Dulux maker Akzo Nobel lifts outlook on easing raw material costs

Dulux maker Akzo Nobel lifts outlook on easing raw material costs

MOSCOW (MRC) -- 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, fuel stockpiles fell last week

U.S. crude, fuel stockpiles fell last week

MOSCOW (MRC) -- 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

North American chemical railcar traffic rose

MOSCOW (MRC) -- 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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China hugely boosts crude stockpiling on cheap Russian oil

China hugely boosts crude stockpiling on cheap Russian oil

MOSCOW (MRC) -- China boosted its stockpiling of crude oil to the highest level in three years in June, taking advantage of cheap Russian crude to bolster inventories and add flexibility to future import requirements, said Reuters.

The world's biggest oil importer added 2.1 million barrels per day (bpd) to commercial or strategic stockpiles in June, according to calculations based on official data.

This was up from the 1.77 million bpd added in May and the most since June 2020, when imports surged as Chinese refiners lifted imports as crude prices slumped to the lowest in three decades as global demand collapsed during the initial stages of the COVID-19 pandemic.

China doesn't disclose the volumes of crude flowing into or out of strategic and commercial stockpiles, but an estimate can be made by deducting the amount of crude processed from the total of crude available from imports and domestic output.

China's refiners processed 60.95 million metric tons in June, equivalent to 14.83 million bpd, according to data released on July 17 by the National Bureau of Statistics. This was up 10.2% from the same month in 2022, and was the second-highest monthly total, eclipsed only by the 14.91 million bpd in March.

The volume of crude available to refiners was 16.93 million bpd, consisting of imports of 12.67 million bpd and domestic output of 4.26 million bpd. Subtracting the refinery throughput from the total crude available leaves a surplus of 2.1 million bpd that was available for storage.

Over the first five months of the year China has added about 950,000 bpd to inventories, an increase of 28% from the 740,000 bpd added over 2022 as a whole. What the storage numbers show is that China has been building up ample stockpiles in the first half of the year, even as refinery processing has increased.

The question for the market is what will Chinese refiners do with all the extra oil in their storage tanks, and the answer is likely to be largely dependent on what happens to global prices. The prevailing market narrative for 2023 so far has been widespread expectations of a strong rise in global crude demand, led by China, and especially in the second half of the year.

The International Energy Agency trimmed its forecast for global demand growth to 2.2 million bpd in 2023 on July 13, down 220,000 bpd from its prior estimate, citing economic headwinds. However, growth of 2.2 million bpd is still robust and implies a substantial tightening of the oil market in the second half.

The OPEC+ group of producers, led by Saudi Arabia and Russia, has been cutting output in efforts it describes as moves to stabilize the market, although it's widely believed the exporting alliance aims to keep oil prices at least $75 a barrel, if not higher.

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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Dioxycle raises USD17 MM to help develop green ethylene

Dioxycle raises USD17 MM to help develop green ethylene

MOSCOW (MRC) -- French-U.S. climate tech start-up Dioxycle said it has raised USD17 MM in funding to help develop sustainable ethylene from recycled carbon emissions, said Reuters.

The raise comes as investors increasingly look to profit from steps to green high-emitting but hard-to-abate sectors across industry that will be crucial for the world to hit its climate goal but which have, to date, received less capital.

The Series A round was co-led by venture capital firms Lowercarbon Capital and Breakthrough Energy Ventures Europe, with participation from Gigascale Capital, it said in a statement. "Global ethylene supply chains face two critical problems: dependence on volatile fossil fuels and highly centralized production. Dioxycle is solving both of those problems at the same time," said Clea Kolster, partner at Lowercarbon Capital.

Launched in 2021, Dioxycle aims to make the chemical, used widely in the production of textiles and plastics, at a price equal to or lower than the current cost of production from fossil fuels, a market it says is worth USD180 bn. As the world's most used organic chemical, removing fossil fuels from its production would cut global carbon emissions by 800 million tons a year, or more than 2% of the world's annual output, it said.

Using a low-temperature electrolyzer, the company said it is able to extract chemicals including ethylene from carbon emissions, water and renewable electricity. Going forward, the company would look to expand its product range, it added. It intends to use the money raised to build its first on-site demonstration project and an industrial prototype.

"Dioxycle is the most exciting electrolysis-based carbon capture and utilization company we have come across," said Carmichael Roberts of Breakthrough Energy Ventures. "The team has developed a low-temp electrolyzer to convert carbon emissions into commodity chemicals with impressive economics unlocking the potential to disrupt the $5 T-plus commodity chemical & fuel industry."

We remind, Britain is sticking to its plan to ban the sale of new petrol and diesel cars from 2030 but some measures to reduce the carbon footprint of residential homes will be relaxed. Britain's green agenda has been thrown into question after the governing Conservatives won a vote for a parliamentary seat last week by attacking London's flagship anti-pollution policy. That risks sparking uncertainty for companies producing everything from electric vehicle infrastructure to heat pumps at a time when the United States and European Union are seeking to spur investment and decarbonize their economies.

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