Stocks Tumble by Corona Fear, Some Companies Anxious While Others Smile

1. Edition: 15th April 2020 #TheChemAnalystExpress Stocks Key Headlines •U.S. Chemical Companies’ Shares Fall while Asia’s Rise After OPEC+ Reduces Production Cut Targets •U.S. Refineries Shut or Induce Production Cuts in Tandem with Waning Oil Demand •Aramco Cuts Oil Prices for Asia Post the Historic Deal •PetChem Curtails Output, Cuts Oleochemical Prices •Hindalco Signs $2.8 Billion Deal to Acquire Aleris Asia Pacific Chemicals Pricing (Key Products) •Ethylene- Firmer crude as the OPEC+ countries agree for curtailing their refinery outputs, pulled up the prices of feedstock ethylene by almost $15 per MT. Ethylene prices rose to $380/tonne CFR South East Asia. •Benzene- Benzene prices witnessed almost no change amid muted demand and reduced offtake from the buyers. CFR India prices of the product were settled at $380/tonne, showing no change on Tuesday. •Propylene- China’s propylene spot prices rallied to $990-$1100 ex-tank East China, due to upward revision by major players. Prices have shown strong increment due to increasing demand from downstream PP market •Styrene Monomer: Improved Chinese market outlook and improvement in demand have shot up the feedstock SM prices to $610/ tonne CFR China. •Toluene: Soft downstream demand as result of production cuts and shutdowns due to contain the spread of coronavirus have almost stagnated the prices of Toluene since Monday. Prices were slightly pushed up on Monday owing to firmer crude. On Tuesday, the prices of Toluene were assessed to be stable at $340/tonne CFR South East Asia. Crude Oil Scenario Oil prices witnessed prominent gains on Tuesday on the back of a news which stated that U.S. shale gas producers will be reducing their outputs to a record low in the second half of April. This slash in production is a positive indication to recover the losses over prolonged collapse in the prices of oil, but dilemma remains over the decline being strong enough to combat global demand destruction. Furthermore, the energy minister of U.S notified that in the next OPEC meet scheduled in June this year, Saudi Arabia could impose further production cuts depending upon the severity of demand crises. As per the current scenario, Brent crude climbed to $32.30 a barrel, incurring a gain of 1.8 per cent from yesterday. Whereas, U.S West Texas Intermediate (WTI) settled at $ 22.88 a barrel, up by 2.1 per cent from previous revision. Stocks Tumble Tumble b by Corona Fear y Corona Fear, Some Companies , Some Companies Anxious Anxious While Others Smile While Others Smile Index WTI Crude Oil Brent Crude Natural Gas (U.S.) Units USD/bbl. USD/bbl. USD/MMBtu Prices 22.88 32.30 1.646

2. Exclusive News & Analysis Asian Companies Welcoming Gains, Turn Optimistic as the Virus Seems to Depart Asian Petrochemical sector witnessed a sudden rise in share values on high hopes of outbreak coming to an end after summiting to the highest record in the worst hit areas. The industry further underwent a sigh of relief with oil prices edging high after significant cuts in U.S. shale gas production this month. In addition, cautious optimism over the restart of production in several industrial sectors of India such as fertilizers, plastic manufacturing, automobile, rubber, agrochemicals and electric and electronic equipment has also pushed the players to indulge in the market at the lowest point to incur gains post the struggle of Pandemic. After termination of lockdown in China, major manufacturers resumed their production activities aiming to restart the trade dynamics to procure gains. Apart from China, manufacturers in other leading countries have also stepped up for the investment in shares of chemical and petrochemical market to secure their finances and to expand their involvement in business to strengthen the prolonged dull market dynamics of the Industry. •Mitsui Chemicals, a reputed chemical manufacturing company of Japan registered a rise in its share by 0.21 per cent. •South Korea’s Lotte Chemical incurred a prominent upsurge in shares by around 7 per cent. •Hang Sensex Index of Hong Kong was also up by 0.77 per cent. •Shares of a Japan based stock exchange company, Nikkei 225, rose by nearly 2 per cent. •KOSPI Index of South Korea followed a rise in share by more than 1.69 per cent. As per the analysts, the sudden rise in share values of Asian Petrochemical Sector is a ray of hope which would improve the demand outlook of commodities, eventually leading to active gains in their business segments by the second half of financial year. U.S. Shares fell Underwent downfall in Share value U.S market has reported a slump in shares of many of its players on the back of negotiations in a supply reduction agreement between OPEC and its allies. After consecutive rise in the last three sessions, the U.S. equity index incurred a slump on Monday as investors remained cautious against bearish market sentiments of commodities amid coronavirus outbreak. With ongoing preventive measures such as lockdowns and trade disruptions, analysts have anticipated corporate finances to plummet by more than 10 per cent in the first quarter of the current financial year. Table 1: Some Popular APAC Companies Experiencing Gains in Stock Company Name Location Percentage Change 0.65% Mitsubishi Chemical Holdings Corporation Hanwha Corporation Japan South Korea 1.96% Sinopec Shanghai Petrochemical Company Limited LG Chem Limited Hong Kong 2.51% South Korea 3.33% Lotte Chemical Corporation South Korea 7.22% 0.21% Mitsui Chemicals, Inc. Japan Nan Ya Plastics Corporation Taiwan 3.98 Table 2: Some Popular U.S Chemical Company Shares Company Name Percentage Change Axalta Coating Systems -2.36% Dow -1.80% Dupont -6.03% Huntsman -2.20% Eastman -2.98% -1.51 LyondellBasell Sherwin-Williams -0.60

3. Industry Research International Plant Shutdowns •Shell Shuts Its Perdido Hub After Leakage in Exxonmobil’s HOOPS Shell has reported temporary shutdown at the Perdido spar in the Gulf of Mexico after a subsurface leak in the ExxonMobil-operated Hoover offshore oil pipeline system (HOOPS). Shell said that without accessing that pipeline system, and with no other alternatives, Perdido had to enforce the shutdown. The Perdido spar is a production hub for the Great White, Tobago and Silvertip fields and is grounded in 2,450 m (8,038 ft) of water in Alaminos Canyon block 857. Shell’s Perdido is the world’s deepest offshore oil drilling and production platform having the capacity to handle 100,000 b/d of oil and 200 MMcf/d of gas. •Texland Petroleum Shuts Oil Wells in The Wake of Economic Downturn in U.S. North America’s Texland Petroleum LP has decided to shut each of its 1,211 oil wells and stop production activities by May after U.S. President Donald Trump promised to curtail U.S. oil outputs. The company’s decision to agree to this “Never done before “output cut was amid the slump in demand and strained market dynamics of the crude oil, after the country became the epicenter of the pandemic with number of positive cases crossing China’s number. The company officials stated that crashing prices and muted demand left no choice but to shut its oil wells. •Uranium Giant, Cameco Shuts its Uranium Hexafluride Plant World’s largest uranium producer, Cameco Corporation, recently announced its plans to shut down a fuel service facility after suspending its uranium production at its key mine, Cigar Lake. Uranium is a key chemical element used as a fuel in nuclear power plants primarily run by utilities. Cameco is shutting its uranium hexafluoride plant at its Port Hope conversion facility for four weeks as the company struggles to maintain workforce amid challenging circumstances due to Covid-19. India Plant Shutdowns •Indag Rubber’s Nalagarh Plant Under Temporary Shutdown India’s Indag Rubber Ltd. has temporarily shut its rubber manufacturing plant located in Nalagarh. The company is engaged in manufacturing and selling of precured tread rubber bonding repair and extrusion gum, rubber cement and associated products, which are used for fixing old used tyres. The company has two plants at Bhiwadi in Rajasthan and at Nalagarh in Himachal Pradesh. •Blast at Galaxy Surfactant’s Factory in Tarapur Amid lockdown measures imposed over the country to contain coronavirus spread, a chemical factory of Galaxy Surfactants Ltd., located in Tarapur MIDC underwent an explosion. The company is involved in manufacturing of cleaning chemicals and alcohol. Under the state-imposed lockdown measures, the factories manufacturing essential items are permitted to operate under certain terms and conditions. The cause of the blast is still not clear; however, the blast was heard up to 5 Kms from the spot with two deaths and one injured reported till date. Global Plant Resumptions •Shells Lifts Force Majeure from Forcados Terminal Global oil producing giant, Shell Petroleum Development Company (SPDC) has reopened the pipeline transporting the crude oil Trans Forcados pipeline which is operated by Heritage Energy Operational Services Ltd. The company had shut this pipeline on April 4, 2020, which was later declared as a force majeure on April 6,2020. This reopening would be a major boost to the Nigerian economy and a major source of revenue for its government. •DCM Shriram Resumes Operations at Baruch Plant Indian company DCM Shriram Limited resumed production at its caustic soda plant located in Bharuch on Thursday, 9th April, 2020 .The company officials stated that the plant has been resumed with production capacity of 150 TPD level (about 10% of the total capacity) which will gradually improve over the next few days depending upon the market

4. situation and Government decisions over lockdown measures. Moreover, the production of Stable Bleaching Powder (SBP) and Fertilizers at the Kota plant has also resumed. Mergers and Acquisitions •Hindalco Signs Deal to Acquire Aleris Aditya Birla Group’s flagship company Hindalco successfully completed the closure of a $2.8 billion deal towards acquisition of Aleris Corporation. The deal would allow the buyout of Aleris by Novelis Inc and marks Novels’ entry into aerospace sector. The company signing this deal amid challenging circumstances reflects a long-term strategic outlook. Aleris is a global leader involved in manufacturing and sales of aluminum rolled products. The deal emerges when the metal sector is already under a downturn due to Covid-19. As per ABL, the deal would enable Aleris to diversify its metals downstream portfolio and penetrate into aerospace. •Ascent Steps into Its First Acquisition in Cuba Oil and gas giant, Ascent Resources has entered the Carribeann market for the first time by acquiring UK-based Energetical Limited, which has exclusive rights to secure a production sharing contract (PSC) on a producing onshore Cuban oil license. Energetical provides exclusive rights to the Block 9B in Cuba which occupies Majaguillar and San Anton fields, located on the north coast of Cuba. The production capacity of the block currently touches 190 gross barrels of oil per day (bopd) from three wells. Ascent is looking for more acquisitions to develop a wider Cuban portfolio across its oil and gas sector, along with its existing oil and gas units in Slovenia. Strategic Investments •Exxonmobil Curtails Borr Contracts Offshore Nigeria ExxonMobil has decided upon early termination of the contracts for the jackups Gerd and Groa offshore Nigeria. The contracts’ estimated duration was 365 days and 200 days, respectively. The rigs are expected to initiate contracts in 3Q 2020. The contracts for both rigs require 180-day notice for early termination. The company said that the major reason for the early termination of Borr jackup contracts is the current downfall in the crude oil market. Get the Chemical and Petrochemical Industry News on Daily Basis, Weekly-Trend & Forecast and Monthly-Analyst Views Subscribe Today! News on WhatsApp/WeChat/Mail First 15 days free news WhatsApp No. +91-9914868686 For sales related query, dial +91-9958299626 or email at sales@chemanalyst.com

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