INEOS Group Holdings S. A.* has released the Q2 2020 results, reporting a gross profit decrease of €296.4 million or about 56.1% to €231.9 million in April—June 2020 versus €528.3 million in the same period last year. The drop resulted from weaker sales, lower margins and higher inventory holding losses.

The EBITDAE of the Olefins & Polymers (O&P) North America segment decreased at an annualised rate of €86.6 million or 45.7% to €102.8 million in April—June 2020. The scheduled turnaround of one of the Chocolate Bayou-based crackers accounted for about €40 million of the decrease. As the North American ethylene (O&P) market generally remained glutted in Q2 2020, lower demand and prices dampened margins then. Larger propylene sales led to a year-on-year rise in the aggregate olefins ones.

   The EBITDAE of the O&P Europe segment tumbled by €105.4 million or 69.9% on an annualised basis to €45.3 million in April—June 2020. The olefin business was suffering from reduced demand in the quarter as a result of the COVID-19 disruptions. Butadiene prices decreased the most compared to the same period of 2019 due to the automotive market collapse. The other olefin segments also saw a year-on-year price reduction mainly because of oversupply and weaker demand. Besides, one of the Cologne-based crackers was under maintenance in Q2 2020, which made about a €25 million dent in the earnings. Higher margins of the polymer business, which benefitted from strong demand from the consumables market, its healthcare and food packaging segments especially, partially offset the losses.

   Phenol and acetone sales were poorer in Q2 2020 than in the same period of 2019 amid a demand drop exacerbated by the global COVID-19 pandemic. Selling prices were following those for raw materials. So, phenol depreciated by 44% roughly compared to last year in April—June 2020 in the wake of a sharp decline in benzene prices, and acetone prices plunged 24%, following a downtrend in the propylene market.

 * - The Group’s statement covers three business segments: O&P North America, O&P Europe and Chemical Intermediates.

Austria’s OMV Aktiengesellschaft has released its Q2 2020 results and adjusted the outlook for the rest of 2020. The company has reported that the contribution of the petrochemicals business fell by 47% year on year from €78 million to €41 million in that period. While ethylene/propylene net margins dropped moderately, benzene and butadiene spreads narrowed sharply. Still, crackers were running at around 90% capacity.

The contribution of Borealis decreased by €94 million to €24 million in April—June 2020 versus last year’s €118 million due to an ineffective inventory valuation, an unplanned outage of the cracker in Stenungsund, Sweden, and a shrinking advantage of light feedstock over naphtha. Polyolefin sales were stable as pickup in demand from the healthcare and the packaging sectors almost offset a drop in that from the automotive and the construction ones. Unfavourable market conditions in Asia and local appreciation of naphtha, which nullified the advantage of ethane processing, worsened performance of Borouge, a joint venture between Abu Dhabi National Oil Company and Borealis based in the UAE whose marketing and sales head office is located in Singapore.

   The company forecast that its petrochemical margins will be level with the last year’s results of €433/t, but now, it expects them to be somewhat below that figure.

   As for the upstream sector, a producer has reported that refineries were operating at a relatively resilient level of 79% capacity in Q2 2020 versus the Q2 2019 figure of 96%, partly owing to the company’s ability to switch from jet fuel to petrochemical production. The refinery in Schwechat, Austria, was under repair in June. OMV expects that the utilisation rate of the European refineries, which was at 97% in 2019, will be at around 85% this year. However, the previously forecast figure was around 80%. The company planned no major TARs at its refineries in Europe for the rest of 2020.

On 22 June, the Interdepartmental Commission on International Trade (ICIT) of Ukraine reversed the resolution on introduction of preliminary safeguard measures against import of polymers into Ukraine irrespective of their country of origin and export dated 22 May. Among other things, it imposed an 18% duty on HDPE and PVC imports in support of domestic production as interests of some HDPE and PVC converters were disregarded and Ukrainian plants produce a limited range of PE and PVC grades, domestic supply is inadequate for the needs of all the converters in the country. Therefore, a lawsuit was filed in the county administrative court of Kyiv City to either revise or overturn the ruling.

As a result, another resolution imposing different safeguard measures against polymers import into Ukraine was released on 22 June.

Now, they apply to:

— suspension PVC, but not its emulsion and microsuspension varieties, with the K value between 59 and 72 (such value is specified in certification documents) that can be classified under the HS code of 3904 10 00 00

— white PE granules of 2—5 mm in diameter, 0.94 g/cm in relative density and 5—17 g/10 min in MFI at 21.6 kgf, or 0.34—0.37 g/10 min in MFI at 5 kgf, or 0.06—0.08 g/10 min in MFI at 2.16 kgf that can be classified under the HS code of 3901 20 90 00.

The preliminary measures will be in effect for 190 days from the date when the law imposing the 18% duty on these polymers is enacted.