materials availability allow," reported S&P Global with reference to a company statement Sept. 8.

Dow said its Taft operations were "making progress" toward restarting, and the company expected to have a clearer timeline for resumption of production in the coming days based on repairs and as access to power and raw materials allow.

According to sources familiar with the company's' operations the restarts would be gradual, as Dow's complexes involve multiple plants that have to be restarted one by one while checking for any storm-related, as-yet-undiscovered damage.

At Plaquemine, Dow has two crackers and multiple polyethylene plants.

Thus, Dow Chemical operates here 1 million mt/year and 500,000 mt/year crackers; 750,000 mt/year high density polyethylene (HDPE); 184,000 mt/year and 350,000 mt/year low density polyethylene (LDPE) and 544,000 mt/year linear low density polyethylene (LLDPE) plants.

As MRC wrote earlier, Dow Chemical began the process of restarting operations at its cracker No.7 in Freeport (Freeport, TX, USA) on 19 July, 2021, after a technological disruption on 4 July, 2021.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Dow Chemical is an American diversified chemical company headquartered in Midland, Michigan. It is a major manufacturer of polymer products, including polystyrene, polyurethane, polyethylene, polypropylene and synthetic rubbers. The company produces more than five thousand products at 188 production facilities in 37 countries.
MRC

US oil prices rise amid concerns over production shutdown due to damage from Hurricane Ida

US oil prices rise amid concerns over production shutdown due to damage from Hurricane Ida

MOSCOW (MRC) -- Oil rose on Monday, supported by concerns over shut output in the United States because of damage from Hurricane Ida, with analysts expecting prices to remain rangebound in a stable market over the coming months, said Hydrocarbonproceesing.

Brent crude rose 55 cents, or 0.8%, to USD73.47 a barrel by 1222 GMT and U.S. West Texas Intermediate (WTI) crude was up 64 cents, or 0.9%, at USD70.36. Brent has held between USD70 and USD74 a barrel over the past three weeks.

"Oil prices may not have much room to rise in the near term, but at the same time are not expected to crash soon," said Stephen Brennock of broker PVM. A U.S. Energy Information Administration (EIA) last week said it expected Brent prices to remain near current levels for the remainder of 2021, averaging USD71 a barrel during the fourth quarter.

"Markets still need clarity on the virus impacts beyond the very near term; and until we get that, it seems like most assets, including oil, may continue to drift sideways," said Howie Lee, an economist at Singapore's OCBC bank. The Organization of the Petroleum Exporting Countries (OPEC) on Monday trimmed its world oil demand forecast for the last quarter of 2021, citing the Delta coronavirus variant and saying a further recovery would be partially delayed until next year.

The producer group said in a monthly report that it expects oil demand to average 99.7 million barrels per day (bpd) in the fourth quarter of 2021, down 110,000 bpd from last month's forecast. Prices still found some support from Hurricane Ida's impact on U.S. output. About three quarters of the offshore oil production in the Gulf of Mexico, or about 1.4 million bpd, has remained halted since late August.

"Hurricane Ida was unique in having a net bullish impact on U.S. and global oil balances - with the impact on demand smaller than on production," Goldman Sachs analysts said in a note dated Sept. 9. Further disruption from bad weather could be around the corner, with tropical storm Nicholas in the Gulf of Mexico and expected to strengthen into a hurricane in the coming days, the U.S. National Hurricane Center (NHC) said.

However, the number of rigs in operation in the United States grew in the latest week, energy service provider Baker Hughes said, indicating production could rise in coming weeks.

Supply risks remain from China's planned release of oil from strategic reserves while the hope of fresh talks on a wider nuclear deal between Iran and the West was raised after the U.N. atomic watchdog reached an agreement with Iran on Sunday about the overdue servicing of monitoring equipment to keep it running. China on Monday said it will announce details of planned crude oil sales from strategic reserves in due course.

As per MRC, most of the nine Louisiana refineries shut by Hurricane Ida have restarted or were restarting, nearly two weeks after the powerful storm came ashore, a Reuters survey showed. Refiners are coming back faster than oil production, a reverse of past storm recoveries. Just three of the nine refineries were completely idled, accounting for about 7% of Gulf Coast refining, compared to shut-ins of two-thirds of oil output.

As MRC informed earlier, Royal Dutch Shell Plc, one of the largest operators in the Gulf of Mexico, declared force majeure on some oil deliveries due to damage from Hurricane Ida, which has crippled U.S. offshore oil production. More than three-quarters of the U.S. Gulf of Mexico's offshore oil output remained shut following Ida. Crude buyers said the full restart of production remained unclear due to extensive damage to various facilities. The hurricane was one of the most devastating for offshore producers since back-to-back storms in 2005 cut output for months.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC