Turkey - Petrochemicals - PETKM: Ethylene - Naphtha Prices
• Ethylene-Naphtha spread increased by 22.8% WoW to USD357.0/ton on August 5th due to the decrease in the naptha prices (-8.4%).• Following the decrease of 102.5 USD in the previous 2 weeks, we consider the w/w increase in the spread as slightly positive. However, we estimate that margins for the main product groups may remain weak considering the ongoing downward trend in the global petrochemical index.
• As of 2Q22, the spread averaged at USD526.4/ton vs USD501.2/ton in 1Q22 and USD630.0/ton in 2Q21. Considering the weakness in late June and July, we think profitability may have been suppressed. However, we anticipate that the margin deterioration may remain moderate, since the spread is not a direct indicator of the final product. Petkim is expected to announce its 2Q22 results on Thursday before the session opening.
Turkiye Petrol Rafinerileri is an energy and refining company based in Turkey. Co. is engaged in providing and refining crude oil, the importing and exporting of oil products, and establishing and operating refineries in Turkey and foreign countries. Also, Co. is establishing and operating factories and facilities in the petrochemical industry. Co. is engaged in purchasing, selling, importing, exporting, storing, marketing and distributing (wholesale, retail, foreign and domestic) all kinds of petroleum products, LPG and natural gas. Co. runs its business through the refineries in Izmit, Izmir, Kirikkale and Batman.
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