Germany weighs merits of growing China trade

Germany weighs merits of growing China trade

MOSCOW (MRC) -- As April winds down and major German chemical companies hold their annual shareholder meetings, questions are being asked whether about the country is tying its trade too closely to with China and repeating the same mistakes it made earlier by becoming dependent on Russian gas, said Chemanager.

The Bloomberg news agency reported on Apr. 27 that Chancellor Olaf Scholz and Economics Minister Robert Habeck were weighing plans to limit the export of chemicals for semiconductors from Germany — a major move that would have an enormous impact on chemical producers such as Merck and BASF.

Bloomberg’s sources said the proposal is part of a package of measures that would cut off China’s access to goods and services needed for the production of advanced semiconductors.

Fears are growing about what would happen to German companies supplying the lucrative Asian market if China invaded Taiwan, is the beating heart of the world’ semiconductor industry.

On the news, BASF shares — which already have lost 25% of their value this year, to the dismay of shareholders — lost a further 4% in early trading, but Merck initially emerged unscathed. Neither Germany’s political leaders nor the companies named confirmed the reports.

If Germany does move forward with the plans, it would join the US as well as other European countries such as the Netherlands, in pushing for a global blockade of China’s access to key technologies.

Strangling the country’s already limited supply line could thwart China’s ability to advance its own industry, commentators said, while noting that China is Germany’s is largest trading partner, and the European country’s trade deficit is increasing.

Germany has no advanced chip-making technologies, but the two chemical producers engaged in trade with China supply the global industry, with Merck claiming to be the only company ”deeply experienced” in every step of the semiconductor value chain,” and BASF a leading exporter of chemicals and solutions for semiconductor processes.

At the chemical giant’s 2023 annual general meeting in Mannheim, BASF’s shareholders gave CEO Martin Brudermuller a run for his money, peppering him with questions about what would happen if China turned inward and closed others out after years of luring western partners to its shores. Not unexpectedly, the answer was, the chances outweigh the risks.

In a telephone conference, BASF oil and gas subsidiary Wintershall’s CEO Mario Mehren had to explain why the risks sometimes have their way and his company is still in Russia — which accounts for 50% of its business — despite announcing plans to withdraw this past January.

The withdrawal is complicated, Mehren said, remarking that the Russian government had “virtually expropriated” its offshoot Wintershall Dea, a joint venture with Russian oligarchs.

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.

LyondellBasell release strong Q1 2023 earnings results

LyondellBasell release strong Q1 2023 earnings results

MOSCOW (MRC) -- LyondellBasell Industries, a specialty chemicals company listed on the New York Stock Exchange, released its earnings results for the first quarter of the fiscal year 2023.

The firm reported an earnings per share (EPS) result of USD2.50 for Q1 2023, outpacing Wall Street’s consensus estimate of USD1.80 by USD0.70 per share, according to RTT News reports. Despite missing analysts’ expectations in revenue, with a recorded figure of USD10.25 billion during Q1 2023 compared to an expected USD10.80 billion, LyondellBasell Industries delivered a net margin of 7.71% and a return on equity of 32.96%.

The figures show improved performance from the same period last year when the company earned USD4 EPS, suggesting that LyondellBasell’s strategies are bearing fruit in line with market growth trends.

Following up on the company’s earnings report, it was recently announced that its shareholders received a dividend of USD1.19 per share for Q1 2023 payout ratio is reported as being 40.34%.The ex-dividend date set at March 13th and shareholders record were issued before that date became eligible for this spot dividend payout.

With an average volume of trading activity at over two million shares daily, LYB was traded up by almost four dollars during Friday’s trading session and hit an intraday high price point of %95.30 per share as at May 1st 2023 which is positive news from their activities.

LYB has been observed as having bearish momentum over recent weeks by some equities analysts; however three investment firms upgraded its rating structure based on recently strong fundamentals announced – this marks significant progress in gaining investor confidence and overseeing any long-term risks associated with volatile markets forecasts.

We remind, LyondellBasell announced it has made a decision to move forward with engineering to build an advanced recycling plant at its Wesseling, Germany. Using LyondellBasell's proprietary MoReTec technology, this commercial scale advanced recycling plant would convert pre-treated plastic waste into feedstock for new plastic production. The final investment decision is targeted for the end of 2023.

Crude prices up 2% on rising U.S. oil demand and lower output

Crude prices up 2% on rising U.S. oil demand and lower output

MOSCOW (MRC) -- Oil prices gained about 2% on Friday after U.S. data showed crude output was declining while fuel demand was growing, said Hydrocarbonprocessing.

Brent crude futures rose USD1.16, or 1.5%, to USD79.53 a barrel by 12:24 p.m. EDT (1624 GMT), while West Texas Intermediate (WTI) crude rose USD1.99, or 2.7%, to USD76.75. Both benchmarks were set for a weekly loss of about 2%-3%, while Brent was also heading for another monthly decline after disappointing U.S. economic data and uncertainty over further interest rate hikes weighed on the demand outlook.

"The market was down much of the week on worries about a looming economic recession and an expansion of the banking crisis with First Republic," said Phil Flynn, an analyst at Price Futures Group. "But, today there were headlines showing there may be a solution to First Republic's problems and data pointing to a rise in oil demand and a decline in output," Flynn said.

U.S. officials are coordinating urgent talks to rescue First Republic Bank(FRC.N), as private-sector efforts led by the bank's advisers have yet to reach a deal, according to three sources familiar with the situation. The U.S. Federal Deposit Insurance Corp (FDIC), the Treasury Department and the Federal Reserve are among government bodies that have in recent days started to orchestrate meetings with financial companies about putting together a solution for First Republic, the sources said.

U.S. crude production fell in February to 12.5 million barrels per day (bpd), its lowest since December 2022, according to a report from the Energy Information Administration (EIA). In the same report, the EIA said U.S. product supplied of crude and petroleum products - a proxy for oil demand - rose to nearly 20 million bpd and finished motor gasoline rose to 8.7 million bpd in February, the highest for both since November 2022.

Oil companies like Exxon Mobil Corp(XOM.N), meanwhile, are riding a wave of strong demand and have held the line on cost-cutting implemented when fuel demand collapsed during COVID-19 lockdowns. Independent U.S. refiner Valero Energy Corp(VLO.N) said its 14 refineries would operate at a total throughput between 90% and 93% of their combined total capacity in the second quarter of 2023.

We remind, U.S. crude oil exports rose more-than-expected last month, building on a record 4.5 million bpd in March, as Chinese refiners snapped up cargoes to meet rising fuel demand, according to ship tracking data and analysts. U.S. crude exports rose by 22% last year from 2021 after Russia's invasion of Ukraine led the European Union, Britain, Canada and the U.S to ban imports of Russian oil and changed global flows.

DuPont to pay USD19 mln for 2014 plant explosion

DuPont to pay USD19 mln for 2014 plant explosion

MOSCOW (MRC) -- DuPont has been found guilty of criminal negligence and fined USD12 million in connection with a November 2014 explosion that killed four employees of its methyl mercaptan plant in LaPorte, Texas, and caused extensive environmental damage, said Chemanager.

The actual sum the company will have pay rises to more than USD19 million when a court-ordered USD4 million donation to the Fish & Wildlife Fund and awards in civil lawsuits are added. In a rare sentence for a business of its size, US District Judge Lee H. Rosenthal also mandated that DuPont be put on probation for two years, during which it must give the US Probation Office full access to all of its operating locations.

The court separately ordered a year’s probation for Kenneth Sandel, unit operations leader of the Insecticide Business Unit (IBU) responsible for the plant. Both the company and Sandel pleaded guilty to all charges. DuPont also acknowledged violating the federal Clean Air Act. Along with killing the four workers, the chemical release injured other DuPont employees and traveled downwind into the surrounding areas, the judgment said.

In a statement, Larry Starfield, acting assistant administrator for the US Environmental Protection Agency’s Office of Enforcement and Compliance Assurance, said DuPont’s failure to follow required chemical safety procedures at La Porte – where an employee inadvertently left open a piping valve of the waste disposal system — had led to the deaths.

The fatal accident “demonstrates the importance of holding chemical facilities accountable for implementing chemical safety requirements that are designed to protect workers and neighboring communities,” Starfield added.

We remind, DuPont has terminated its USD5.2bn deal from November 2021 to acquire Rogers Corp as the companies have been unable to obtain timely clearance from all the required regulators. DuPont is paying Rogers a termination fee of USD162.5m, it said in a brief statement late on Tuesday. The companies had not been able to obtain approval from regulators in China, officials said previously.

Olin announced 1Q 2023

Olin announced 1Q 2023

MOSCOW (MRC) -- Olin Corporation announced financial results for 1Q ended 31 Mar 2023, said the company.

1Q 2023 reported net income was USD156.3 M, or USD1.16/diluted share, which compares to 1Q 2022 reported net income of USD393.0 M, or USD2.48/diluted share.

1Q 2023 adjusted EBITDA of USD434.1 M excludes depreciation and amortization expense of USD137.1 M and restructuring charges of USD60.9 M. 1Q 2022 adjusted EBITDA was USD710.9 M. Sales in 1Q 2023 were USD1844.3 M compared to USD2461.4 M in 1Q 2022.

Other corporate and unallocated costs in 1Q 2023 increased USD4.0 M compared to 1Q 2022 primarily due to mark-to-market adjustments on stock-based compensation. The cash balance on 31 Mar 2023, was USD176.0 M and we ended 1Q 2023 with net debt of approximately USD2.6 bn and a net debt to adjusted EBITDA ratio of 1.2 times.

During 1Q 2023, net debt increased by USD211.5 M, primarily due to the funding of inventory built in advance of a planned maintenance turnaround and typical seasonal working capital. The increase in working capital was USD244.4 M in 1Q 2023. On 31 Mar 2023, Olin had approximately USD1.3 bn of available liquidity.

During 1Q 2023, approximately 3.6 M shares of common stock were repurchased at a cost of USD206.1 M. On 31 Mar 2023, Olin had approximately USD1.5 bn available under its current share repurchase authorization.

We remind, Olin Corporation has announced its decision to stop the operations of its cumene facility in Terneuzen, Netherlands and solid epoxy resin production facilities in Gumi, South Korea, and Guaruja, Brazil. In 1Q 2023, the company results are forecasted to include around USD57 M of restructuring charges associated with these plans of which around $15 M represent non-cash asset impairment charges.