MOL Q1 earnings drop 35% on lower margins

MRC) -- MOL’s petrochemicals division’s first-quarter clean current cost of supplies (CCS) earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 35% year on year on lower margins, said the company.

Q1 2022 petrochemical product sales stood at 359,000 tonnes, versus 381,000 tonnes in the same period of last year and 349,000 tonnes in Q4 2021. MOL said higher oil prices were mainly behind the petrochemical integrated margin decline of EUR180/tonne between the first quarters of last year and this year.

The polyol complex that MOL has under construction reached a mechanical completion ratio of 96% by the first quarter. Overall MOL, an integrated oil, gas and petrochemicals group, recorded a net profit of Hungarian forint (Ft) 222.6bn (USD624.2m) in the first quarter, up by 145% from a restated Ft90.8bn in Q1 2021.

Fourth-quarter group net sales were up 79% year on year to Ft1.93tr.

As per MRC, MOL Group acquired ReMat Zrt., a recycler with production plants located in Tiszaujvaros and Rakamaz, Hungary, and a logistics hub in Bratislava, Slovakia. ReMat is a market leading plastics recycler in Hungary with an annual processing capacity of 25,000 tons and almost 200 employees, as per the company's press release.
The transaction fits into MOL’s portfolio and its goal to become a key player in the low carbon circular economy in Central and Eastern Europe.

We remind that in March 2021, MOL became a biofuel producer through the realization of an investment in the Danube Refinery. Bio feedstock will be co-processed together with fossil materials increasing the renewable share of fuels and reducing up to 200,000 tons /year CO2 emission without negatively affecting fuel quality.

MOL Group is an international, integrated oil, gas, petrochemicals and consumer retail company, headquartered in Budapest, Hungary. It is active in over 30 countries with a dynamic international workforce of 25,000 people and a track record of more than 100 years. MOL Group operates three refineries and two petrochemicals plants under integrated supply chain management in Hungary, Slovakia and Croatia, and owns a network of almost 2000 service stations across 10 countries in Central & South Eastern Europe. MOL’s exploration and production activities are supported by more than 85 years’ experience in the field of hydrocarbons and more than 30 years in the injection of CO2. At the moment, there are production activities in 9 countries and exploration assets in 14 countries. MOL is committed to transform its traditional fossil-fuel-based operations into a low-carbon, sustainable business model and aspires to become net carbon neutral by 2050 while shaping the low-carbon circular economy in Central-and Eastern Europe.
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Trinseo expects its second-quarter earnings to be similar to those in the first quarter, said the company.

On the one hand, Trinseo expects higher profitability for styrene, larger margins for its Engineered Materials segment and increased sales volumes for latex binders, said Frank Bozich, CEO. He made his comments during an earnings conference call.

However, margins should approach more normal levels for polystyrene (PS), acrylonitrile butadiene styrene (ABS) and polycarbonate (PC) products, he said. The COVID-19 shutdowns in China should hit the company's Polystyrene business. Beyond the second quarter, styrene margins should approach more normal levels in the second half of the year, Bozich said.

During the first part of the year, those margins had been significantly elevated because of plant outages and logistical challenges, which had prevented producers from taking advantage of arbitrage opportunities in other parts of the world, Bozich said.

For all of 2022, Trinseo expects to report USD174m-221m in net income and USD625m-675m in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA). That compares with Trinseo's previous guidance of USD294m-332m in net income from continuing operations and USD700m-750m in adjusted EBITDA. Trinseo's latest earnings guidance assumes that the demand levels in the first quarter will persist through the end of 2022, Bozich said.

As per MRC, Trinseo will use gasification technology to depolymerize post-consumer polystyrene waste into pure styrene. It’s a first-of-its-kind project on an industrial scale. Trinseo’s plant will process 15 kilotons of recycled polystyrene flakes every year. These will be transformed into high-quality recycled styrene and used for the production of new polystyrene and/or styrene derivatives, including acrylonitrile butadiene styrene (ABS) and styrene acrylonitrile (SAN).

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 $4.8 billion in net sales in 2021 and has 26 manufacturing sites and one recycling facility around the world and approximately 3,400 employees.
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Reliance Industries reports a 24.8% rise year on year (YOY) in EBITDA for its oil-to-chemicals (O2C) business, to 142.4 billion Indian rupees (USD1.8 billion) in the fiscal fourth quarter ended 31 March, said the company.

Downstream product margins were negatively impacted by weak naphtha cracking economics and supply overhang in fiber intermediates. Quarterly sales rose 44.2% YOY to Rs1.4 trillion, due primarily to increased crude oil prices, it says.

Reliance’s O2C business includes refining, petrochemicals, fuel retailing through the Reliance BP Mobility business, aviation fuel, and bulk wholesale marketing.

In Reliance’s polymers business, domestic demand grew during the fourth quarter with the overall improvement in India’s economy and the easing of pandemic restrictions. Overall polymers demand improved by 3% YOY, which was 16% above pre-COVID pandemic levels. Polyethylene (PE) margins averaged USD325/metric ton compared with $539/metric ton the previous year. The sharp increase in naphtha prices resulted in unfavorable economics for naphtha-based crackers, it says. Naphtha prices averaged USD871/metric ton, up 23% quarter on quarter (QOQ).

As per MRC, Reliance Industries, operator of the world's biggest refining complex, may avoid buying Russian fuels for its plants following western sanctions on Moscow over its invasion of Ukraine.

As MRC informed before, in November 2021, Reliance Industries and Saudi Aramco decided to re-evaluate their agreement for the Middle Eastern producer to buy a stake in the refining and petrochemical business of India's biggest private refiner, and both companies would look at broader areas of cooperation due to the changing energy scenario.

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 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas.shipments of PP random copolymers decreased significantly.

Reliance Industries is one of the world's largest producers of polymers. The company produces polypropylene, polyethylene and polyvinyl chloride and other petrochemical products.
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Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN) in Europe, according to the company's press release as of May 4.

Effective May 1, 2022, or as existing contract terms allow, the contract and spot prices for the products listed below rose to reflect current market conditions as follows:

STYRON™ general purpose polystyrene grades (GPPS) by +90 Euro per metric ton
STYRON™ and STYRON™ A-TECH, STYRON™ C-TECH and STYRON™ X- TECH high impact polystyrene grades (HIPS) by +90 Euro per metric ton
MAGNUM™ ABS resins by +60 Euro per metric ton
TYRIL™ SAN resins by +60 Euro per metric ton

We remind, Trinseo last raised its prices for all PS, ABS and SAN grades on 1 April 2022, as stated below:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR430 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR430 per metric ton;
- MAGNUM ABS resins - by EUR430 per metric ton;
- TYRIL SAN resins - by EUR430 per metric ton.

As per ICIS-MRC Price Report, Russia's domestic expandable polystyrene (EPS) producers kept the prices of their material at the level of April, in early May. Plastik (Uzlovaya) significantly decreased the price of acrylonitrile butadiene styrene (ABS) for various buyers, this month.

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 $4.8 billion in net sales in 2021 and has 26 manufacturing sites and one recycling facility around the world and approximately 3,400 employees.

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CJ Bio, a division of South Korea-based CJ CheilJedang, has begun manufacturing PHA biopolyester at a newly commissioned facility located in Pasuruan, Indonesia, the company has announced.

With a rated capacity of 5,000 tonnes, the new facility will exclusively produce ‘amorphous’ PHAs (a-PHAs). Amorphous PHA , which has a low glass transition temperature (Tg), is a soft, rubbery version of PHA that offers fundamentally different performance opportunities than crystalline or semi-crystalline forms of PHA.

This material will be used as a modifier for other polymers and biopolymers to improve functional characteristics and biodegradability.

Polyhydroxyalkanoates are linear polyesters produced in nature through bacterial fermentation of sugars or lipids. They occur naturally in living cells from a 5-10% rate, which gives PHAs their excellent biodegradability. CJ BIO can increase PHA content up to 85% through bacterial strain and proprietary fermentation technology. The company employs advanced downstream technology for the extraction of PHA components and for the manufacture of specific products.

The technology also has the potential to develop building blocks for other performance materials made from non-fossil fuel sources. With the company’s first commercial production facility up and running a, CJ Bio shipped its first material in April of this year.

This new PHA manufacturing facility in Pasuruan is the culmination of decades of work that started at the company Metabolix in the early 2000s and which CJ Bio has been improving since it acquired Metabolix biopolymer assets in 2016. The company will continue to work of further expansion plans.

We remind, CJ CheilJedang is seeking to continue its success story in the United States, after the successful launch of its dumpling, by introducing ready-to-eat rice "hetbahn" to American consumers in August. Hetbahn, developed by CJ CheilJedang, is the best-selling pre-cooked rice product in the Korean market now in its 27th year. The company has been working on introducing a range of flavors that suit the American consumer palate for the last five years.
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