LANXESS remains on track despite the impact of the coronavirus crisis: Following the third quarter, the specialty chemicals company is confirming and narrowing the corridor for the guidance for 2020 and now expects EBITDA pre exceptionals for the full year to come in between EUR 820 million and EUR 880 million. Earnings were previously expected in the range of EUR 800 million to EUR 900 million.

 “We are continuing on course in the troubled waters of the coronavirus crisis and have specified our 2020 guidance. We want to deliver what we announced in spring. Given these volatile times and the many uncertainties, this is a great achievement of the entire LANXESS team and I am very proud of this,” said Matthias Zachert, Chairman of the Board of Management at LANXESS AG.

 LANXESS will be paying a special bonus for the extraordinary commitment of its employees during the coronavirus pandemic. “In particular, our colleagues at the plants played a crucial role in keeping our business running during the crisis,” said Zachert. “With this bonus, we would like to thank them and all the others who have made special contributions over the past months.” In total, LANXESS will distribute a high single-digit million euro amount. The amount of the payment varies from employee to employee. In Germany, the special bonus will be paid out in December. Different rules apply in the other countries.

 Coronavirus crisis affected business figures

 The coronavirus crisis continued to affect business figures in the third quarter. At EUR 193 million, EBITDA pre exceptionals was 28.3 percent down on the prior year’s figure of EUR 269 million. The EBITDA margin pre exceptionals declined to 13.2 percent, against 15.8 percent in the prior quarter. In addition to the pandemic, a planned major maintenance shutdown in Belgium, effects from reduced selling prices and adverse exchange rate effects, particularly relating to the U.S. dollar, burdened the result. By contrast, business in the Consumer Protection segment continued to develop well. There were also positive signals from the markets compared with the previous quarter.

 “In many businesses, we are seeing indications that things are taking a turn for the better. Demand in key customer industries, including the automotive sector, picked up again in comparison to the second quarter. China and the U.S., in particular, are providing positive stimuli,” said Zachert.

 Group sales amounted to EUR 1.461 billion, down 14.3 percent on the previous year’s figure of EUR 1.704 billion. Net income from continuing operations fell by 68.4 percent from EUR 79 million to EUR 25 million.

 Segments: Consumer Protection remains strong pillar

 Demand in the Advanced Intermediates segment stabilized in both business units compared with the second quarter, so that sales volumes almost reached the previous year’s level. However, given lower selling prices and negative exchange rate effects, sales and earnings were down year on year. Sales decreased by 14.4 percent from EUR 549 million to EUR 470 million. At EUR 65 million, EBITDA pre exceptionals was 28.6 percent lower than the prior year’s figure of EUR 91 million. The EBITDA margin pre exceptionals was 13.8 percent, against 16.6 percent in the prior year.

 The coronavirus pandemic continued to impact the Specialty Additives segment also in the third quarter. Sales volumes declined significantly, particularly due to lower demand from the automotive and aviation industries. Lower selling prices and negative exchange rate effects also had a negative impact. Sales fell by 18.5 percent from EUR 503 million to EUR 410 million. At EUR 65 million, EBITDA pre exceptionals was 33.0 percent lower than the prior year’s figure of EUR 97 million. The EBITDA margin pre exceptionals decreased from 19.3 percent to 15.9 percent.

 The Consumer Protection segment remained a strong pillar of the Group thanks to a strong agrochemicals business and good demand for disinfectants. In addition, the positive portfolio effect from the acquisition of the Brazilian biocide manufacturer IPEL offset adverse exchange rate effects. With EUR 278 million, sales were stable year on year. At EUR 59 million, EBITDA pre exceptionals was 7.3 percent higher than the prior year’s figure of EUR 55 million. The EBITDA margin pre exceptionals picked up to 21.2 percent, against 19.9 percent in the prior year.

 The Engineering Materials segment was impacted by weak demand in the automotive industry, particularly in Europe, although this did improve compared with the previous quarter. At EUR 285 million, sales were down 19.3 percent on the prior year’s figure of EUR 353 million, also due to lower selling prices and negative exchange rate effects. A planned major maintenance shutdown in Belgium weighed on EBITDA pre exceptionals, as did weak demand, prompting a 44.1 percent downturn in earnings from EUR 59 million to EUR 33 million. The EBITDA margin pre exceptionals of 11.6 percent was below the figure of 16.7 percent posted in the prior year.

 LANXESS continues to improve sustainability credentials

 After LANXESS announced a year ago that it would become climate neutral by 2040, the specialty chemicals company has now set itself new goals for sustainable water management. As part of its “Water Stewardship Program”, LANXESS will initially strengthen sustainable water management with specific local projects at four sites in the areas with the greatest water stress. The aim is to reduce absolute water withdrawal at these sites by 15 percent by 2023. The experience gained from these projects should help to further improve water performance globally.

 LANXESS has also improved its MSCI ESG rating from BBB to A. The climate strategy, the well-formulated principles of corporate governance and the robust efforts in the area of chemical safety have led to the improvement.

Nouryon, a leading supplier of organic peroxides and a developer of organic peroxide solutions, has formally announced the completion of capacity expansion of its organic peroxides manufacturing facility in Ningbo, China.

The company's production capacity for Perkadox 14 and Trigonox 101 organic peroxide products, which are crucial components for altering polymer characteristics and crosslinking rubbers and thermoplastics, has increased to 6,000 tonnes each as a result of this capacity expansion. Furthermore, by improving the qualities of recycled polypropylene (R-PP), these solutions can also allow consumers to employ recycled polymers in applications that were previously exclusive to virgin plastics.

Alain Rynwalt, Senior Vice President – Performance Materials, Nouryon, said, “Nouryon is a world leader in essential ingredients for the polymer industry and this expansion highlights our dedication to supporting our customers’ growth across the entire polymer cycle. Customer interest in improving the properties of recycled polypropylene continues to rise, in line with increased consumer awareness and more stringent regulations.”

Sobers Sethi, Senior Vice President – Emerging Markets and China, Nouryon, said, “Asia Pacific is a key region for Nouryon and our most recent expansion in China strengthens our supply position even more in this growing region. Our customers rely on our existing network of manufacturing facilities and innovative technologies, and we are pleased to build more capacity to meet growing customer demand around the world.”

Trinseo, a speciality materials solutions provider, has signed agreements to supply its polycarbonate technology license as well as all proprietary polycarbonate production equipment in Stade, Germany to Deepak Chem Tech Ltd, a wholly owned subsidiary of Deepak Nitrite Limited, a diversified chemical intermediates company based in Vadodara, Gujarat, India.

The combined deals are worth USD 52.5 million. Subject to significant milestones, the business anticipates receiving around USD 9 million by the end of 2024 and an additional USD 21 million in the first part of 2025. The firm has made the decision to leave Stade, Germany, with this disposal of the production assets.

Frank Bozich, President and Chief Executive Officer, Trinseo, said, “While Trinseo recently announced its decision to exit virgin polycarbonate production, our polycarbonate technology is highly valued and the manufacturing equipment in Stade, Germany, can be utilised in India by Deepak. These are the initial steps of a strategic, collaborative partnership with Deepak, as we explore additional opportunities to leverage our technology portfolio and expand in higher-growth areas such as India.”

China's butadiene exports have experienced significant growth in recent years, particularly in 2021 and 2024. According to Sublime China Information (SCI), this surge is primarily driven by supply constraints in key regions, including the US and Southeast Asia.

Export Volume and Price Trends

In 2021, China's butadiene exports reached a historic high due to a supply gap in the US market. According to SCI, this trend continued in 2024 as reduced deep-sea cargo shipments and production challenges in Southeast Asia further tightened global supplies. From January to September 2024, China's total butadiene exports surged by 111 percent year-over-year to approximately 120.8 kilo tonnes.

The average export price of butadiene has fluctuated over the past five years. In 2023, weak demand in South Korea and competition from deep-sea cargoes led to a significant decline in export prices. However, in 2024, supply shortages from key regions drove prices to a five-year high. As of September 2024, the average export price reached USD 1,391 per metric ton, a 35 percent month-over-month increase, added SCI.

Export Destinations and Regional Dynamics

The majority of China's butadiene exports are directed to South Korea and Taiwan. In 2024, South Korea accounted for 74 percent of total exports, a significant increase from the previous year. This surge was driven by factors such as limited domestic supply and increased demand for spot butadiene.

While China's butadiene exports have been strong, the long-term potential for significant growth in deep-sea exports remains limited due to established supply chains and regional demand dynamics. Most of China's exports are currently concentrated in Northeast Asia, with limited opportunities for expansion into other regions.

Future Outlook

SCI added that 2025 China's butadiene supply is expected to be relatively sufficient, and export volumes may increase further. However, the sustained growth of exports will depend on various factors, including downstream demand in key markets, the availability of deep-sea cargoes, and the development of new production capacities in other regions.

Despite these uncertainties, China's butadiene industry is well-positioned to capitalize on global supply-demand imbalances and continue to play a significant role in the global market.

Cabot Corporation, a global speciality chemicals and performance materials company, has announced through an official statement that it will raise prices globally for carbon black products sold by its speciality carbons business. The price rise will be global and will come into effect for all shipments on or after 1 December 2024, or as contracts allow.

The company claims that the price rise is necessary owing to the impact of inflation on labour, maintenance and other production activities, as well as supply chain-related expenditures. The price increase will vary depending on the product and region.

The statement further elaborates that these price adjustments will help the company remain a dependable, long-term provider of high-quality products and services to its consumers. Cabot also underlined its commitment to guaranteeing supply security and the best service standards for its clients, as well as providing technological and process improvements and moving forward with its environmental goals.