The Urethane Blog
Everchem Updates
VOLUME XXI
September 14, 2023
Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: — read more
January 28, 2021
Dow reports fourth quarter 2020 results; Double Digit Sales Growth in Polyurethanes
Thu January 28, 2021 6:00 AM|Business Wire|About: DOW
MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):
FINANCIAL HIGHLIGHTS
- GAAP earnings per share was $1.65; Operating EPS¹ was $0.81, excluding significant items in the quarter totaling $0.84 per share, primarily related to a gain on the sale of certain U.S. Gulf Coast marine and terminal operations and assets, as well as a gain associated with a legal matter.
- Net sales were $10.7 billion, up 5% versus the year-ago period, with increased local prices, currency and volume. Dow’s fourth quarter sales increased 10% versus the prior quarter as the global economic recovery continued.
- Local price increased 2% versus the year-ago period, primarily driven by improved pricing in polyethylene and polyurethane applications. Currency increased sales by 2%. Sequentially, price increased 8% with improvements in all segments.
- Volume increased 1% versus the year-ago period, reaching pre-pandemic volume levels in all operating segments. The year-over-year increase was led by demand growth in Packaging & Specialty Plastics and Performance Materials & Coatings. Compared to the prior quarter, volume increased 2% with gains in Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and in all regions, driven by strong supply and demand fundamentals.
- Equity earnings were $106 million, up $127 million compared to the year-ago period, primarily driven by continued improvement in financial results at the Sadara joint venture.
- GAAP Net Income was $1.3 billion. Operating EBIT1 was $1.1 billion, up from $1.0 billion in the year-ago period due to margin expansion in polyethylene and polyurethane applications.
- Cash provided by operating activities – continuing ops. was $1.7 billion and free cash flow1 was $1.4 billion. Working capital was a $236 million source of cash despite increased sales. Free cash flow for the year was $5 billion, up $1.2 billion over the prior year. Cash conversion1 in the quarter was 93%, leading to a full-year rate of 112%, a 30% improvement over the prior year.
- Dividend returns to shareholders totaled $519 million in the quarter.
- Total cash and available committed liquidity at quarter-end was $14.6 billion, an increase of $3.9 billion over the year-ago period.
- Net debt1 was reduced by $837 million in the quarter, resulting in a total net debt improvement of more than $2.6 billion in 2020. The Company continues to have no substantive long-term debt maturities due until the second half of 2024.
- Dow completed the sale of select U.S. Gulf Coast marine and terminal operations and assets, receiving cash proceeds of $620 million in the quarter.
- Sadara reached agreement in principle on key terms for its debt reprofiling with all remaining lenders in January 2021, supporting the joint venture’s path toward cash flow self-sufficiency.
CEO QUOTE
Jim Fitterling, Dow’s chairman and chief executive officer, commented on the quarter:
“The Dow team delivered top- and bottom-line growth in the fourth quarter, reaching pre-pandemic levels across most businesses as the economic recovery continued to gain traction. Our consumer-led portfolio and ongoing focus on capturing demand drove year-over-year volume growth in every region and segment, as well as sequential price and margin expansion across the portfolio.
“We delivered free cash flow of $5 billion for the year, and further improved our cash conversion rate by 30 percent. This focus on cash flow generation, coupled with our execution of key strategic cash levers such as the sale of select U.S. Gulf Coast marine and terminal assets, enabled additional deleveraging in the quarter as we reduced total net debt by more than $2.6 billion for the year. And we also achieved a significant milestone for Sadara by reaching agreement in principle with the lenders on its debt reprofiling. This was a strong finish to a year where the Dow team capably overcame significant macroeconomic and other external challenges. I am confident about our path forward for 2021 and beyond.”
Industrial Intermediates & Infrastructure net sales were $3.5 billion, up 8% versus the year-ago period. Local price improved 6%, primarily driven by significant increases in consumer goods and appliances. Currency increased net sales by 2%. Volume was resilient with growth from strong construction and durable goods demand, offset by downward pressure from supply limitations. On a sequential basis, the segment recorded a net sales increase of 14%, driven by significant price improvement in polyurethanes and robust demand in Industrial Solutions in line with the macroeconomic recovery.
Equity earnings for the segment were $36 million, an increase of $81 million compared to equity losses of $45 million in the year-ago period, driven by margin expansion at Sadara.
Operating EBIT was $296 million, compared to $221 million in the year-ago period due to strong supply and demand fundamentals in Polyurethanes & Construction Chemicals and at Sadara. Sequentially, the segment increased Op. EBIT by $192 million driven by significant improvement in margin-over-raw material costs across both businesses.
Polyurethanes & Construction Chemicals reported a double-digit net sales increase compared to the year-ago period, primarily due to significantly higher local prices in polyurethane applications, with improvements in all regions except Latin America. Demand recovery in Europe, Middle East, Africa and India (EMEAI) and Latin America, particularly in construction and consumer durables, was more than offset by lower supply volumes from planned and unplanned maintenance, weak demand for aircraft de-icing fluids, and reduced participation in select markets. And sequentially, the business delivered double-digit sales growth, driven by strong local pricing in all regions, as well as in furniture & bedding and appliance end markets.
https://seekingalpha.com/pr/18168733-dow-reports-fourth-quarter-2020-results
January 28, 2021
Dow reports fourth quarter 2020 results; Double Digit Sales Growth in Polyurethanes
Thu January 28, 2021 6:00 AM|Business Wire|About: DOW
MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):
FINANCIAL HIGHLIGHTS
- GAAP earnings per share was $1.65; Operating EPS¹ was $0.81, excluding significant items in the quarter totaling $0.84 per share, primarily related to a gain on the sale of certain U.S. Gulf Coast marine and terminal operations and assets, as well as a gain associated with a legal matter.
- Net sales were $10.7 billion, up 5% versus the year-ago period, with increased local prices, currency and volume. Dow’s fourth quarter sales increased 10% versus the prior quarter as the global economic recovery continued.
- Local price increased 2% versus the year-ago period, primarily driven by improved pricing in polyethylene and polyurethane applications. Currency increased sales by 2%. Sequentially, price increased 8% with improvements in all segments.
- Volume increased 1% versus the year-ago period, reaching pre-pandemic volume levels in all operating segments. The year-over-year increase was led by demand growth in Packaging & Specialty Plastics and Performance Materials & Coatings. Compared to the prior quarter, volume increased 2% with gains in Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and in all regions, driven by strong supply and demand fundamentals.
- Equity earnings were $106 million, up $127 million compared to the year-ago period, primarily driven by continued improvement in financial results at the Sadara joint venture.
- GAAP Net Income was $1.3 billion. Operating EBIT1 was $1.1 billion, up from $1.0 billion in the year-ago period due to margin expansion in polyethylene and polyurethane applications.
- Cash provided by operating activities – continuing ops. was $1.7 billion and free cash flow1 was $1.4 billion. Working capital was a $236 million source of cash despite increased sales. Free cash flow for the year was $5 billion, up $1.2 billion over the prior year. Cash conversion1 in the quarter was 93%, leading to a full-year rate of 112%, a 30% improvement over the prior year.
- Dividend returns to shareholders totaled $519 million in the quarter.
- Total cash and available committed liquidity at quarter-end was $14.6 billion, an increase of $3.9 billion over the year-ago period.
- Net debt1 was reduced by $837 million in the quarter, resulting in a total net debt improvement of more than $2.6 billion in 2020. The Company continues to have no substantive long-term debt maturities due until the second half of 2024.
- Dow completed the sale of select U.S. Gulf Coast marine and terminal operations and assets, receiving cash proceeds of $620 million in the quarter.
- Sadara reached agreement in principle on key terms for its debt reprofiling with all remaining lenders in January 2021, supporting the joint venture’s path toward cash flow self-sufficiency.
CEO QUOTE
Jim Fitterling, Dow’s chairman and chief executive officer, commented on the quarter:
“The Dow team delivered top- and bottom-line growth in the fourth quarter, reaching pre-pandemic levels across most businesses as the economic recovery continued to gain traction. Our consumer-led portfolio and ongoing focus on capturing demand drove year-over-year volume growth in every region and segment, as well as sequential price and margin expansion across the portfolio.
“We delivered free cash flow of $5 billion for the year, and further improved our cash conversion rate by 30 percent. This focus on cash flow generation, coupled with our execution of key strategic cash levers such as the sale of select U.S. Gulf Coast marine and terminal assets, enabled additional deleveraging in the quarter as we reduced total net debt by more than $2.6 billion for the year. And we also achieved a significant milestone for Sadara by reaching agreement in principle with the lenders on its debt reprofiling. This was a strong finish to a year where the Dow team capably overcame significant macroeconomic and other external challenges. I am confident about our path forward for 2021 and beyond.”
Industrial Intermediates & Infrastructure net sales were $3.5 billion, up 8% versus the year-ago period. Local price improved 6%, primarily driven by significant increases in consumer goods and appliances. Currency increased net sales by 2%. Volume was resilient with growth from strong construction and durable goods demand, offset by downward pressure from supply limitations. On a sequential basis, the segment recorded a net sales increase of 14%, driven by significant price improvement in polyurethanes and robust demand in Industrial Solutions in line with the macroeconomic recovery.
Equity earnings for the segment were $36 million, an increase of $81 million compared to equity losses of $45 million in the year-ago period, driven by margin expansion at Sadara.
Operating EBIT was $296 million, compared to $221 million in the year-ago period due to strong supply and demand fundamentals in Polyurethanes & Construction Chemicals and at Sadara. Sequentially, the segment increased Op. EBIT by $192 million driven by significant improvement in margin-over-raw material costs across both businesses.
Polyurethanes & Construction Chemicals reported a double-digit net sales increase compared to the year-ago period, primarily due to significantly higher local prices in polyurethane applications, with improvements in all regions except Latin America. Demand recovery in Europe, Middle East, Africa and India (EMEAI) and Latin America, particularly in construction and consumer durables, was more than offset by lower supply volumes from planned and unplanned maintenance, weak demand for aircraft de-icing fluids, and reduced participation in select markets. And sequentially, the business delivered double-digit sales growth, driven by strong local pricing in all regions, as well as in furniture & bedding and appliance end markets.
https://seekingalpha.com/pr/18168733-dow-reports-fourth-quarter-2020-results
January 28, 2021
January 25th, 2020
Dear Valued Customer,
Due to escalating raw material cost, COIM USA is increasing the selling prices of its Isoexter® polyester polyols for pour in place, rigid bunstock, and spray foam applications in the US and Canada by $0.04/lb. This price increase is effective March 1st, 2021, or as contracts allow.
We appreciate the business and partnership between our companies, and your account manager will contact you shortly to discuss the specifics of this increase.
January 28, 2021
January 25th, 2020
Dear Valued Customer,
Due to escalating raw material cost, COIM USA is increasing the selling prices of its Isoexter® polyester polyols for pour in place, rigid bunstock, and spray foam applications in the US and Canada by $0.04/lb. This price increase is effective March 1st, 2021, or as contracts allow.
We appreciate the business and partnership between our companies, and your account manager will contact you shortly to discuss the specifics of this increase.
January 27, 2021
US Gulf braces for more benzene cargoes from South Korea as volumes hit new highs January 27/2021 MOSCOW (MRC) — Benzene exports from South Korea have increased as prices spiked globally, leading to more than 204,000 metric tons being loaded for export in December for destinations worldwide, said Chemweek.
The last time that South Korean export volumes were near this level was in April 2020. Since then, the country’s exports of benzene have fallen from 196,000 metric tons in both May and June to 147,000 metric tons in October, at a time when low benzene prices and poor margins for para-xylene caused producers in South Korea to throttle back benzene output.
However, the final six weeks of 2020 saw benzene prices spike in North America and Europe as traders and consumers become concerned about availability as styrene monomer prices were also spiking.
In December 2020 more than 80,000 metric tons of benzene departed South Korea for the US Gulf Coast (USGC), the highest since February last year. About 10,000-15,000 metric tons of that volume was the result of delayed November loadings that became early-December departures. November benzene volumes from South Korea to the USGC had been expected to be around 35,000 metric tons and ended up at 23,000 metric tons instead.
The higher benzene prices in the USGC and Europe attracted more supply. With Indian benzene moving to the EU, China pulled in over 100,000 metric tons from South Korea, the highest volume to load from there to China since June 2020.
The driving factor behind the higher benzene prices and better margins remains the stronger end demand for styrene, phenol, and methylene di-para-phenylene diisocyanate (MDI). COVID-19 has changed consumer behavior and caused spikes in demand for food packaging and single-use plastics, and has even improved automobile demand in some regions.
The spot benzene price in North America on 10 November was USD1.68/gallon (gal) for the prompt month. One month later, the prompt month benzene price was USD2.56/gal for North America, an increase of USD0.88/gal, or USD263/metric ton. Such a steep price increase has improved benzene margins for the various production methods, including heavier steam cracker feedstocks, refinery extraction, and selective disproportionation (STDP) units.
Producers noticeably began to increase benzene production in both South Korea and North America by December. North America saw the STDP units increase rates, and domestic producers begin to sell more barrels into the spot market. At the same time, the frenzy of cargoes being booked from South Korea resulted in the 58,000 metric tons loading increase between October and December.
When producers in South Korea are running at high rates, their monthly benzene exports can reach upward of 260,000 metric tons. South Korean derivative production rates or turnarounds also impact how much benzene is exported from month to month.
North American benzene supply is expected to be more plentiful in January than was initially expected in November 2020. The high prices were not sustainable, however, as the influx of cargoes into the USGC combined with US sellers diverting as much supply as possible into the spot market caused prices to ease. The benzene spread over gasoline narrowed from USD1.50/gal on 9 December to USD1.20/gal this week as traders and consumers adjusted their price expectations now that more supply has been made apparent. That includes the consideration that up to 40,000 metric tons of benzene was exported from the USGC to Europe between December and January scheduled loadings, some of which was made available due to unplanned derivative production issues at US styrene and/or phenol plants.
Along with phenol, acetone is largely used to produce bisphenol A (BPA), which, in its turn, is used in the production of plastics such as polycarbonate (PC) and epoxy resins.
Everchem Updates Archive 
Sign Up for Email Updates