Alfa Laval update on Ukraine and Russia

Alfa Laval has taken the decision to pause all shipments in and out of Russia, said the company.

The priority for Alfa Laval is to ensure the safety and wellbeing of its employees and provide support to those in the affected areas.

The Russian invasion of Ukraine is affecting Alfa Laval in many ways. The priority for Alfa Laval is to ensure the safety and wellbeing of its employees. Alfa Laval is providing financial and other support to affected employees. As the war is escalating, Alfa Laval will continue to review how to support and help its employees in the area – in the short and the long term. In addition, Alfa Laval will evaluate how it can further support the victims of the conflict.

Alfa Laval has decided to pause all shipments in and out of Russia. Historically the order intake from the markets in Russia and Ukraine has been approximately SEK 1 billion per year, equivalent to 2 percent of the total company. In parallel, an evaluation is being made of the existing orders and open projects. The total order book in Russia and Ukraine amounts to approximately SEK 750 million. The integrity of the order book will be re-assessed in connection with the first quarter report. In addition, some negative result effects are expected due to difficulties in completing ongoing projects.

Alfa Laval has a competent team of 240 employees in Russia and Ukraine. The team will be maintained despite the expected low utilization in the near term, while assessing the longer-term implications of the war on the Russian market.

As per MRC, Alfa Laval, a leading global provider of specialized products and engineering solutions based on its key technologies of heat transfer, separation and fluid handling, has strengthened its operations in the United States with three new facilities, expanding its commitment to serving its customers in the United States.

As MRC wrote before, in 2017, Alfa Laval won an order to supply compact heat exchangers to a refinery in China. The order has a value of approximately USD10.6 MM. It was booked late June in the Gasketed Plate Heat Exchangers unit of the Energy Division, with deliveries scheduled for 2018.

Alfa Laval is a world leader in heat transfer, centrifugal separation and fluid handling, and is active in the areas of Energy, Marine, and Food & Water, offering its expertise, products, and service to a wide range of industries in some 100 countries. The company is committed to optimizing processes, creating responsible growth, and driving progress to support customers in achieving their business goals and sustainability targets.
mrchub.com

Saudi Aramco through its Saudi Aramco Asia Company (SAAC) subsidiary signed a MoU with China Petroleum & Chemical Corporation (Sinopec) for potential downstream collaboration in China, said Hydrocarbonprocessing.

SAAC and Sinopec also aim to support Fujian Refining and Petrochemical Company (FREP) in conducting a feasibility study into the optimization and expansion of capacity. This MoU provides a basis for continued downstream collaboration between Aramco and Sinopec, capitalizing on each company’s strengths and their long-term relationship through existing JVs, namely FREP and Sinopec Senmei (Fujian) Petroleum Company (SSPC) in China, and Yanbu Aramco Sinopec Refining Company in Saudi Arabia.

Mohammed Y. Al Qahtani, Aramco Senior Vice President of Downstream, said: “This MoU represents an exciting new chapter in our long-standing relationship with Sinopec. Such collaborations promote our downstream integration and expansion strategy in Asia and support our broader objectives of becoming a global leader in liquids-to-chemicals and a resilient and reliable supplier of one of the lowest upstream carbon intensity oils to meet China’s growing demand."

Yu Baocai, President of Sinopec Corporation, said: "Sinopec and Aramco enjoy a long history bookmarked by numerous examples of successful cooperation, which continues to strengthen our strategic relationship. Both companies cooperate in mutually beneficial crude trading, refining and chemical joint ventures, engineering services as well as science and technology research and development. Together such collaboration represents a model of energy cooperation between China and Saudi Arabia. The signing of this MoU will support our refinery feedstock optimization and downstream petrochemical development, while offering new opportunities to deepen and expand activity amid an accelerating global energy transition."

As per MRC, Sinopec revealed it has completed the construction of China's first megaton CCUS project, the Qilu-Shengli Oilfield CCUS. The project will reduce carbon emissions by 1 MMtpy. As China's largest full industrial chain CCUS demonstration base and industry benchmark, the Project is estimated to increase the oil production by 2.965 MMt in the next 15 years. It's of great significance to China's scaled development of CCUS and building an "artificial carbon cycle" model to increase China's carbon emissions reduction capabilities as the country advances to achieve the "dual carbon" goals of reaching peak carbon emissions by 2030 and carbon neutrality by 2060.

Sinopec has set up a separate company to work on projects in the field of alternative energy sources. The authorized capital of the company, which received the name Zhongshihua Xiongan Xinnenyuan (Zhongshihua Xiong'an Xinnengyuan), amounted to 100 million yuan (USD15.7 million). Li Yutian has been appointed as its legal representative.

Earlier it was reported that SIBUR, the largest petrochemical complex in Russia and Eastern Europe, and the Chinese petrochemical giant - Sinopec - raised project financing for the Amur Gas Chemical Complex (GCC) from a syndicate of international, Chinese and Russian banks for a total of USD9.1 bn.
MRC

LyondellBasell Industries will turn down new business opportunities with Russian state-owned entities, and plans to discontinue existing business with those entities as well, said Plasticsnews.

Houston-based LyondellBasell also is donating 200,000 euros (USD220,000) to relief efforts in Ukraine. "We are closely monitoring the Russia-Ukraine situation as it continues to evolve," officials said in a statement sent to Plastics News. "LyondellBasell condemns the unprovoked attacks on Ukraine, and we are taking action to support the humanitarian efforts as a result of this conflict.

"In addition to abiding by all sanctions, effective immediately, LyondellBasell will not enter into any new business transactions or relationships, and to the extent legally possible, intends to discontinue business relationships with Russian state-owned entities. We are in the process of assessing how this will impact our operations, including feedstocks, utilities, supply chain providers, and customers."

Officials added that although LyondellBasell doesn't have operations in Ukraine, the firm has seen the rising number of refugees and dislocated families and is supporting the humanitarian crisis through its global corporate citizenship program, Advancing Good.

Half of LyondellBasell's donation will go to the United Nations High Commissioner for Refugees to provide shelter, emergency relief items, cash assistance and mental health support. The other half will go to the International Medical Corps to support their mobile medical units programs.

LyondellBasell ranks as a global leader in production of polyethylene and polypropylene resins and as North America's largest plastics compounder. The firm has operations in more than 100 countries — including Russian offices in Moscow and Togliatti — and posted sales of USD27.7 bn in 2020.

As MRC wrote earlier, in July, 2021, Neste and LyondellBasell announced a long-term commercial agreement under which LyondellBasell will source Neste RE, a feedstock from Neste that has been produced from 100% renewable feedstock from bio-based sources, such as waste and residue oils and fats. This feedstock will be processed through the cracker at LyondellBasell’s Wesseling, Germany, plant into polymers and sold under the CirculenRenew brand name.

As MRC informed earlier, three US subsidiaries of Dutch chemical giant LyondellBasell Industries N.V. (LBI) have agreed to make upgrades and perform compliance measures estimated to cost USD50 million to resolve allegations they violated the Clean Air Act and state air pollution control laws at six petrochemical manufacturing facilities located in Channelview, Corpus Christi, and LaPorte, Texas, and Clinton, Iowa, according to the Department of Justice and the US Environmental Protection Agency's (EPA) statement.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges, like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world"s largest producer of polymer compounds and the largest licensor of polyolefin technologies. In 2020, LyondellBasell was named to Fortune Magazine"s list of the "World"s Most Admired Companies" for the third consecutive year.
MRC

Russian producers began negotiations over March shipments of Russian PVC at the end of last week. And, despite the significant devaluation of the rouble and the fall in imports, producers decided to keep February prices for March deliveries, according to the ICIS-MRC Price Report.

The growth of imports in January, a serious drop in prices in foreign markets and low demand forced Russian producers to reduce PVC prices for the domestic market in February. At the same time, the largest price reduction was for PVC with K70. And many buyers were hoping for a continuation of the downtrend in March.

And the last month has radically changed the situation on the market. The significant devaluation of the rouble brought down all hopes for PVC price reduction, but the producers did not rush to conclusions either, and in fact kept the suspension PVC prices for March and February. Demand for March delivery was mixed.

On the one hand, the seasonal factor suggests an increase in demand. On the other hand, because of economic factors, converters do not understand what March will be like. There was no shortage of PVC supply on the market yet, although import volumes have declined markedly in the last two weeks of February.

At the same time, imports are expected to be completely stopped in March on the back of a galloping devaluation.
The Central Bank raised the key rate from 9.5% to 20%, followed by commercial banks on new loans raised rates on average by 25%, mortgage rates also increased. It is highly likely that, taking into account the new interest rates on loans, the demand for finished PVC products will decrease.

So far, the situation with the demand for finished products was mixed. Some companies have planned a slight increase in capacity utilisation for March. Also, some converters reported an increased demand for finished products from their customers, but at the same time limits current sales. Some converters still fear that the new refinancing rates will have a negative impact on the demand for finished PVC products.

The devaluation of the rouble improved the export positions of Russian producers. But so far they prefer the domestic market. Also, the devaluation of the rouble led to a serious increase in the cost of additives for PVC processing. Some buyers have taken a break from additive purchases, which could negatively impact their PVC processing volumes.

At the same time, some large converters reported that they have at least a month's supply of additives to work with.
Chinese producers of acetylene PVC have slightly adjusted export prices this week. There was no real demand from Russian companies because of a serious devaluation of the rouble, the price of acetylene PVC will be at least 15% more expensive compared to Russian counterparts.

In addition, there were serious problems with logistics. Deals for March shipments of PVC with K64/67 were negotiated in the range of Rb170 000 - 177 000/tonne CPT Moscow, including VAT, , for volumes up to 500 tonnes. Prices of resin with K=70 were discussed at an average of Rb195,000-198,000/tonne CPT Moscow, including VAT.

MRC

Belarusian Polymir, part of JSC "Naftan", had to shut down part of its capacities of low density polyethylene (LDPE) due to problems with the sale of by-products, according to ICIS-MRC Price report.

According to the company's customers, last weekend the Belarusian producer was forced to stop production at the second line of LDPE production (158 PE). The outage is scheduled to last for one month. The second line's annual production capacity is 65,000 tonnes.

At the same time, it should be added that the temporary shutdown of part of the capacity will not affect the supply of PE from the Belarusian producer. There were sufficient stocks. It is also worth noting that Polymir intends to shut the first line of LDPE for a month in May for scheduled maintenance works, the second line will be shut for repairs in June, but at the same time, the shutdown will last a little more than 30 days.

Polymir (part of Naftan) is Belarus' largest petrochemical company, producing a wide range of chemical products, such as low density polyethylene (LDPE), acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. Polymir was founded in 1968.

The producer uses technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), as well as the developments of scientific research institutes and design institutes of the CIS countries.

The plant's annual production capacity is 130,000 tonnes.

MRC