Kem One Ceases Caustic Production in France Due to Profitability Issues

Kem One, a significant player in the chemical industry, has made a strategic decision to temporarily suspend operations at its chlorine and caustic soda production facilities in France, said Chemanalyst.

This move is driven by the persistent issue of low profitability that the company has been grappling with. Kem One has announced that this shutdown is expected to endure for several months, reflecting the need to navigate through turbulent economic conditions.

The primary impetus behind this challenging decision stems from the continuous deterioration of market conditions within the processing sector. Kem One has observed a disconcerting absence of signs pointing to a swift recovery in demand, while the prevailing dynamics in the market are posing considerable challenges to the profit margins of European producers.

Over the preceding months, Kem One has witnessed a significant reduction in its production output, with figures showing that it has nearly halved. This substantial drop in production can be largely attributed to reduced demand for construction-related products and chemicals across the industry. To underscore the gravity of the situation, recent data from Eurochlor, an industry organization dedicated to chlorine production, reveals that capacity utilization for chlor-alkali products across Europe in the year 2023 is anticipated to reach historically low levels.

Kem One's presence in the French chemical industry is marked by two major production facilities. The first is located in Lavera, with an annual capacity of 341,382 tonnes of chlorine and 333,373 tonnes of caustic soda. The second is situated in Fos, boasting a capacity of 635,710 tonnes of chlorine and a substantial 2,202,200 tonnes of caustic soda per year.

Prior to this recent development, it was reported that Kem One, recognized as the third-largest producer of PVC (polyvinyl chloride) in Europe, faced an unscheduled shutdown of its caustic and chlorine production operations in St. Fons, France, in February. This unexpected disruption was triggered by a technical malfunction at the Kem One plant in Saint-Fons, which resulted in a production hiatus lasting for nine days.

The decisions taken by Kem One highlight the intricate and dynamic nature of the chemical and processing industry, where factors such as profitability and market conditions hold a pivotal role in shaping operational strategies. These actions undertaken by Kem One reflect the continuous challenges faced by the sector and underscore the company's commitment to adapting to the ever-evolving economic landscape.

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BASF and 3Helix Inc., a U.S.-based technology start-up, announce their innovation partnership on 3Helix’s proprietary CHP technology, said the company.

The partnership involves an equity investment and licensing agreement, granting BASF exclusive rights to commercialize CHP solutions for the personal care field.

3Helix's patented CHP technology is based on short, single-stranded collagen-like peptides that have the unique ability to bind to damaged and denatured collagen, enabling extraordinary anti-aging claims.

The partnership comes after successful research and development work by 3Helix, which has seen their CHP technology quickly progress from laboratory scale to pilot stage. Recognizing the immense potential of this technology, BASF plans to bring it in-house and aims to launch initial CHP solutions in 2025.

Since its establishment in 2015, 3Helix has focused on developing an innovative technology platform to target damaged collagen for various applications, including personal care.

“It has been an exciting journey to bring our technology to this point where we can partner with BASF,” states Mike Kirkness, CEO of 3Helix Inc. “We look forward to the intense collaboration in the coming years and welcome BASF to the 3Helix Board of Directors.”

“With this partnership, BASF continues to demonstrate our investment in open innovation and expand our innovative offerings to our customers,” said Dr. Marina Safont Sempere, Director of New Business Models & Digital Officer, Care Chemicals at BASF. “3Helix’s results from laboratory trials are very encouraging and show the potential of this new innovation for the personal care market.”

The partnership between BASF and 3Helix is a further example of how BASF’s Care Chemicals Division is addressing future challenges.

We remind, BASF posted a 57.3% drop on earnings before interest and taxation (EBIT) and a 28.3% drop in sales in the third quarter, due to considerably lower prices and lower volumes. For Q4, BASF expects global chemical production to further stabilise, while the macroeconomic outlook remains extremely uncertain in the current interest rate policy environment and in view of increasing geopolitical risks. The company also said that rising raw materials prices in particular could weigh on demand and margins.

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Integrated nylon 6 producer AdvanSix on Friday reported a third-quarter net loss of $8m, compared with net income of $10m in Q3 2022, said the company.

Sales fell 32.6% year on year to $323m while total costs and expenses fell only 28.6% and came in higher than sales.

Sales fell as market-based pricing was unfavourable by 24%, primarily reflecting reduced ammonium sulphate (AS) pricing amid lower raw material input costs and a more stable global nitrogen supply environment.
Nylon pricing was unfavourable due to tough supply and demand conditions.
Raw material pass-through pricing was unfavourable by 8% as a result of a net cost decrease in benzene and propylene.
Overall sales volume decreased about 1%.

AS is a by-product of AdvanSix’s integrated production process. Benzene and propylene are inputs to cumene, which is a key feedstock for the company's products.

We remind, US integrated nylon producer AdvanSix has ended its alliance with biaxially oriented polyamide (BOPA) film maker Oben Group but will continue to support Oben as a resin supplier. Under the alliance, formed in 2019, Oben took on the role of producing BOPA film while AdvanSix managed its commercialisation and distribution in the US and Canada.

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China's PetroChina is proposing to buy up to 8 million barrels a month of Venezuelan crude from state-run oil company PDVSA, according to four people familiar with the matter, hoping to resume a trade suspended four years ago by U.S. sanctions, said Hydrocarbonprocessing.

In October, the U.S. Treasury Department temporarily lifted the sanctions, paving the way for Venezuela to resume exporting crude, gas and fuel to its best customers. Washington has said the six-month reprieve hinges on Venezuela's government embracing a fair and open presidential election next year.

Since the measures were relaxed, some companies that had acquired Venezuelan oil prior to sanctions have sought to revive those deals. PetroChina, China's second-largest oil refiner, has offered yuan payment for about 265,000 barrels per day (bpd) of Venezuelan crude through its joint ventures with PDVSA, which would allow them to rebuild cashflow and capital for production investment, two of the sources said.

"They are working on it," said a person close to PetroChina. The company before sanctions was taking up to six 2 million-barrel cargoes of Venezuelan oil per month. PDVSA and PetroChina did not immediately reply to requests for comment.

Following the U.S. measures, China's government called for a total lifting of sanctions on Venezuela. President Nicolas Maduro traveled with a large delegation to China in September to re-launch bilateral trade, with a heavy emphasis on restoring direct energy trade.

We remind, Petrochina Guangxi has entered into a license agreement with Grace to use its Unipol PP technology for its new 400 kilotons per annum single reactor line in China. With this move, Petrochina Guangxi aims to deliver higher value PP products to the local market. Grace has announced the signing of a new license with Petrochina Guangxi to develop a 400-kilotons per annum single reactor line using its Unipol PP technology.

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Nigeria's state oil firm NNPC Ltd will supply the new 650,000-bpd Dangote oil refinery with up to six cargoes of crude oil in December to be used in test runs, three industry sources with knowledge of the matter said, as per Hydrocarbonprocessing.

The refinery, funded by Africa's richest man, Aliko Dangote, will transform oil trading in the Atlantic Basin and remove a lucrative outlet for fuels produced in Europe and the United States that have for years powered the cars, trucks and generators on the continent.

The refinery is in the Lekki free trade zone near Lagos. Once it is fully up and running, it will turn oil powerhouse Nigeria into a net exporter of fuels, a long-sought goal for the OPEC member that is currently almost totally reliant on imports.

One of the sources, an NNPC official, who declined to be named, specified six cargoes, or 200,000 bpd, would be supplied in December as part of a one-year deal, adding that volumes in future months would be supplied "based on mutual agreement and availability".

The other sources said about 4-5 cargoes, or at least 130,000 bpd, were planned. A Dangote Group official, who did not wish to be named, said "some of the agreements have confidentiality clauses" without elaborating when asked about the NNPC supply deal.

The NNPC official said gasoline and diesel purchases from the refinery would be negotiated in separate contracts at a later date. NNPC has a 20% stake in the refinery. The refinery began the commissioning process in May this year after running years behind schedule at a cost of $19 billion, above initial estimates of $12-14 billion.

Commissioning includes testing the different units that make products from gasoline to diesel and making sure they respond to the control panels. Experts say it can take months for refineries to move from test runs to producing high-quality fuels at full capacity.

We remind, Seaborne diesel and gasoil exports from Russian ports fell 11% in October from a month earlier to about 2.55 MMt due to major maintenance work at refineries and a fuel export ban, data from traders and LSEG showed. Idle primary oil refining capacity for October stood at 4.915 million tons, down by around 1.9% from September, according to Reuters calculations.

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