BASF Group releases preliminary figures for 1Q 2023

BASF has released preliminary figures for the 1Q 2023, said the company.

Sales declined by 13.4% in the 1Q 2023 to EUR 19,991 M (1Q 2022: EUR 23,083 M). This was mainly driven by considerably lower volumes. Sales were considerably lower than average analyst estimates for the 1Q 2023 (Vara: EUR 21,819 M). EBIT before special items of BASF Group amounted to an expected EUR 1931 M in the 1Q 2023, a decline of 31.5% compared with the prior-year quarter (1Q 2022: EUR 2818 M) but considerably above the analyst consensus for the 1Q 2023 (Vara: EUR 1599 M). In particular, EBIT before special items in the Agricultural Solutions segment considerably exceeded average analyst estimates.

Chemicals, Materials and Surface Technologies were also considerably above the respective average analyst estimates for EBIT before special items in the 1Q 2023. In the Industrial Solutions and Nutrition & Care segments, EBIT before special items missed average analyst estimates slightly and considerably, respectively. In Other, EBIT before special items was weaker than expected by analysts on average.

The BASF Group's EBIT amounted to an expected EUR 1867 M in the 1Q 2023, considerably below the figure for the prior-year quarter (1Q 2022: EUR 2785 M) but considerably above the analyst consensus (Vara: EUR 1533 M). Net income reached EUR 1562 M, considerably above the figure in the prior-year quarter (1Q 2022: EUR 1221 M) and considerably above average analyst estimates for the 1Q 2023 (Vara: EUR 1081 M). In the prior-year quarter, impairments on the participation in Wintershall Dea had burdened net income of BASF Group.

We remind, BASF announced that it has received the International Sustainability and Carbon Certification (ISCC) PLUS for certain grades of plastic additives produced at its manufacturing sites in Kaisten, Switzerland and McIntosh, Alabama, United States.

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Billionaire Mukesh Ambani-owned Reliance Industries has decided to withdraw the proposal to merge subsidiary Reliance New Energy Limited (RNEL) with itself and, instead, let the venture undertake the renewable energy venture of the conglomerate, said Moneycontrol.

The development comes after a board meeting reviewed the new energy business and investment structure last week. "Based on a review of the new energy / renewable energy business and investment structure, the Board has decided that the new energy / renewable energy business should be undertaken through RNEL and the Scheme be withdrawn," the oil-to-telecom conglomerate said in a regulatory filing.

In May last year, the company had said that Reliance New Energy (RNEL) would be amalgamated as the renewable energy initiatives and be undertaken by RIL directly. RNEL is a wholly-owned subsidiary of RIL. However, the scheme presently pending with the National Company Law Tribunal (NCLT), Mumbai Bench for approval, has now been decided to be withdrawn.

Reliance Industries Chairman Mukesh Ambani had in 2021 announced the conglomerate’s ambitions to recast itself increasingly as a clean energy enterprise, powered by huge investments as it braces for a new future. Ambani had revealed the plans lined up to pursue RIL’s clean energy goals, which will entail an investment of Rs 75,000 crore over three years. For its clean energy initiatives, RIL will invest over Rs 60,000 crore over the next three years and invest an additional Rs 15,000 crore in value chain, partnerships and future technologies, including upstream and downstream industries, Ambani had said in the annual report for FY22.

Meanwhile, shares of Reliance Industries on April 21 closed 0.14 percent higher at Rs 2,348.90 apiece on the BSE. On April 21, India's biggest company in terms of valuation reported net profit, attributable to the owners of the company, at Rs 19,299 crore for the March quarter of the financial year 2022-23, up 19 percent from the year-ago period. The profit beat estimates driven by a strong performance across businesses. Gross revenue from operations of India's most valued company came in at Rs 2.39 lakh crore, registering a year-on-year rise of 2.8 percent. Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.?

We remind, Reliance Industries Limited (RIL) unveiled India’s first Hydrogen Internal Combustion Engine technology solution for heavy duty trucks flagged off by Honourable Prime Minister Narendra Modi at the India Energy Week in Bangalore. The Hydrogen Internal Combustion Engine (H2ICE) powered trucks will emit near zero emissions, deliver performance on par with conventional diesel trucks and reduce noise and with projected reductions in operating costs thus redefining the future of Green Mobility.

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Chinese state oil giants and major private refiners are sweeping up more Russian crude, supporting prices and forcing smaller independents to seek out cheap alternatives such as Iranian oil, according to trade sources and shipping data, said Hydrocarbonprocessing.

The demand from China's biggest buyers, which had shied away from Russian crude in the immediate aftermath of Western sanctions on Moscow over its invasion of Ukraine, shows growing confidence in the trade after state refiners PetroChina and Sinopec resumed imports in February.

Large private oil refiners Hengli Petrochemical and Jiangsu Eastern Shenghong Co started receiving Russian crude from March, attracted by wide discounts for the oil, according to traders and shiptracking data from Refinitiv, Kpler and Vortexa.

Four cargoes of about 740,000 barrels each of low-sulfur ESPO crude discharged at Hengli's Dalian berth in March while another two arrived in April, the Kpler data showed. Shenghong imported a Urals crude cargo of about 720,000 barrels in March and 1 million barrels in April, Kpler showed.

In April, PetroChina received a Urals crude cargo of 1 million barrels via Myanmar's Made Island port, which is linked by pipeline to its Yunnan refinery, the Kpler data showed. PetroChina, Hengli and Shenghong did not reply to requests for comment.

China's overall Russian crude imports, including pipeline and ships, rose to a record 9.61 million tons, or 2.26 million barrels per day (bpd) in March, customs data showed on Friday.

We remind, Russia has increased its diesel exports to Brazil and other parts of Latin America following an embargo on shipments to Europe, traders said and Refinitiv Eikon data showed. Russia has long been the main diesel supplier for Europe, where refineries do not produce enough fuel to meet domestic demand for diesel cars. But a full EU embargo on Russian oil products since Feb. 5 has diverted Russian diesel exports to Asia, Africa, the Middle East and STS loadings.

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Senate lawmakers have reintroduced two pieces of bipartisan legislation focused on improving the nation’s recycling and composting systems, said Recyclingtoday.

Sen. Tom Carper (D-Del.), Sen. Shelley Moore Capito (R-W.Va.) and Sen. John Boozman (R-Ark.) have reintroduced The Recycling and Composting Accountability Act as well as the Recycling Infrastructure and Accessibility Act.

Both bills were introduced last year, and they had support from several industry groups, including the National Waste & Recycling Association (NWRA), the Plastics Industry Association (Plastics) and the Solid Waste Association of North America. Senate lawmakers passed these bills in August 2022; however, the companion legislation introduced in the House of Representatives did not proceed past a hearing in the House Committee on Energy and Commerce’s Subcommittee on Environment and Climate Change.

According to a news release from the U.S. Senate Committee on Environment and Public Works, which is chaired by Sen. Carper, the Recycling and Composting Accountability Act would improve data collection on the nation’s recycling systems and explore the potential of a national composting strategy. The legislation would require the Environmental Protection Agency (EPA) to collect and publish data on recycling and composting rates across the country to provide an accurate reflection of performance both nationwide and at the state level.

The Recycling Infrastructure and Accessibility Act would establish a pilot recycling program at the EPA, which would award grants on a competitive basis to eligible entities for improving recycling accessibility in communities. According to the U.S. Senate Committee on Environment and Public Works, the goal of this program is to fund eligible projects that would significantly improve access to recycling systems in underserved communities through the use of a hub-and-spoke model for recycling infrastructure development.

We remind, more than 120 European packaging industry associations issued a joint letter urging co-legislators to preserve the internal market legal basis of the EU Packaging and Packaging Waste Regulation in its entirety, as the best way to achieve the environmental and economic objectives of the proposal. The internal market legal basis addresses the differences among the various national rules on the management of packaging and packaging waste and resulting internal market barriers, while providing a high level of environmental protection.

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Several Asian petrochemical producers plan to switch a portion of their feedstock from naphtha to cheaper liquefied petroleum gas (LPG) late in the second quarter as the price gap between the two fuels has widened, refinery and trade sources said, said Reuters.

A rise in LPG use by petrochemical units could hit Asian refiners' margins for naphtha, which is used to make consumer goods including plastics and clothing. Profits from making naphtha from Brent crude have already dropped by about 51% to USD50.25 a ton since Feb. 5, when European Union sanctions forced Russia to divert naphtha supplies from the EU to Asia.

This has prompted Taiwan's Formosa Petrochemical, Asia's top naphtha importer, to plan a 10% switch of its naphtha feed to LPG in May, spokesman KY Lin said. The feedstock change is expected to continue until the end of the third quarter.

Formosa is exploring ways to increase use of LPG, a mixture of propane and butane, to more than 10% without affecting its overall petrochemical production, Lin said. The company has already bought two propane cargoes of 46,000 tons each for May delivery, Lin added.

The price of the LPG cargoes was USD104-105 per ton below the Japan naphtha benchmark price, traders said. That has dropped from a premium of USD8 to Japan naphtha in early February, according to Reuters calculations based on Eikon data. Petchem makers typically buy spot cargoes only when prices are at least USD50 a ton cheaper than naphtha.

LPG prices, which rose in tandem with natural gas last year as sanctions on Russian energy trade unfolded, collapsed more than naphtha after winter demand waned earlier this month, consultancy FGE said in a note. Steam crackers in Asia can typically switch between 10% and 20% of naphtha to alternative feedstock LPG whenever prices are low.

An east Indian cracker operator is also planning to switch to LPG, a company source said, without giving a timeline. A source at a South Korean petrochemical producer said his company plans to boost LPG use to 15% during summer, up from 10% use in winter months.

Asia is also receiving more LPG from the U.S. and the Middle East as winter demand for the heating fuel has passed. Monthly U.S. LPG exports to Asia in February and March rose to around 2.6 million-2.8 million tons, up 100,000-200,000 tons from January, ship-tracking data from Vortexa and Kpler showed.

March supplies from Middle East have risen to the highest level so far this year at about 2.8 million-3.4 million tons in March, the data showed.

We remind, Singapore's imports of Russian naphtha nearly tripled in the first quarter of 2023, government data showed, after the European Union banned oil products imports from Russia. The Asia oil hub imported 741,000 tons of Russian naphtha in the period, accounting for about 23% of Singapore's total imports of the refined product, a Reuters calculation based on Enterprise Singapore data showed. This jumped from about 261,000 tons imported in the fourth quarter last year, the data showed.

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