CEE petchem margin 6.5% below pre-crisis level in 2010 - Erste

03 February 2011 14:59  [Source: ICIS news]

PRAGUE (ICIS)--The average petrochemical margin in central and eastern Europe (CEE) in 2010 was 6.5% below the pre-crisis level, Erste bank said on Thursday.

Growing naphtha feedstock prices put a brake on the post-crisis recovery in the margin but "nevertheless, the average attained in 2010 (€285tonne) was quite close to the pre-crisis level of 2005-2007 (€305/tonne),“ it added.

Erste forecast that the average would only edge up to €290/tonne ($403/tonne) in 2011 with the slow economic recovery of CEE causing a lack of pre-stocking effect from industries, as was also experienced in 2010.

"We do not expect any major rebound in the average petchem margins in 2011...  Nevertheless, some correlation to GDP growth (weaker in 2011 than 2010) and consumer spending is likely, so [we can] forecast a gradual recovery," the bank said.

"We have €290/tonne predicted for 2011, but the figure could arrive anywhere between €280-€300/tonne, while the relatively low volatility in petchem margins is likely to prevail,“ it concluded.

Raiffeisen Centrobank has noted that Czech petrochemical producer Unipetrol is struggling with what could turn out to be a long decline in its olefin margins, and has also determined that petrochemical margins at Polish group PKN Orlen are stagnating.

($1 = €0.72)

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By: Will Conroy
+44 20 8652 3214

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