Petrochemicals: Lower crude drives down petrochemical prices
The petrochemical chain pricing largely followed the direction of crude oil prices during the week tapering down over 10% across varied feedstock. Resultantly, PolyVinyl Chloride (PVC) and Polyester Staple Fibre (PSF) margins leapt higher during the week.
During the week, PVC prices remained unchanged at USD865/ton for South East Asian region. On the other hand, ethylene prices came off by USD95/ton to stand at USD600/ton, a marked drop of 14% WoW.
PVC core delta settled at USD565/ton, up by 9% WoW, the highest margin in the past 9 years. The latest data on margin is positive for Engro Polymer and Chemicals Ltd (EPCL).
Purified Terephthalic Acid (PTA) - Paraxylene (PX) margin hovered around the same levels for the week indicating the level of USD108/ton.
Weakness in feedstock PX rates was witnessed in line with upstream energy prices as it came off by USD80/ton to USD590/ton, down 12% WoW while PTA depicted a similar trend to settle at USD500/ton, down 10% WoW.
PTA-PX margin has hovered at the same levels for the past few weeks lower than long term average of USD115/ton. The current trajectory remains negative for Lotte Chemical Pakistan Ltd (LOTCHEM).
Polyester Staple Fibre (PSF) margins rose by 10% WoW to USD388/ton amid depressed feedstock rates. PSF prices were lower by 2% WoW at USD986/ton. Mono-Ethylene Glycol (MEG) prices were noted at USD480/ton, down USD35/ton or 7% WoW.
Engro Polymer & Chemicals Limited is a chlor vinyl chemical company. The principal activity of the Company is to produce and market chlor-vinyl products, which include poly vinyl chloride (PVC), vinyl chloride monomer (VCM), caustic soda, hydrochloric acid and sodium hypochlorite. The Company operates through three segments: poly vinyl chloride (PVC) and allied chemicals, caustic soda and allied chemicals, and power supplies. The poly vinyl chloride (PVC) and allied chemicals segment manufactures and sells PVC and allied chemicals to various industrial customers, including pipe manufacturers, shoe and packaging industry. The caustic soda and allied chemicals segment manufactures and sells caustic soda and allied chemicals to textile and soap industry. The power supplies segment supplies surplus power generated from its power plants to Engro Fertilizers Limited. The Company manufactures and markets over four grades of PVC under the brand name SABZ.
Lotte Chemical Pakistan Limited (LCPL) is a Pakistan-based manufacturer and supplier of Purified Terephthalic Acid (PTA). The Company has the capacity to produce approximately 500,000 tons of PTA per year through its plant located at Port Qasim, Karachi. It operates in the manufacture and sale of chemicals segment. The Company is a supplier for the domestic polyester and polyethylene terephthalate (PET) industries. For producing PTA, it imports its feedstock (Paraxylene) from suppliers based in Asia and Middle-East region. PTA is the primary raw material for producing polyester fiber, polyester filament yarn, polyester film and PET.
BMA is amongst the leading financial groups in Pakistan. BMA Capital’s core areas of business include Capital Markets, Corporate Finance & Advisory, Asset Management, and Financial Products Distribution. BMA Capital is the leader in privatisation advisory in Pakistan, having successfully advised on over 50% of all privatisations in Pakistan, by value, in transactions valued in excess of US$4 billion. Recent transactions include joint lead managing the $813 million GDR Offering of 10% of OGDCL on the London Stock Exchange in 2006-07, and advising Etisalat on their successful acquisition of a 26% strategic stake in Pakistan Telecommunications Company Limited (PTCL) for US$2.6 billion, the largest M&A transaction and foreign direct investment in Pakistan’s history. The firm is among the top brokers in the Pakistan equity and treasury markets, and is among a handful of firms that comprehensively cover all segments of the capital markets. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media. BMA Capital’s retail brokerage brand, BMA Trade, has launched a nationwide network of branches as well as a comprehensive online trading platform, enabling investors across Pakistan to take part in the capital markets.
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