Stepan sales decreased by 23% in Q2

Stepan’s Q2 polymers operating income decreased by USD17.6m from USD33.9m in the second quarter of 2022 to USD16.3m in the second quarter of 2023, the company said in its Q2 earnings call on Wednesday.

Stepan’s PA business accounted for a decrease of USD4.7m during the period. The decrease was attributed to reduced construction industry activity, as well as customer and channel inventory destocking.

The housing and construction sectors have experienced lower demand since 2022, hampered by elevated interest rates and shifting consumer spending habits, with the threat of a US recession looming. US housing starts fell by 8% in June, following a surge in May.

Demand for PA has suffered as a result of lower activity in the housing and construction industries, with PA being used in the production of various construction materials including piping, counter tops and insulation. According to market participants, demand is expected to be flat to lower for the remainder of 2023.

PA is used as a chemical intermediate in the production of phthalate plasticizers, as well as in unsaturated polyester resins (UPRs). Stepan and Koppers are the two US PA producers that sell to the market, while ExxonMobil produces PA for captive use.

We remind, Stepan’s Q1 operating income fell nearly 67% year on year to USD21m as sales volumes in the surfactants and polymers segments fell amid softening demand. Also hurting results were delays in the startup of new low 1,4 dioxane production assets and continued customer and channel destocking, the company said.

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The Chemours Company (Chemours), a global chemistry company with leading market positions in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials, announced the appointment of Joseph Martinko as President, Thermal & Specialized Solutions (TSS), effective immediately, said the company.

Martinko was appointed interim leader on June 1 and stood out as the top candidate following an internal and external search.

"Joe has been a principal architect of the entire Opteon™ solutions portfolio and brings unmatched knowledge of our thermal management products, market, and customers to this role. In addition, having led the commercialization and market transition to low-GWP Opteon™ products for the mobile and stationary refrigeration and foam expansion markets, he knows what it takes to innovate in the space as we look for more sustainable solutions," said Mark Newman, Chemours President and Chief Executive Officer. "With Joe's deep commercial and regulatory experience and his proven track record, I have no doubt that the TSS team will continue to deliver strong financial performance and business growth under his leadership."

Martinko brings to the role over 30 years of expertise in the chemical industry, with more than 20 years of experience across TSS and Chemours’ legacy fluoroproducts business in a range of global market, product, and regional leadership roles. Before he was appointed to lead TSS, he served as the Sr. Business Director, Americas, a role in which he drove business strategy, delivered record-breaking financial performance, and built a high-performing team. Prior to that, Martinko has held various roles in the fluoroproducts business with responsibility for regulatory and advocacy, customer service, marketing, sales, technical service, asset strategy and product management. Before Chemours, Martinko worked for over 20 years with DuPont in various business leadership and manufacturing roles.

"The TSS business has a solid foundation upon which we will continue to build," said Joseph Martinko, President of Chemours Thermal & Specialized Solutions. "We have an industry-leading product portfolio, an exciting innovation pipeline, and a highly capable and resolute team that knows how to win. All of this ensures that we are well positioned for continued growth. I have every confidence in our TSS team's ability to continue executing our strategy and delivering strong business results."

We remind, Chemours Company has entered into a definitive agreement to sell its Glycolic Acid business for USD137 M in cash to PureTech Scientific, a company founded and backed by Iron Path Capital, a private equity firm focused on lower-middle market investments across the speciality industrial and healthcare sectors. The Chemours Company is a chemistry company with market positions in titanium technologies, thermal & specialized solutions, and advanced performance materials.

The Chemours Company is a global leader in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials providing its customers with solutions in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. We deliver customized solutions with a wide range of industrial and specialty chemicals products for markets, including coatings, plastics, refrigeration and air conditioning, transportation, semiconductor, and consumer electronics, general industrial, and oil and gas. Our flagship products are sold under prominent brands such as Ti-Pure™, Opteon™, Freon™, Teflon™, Viton™, Nafion™, and Krytox™. The company has approximately 6,600 employees and 29 manufacturing sites serving approximately 2,900 customers in approximately 120 countries. Chemours is headquartered in Wilmington, Delaware and is listed on the NYSE under the symbol CC.

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Dutch paints and coatings maker Akzo Nobel raised its annual profit outlook, supported by declining raw material costs and resilient demand, said Reuters.

"We expect the second half of the year to be slightly better than the first one, but not significantly better," CEO Gregoire Poux-Guillaume told Reuters. Poux-Guillaume said volumes were rising in anything linked to automotive, marine and air space, while the building and construction sectors were suffering more.

The maker of Dulux and Flexa paints raised its 2023 outlook for adjusted core earnings (EBITDA) to 1.4-1.55 billion euros ($1.55-$1.72 billion, with a midpoint slightly above analysts' consensus forecast of 1.44 billion. The shares were up 2.4% at 76 euros as of 1110 GMT.

Akzo said it saw the first benefits of easing raw material costs in the second quarter. "We saw raw materials starting to turn especially in the Coatings business, while in Decorative Paints they were still up," Chief Financial Officer Maarten de Vries said on a media call.

Paint makers passed on steep raw material costs to customers last year through price increases. Akzo's prices in the second quarter were up 5% from a year earlier, to offset wage and energy cost inflation, it said. Its adjusted EBITDA rose 18% to 397 million euros in the quarter, slightly below the 403 million expected by analysts.

Akzo, which has warned of volume weakness due to the uncertain economic situation, said volumes were better than expected in the first half, declining by 2%.

We remind, AkzoNobel has received approval to supply its water-based refinish products to Porsche China – currently one of the premium automotive brand’s biggest markets.


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U.S. crude stocks, gasoline and distillate inventories fell last week, the Energy Information Administration said, as per Hydrocarbonprocessing.

Crude inventories fell by 600,000 barrels in the last week to 456.8 million barrels, compared with analysts' expectations in a Reuters poll for a 2.3 million-barrel drop. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.6 million barrels in the last week, EIA said.

Refinery crude runs fell by 107,000 barrels per day in the last week, EIA said. Refinery utilization rates fell by 0.9 percentage points in the week.

U.S. gasoline stocks fell by 786,000 barrels in the week to 217.6 million barrels, the EIA said, compared with analysts' expectations in a Reuters poll for a 1.7 million-barrel drop.?

Distillate stockpiles, which include diesel and heating oil, fell by 245,000 barrels in the week to 117.9 million barrels, versus expectations for a 301,000-barrel drop, the EIA data showed. Net U.S. crude imports fell by 1.58 million barrels per day, EIA said.

We remind, Russia is considering limiting the number of companies allowed to export oil products in a bid to curb illegal exports of fuel intended for the domestic market. The Kommersant newspaper reported earlier that Russia was looking at creating a list of approved refiners to combat so-called "grey exports" of subsidised domestic fuel.

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North American chemical railcar traffic rose for the first time in 10 weeks, with loadings for the week ended 22 July up 1.3% year on year to 45,218, according to the freight rail data of Association of American Railroads.

In Canada, rail traffic continued to be affected by a strike from 1-13 July at the Vancouver and other west coast ports, as well as by ongoing wildfires in parts of the country.

Although port workers are back at their jobs, rail carrier Canadian National (CN) and manufacturing trade groups have warned it could take up to two months for logistics chains to normalise.

For the first 29 weeks of 2023 ended 22 July, North American chemical rail traffic was down 2.8% year on year to 1,307,547 - with the US down 4.0% to 901,353 loadings, and Canada down 1.3% to 381,075.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

We remind, North American chemical railcar traffic fell for a ninth straight week, with loadings for the week ended 15 July down 2.0% year on year to 44,025. The decline was led by a 10.8% drop in Canada where railways embargoed certain cargoes because of a port strike at Vancouver and other west coast ports. For the first 28 weeks of 2023 ended 15 July, North American chemical rail traffic was down 2.9% year on year to 1,262,326, with the US down 4.2%, to 870,044 loadings.

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