Tronox swings to Q4 loss

Tronox swung to a Q4 net loss and warned that Q1 earnings could fall sharply year on year, the US-based pigment producer said.

The following table shows the company's Q4 financial performance. Income fell because sales fell faster than costs.

During the second half of 2022, Tronox said a significant market pullback started in China and then spread to the rest of the Asia-Pacific region as well as Europe, the Middle East and Africa (EMEA) and the Americas.

For the first quarter, Tronox expects to report USD120m-130m in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA). That is down from USD240m in adjusted EBITDA that Tronox reported in Q1 2022.

First quarter sales volumes for TiO2 should rise versus the fourth quarter by the low- to mid-teens percent, Tronox said. Year on year, they should decline. The company will continue to contend with the aftermath of a fire at its KZN mineral separation plant in South Africa and floods at its Gingko and Atlas Campaspe mines in Australia.

The fire and floods should affect the amount of zircon that is available for sale and the cost of ore produced from the new mine in Australia. Zircon production and ore costs should improve during the first quarter.

In South Africa, Tronox's KwaZulu-Natal (KZN) Sands operations include the Fairbreeze mine, a concentration plant, a mineral separation plant and two smelting furnaces that produce titanium slag.

We remind, Tronox reported an increase in third-quarter net income on increased sales and a tax benefit, said the company. The following table shows the company’s financial performance. Figures are in millions of dollars. The company said revenue was up year on year driven by higher prices for titanium dioxide (TiO2), zircon and pig iron and on higher pig iron volumes. John D Romano, co-CEO, said the results were despite a significant reduction in demand in Europe, Middle East, Africa, and Asia Pacific.

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On February 11, the 50kt/year nylon 66 plant of nylon new material project phase I of China Chemical Tianchen Qixiang New Materials Co., Ltd., has successfully commenced and yielded the first batch of high-grade products, said Ccfgroup.

This is another successful start-up of Tianchen Qixiang following the startup of acrylonitrile, hexanediamine (HMDA) and adionitrile (ADN), which marks the comprehensive formation of the complete industrial chain system of the first phase of Tianchen Qixiang nylon new material industrial base. It has laid a more solid foundation for the industrial chain and cluster development of high-end nylon new materials.

In the next step, Tianchen Qixiang will continue to focus on solving the problems of "lack of core technology and raw materials" in the field of new materials and new energy, and insist on new chemical materials, special nylon and other chemicals with high technical threshold, engineering plastics, high-performance fibers and other materials, and continue to expand into the field of high value-added products in the chemical industry.

We remind, Toray has announced that it has developed technology to create a recycled nylon 66 recovered from discarded silicone-coated airbags offering the same flowability and mechanical properties as virgin nylon 66 injection moulding grades. Airbag fabric can be coated or non-coated with silicone. Recycling of the non-coated fabric is common practice; Refinverse was the first in Japan to achieve commercial-scale silicone-coated fabric recycling. It strips the silicone from airbag fabric scrap cuttings, after which these are washed.

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Mexican polyester producer Alpek reported on Wednesday a year-on-year rise in Q4 net income because of lower taxes, said the company.

Alpek reported a Q4 tax charge of Mexican peso (Ps)549m (USD29.5m), down from Ps1.41bn from the same time in 2022.

The following shows the company's Q4 financial performance.

We remind, Alpek, Indorama and FENC announced earlier that Corpus Christi Polymers (CCP) will resume construction on the facility in August. The plant is expected to begin production of polyethylene terephthalate (PET) and purified terephthalic acid (PTA) in early 2025. Construction of the state-of-the-art plan is resuming following a period of pandemic-related disruptions. The new facility is expected to be the largest vertically integrated PTA-PET production plant in the Americas, with annual capacities of 1.1m tonnes of PET and 1.3m tonnes of PTA. It will employ three state-of-the-art technologies.

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MEG spot and futures remained weak in the first half of February along with the the continued decrease in commodity futures. Coal prices decreased and end-user orders were tepid, said Ccfgroup.

MEG supply also decreased both in and outside China. China's MEG imports may fell to a record low in March-April. China domestic MEG output will also decrease.

Local MEG inventory in the US market was tight previously due to the shutdown of Lotte, MEGlobal and Nan Ya. Loadings of US cargoes to China continued decreasing in January and February. China's MEG imports from the US and Canada is estimated at about 100kt per month, and those cargoes are expected to arrive in China in February-April. In addition, suppliers are also inactive to ship MEG to China due to the low price in China.

In Saudi Arabia, Yansab has shut its 910kt/year MEG plant for maintenance. Kayan also plans to shut its 850kt/year plant for maintenance. Sharq is also running its units at lowered rate. Output in Saudi Arabia will decrease apparently in the first quarter and month loadings are expected to fell to about 260-280kt. As a result, some suppliers are also seeking spot cargoes in the market.

PRefChem mainly sells its cargoes to Thailand, and there are no cargoes to China yet. Increase from this plant to China will be seen in March, estimated at about 10-20kt.

We remind, Pengerang Refining and Petrochemical Complex (PRefChem), 50%-50% joint venture (JV) between Petronas and Saudi Aramco, aims to restart its cracker in Malaysia this May after more than two years of staying offline following an explosion on 16 March 2020. PrefChem's complex houses a naphtha cracker that produces 1.2 million tons/year of ethylene and 600,000 tons/year of propylene. Downstream units include a 450,000 ton/year homo-PP line, a 450,000 tons/year PP copolymer, and a 400,000 tons/year HDPE unit. The company also owns a C6-based metallocene PE plant with a capacity of 350,000 tons/year.

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Covestro has accepted a request from CFO Thomas Toepfer for early termination of his contract, said the company.

Toepfer will leave the company as of 31 August 2023 to join European aircraft manufacturer Airbus as CFO, ahead of his current contract which is due to expire on 31 March 2026.

Covestro’s Supervisory Board has started its search for a successor and will make an announcement in due course. Toepfer will continue in his role as CFO and Labour Director until he leaves the company.

Toepfer has been a member of Covestro’s management board since April 2018 as CFO and is responsible for Accounting, Controlling, and Finance. He has additionally held the position of Labour Director since 2019.

We remind, Covestro has successfully started up a new world-scale facility for the production of chlorine in Tarragona, Spain. It is the first world-scale production plant for chlorine based upon the highly innovative and energy efficient ODC (oxygen depolarized cathode) technology invented by Covestro and its partners.

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