BASF increased sales by 42% for the third quarter of 2021

MOSCOW (MRC) -- BASF swung to a third-quarter net profit of EUR1.25bn from a loss of EUR2.12bn in the same period of last year on the back of higher prices in all business segments, especially in chemicals, surface technologies and materials, said the company.

The projected sales volume for 2021 is 76-78 billion euros. EBIT, excluding one-time effects, rose to 1.9 billion euros, for the year the company expects this figure to be 7.5-8 billion euros.

Sales for the third quarter of 2021 were recorded at 19.7 billion euros, which is 5.9 billion euros more than in the same period last year. The company said in a statement that the growth is largely due to higher prices in all segments. Sales growth was also driven by a significant increase in sales volumes in virtually all segments.

“Thanks to the significant contribution of the Chemicals and Materials segments, total revenue in the third quarter of 2021 is comparable to the second quarter of 2021. Our downstream businesses continue to face continued increases in raw materials, energy and transportation costs. products in most of these businesses only partially offset the increased costs, ”said Martin Brudermuller, Chairman of the Board of Executive Directors of BASF SE.

One-time EBIT effects were minus EUR43 million in the third quarter of 2021. The costs are mainly related to restructuring measures, as well as disintegration and integration costs. Other income had a compensating effect. One-off effects in the previous year were minus EUR3.2bn, primarily due to lower asset values ??across all segments, as well as restructuring measures.

Compared to the third quarter of 2020, operating profit before depreciation, amortization and non-recurring effects (EBITDA excluding one-time effects) increased by 1.2 billion euros to 2.8 billion euros, and EBITDA increased by 1.7 billion euros up to 2.7 billion euros. Net profit amounted to 1.3 billion euros against a loss in the same period last year.

As per MRC, BASF, the world's petrochemical major, is strengthening its global catalyst development and helping customers to bring new products faster to the market. As part of this strategy, BASF is building a new pilot plant center at its Ludwigshafen site.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

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.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have provided the following details regarding utility surcharges for Trinseo PMMA Resins and Sheets, as per the company's press release.

In order to continue ensuring normal production and service levels, Trinseo and its affiliates will implement, as of October 27, 2021, price surcharges to all deliveries of the following products in the EMEA region:

- ALTUGLAS acrylic resins and sheets - EUR350/mt;
- OROGLAS acrylic sheets - EUR350/mt.

These surcharges are in response to unprecedented and escalating pressure from energy prices, apply to all current agreements and contracts for deliveries as of October 27, 2021 and are subject to further potential adjustments linked to fluctuating energy prices.

As MRC reported earlier, in May, 2021, Trinseo announced the closing of the previously announced transaction to acquire Arkema’s polymethyl methacrylates (PMMA) business. PMMA is a transparent and rigid resin with a wide range of end uses that augments Trinseo’s existing offerings across several end markets including automotive, building and construction, medical and consumer electronics.

The main application, consuming approximately 75% MMA, is in the production of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used to produce methyl methacrylate-butadiene-styrene copolymer (MBS), used as a modifier for polyvinyl chloride (PVC).

According to ICIS-MRC Price report, negotiations over Russian November PVC shipments have begun next week.
In fact, converters were severely affected by the global short supply and record high prices.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.
MRC

1.Lifting of COVID-19 state of emergency to support Japanese gasoline demand in October

MOSCOW (MRC) -- Japan's decision to lift all of the COVID-19 state of emergency and priority measures at the end of September would support the country's ailing gasoline demand in October but market sources remained cautious about the speed of recovery, reported S&P Global. Japan decided to lift all of its state of emergency on 19 prefectures and its priority measures on eight prefectures on Sept. 30 following a significant drop in new infections. This has been the first time that Japan was not under any of COVID-19 state of emergency and priority measures since early April. "Japan's crude runs are expected to rise to 2.7 million b/d between November and January, up from 2.3 million b/d in October, as refiners gear up for winter heating demand, and this will be supportive for crude imports over the next few months," said JY Lim, oil markets adviser at S&P Global Analytics.

MRC

MOSCOW (MRC) -- Japan's decision to lift all of the COVID-19 state of emergency and priority measures at the end of September would support the country's ailing gasoline demand in October but market sources remained cautious about the speed of recovery, reported S&P Global.

Japan decided to lift all of its state of emergency on 19 prefectures and its priority measures on eight prefectures on Sept. 30 following a significant drop in new infections. This has been the first time that Japan was not under any of COVID-19 state of emergency and priority measures since early April.

"Japan's crude runs are expected to rise to 2.7 million b/d between November and January, up from 2.3 million b/d in October, as refiners gear up for winter heating demand, and this will be supportive for crude imports over the next few months," said JY Lim, oil markets adviser at S&P Global Analytics.

A source with a Japanese refiner said: "After October, we could see (crude oil) demand increase for transportation use with state of emergency lifted."

Japanese refiners and traders surveyed by S&P Global said Sept. 28 that the companies expect their October gasoline demand will recover from September but some remain cautious about whether the demand will mark a year-on-year increase in the next month.

One Japanese refiner said its October gasoline demand is expected to be flat from a year ago when the country had less impact from the coronavirus pandemic.

Another Japanese refiner was less optimistic about gasoline demand recovery in October when it does not expect its gasoline demand to reach the 2020 level as yet amid rising gasoline prices following the strength in crude oil prices.

As MRC wrote before, Japan has set an ambitious target for renewable energy in the nation's electricity mix by 2030 as it aims to tackle climate change and achieve its 2050 carbon neutral goal.

We remind that Eneos Holdings Inc, Japan's biggest refiner, plans to buy Japan Renewable Energy for about 200 billion yen (USD1.8 billion) from Goldman Sachs and Singaporean sovereign wealth fund GIC. The deal would mark the first major purchase of a renewables company by a top Japanese oil company, the Nikkei said, as Eneos looks to shift away from fossil fuels.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC

MOSCOW (MRC) -- Crude oil prices reached a ceiling during morning trade in Europe Oct. 27, dropping from bullish fundamentals after the US reported a larger-than-expected stock build, reported S&P Global.

At 10:07 AM (0907 GMT) London time, the ICE December Brent futures contract was USD1.15/b (1.33%) lower from the previous close at USD85.25/b, while the NYMEX December light sweet crude contract was USD1.48/b (1.75%) lower at USD83.17/b.

"This morning, the energy complex is succumbing to negative pressures following a bearish API report concerning US oil stocks," Stephen Brennock of PVM Oil Associates said Oct. 27.

A larger-than-expected stock build showed US crude inventories increasing 2.3 million barrels for the week ended Oct. 15, according to API's weekly report on Oct. 26. The economists were, however, expecting a build of about 1.7 million barrels.

The API data also showed that gasoline inventories rose 530,000 barrels last week, and distillate stocks increased 986,000 barrels.

"Analysts suggest the prices are starting to look overbought and investor profit taking is largely expected," one analyst said Oct. 27.

However, some analysts continue to cite the bullish nature of the complex as a cautious increase in OPEC+ oil production tilts the supply-demand balance.

"Oil companies in western countries are under pressure to lower their carbon emissions, which will doubtless make them less keen to invest in fossil fuels such as oil," Carsten Fritsch of Commerzbank said.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
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