03 November 2009 19:01 [Source: ICIS news]
HOUSTON (ICIS news)--Asian export demand for US polyethylene (PE) has recovered from a temporary September slowdown and should remain strong through at least November, allowing LyondellBasell’s polymers segment to continue to beat expectations, the producer said on Tuesday.
“Right now, through November, our order book is pretty much full with these export opportunities,” chief operating officer Ed Dineen said during the company's monthly conference call.
September polymers earnings before interest, tax, depreciation and amortisation and restructuring costs (EBITDAR) were $100m (€68m), nearly level with August’s $109m EBITDAR despite a temporary drop in exports.
"We initially experienced some decline in US PE export demand, but has since reversed itself and ... has really recovered," Dineen said.
However, overall September earnings were $225m, down from year-earlier earnings of $2.7bn, largely as a result of falling fuel earnings.For the year-to-date, the polymers segment had earnings of $628m, well ahead of the operating forecast of $352m as rising crude prices have spurred demand in Asia, particularly in China, the company said.
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With global inventories low, cost movements such as crude oil’s increase are likely to draw increased market reaction, Dineen said.
The company said polymer demand typically declines in late December as companies shut down for holidays, but that in an unusual year like 2009 with low inventories across the board, the forecast was uncertain.
PE is responsible for about 60% of the polymers segment’s EBITDAR, with advanced polyolefins making up 25% and polypropylene (PP) comprising the remaining 15%. Overall, September’s polymer earnings were slightly higher year over year, LyondellBasell said.
Elsewhere, the company’s chemicals segment beat expectations behind an earnings improvement by the European olefins division, Lyondell said.
European olefins improved from break-even results in August to a $25m profit in September, behind significantly lower naphtha costs coupled with higher product pricing, Dineen said.
The chemicals EBITDAR for September was $106m, pushing year-to-date earnings to $586m, compared with a forecast of $481m.
However, the company’s refining segment continued to lag its year-to-date forecast, with earnings declining to $7m in September from $35m in August and $65m in July. Year-to-date earnings are $262m, less than half of the $565m forecast.
Lyondell said low demand and higher costs for crude oil were leading factors in the decline. As such, the company said its
The company said it expected the weak refining conditions to continue for the remainder of the year.
LyondellBasell added that its conversion to 30,000 bbl/day of bio ethyl tertiary butyl ether (ETBE) capacity at its
Going forward, LyondellBasell - whose
($1 = €0.68)
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