Thai PTTCH Margin May Fall, to Shut Units in Q3
PTT Chemical PCL, Thailand's largest olefins marker, said on Tuesday it expected 2009 revenue to rise 7% to THB88bn ($2.5bn), better than analysts' forecasts, due to higher capacity.
PTTCH, a flagship in the olefins petrochemical business of top energy firm PTT PCL, did not expect margins between product prices and feedstock to be as good this year as last, President Veerasak Kositpaisal said.
"Spreads this year should stay at a good level, but it can't be compared to last year. We had already expected this year to be the downturn for the petrochemical sector, while new supplies from the Middle East will enter the market," he told reporters.
Twelve analysts polled by Reuters Estimates forecast a 7% fall in revenue in 2009.
PTTCH planned to shut down its olefins plant and a high-density polyethylene (HDPE) plant temporarily in the third quarter, he said, without giving reasons for the shutdown.
The company planned to invest THB39.7bn during 2009–2013, of which THB25bn would be spent this year to boost olefins capacity by 100,000t a year and propylene by 50,000t a year, he said.
PTTCH produces ethylene and propylene, together called olefins, petrochemicals used to make plastic pellets for packaging and other industries. PTT supplies gas to the company.
After the expansion, the company's annual olefins capacity will rise to 2.89 million tonnes in 2010 from 1.7 million tonnes, and HDPE capacity to 830,000t from about 500,000t.
The company is also on track to build an ethane cracker with annual capacity of 1 million tonnes, and a linear low density polyethylene (LLDPE) plant, expected to be completed by the fourth quarter of this year, Veerasak said.
Despite the overall downward trend, he said demand had picked up in the first quarter as clients had run out of inventories after cancelling buying orders in the fourth quarter.
Based on an assumption of crude prices above $40 a barrel this year, prices of naphtha, a key raw material, were expected to be $400–410 a tonne, while olefins prices should be around $600–700 a tonne, he said.
The spread between naphtha and key product HDPE was expected to be $400–500 a tonne this year, he added.
Last week, PTTCH reported its first ever quarterly loss for the fourth quarter of 2008 due to a sharp drop in product prices that led to inventory losses and a lower production rate.
At the midday break, PTTCH shares were down 0.83% at THB29.75, while the overall Thai market was 1.4% lower.
By Pisit Changplayngam, Reuters.
quoted from: www.chemicals-technology.com
PTTCH, a flagship in the olefins petrochemical business of top energy firm PTT PCL, did not expect margins between product prices and feedstock to be as good this year as last, President Veerasak Kositpaisal said.
"Spreads this year should stay at a good level, but it can't be compared to last year. We had already expected this year to be the downturn for the petrochemical sector, while new supplies from the Middle East will enter the market," he told reporters.
Twelve analysts polled by Reuters Estimates forecast a 7% fall in revenue in 2009.
PTTCH planned to shut down its olefins plant and a high-density polyethylene (HDPE) plant temporarily in the third quarter, he said, without giving reasons for the shutdown.
The company planned to invest THB39.7bn during 2009–2013, of which THB25bn would be spent this year to boost olefins capacity by 100,000t a year and propylene by 50,000t a year, he said.
PTTCH produces ethylene and propylene, together called olefins, petrochemicals used to make plastic pellets for packaging and other industries. PTT supplies gas to the company.
After the expansion, the company's annual olefins capacity will rise to 2.89 million tonnes in 2010 from 1.7 million tonnes, and HDPE capacity to 830,000t from about 500,000t.
The company is also on track to build an ethane cracker with annual capacity of 1 million tonnes, and a linear low density polyethylene (LLDPE) plant, expected to be completed by the fourth quarter of this year, Veerasak said.
Despite the overall downward trend, he said demand had picked up in the first quarter as clients had run out of inventories after cancelling buying orders in the fourth quarter.
Based on an assumption of crude prices above $40 a barrel this year, prices of naphtha, a key raw material, were expected to be $400–410 a tonne, while olefins prices should be around $600–700 a tonne, he said.
The spread between naphtha and key product HDPE was expected to be $400–500 a tonne this year, he added.
Last week, PTTCH reported its first ever quarterly loss for the fourth quarter of 2008 due to a sharp drop in product prices that led to inventory losses and a lower production rate.
At the midday break, PTTCH shares were down 0.83% at THB29.75, while the overall Thai market was 1.4% lower.
By Pisit Changplayngam, Reuters.
quoted from: www.chemicals-technology.com
