02 February 2011 13:46 [Source: ICIS news]
PRAGUE (ICIS)--Unipetrol is struggling with what could turn out to be a lengthy decline in olefin margins, Raiffeisen Centrobank said on Wednesday.
Unipetrol’s petrochemicals business was not currently proving to be a driver for the Czech Republic-based petrochemical producer and refiner, said Raiffeisen analyst Phillip Chladek.
“[Petrochemicals] will see better margins in polyolefins, but unfortunately, this is only half of the story,” he said.
“Olefin margins are receding and we currently see no sign of improvement anytime soon. The demand development is also not as positive as we previously hoped.
“On the other hand, we see a slightly better demand development in the longer run, as we still see additional demand potential due to the still significantly lower per capita consumption of petrochemical products in central and eastern Europe compared to western Europe.
“So we still see the catching-up process taking place, but it will take longer than previously assumed,” Chladek added.
The bank retained its “hold” recommendation on Unipetrol’s stock, and Chladek said the company’s latest trading statement had shown unanticipated weaknesses in benzene and agrochemicals.
An ailing plant and the company's delays in issuing a new strategy document – which had been expected by the end of 2010 but could now be issued as late as the end of 2011 – were other negative factors of concern for Unipetrol, said Chladek.
Unipetrol and Polish parent company PKN Orlen are scheduled to report their full fourth-quarter results on 10 February.
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