Issue 9/2021 - Global Chemicals Quick Review

Analysts are optimistic about the earnings of US chemical companies in 2021

Given strong demand for major chemicals and tight supply, Wall Street analysts are bullish on U.
S.
chemical companies' earnings in 2021, with one raising its earnings forecast
for 10 of the 16 companies in the chemical sector.
Hassan Ahmed, an analyst at Alembic Global Advisors, said product price increases are expected to outpace raw material cost inflation
in 2021.
U.
S.
-based PPG announced that first-quarter net sales rose 15 percent from a year earlier, beating initial expectations
.
Ahmed said the ability to pass on raw material costs to consumers is driving strong margin growth
for some chemicals from a year earlier.
Affected by a rebound in demand and production disruptions, most bulk chemical prices increased year-on-year in the first quarter of 2021, with polyethylene contract prices up 50.
8% year-on-year and ethylene contract prices up 68.
9%
year-on-year.

Petrochemical projects in the next five years will boost Saudi Arabia's oil and gas industry

According to GlobalData, Saudi Arabia's petrochemical projects are expected to account for 61% of its total number of projects starting operations over the next five years, which will boost its oil and gas industry
.
This represents 61%
of the total number of projects expected to start operations by 2025.
GlobalData said in its report, Middle East Oil and Gas Project Outlook to 2025, of these projects, new construction accounted for 84%, the rest were expansion projects, petrochemical projects numbered 50, midstream projects 18, refinery projects 8 and upstream (oil and gas field) projects 6.

Among Saudi Arabia's upcoming petrochemical projects to come on stream in Saudi Arabia, Saudi Aramco's Jubail ethylene plant is a large-scale project with a capacity of 1.
5 million mt/year and a cost of $1.
6 billion
, GlobalData said.
The plant supplies feedstock
to other petrochemical and specialty chemicals companies in Jubail Industrial City.

South Korea's base oil exports rebounded sharply

Data released by the Korea Customs Administration showed that South Korea's base oil exports and export value in March were the highest since January last year, and the export value was much higher than the same period last year
.
In March, South Korea's base oil exports were 418459 tonnes, up 9% from the same period last year; The export value was 358.
6 million US dollars, an increase of 45%
over the same period last year.
In the first quarter of this year, South Korea's base oil exports were 1.
15 million tons, slightly higher than the 1.
13 million tons in the same period last year; Exports amounted to US$908.
1 million, an increase of 19%
over the same period last year.
South Korea is one of the world's largest base oil exporters, with most of its production sold to markets around the world, generating significant profits for the country's refiners, including SK Lubricants, S-Oil, GS Caltex and Hyundai Shell base oils
.

U.
S.
renewable diesel production capacity will grow rapidly in the coming years

At the end of 2020, there were four renewable diesel plants operating in the United States with a total capacity of 553 million gallons per year
.
Six other plants are being expanded or under construction and will be put into operation in 1~2 years, adding 2 billion gallons per year
.
In addition, at least five more projects are planned
.
If these planned projects are implemented, there will be 15 renewable diesel plants in the United States, with a total designed capacity of 5.
5 billion gallons per year
.
Companies involved in the conversion of large-scale refineries into renewable diesel production facilities and the construction of new renewable diesel production facilities include well-known companies such as Marathon Petroleum and Valero Energy, biodiesel producers, Renewable Energy Group (REG) and World Energy, as well as refiners CVR Energy, HollyFrontier Corp.
and Phillips 66
.