Petrochemicals: Rebound in core delta noted after five weeks
Latest weekly update on petrochemical prices suggests core delta of PolyVinyl Chloride (PVC) rose by 3% WoW to USD428/ton.
Ethylene prices depicted weakness during the week on the back of bleak buying sentiments and lower downstream demand, standing at USD785/ton, a drop of USD45/ton or 5% WoW. PVC prices remained steady at USD820/ton during the week.
On the other hand, robust Purified Terephthalic Acid’s (PTA) margin has been recorded at USD103/ton for the week, a jump of 9% WoW, as PTA prices improved and weakness prevailed in feedstock.
Feedstock Paraxylene (PX) rates retreated to USD770/ton, down 1% WoW, while PTA prices were noted at the level of 615/ton, up 1% WoW,
Polyester Staple Fibre (PSF) margins contracted by 1% WoW to USD344/ton owing to higher feedstock prices. Mono-Ethylene Glycol (MEG) prices were seen rebounding to USD560/ton, a rise of USD15/ton or 3% WoW while PTA rose 1% WoW. On the other hand, PSF prices inched up to USD1,070/ton.
Recovery in latest petrochemical margins remains a positive development for Engro Polymer and Chemicals Pakistan Ltd (EPCL) and Lotte Chemical Pakistan Ltd (LOTCHEM) while we remain cognizant of sustainability of the same directionally
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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