Stepan Q4 profit decreased

Stepan’s Q4 operating income fell by 41.5% year on year to USD11.7m as sales volumes fell 17%, said the company.

Gross profit fell as the cost of sales rose at a higher pace than sales.

Surfactant and polymer operating income was "significantly impacted" by customer and channel inventory destocking, the company said.

Surfactant operating income was USD21.8m, down from USD32.4m in Q4 2021, primarily due to a 15% decline in global sales volume. Polymer operating income was USD3.0m, down from USD12.9m in Q4 2021, primarily due to a 23% decline in global sales volume, including a 21% volume decline in rigid polyols and a lower demand in the specialty polyols and phthalic anhydride (PA) businesses.

Stepan’s Specialty Products business reported operating income of USD6.6m, up from USD2.1m in Q4 2021, primarily due to improved margins and customer mix within the medium chain triglycerides (MCT) product line.

In 2023, Stepan's business will be challenged by continued elevated inflation and high interest rates, said CEO and president Scott Behrens. “We believe this macro environment could negatively impact consumer demand and construction-related activity which will affect both our Surfactant and Polymer businesses,” he said. Additionally, higher overall cost inflation, higher depreciation and pre-start up expenses associated with Stepan’s new site in Pasadena, Texas would challenge earnings growth in 2023, he said.

As MRC informed before, Stepan conducted planned maintenance at its 90,000 tonnes/year phthalic anhydride (PA) plant Millsdale, Illinois, US, from early October to end-October, 2020.

Stepan is a manufacturer of specialty and intermediate chemicals used in a wide range of industries. The company is based in Northfield, Illinois, USA. The company is also a manufacturer of surfactants, which are key ingredients in consumer and industrial cleaning formulations. In addition, the company is a supplier of polyurethane polyols used in the growing market for thermal insulation and the CASE industry (coatings, adhesives, sealants and elastomers).

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MEGlobal has nominated its March 2023 monoethylene glycol (MEG) Asian Contract Price (ACP) at USD860/tonne, up by USD20/tonne from its February ACP, said the company.

The price is on a CFR (cost and freight) Asia basis.

We remind, MEGlobal has nominated its January 2023 monoethylene glycol (MEG) Asian Contract Price (ACP) at USD820/tonne, up by USD20/tonne from the December ACP. The price is on a CFR (cost and freight) Asia basis.
Asia MEG market has bottomed out in December after China relaxed its COVID curbs, but the upcoming new capacities in China and India may weigh on the prices.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).

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More Indian firms are attracted to buying Russian naphtha as low-cost feedstock for their refineries and petrochemical plants after price caps imposed by Western nations, six refining sources said, said Hydrocarbonprocessing.

Prices for refined products such as naphtha and fuel oil are capped at USD45/bbl by the Group of Seven nations, the European Union, and Australia in a scheme aimed at curbing Moscow funding its war against Ukraine. By comparison, Singapore naphtha traded at USD80.03/bbl on Tuesday on a free on board basis. The price cap was implemented along with an EU ban on Russian oil products imports on Feb. 5.

India's interest in ramping up Russian oil products imports comes after the world's third largest crude importer became Moscow's top oil client after China as the West shunned supplies from Moscow. Cheap Russian crude has shaved costs at Indian refiners and boosted margins. Reliance Industries Ltd. boosted its imports of Russian naphtha imports in February to about 222,000 t, ship tracking data from Refinitiv showed.

Reliance began importing Russian naphtha in September and by the end of January had shipped in about 217,000 t, the data showed. Reliance, already India's largest buyer of Russian naphtha and fuel oil, would consider increasing imports further, one of the sources said.

Its Russian fuel oil imports are set to triple a record of around 4.8 MMt between April 2022 and Feb. 2023, the first 11 months of this financial year, from about 1.6 MMt in 2021/22, Refinitiv Eikon data showed. State-owned refiners Bharat Petroleum Corp. and Indian Oil Corp., which have petrochemical facilities, are also looking for opportunities to buy Russian naphtha, sources said.

"So far there is no offer made to us for Russian oil. It is early days..we will definitely buy Russian naphtha if we get it at cheaper rate," said an official at one of the state refiners. Haldia Petrochemicals Ltd would also consider buying Russian naphtha if the quality and cost are suitable for its plants, two sources at the company said.

Reliance, IOC, BPCL and Haldia Petrochemicals did not respond to Reuters' emails seeking comment. The G7 price caps prohibit Western insurance, shipping and other companies from financing, insuring, trading, brokering or carrying cargoes of Russian crude and oil products unless they were bought at or below the set price caps.

We remind, Russia has diverted its diesel export supplies to Africa and Asia, as well for ship-to-ship (STS) loadings in February, as embargo closed the European markets for Russian-origin fuel, according to traders and Refinitiv data.
Russia has long been the main diesel supplier for Europe, where refineries do not produce enough fuel to meet domestic demand from its large diesel car fleet. A full EU embargo on Russian oil products went into effect on Feb. 5.

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Solvay has joined the Genesis Consortium to support biotech companies through its venture capital arm, said the company.

Funding will be put towards the IndieBio start-up development programme, which includes a portfolio of early-stage venture-backed companies with ties to Solvay’s key end markets, including agri-tech, food, bio-based materials and personal care.

Solvay Ventures did not specify how much they would spend on the programme but is currently investing from an €80m global evergreen fund.

The Genesis Consortium was founded by Silicon Valley-based venture capital firms SOSV and Mayfield as a global alliance of venture capital firms and corporations focussing on biotechnology start-ups addressing human health and environmental challenges.

SOSV is a multi-stage venture fund which operates start-up development programme IndieBio, which was founded in 2015, based in New York and San Francisco in a variety of sectors including food, materials, climate tech, biopharma, and agriculture.

The strategic investment will enable Solvay to accelerate and expand it portfolio using biotechnology and will strengthen the specialty firm’s renewable materials and biotechnology platform.

We remind, Solvay in advanced negotiations to divest its stake in Rusvinyl. The company confirms it is in advanced negotiations to divest its stake in Rusvinyl, an independent 50/50 joint venture in Russia, to its joint venture partner, Sibur. In addition to the recently obtained preliminary clearance from Russian governmental authorities, the potential transaction is still subject to several other regulatory approvals. Solvay will keep the market informed if and when appropriate, in accordance with applicable law.

Solvay is a science company whose technologies bring benefits to many aspects of daily life. With more than 21,000 employees in 63 countries, Solvay bonds people, ideas and elements to reinvent progress.

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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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