SIBUR begins construction of R&D center in Kazan

SIBUR begins construction of R&D center in Kazan

SIBUR began construction of a research and technology scaling center in Kazan, which will provide for a full cycle of creating new synthetic materials for key sectors of the Russian economy, the company's press service said in a statement.

The key areas of operation for SIBUR's R&D center will be the development and scaling of new polyolefin and heterogeneous catalysts, synthesis and piloting of new products for the development of the company's existing chains and creation of fundamentally new materials, process modeling and engineering, development of new technologies, implementation of projects aimed at decarbonization, a closed cycle economy and digital initiatives.

"The center will combine two key areas - development of new products and technologies in the field of oil and gas chemistry with scaling to industrial applications. One of the main focuses of the new center will be the development of new materials, including superstructural plastics to meet the prospective and import substitution demand in medicine, construction, automotive and other industries," the statement said.

SIBUR expects that combining laboratory research and the ability to immediately pilot the results obtained at one site will accelerate the pace of development by 25%.

The capabilities of the center will create a platform for R&D development, further localization of all catalysts in demand in oil and gas chemistry and independent creation of new generations of these catalysts. Another important area of the new center's work will be the development of technologies for chemical recycling of polymers, which will make it possible to recycle polymer waste into primary raw materials without limiting its use.

The company will invest 8-10 billion rubles in the R&D center, head of the holding Mikhail Karisalov told reporters in Kazan.

The buildings of the R&D center will be integrated into SIBUR's business district in Kazan, which is being created in close proximity to Kazanorgsintez . The center will become a part of the Northern Gate industrial park, creation of which was specified in an agreement Kazanorgsintez signed earlier in February with the Alabuga special economic zone.

The R&D center project envisages construction of two buildings with a total area of more than 18,000 square meters, of which laboratory space and pilot units will comprise 10,000 square meters. SIBUR plans to complete construction and open the center in 2026.

We remind, SIBUR, Russia's largest producer of polymers and rubbers, summarised the company's key operational results for 2023 at the Ruplastica international trade fair, which was held in Moscow on 23–26 January 2024. In 2023, SIBUR ramped up the sales of its key products, with the share of supplies to the Russian market rising to 75%. Since 2021, SIBUR has been consistently increasing its sales in the domestic market, which is the Company's priority, by reducing export sales and continues to stimulate further growth in local polymer processing and reducing imports of finished polymer products.

Orbia posts loss on weakness in PVC markets

Orbia posts loss on weakness in PVC markets

Mexico's Orbia has decided to put a pause on the expansion plans for its polyvinyl chloride (PVC) production capacity due to a challenging market situation that adversely impacted its profits in 2023, said Chemanalyst.

The company's polymer division, which includes PVC, faced a substantial setback in the fourth quarter of the previous year, reporting a 54% year-on-year decline in earnings before interest, taxes, depreciation, and amortization (EBITDA), amounting to USD47 million. Additionally, sales within this division experienced a 21% year-on-year decrease, reaching USD577 million.

The overall decline in total revenue for the October-December 2023 period was primarily attributed to reduced sales volumes and prices for both specialty PVC and caustic soda. This downturn was a consequence of weak demand and oversupply prevailing in the market. Notably, PVC production also witnessed a decline due to planned repairs and associated delays at the ethylene joint venture during this timeframe.

In 2022, Orbia's CEO, Samir Bharadwaj, had previously indicated the company's contemplation of expanding PVC production. The expansion project was expected to be completed either in 2027 or 2028, following the conclusion of the design phase at the end of 2023. However, the unfavorable market conditions and the significant drop in earnings from the Polymers division, constituting approximately a third of Orbia's total sales, prompted a reevaluation of these expansion plans.

The challenges faced by the Polymers division, especially the decline in PVC production and earnings, had a cascading effect on Orbia's overall financial performance in the last year. The company's consolidated net loss in the fourth quarter widened to USD71 million, marking a substantial increase. Furthermore, the net profit for the entire year witnessed an 89% decrease, reflecting the broader impact of the challenging market dynamics on Orbia's financial health.

The decision to suspend the expansion of PVC production aligns with Orbia's strategic response to navigate the current market uncertainties and optimize its resources for sustained profitability. By reevaluating and pausing expansion plans, the company aims to reassess market conditions, address operational challenges, and strategically position itself for future growth opportunities.

Orbia's proactive approach to managing its PVC production capacity reflects the resilience and adaptability required in a dynamic market environment. As the company recalibrates its strategies, it remains focused on enhancing operational efficiency, responding to market fluctuations, and making informed decisions to safeguard its financial well-being. This strategic pause underscores Orbia's commitment to responsible business practices and its dedication to ensuring long-term sustainability in the face of evolving market challenges.

Biden announces new anti-Russian sanctions

U.S. President Joe Biden on Friday announced more than 500 new sanctions against Russia, including measures targeting Russia's financial sector and defense industry, the White House said on February 23, said Interfax.

"Today, I am announcing more than 500 new sanctions against Russia. These sanctions will target [...] Russia's financial sector, defense industrial base, procurement networks and sanctions evaders," Biden said in a statement published by the White House.

The U.S. is introducing new export restrictions against around 100 enterprises that support Russia's defense industry, he said.

"We are taking action to further reduce Russia's energy revenues," Biden said.

We remind, imports of polymer feedstock to Russia may grow in 2024, Petr Bazunov, General Director of the Russian Plastics Processors Association (RPPA). A number of processors in our Association have decided to increase imports, as imported raw materials in Russia are sold at prices equal or close to those of SIBUR. The principle of import parity or so-called netbacks is in effect. Refiners choose the raw materials that are more profitable for them.

BASF’s financial strength supports proposed stable dividend share for the 2023 business year

In a market environment shaped by economic uncertainty, BASF Group reported sales of €68.9 billion in the 2023 business year, compared with €87.3 billion in the previous year, said the company.

This sales development was mainly driven by considerably lower prices and volumes. Lower raw materials prices in particular led to lower prices in almost all segments. Sales volumes fell in all segments as a result of weak demand from many customer industries. Nevertheless, BASF demonstrated economic strength with cash flows from operating activities rising 5.2 percent year on year to reach €8.1 billion. The company had already released preliminary figures for the full year 2023 on January 19, 2024.

Today, Dr. Martin Brudermuller, Chairman of the Board of Executive Directors of BASF, and Dr. Dirk Elvermann, Chief Financial Officer, presented the 2023 business development in detail and announced a further program for the Ludwigshafen site with additional annual cost savings of €1 billion by the end of 2026. This is in addition to the existing cost savings program in non-production units with a focus on Europe and the adaptation of production structures in Ludwigshafen.

We remind, BASF is utilizing its extensive global expertise in chemical recycling, employing pyrolysis technology known as ChemCycling, to introduce International Sustainability and Carbon Certification (ISCC) Plus certified "Ccycled" materials sourced from the BASF TotalEnergies Petrochemicals facility located in Port Arthur, Texas, said the company. This facility operates as a joint venture between BASF and TotalEnergies, with a ownership split of 60/40 respectively, with TotalEnergies headquartered in France.

Vitol Bunkers takes delivery of first biofuel barge in Asia

Vitol Bunkers takes delivery of first biofuel barge in Asia

Vitol Bunkers has taken delivery of the marine future, its first specialized bunker barge in Singapore, strengthening its position in Asia’s expanding biofuel bunker market, said Hydrocarbonprocessing.

The addition of this specialized IMO type 2 notation bunker tanker to the V-Bunkers fleet will uniquely make it possible to supply biofuel blends including B24, B30 and up to B100, depending on customer specifications.

Built in China, Marine Future is 102.6 m in length and has the capacity to carry about 7,000 MMt of biofuels.

The current fleet of bunker tankers in Singapore are classified as oil tankers and are therefore restricted to a maximum of 25% bio component in biofuel blends. This new bunker tanker has no such restriction, hence can deliver bunker fuels consisting of 100% bio component (B100).

Biofuels are a key pathway for the hard-to-abate shipping sector to mitigate emissions. Biofuel sales in Singapore reached 520,000 tons in 2023 according to the Maritime and Port Authority of Singapore (MPA), representing a material increase on the prior year where volumes were 140,000 tons.

“We are delighted to now be able to offer our maritime customers the option to take up to 100% bio component bunker fuel here in Singapore and play our part in advancing the port’s decarbonization efforts. Should there be demand, this vessel can also be re-configured in future to supply methanol,” said Mike Muller, head of Vitol Asia.

We remind, Trading house Vitol has bought the first naphtha cargo produced for export by Nigeria's new 650,000-bpd Dangote oil refinery. Dangote issued a tender to sell the 60,000 metric ton cargo earlier this month for Feb. 23-29 loading. Vitol declined to comment.